Boven 04102013

Mobilising people to protect and restore our environment – the roles of paradigms, cosmologies, theories, values and beliefs

(Psycho-history 101)

Institute for Governance and Policy Studies, VUWRick Boven

4 October 2013

ENTERING THE AGE OF SCARCITY? REAL PRICE INDEX: 2000 = 100

2

Note: Base 2000=100Source: The World Bank (2011b).

Metals &

minerals

19601963

19661969

19721975

19781981

19841987

19901993

19961999

20022005

20080

50

100

150

200

250

300

350

Energy

Food

TWO-THIRDS OF MAJOR ECOSYSTEM SERVICES PROVIDED BY NATURE ARE IN DECLINE

3

Declining

•Fish stocks and wild foods

•Productive land quality

•Fresh water supply

•Fresh water quality

•Wood fuel

•Species diversity including crop varieties

•Species groups closer to extinction

•Atmosphere cleansing of pollutants

•Local climate regulation via land cover

•Natural buffers against extreme events

•Wild and domestic pollinators

•Medicinal resources

•Quantity and quality of aesthetically pleasing natural landscapes

•Sacred groves and species

Improving

•Crops, livestock, aquaculture production

•Global climate regulation (via increased albedo due to forest clearing)

Mixed

•Timber and forests

•Regulation of water flows

•Biological control

•Recreation and tourism opportunities

CARBON DIOXIDE CONCENTRATION IN ATMOSPHERE, 1791-2011, PPM

4Source: NOAA, National Oceanic and Atmospheric Administration (2012); Neftal et al. (1994).

17911801

18111821

18311841

18511861

18711881

18911901

19111921

19311941

19511961

19711981

19912001

20110

50

100

150

200

250

300

350

400

450

5

Marriage of Louis XIV to Maria Theresa of Spain, c.1660

PEOPLE WHO WORE FUNNY CLOTHES AND HAD MANY STRANGE AND WRONG IDEAS

6

Photo credit: iStock

MORE PEOPLE WEARING FUNNY CLOTHES WITH STRANGE IDEAS

HOW PARADIGMS CHANGE

Old paradigm begins to fail• Unacceptable outcomes• Inconsistent observations

Someone re-organises and extends concepts to form a new paradigm

Paradigm change process• Explain why old paradigm has become obsolete• Show how new paradigm overcomes the

deficiencies of the old paradigm• Change the views of leaders or change the leaders

7

MY HYPOTHESIS: “The way we think about managing economy-environment trade-offs affects

the future we will experience”

8

Long term co-dependence

Short termtrade-offs

Healthy environment

Strong economy

Environment damage

Economic costs

EXAMPLES OF DIFFERENCES BETWEEN ECONOMICS AND STRATEGY

9

Economics Strategy

Assume same costs and prices for all

Assume static industry economics

Predict equilibrium outcomes

Discover cost and price differences, and reasons

Understand industry evolution and options to influence

Create sustainable cost and price advantages

TYPES OF IDEAS

10

Type Meaning

Cosmology Entrenched system of beliefs about how and why the world works as it does

Paradigm A framework for understanding an important aspect of the world

Theory A rule that can be used to develop predictions

Value A source of utility for individuals

Belief A probability statement about an expected outcome from given conditions

In conventional psychological analysis behaviour is determined by values and

beliefs

UNRECOGNISED BUT DOMINANT MODERN ASSUMPTIONS?

Cornucopian A futurist who believes that continued progress and provision of material items for mankind can be met by similarly continued advances in technology

Panglossian Unwarranted optimism, the belief that all works out to be the best it can be; blindly or naively optimistic

11

PUNCTUATED EQUILIBRIUM FROM ECOLOGY

12

Source: Adapted from http://anthro.palomar.edu

Evo

luti

on

Time

Stable environment

Rapidly changing environment

CLIMATE MODELLERS IMPLY GRADUAL, CONTINUOUS CHANGE IN OUR FUTURE . . .

13

. . . BUT THE RECORD SHOWS THAT RAPID CLIMATE CHANGE IS NORMAL

14

Temperature volatility is normal

Unusual stability for 10,000 years

7 degrees Celsiuschange in 20 years

WE MAY UNDERSTAND HISTORY AS DESCRIPTIONS OF THE PAST . . .

15

Kings of England and Wales

1272-1307 Edward I House of Plantagenet

1307-1327 Edward II House of Plantagenet

1327-1377 Edward III House of Plantagenet

1377-1399 Richard II House of Plantagenet

1399-1413 Henry IV House of Lancaster

1413-1422 Henry V House of Lancaster

1422-1461 Henry VI House of Lancaster

1461-1483 Edward IV House of York

1483 Edward V House of York

1483-1485 Richard III House of York

1485-1509 Henry VII House of Tudor

. . . OR PERHAPS AS INEXORABLE TECHNOLOGICAL ADVANCE . . .

16

-10,000

-1,000 -100 -10Years before present

Farming

Computers

Iron

Electricity

Genomics

Printing

Wheel

Guns

. . . THAT WE CAN PROJECT INTO THE FUTURE

17

Interstellar travel

Regenerating organs

Solar system exploration

Immortality

Artificial intelligence

WHAT MODERN SOCIETY LEARNED FROM GODEL AND POPPER

Philosopher Learning

Godel A system of sufficient complexity can generate an infinite number of possibilities

Popper History unfolds by technology advance and human choice.Technology inventions and human choices are not predictable. Therefore history is not predictable

18

Don’t try to anticipate the futureModern conclusion :

HUNTER-GATHERER ERA

19

Sustainable environmental productivity

Rate of resource use

Food potential limited by productivity of forests, savannahs, coastlines

Food production limited by hunting and gathering technologies

10,000 BCIce age

20



10,000 BCIce age 1800

Food potential limited by productivity of farmland

Food production limited by traditional agriculture

technology and human and animal energy

Dramatic increase in food productivity of land due to switch to agriculture

ERA OF TRADITIONAL AGRICULTURE

21



10,000 BCIce age 1800 2013

Sustainable food productivity increases • Shipping of resources to Western

economies• Fossil fuel energy • Agricultural technologies

Output grows rapidly. Environmental constraints irrelevant.

BREAK-OUT TO GROWTH PHASE

ESTIMATED GLOBAL OUTPUT

22Source: Maddison (2010); U.S. Census Bureau (2011b).

0.000.100.200.300.400.500.600.700.800.901.001.101.201.301.401.501.601.701.801.902.002.102.202.302.402.502.602.702.802.903.003.103.203.303.403.503.603.703.803.904.004.104.204.304.404.504.604.704.804.905.005.105.205.305.405.505.605.705.805.906.006.106.206.306.406.506.606.706.806.907.007.107.207.307.407.507.607.707.807.908.008.108.208.308.408.508.608.708.808.909.009.109.209.309.409.509.609.709.809.9010.000

2

4

6

8

10

12

14

16

18

Global population, billions

GDP perCapita,1990

Int.$000s

1800 1950

2000

Projectedfor 2050

23

1800 2013 2050



Food potential limited by agricultural productivity and

available land

ENVIRONMENTAL CONSTRAINTS RETURN

24

Eras

Transitions

Traditionalagriculture

Hunter-gatherer

Industrialisedagriculture

Time

HUMAN HISTORY AS PUNCTUATED EQUILIBRIUM

25

1980 2050

In 1980, 1.0 Earth required to

operate sustainably

Eco-systems in decline

By 2050, 2.0 Earths would be required

to operate sustainably

OVERSHOOT EMERGES

26

2013 2050

WHICH FUTURE?

Growth forever

Overshootcrisis

Sustainability

Soft landing

2.0

1.0Eart

hs

req

uir

ed

STRATEGY CHOICE – MAXIMISE GROWTH OR REDUCE RISK?

27

Cornucopian Constrained

Maximise Growth

Technology saves us

Overshoot crisis

Reduce Risk

Slower growth

Soft landing

State of the world

Strategy Choice

WHAT’S WRONG WITH THE CORNUCOPIAN ASSUMPTION?

Constraints status Constraints outlook

Food Real land, water, energy and food cost increasing.Population growing.

Yield increase slowing.Land in production being degraded.Reserve land scarce.

Climate Greenhouse gas emissions accelerating.

Emerging consensus we won’t prevent 2 degrees Celsius increase.

Energy Costs increasing and fossil fuel use growing.

Fossil fuel growth plans incompatible with climate stability.

Ecosystems Value of services provided is several times value of measured global economy.

In absolute decline.Pressures increasing.

28

SOME BAD ECONOMIC THEORIES AND PROPOSED CORRECTIONS

Economic theory Proposed corrections

Individuals are self-interested pursuers of consumption

Individuals have diverse motivations including valuing outcomes for others

The purpose of economic policy is to provide consumption growth

Economic policy should avoid creating unacceptable risks

Economic activity is small relative to the size of the environment

Economic activity is large relative to the size of the environment

There are free gifts from the environment and free disposals to the environment

The economy and environment are co-dependent

Business activity should be unconstrained

Business activities should be constrained if they harm the future productivity of the environment

29

THE BAD THEORIES USED TO BE GOOD

Economic theory Function

Individuals are self-interested pursuers of consumption

Simplified the mathematics

Encouraged economic growth

The purpose of economic policy is to provide consumption growth

Encouraged economic growth

Provided individual utility

Economic activity is small relative to the size of the environment

Was true

There are free gifts from the environment and free disposals to the environment

Not a big problem with a small economy

Business activity should be unconstrained

Externalities did not threaten civilisation

30

COBB-DOUGLAS PRODUCTION FUNCTION

31

Capital

Labour

Technology Output Consumption

Technology converts capital and labour inputs to output

Some output is consumed and some is reinvested to replace and increase capital and labour stocks

There is no limit constraining output growth

(Y=AKαLβ)

THE TWO SIDES OF THE PARADIGM WAR

Economic – 20th Century thinking

Economy is small relative to environment

The future will be an extension of the past

Societal objective should be to maximise GDP

Environmental – 21st Century thinking

Economy is large relative to environment

The future will be different from the past

Societal objective should be to reduce risk

32

(Modern conventional economists, many political and business leaders)

(Ecological economists, scientists, activists)

“STAGES” OF THE CONSUMPTION VALUE

33

Argument When?

Humans are self-interested (Hobbes) 17th

Humans seek utility from pleasure, avoiding pain (Bentham)

18th

Humans get utility from commodities (Jevons)

19th

Output and then consumption maximisation as national goal

1930s through 1950s

Consumption entrenched as primary goal for individuals

Late 20th

Consumption goal exported to emerging economies

Late 20th

FUNCTIONS OF “SINS”

Value Traditional Agriculture Sins

Growth Phase Virtues

Greed Limits consumption that depletes scarce resources

Encourages activity and wealth accumulation

Envy Prevents efforts to lift consumption to match others

Encourages efforts to lift consumption to match others

Pride Avoid conspicuous consumption

Encourage conspicuous consumption

Gluttony Limits consumption of food, which is what limits population

Encourages consumption of food, stimulating growth

34

35

Source: Adapted from Boven, 2003.

HISTORY EMERGES FROM CO-EVOLUTION

Time

Ideas

Ideas

Ideas

Ideas

Behaviour Behaviour Behaviour

Outcomes Outcomes Outcomes

PROPOSED VALUES AND THEIR ENVIRONMENTAL FUNCTION

PROPOSED VALUE FUNCTION

Live in harmony with nature Value environmental outcomes

Be a custodian for future generations Avoid high discount rates that encourage a short term view

Take no more than you need Reduce ecological footprint

Contribute more than you take Encourage productivity

Treat others as you would have them treat you

Avoid externalities and tragedy of the commons

Look after your physical and mental health

Don’t become a burden

Learn and teach Build capability

Avoid superiority Reduce subjective competition, which creates prisoner’s dilemma games

36

FORCES PREVENTING VIGOROUS ENVIRONMENT PROTECTION BY OUR LEADERS

37

Governments

Must promote policies that appeal to voters, who want more consumption

Short term focus because they face election every 3 to 5 years

Subject to influence from wealthy individuals and businesses, both wanting more wealth for themselves

Businesses

Providers of goods and services wanted by customers, who aspire to consume more

Purpose is to grow shareholder wealth

Directors are legally required to act in the interests of the company

Discount rates and capital markets encourage focus on short term

PROPOSED INFLUENCE STRATEGY TO CHANGE IDEAS AND OUTCOMES

38

Initiators

Opinion-leaders

Other individuals

Governments

Businesses

LESSONS FROM CATASTROPHIC POLICY FAILURES

“In the first stage, mental standstill fixes the principles and boundaries governing a problem. In the second stage, when dissonance and failing function begin to appear, the initial principles rigidify.This is a period when, if wisdom were operative, re-examination and rethinking and a change of course are possible, but they are as rare as rubies in a backyard.Rigidifying leads to increase of investment and the need to protect egos; policy founded upon error multiple never retreats.The greater the investment and the more involved in it the sponsor’s ego, the more unacceptable is disengagement.In the third stage, pursuit of failure enlarges the damages until it causes the fall of Troy, the defection from the Papacy, the loss of a trans-Atlantic empire, the classic humiliation in Vietnam.Persistence in error is the problem.”

- Barbara Tuchman, The March of Folly (1984).

39

40

Photo credit: Corbis Images

MORE PEOPLE WITH STRANGE CLOTHES AND FUNNY IDEAS

RELEVANT PRIOR WORK(WITH REFERENCES USED HERE)

Navigating an uncertain future: Environmental foundations for long-term success (2012) Rick Boven, Catherine Harland and Lillian Grace

Choosing your future: The role of ideas in managing trade-offs between economic and environmental objectives (2003) Rick Boven

Both available at www.stakeholderstrategies.co.nz/our-work

41

http://www.stakeholderstrategies.co.nz/our-work