Rooting The Economy In Earth

Nowadays, every Earth Day seems like an occasion to acknowledge the planet, and the damage we’re doing to it, before we carry on with business as usual. The world is in the midst of environmental crisis not because people wanted that outcome, but because, under the current economic system, the logical, profitable thing to do is often the most extractive and polluting.

Any economy is meant to control the flow of material, products, and services in a way that generates value and growth while balancing needs. It’s often compared to a living being, the market with its “invisible hand” spoken of like they’re forces of nature. But the economy we have is not aligned with nature, and Earth is not represented on the stock exchange. Part of the problem is how we determine what has value.

(Re)Defining Value

The economy doesn’t just operate on Earth, it’s as firmly planted in the soil as the roots of trees. In short, ecosystems are the foundation of the economy, and every other thing that humans do. This crucial reality should be reflected in how we value products and services, including those provided by nature, including food, clean water and air.

There are efforts to correct this. The Earth Economics organization works to quantify and valuate the ‘natural capital’ of a region. By putting a number to the value of something like a properly functioning floodplain, or the natural carbon sequestration performed by a grassland left undeveloped protected, these fundamentally important things can be taken into economic account.

The dollar amounts at play here are significant — A study of the Keweenaw Peninsula in northern Michigan found that the ecosystem provided services valued between $613 million and $1.5 billion a year. Alongside fishing, property values and other familiar aspects, this measured the region’s soil building, pollination and seed dispersal, water storage, and other ‘services’ performed by nature, unpaid and rarely if ever accounted for.

Accounting for these forms of natural capital means creating a hedge against their loss. If a landscape is worth over a billion dollars for the services it naturally provides, a mining operation worth hundreds of millions has a steeper hill to climb before it begins operations. Such natural capital includes climatic processes, nutrient cycles, and other natural systems right alongside minerals, energy, plants, animals, and other forms of value we easily recognize. Ecosystem services aren’t owned by any one person, either, but can serve entire regions, and anyone living downstream. That’s planetary capital; on the other hand is creative capital. It’s time to imagine new ways of organizing our economy so that it serves and preserves the Earth.

Finite Planet, Infinite Possibilities

The success of our current economic system is usually measured in GDP, and currency can be traded freely no matter what kind of growth might be backing it. An environmental disaster for example can be measured as a positive for GDP, by initiating a lot of economic activity. An earthquake, a flood, an oil rig explosion (or just the daily operations of an oil company) are considered a economic positive. The dollars coming from those activities don’t carry any penalty compared to dollars that came from, say, writing a hit song, or inventing a life-saving medical treatment, just by spending money we all effectively launder the environmental damage centered elsewhere in the economy.

If we want an economy that can grow infinitely, its basis can’t be finite. One different approach would be to make human creativity the foundation.

Our minds are a natural resource unlike any other. The human brain breaks the traditional confines of supply and demand. We live on a planet of finite material and energy resources, yet posses the ability to create an always-growing amount of information — through technology, culture, science, and other activities unique to human brains. One way to do this would be to have separate value systems — even separate currencies — to represent the value or cost of the finite resources of the Earth on one hand, and the infinite potential of human creativity and innovation on the other. We could peg one to the finite, unchanging value of Earth’s resources, and the other to the boundless possibility of culture, science, technology — in short, on innovation itself.

This is just one way that we could start to consider a system that encourages the efficient use of resources, the expansion of human ingenuity, and ultimately makes Earth the foundation of our value system, and human ingenuity the vehicle and measure of economic growth. However we do it, we must confront the consequences of shrinking access to limited resources and a growing population. It will require thinking of our economy as a system rooted in Earth before we can see it serve as a benefit for the planet, instead of depleting its resources and straining its ecosystems. On this Earth Day, let’s commit ourselves to reimagining how we organize ourselves, because our planet needs us to do so, and we need our planet.