Stories tagged Stephen Polasky

May
28
2010

A few weeks ago, I assumed that some of our readers were bored with the same ol’ climate change arguments. I know you know what I’m talking about: the Cuddly-Animals-are-Dying and the Catastrophic-Disasters-Will-End-the-Human-Race arguments come to mind first. Now, I’m not saying there isn’t some merit to these frames, but c’mon! Can’t we get a little variety?

Stephen Polasky: This UofM professor and IonE fellow has some BIG ideas about $, the earth, and climate change.
Stephen Polasky: This UofM professor and IonE fellow has some BIG ideas about $, the earth, and climate change.Courtesy University of Minnesota

Lucky for you, University of Minnesota professor and Institute on the Environment fellow Stephen Polasky thinks creatively. In April, he gave a presentation on how adopting inclusive wealth could ultimately reduce climate change and its effects. And since virtually everybody likes money, I’m going to go out on a limb and bet you want to know more about the ca-ching!$

Here’s the skinny:

Economists say that just about everything has a monetary value, and how much something is worth plays largely into the decisions politicians make. Scientists like Polasky are increasingly saying that these traditional accounting methods do a poor job assessing value to natural resources, and these mistakes are leading us to make irrational choices. As an alternative, Polasky suggests adopting inclusive wealth theory.

This is not going to cut it.: Inclusive wealth is a really complicated theory for both scientists and economists.
This is not going to cut it.: Inclusive wealth is a really complicated theory for both scientists and economists.Courtesy happyeclaire (Flickr)

Ready for the good stuff??

Economists and scientists both agree that the environment has worth, called natural capital, but they disagree on how much. In fact, not only do economists and scientists disagree with each other, but they disagree amongst themselves! To be fair, determining something’s worth can be extremely difficult. Because there are already economic markets for some natural resources like trees (i.e. lumber) and metals (i.e. gold), it’s easier to assess their value. Most ecosystem services, however, like the flood control provided by wetlands, are more difficult to put a dollar value on.

Inclusive wealth theory says that our decisions should be made on economic assessments that include true representations of the value of natural resources (difficult as that may be).

Politicians make important decisions regarding environmental policies, including actions that affect climate change. When politicians are choosing between multiple policy options, they are conducting policy analysis. One criterion that politicians pretty much always use is a cost-benefit ratio, or cost efficiency. In order to do that, politicians must determine the value of each policy option and weight the outcome against the rest. (It might sound complicated, but you do this same process informally everyday when you make decisions regarding what to eat for breakfast and whether to walk or ride your bike to school/work.)

Timber!: Land use changes, like logging, release greenhouse gases like carbon dioxide into the atmosphere, ultimately contributing to climate change.
Timber!: Land use changes, like logging, release greenhouse gases like carbon dioxide into the atmosphere, ultimately contributing to climate change.Courtesy Ben Cody

Polasky and other like-minded individuals argue that under traditional accounting methods, politicians’ cost-benefit ratios are distorted – they are not accurately representing the true worth of the environment. Furthermore, as a result, we’re making some pretty big, bad decisions. According to Polasky, the solution is simple in theory, but difficult in practice: adopt inclusive wealth theory to more accurately measure environmental worth. If we increase the value of the environment in our analysis, the cost-benefit ratios will change and perhaps favor decisions that are more environmentally friendly. That is, under inclusive wealth, we might finally see how important it is to take climate change-reducing actions such as reducing our fossil fuel consumption, protecting forests from logging, and stopping eating so much meat… or not.

What do you think?

How much $$ is the environment worth to you? What about individual ecosystem services like pollination by bees or decomposition of waste by microbes?

Are politicians doing an accurate job of assessing the value of natural capital?

Post your comments below!