By Roar Bjonnes
Of all the crises facing the world today, the one with the potential for having the most profound impact on human life is the environmental crisis. Financial crises are human, not natural, catastrophes. By employing the most appropriate economic interventions, we can certainly resolve such crises. The same goes for the inequality crisis.
Through economic reform and restructuring, as well as technological innovation, production and wealth can increase and be redistributed, and poor, destitute areas can become affluent within a short time. But it is not so easy to fix an environmental crisis. Especially not if we run out of certain irreplaceable, natural resources.
Planetary Credit Crunch
We are currently experiencing a very grave resource crisis, an ecological “credit crunch” caused by our overuse of the world’s natural elements. And for the future of humanity, this is a far more serious problem than a financial crisis. Yet most people living in industrialized countries are oblivious to the fact we are living beyond our means.
Most are unaware, for example, that Britain, Norway, the Netherlands, Austria and 23 other countries are importing more than half the water consumed in the form of goods such as cotton, rice, wheat, and so on.
“We are using 50% more resources than the Earth can provide, and unless we change course that number will grow very fast— by 2030, even two planets will not be enough,” according to Jim Leape, Director General of WWF International. He concludes that if the average citizen on planet earth lived like a citizen of the United States, four planets would be required to produce enough resources.
Since the average citizen of China, with nearly one-sixth of the earth’s population will, according to Chinese planners, shortly consume as much as an American citizen, we may soon run out of many resources, especially fresh water, which is already scarce in many parts of the world. That is, unless we make dramatic changes in the way we produce, use, and reuse goods which nature “freely” provides.
The Real Problem: Dead Rivers and Forests
Shortages of oil and other energy resources would have an enormous impact on our lives. However, the non-renewable resources we may run out of soon, such as hydrocarbons from crude oil and rare minerals used in the high-tech industry, are resources nature itself is not dependent on. Sure, a lack of these resources may destroy civilization as we know it and reduce the number of people the world can support, but the very functioning of the earth as a living, breathing eco-system will not be affected beyond repair.
There are aspects of the environmental crisis far more important than our dependency on non-renewable sources of energy, such as oil and coal. If our dependency on nature’s services from air, water, soil and forests are threatened on a global scale, or if global warming reaches catastrophic levels, there is no technological, economic or political solution available to counter these effects.
We cannot simply reinvent what nature has provided for us for hundreds of thousands of years. Along with the plants and the animals, we too are ecological creatures, and to understand the magnitude of this looming crisis, we need to have a better understanding of what nature provides for humankind. Most importantly, we need to better understand the relationship between the economy and the ecology of the biosphere.
Destroying the Hand that Feeds Us
Human beings, like all other creatures, are completely dependent on the gifts provided to us by nature. A report issued in 1997 by a team of biologists and economists put the “business services” provided by the global ecosystem, through free pollination of crops, the recycling of nutrients by the oceans, etc. to $33 trillion, at that time twice the global GDP.
It is not clear exactly what the commonly used definition of “business services” is, but the report certainly did not include the total value of services provided to us by nature, which must also include how its beauty positively affects our health and wellbeing. Yes, what is the value of a family picnic on the grass under the trees? What is the value of fresh water in a creek—to the fish, the frogs, and to human beings who relax by its banks? What is the total value nature is providing when we grow a vegetable crop in the backyard?
The Priceless, the Endangered
The many ways nature contributes to our life and wellbeing are, to say the least, priceless. We do not have any means other than nature’s to bind solar energy with carbon dioxide and water to produce organic compounds. We are totally dependent on nature to accomplish this vitally important undertaking. Since we cannot replicate the enormous economic and aesthetic contributions made by nature, it is invaluable to us. It is therefore not possible to make up an economic formula or an accurate price tag on either its partial or total value.
The sun is the great power source that fuels the works of nature.. Without this source of energy, the Earth would be incapable of sustaining life. The scale of our own attempts to harvest solar energy directly, in terms of solar cells and passive solar houses, is miniscule compared to the amount of solar energy harnessed by nature through photosynthesis, water cycles, etc.
Indeed, it is almost negligible in comparison. That said, if we learn to harness more efficiently the sun’s energy, either directly or indirectly, including the use of wind, wave, and geo-thermal energy, we can continue to sustain life long into the foreseeable future on this green planet of ours. Hence, the value of the sun’s energy and its many complex functions in nature is beyond comparison, beyond any finite value in pounds or in dollars.
At the end of the day, all we human beings can do is to find various ways to utilize the services nature already provides us. This observation is quite different from the labor theory of value, emphasized by both Karl Marx and Adam Smith, which stipulates that all economic value derives from human labor. Far from it, it is nature that provides the underlying and lasting value for all wealth utilized by human society.
All the technological inventions, capital investments, production hours, and infrastructure involved in creating a product are but a small part of the total capital we are using. The total capital provided by nature in the form of land, raw materials, water, sun, air and space is by far the largest of all forms of capital, but unfortunately in the current market economy natural capital is seen as free, or largely undervalued, and thus used up at an alarming rate.
To remedy this predicament, scientists have made various attempts to put a price tag on nature’s services. In 2011, The Department for Environment, Food and Rural Affairs in the UK announced the findings of a national ecosystem assessment, a project involving 500 experts, who had established “the true value of nature … for the very first time”. But to simply put a dollar value on what nature is worth is not a comprehensive solution.
How to Make Natural Capital the Foundation of True Wealth According to Prout
Given the enormous contribution nature provides, the current degradation of the natural systems that provide us with free services is a virtual threat to our very survival. If nature stops, or even reduces its provisions of beneficial, natural services, it will have drastic and immediate effects on all life on planet earth. In a worst-case scenario, humanity’s survival may be threatened beyond repair.
Here are a few solutions based on the principles of Prout economics:
- Constitutionalize Nature’s Rights: As in Ecuador, each country’s constitution must explicitly recognize nature as a legal entity with rights. The Ecuadorian Constitution grants ecosystems the inalienable rights to exist, maintain, and regenerate their life cycles, structures, functions, and evolutionary processes.
- Redefining Economic Value. Shift from measuring wealth solely by GDP and financial returns to accounting for the true value of natural capital, such as clean water, air, soil fertility, and biodiversity, so that economic planning includes the preservation and regeneration of ecosystems, not just their exploitation.
- Resource Allocation. Establish clear guidelines for the use and regeneration of natural resources, ensuring that extraction rates never exceed nature’s capacity to renew itself. This would prevent the kind of “ecological credit crunch” described above.
- Societal Oversight. Resource management should be overseen by collective bodies representing the interests of society and future generations, rather than leaving decisions solely to market forces or private interests.
- Wealth Caps and Resource Quotas. Establish legal and regulatory limits on how much land, water, and other vital resources any individual, cooperative, or corporation can own or control. This prevents the concentration of resources in the hands of a few and ensures equitable access for all.
- Cooperative Ownership Models. Promote cooperative and community-based management of key resources, especially those essential for survival (water, forests, energy, farming). This democratizes control and aligns resource use with community needs and ecological sustainability.
- Public Stewardship of Strategic Sectors. Large-scale, strategic industries (such as energy, water, and transportation) should be managed on a “no profit, no loss” basis for the collective good, rather than for private profit.
The environmental crisis is fundamentally a crisis of values and economic interests. Prout’s principles offer a holistic framework to realign economic systems with the realities of ecology and human well-being. By ensuring maximum and rational use of resources, limiting accumulation, decentralizing economic power, and internalizing environmental costs, societies can move toward a resilient future that values the invaluable services provided by nature.