A Sustainable Scale

     As society continues its somewhat “bandwagon” sustainability initiative, we must now look at the ends and not the means, because if our ends cannot be justified with a prosperous long-term society, then the means are of wasted energy. Who then should determine the ends that are most logical? I believe it should be the most efficient entity we know of to date, planet Earth. If the ends of our means may result in less than ideal environments on Earth, then the means are not sufficient enough. To continue this critical analysis of the sustainability movement, we must first define some key terms that will help us determine means and ends that do suffice, and means and ends that do not suffice.

Command-and-Control Regulation: Flat prohibitions, quotas, or standards as opposed to monetary incentives that operate through prices or taxes.

Subsidy: A bonus or payment for doing something, the opposite of a tax.

Tradable Permits: Shares of an aggregate quota that are in some way divided up among individuals, who can then buy and sell their quota rights among themselves.

Cap and Trade: Is an environmental policy tool that delivers results with a mandatory cap on emissions while providing sources flexibility in how they comply. Successful cap and trade programs reward innovation, efficiency, and early action and provide strict environmental accountability without inhibiting economic growth. 

Marginal Abatement Cost: Is a set of options available to an economy to reduce pollution. They are valuable tools in understanding emissions trading, driving forecasts of carbon allowance prices, prioritizing investment opportunities, and shaping policy discussions. 

Marginal Abatement Cost Curve

Arthur Cecil Pigou

      Now that we have defined the key terms necessary to continue the critical analysis of the sustainability movement, we can begin to determine the means that are necessary to create ends that are planet Earth worthy. When we view markets and the institutions within them, we have tendencies to speculate on the success or failure of the market and when it will occur. We also view market efficiency with the use of Pigouvian taxes and subsidies, which create market environments that promote environmentally steward practices -- which planet Earth approves of. Pigouvian taxes and subsidies were developed by the late english economist, Arthur Cecil Pigou, who was a diversified economist in England and leaned towards welfare economics. Pigouvian taxes and subsidies are considered as some form of market solutions that are means that do assist in sufficient ends, because with the Pigouvian tax institutions that produce externalities (mostly negative) are taxed the determined amount that the negative externality equates to. So if a company produces $150,000 in negative externalities that are not covered, then a tax amounting to $150,000 is required by the company, by this the company is paying for the negative externalities through the tax. A Pigouvian subsidy on the other hand is established when an institution accounts its own negative externalities into its bottom line, therefore creating a more efficient and environmentally conscious business, which then relays a payment back to the company for each unit by which it reduces environmental costs. With these two concepts there are market solutions presented, which can be implemented to create a more efficient market that rewards voluntary stewardship and fines markets that continue to act in non-compliance towards efficient and clean operations.

Fish Stock From a Fishery

     Another possible market solution that is a means towards a logical end is individual transferable quotas (ITQs). ITQs are a sustainable alternative in the fisheries industry, because previously fisheries would simply be over-fished as every fishing rig tried to exceed the amount of fish the next rig caught. This has led to severe depletion of most fisheries in recent years, even placing some species of fish on federal threatened or endangered lists. ITQ assists in designing fishery harvesting operations that are not solely based on total allowable commercial catch (TACC). This is important because initial ITQs in terms of tons of fish are awarded to fisherman in proportion to their catch history. So fisherman now need invest only enough to capture their share, based on the ITQ given to them. Along with providing a more sustainable harvesting method, ITQs would designate varied harvesting dates rather than set dates, because along with the TACC, which sets a limit of catch amounts, ITQs would require larger harvesting rigs to harvest only when populations are peaking, and smaller ITQs may be able to harvest outside of peak season, which all reduces the impact on the fishery populations by spreading harvest dates over a period of time. If society were to implement ITQs in all fishery management systems, the outcome would be varied. It all depends on the circumstances of the specified fishery, an example of this diversification that would be hard to implement ITQs in all fisheries is, ITQs tend to concentrate in the hands of the larger firms, leading to concentration of the wealth in a lucrative industry. When the TACC decreases, small-scale fisherman lack collateral for bank loans to purchase more ITQs, while large firms have other assets they can use as collateral. From this we can see that there is no perfect fit for an ITQ in a market with TACCs, but we can determine they are a logical “bridge” to the next system that will provide for a more sustainable practice that is a means to a sufficient end that is worthy of planet Earth’s approval.

    Based on the information provided here, and the plethora of information available elsewhere all relating to the sustainability movement, the critical analysis determines that before society invests their precious resources into something, being sustainable or not, we must make sure that the means are sufficient enough to match the efficiency rates of the best, planet Earth. And after this has been determined, to not stray too far from the objective (end) as we continue making a our way through this mysterious maze, which no one really has the correct route to success.

Thanks for your interest, please comment and subscribe.

Onward,

Hayden van Andel

Do we really consume too much?

    We are all guilty of it. What, you may ask, what could we as a species possibly be guilty of? There are so many answers to this question that many volumes of books could be printed solely on the kinds of detrimental acts humans are responsible for. But the largest guilt trip we ‘should’ be suffering from is our consumption habits. Human society has been “over”-consuming at amounts previously never experienced in planet Earth’s history -- all 4 BILLION YEARS. Currently the established system for determining Earth’s official overshoot day -- the day when one full fiscal year’s worth of Earth’s resources are used up -- is currently August 22, 2012. This means that in eight months and twenty-two days humans use up enough resources that require one FULL year for the Earth to replenish them, and the time span is only getting shorter. So what does all of this relate to? Well, since it has been proven that humans are unwilling to decrease their consumption habits, unless put under immediate pressure -- either financially or politically -- there are solutions that would require human society to change their habits through policy and regulation, and these changes would have immediate effect on society and on planet Earth’s resources. But, before we can continue we must first define some key terms that will assist in determining these solutions that will decrease human societies' consumption habits, either voluntary or involuntary.

Policy: A definite course or method of action selected from among alternatives and in light of given conditions to guide and determine present and future decisions.

Property Rights: Are rights beholden on an individual who can present proof of ownership towards distinguished property.

Pareto Optimality: Occurs when no other allocation could make at least one person better off without making anyone else worse off. This is also known as a Pareto Optimum.

Distributive Justice: The economic framework that each society has — its laws, institutions, policies, etc. — results in different distributions of economic benefits and burdens across members of the society. These economic frameworks are the result of human political processes and they constantly change both across societies and within societies over time.

Ecological Sustainability: The capacity of ecosystems to maintain their essential functions and processes, and retain their biodiversity in full measure over the long-term.

     Now that we have established the key terms that will assist in distinguishing the possible solutions towards decreasing our consumption rates, we may begin discussing them. When we consider consumption rates, we are assuming that all resources can reach all individuals over any span of time. An example is eating fruit in the area you live in where that fruit is not grown. Another example is water, unless you source from a well, most buildings access water through systems that source the water from treatment plants. This water is technically free, less the utility cost, but consider the current water scarcity claims proposed by most -- if not all environmental scientists -- that potable water may become a scarce resource. This is where limiting scale may play a part in reducing consumption rates by supplying less with current demand rates. If regulations were to be put in place, which established limited scales on water sourcing, that would mean that the originally “free” water most people received would become a scarce economic good. Now this doesn’t seem logical, but if it were to be implemented correctly, developments around the world that have previously sourced their water from reservoirs and rivers sometimes hundreds of miles away would have a limited scale of accessibility, even rendering the developments from existing at all. This may seem too extreme by the sounds of it, deeming Las Vegas, Nevada; Phoenix, Arizona; and other cities of the like as unsustainable in their current water sourcing and consuming practices requiring them to comply to regulated scaling proximities, but is it necessary?

     When considering over consumption human society has two clear options currently, limiting demand through increases in prices (taxes), or limiting availability (quotas). Both options have been used throughout history in numerous situations. The question is, which would be more beneficial in the long-term decrease of current consumption rates? I believe that to develop a society that exploits less and in turn consumes less, it is only possible by limiting the availability to resources, as to continue to conserve the resources necessary for survival, while developing more beneficial systems to take the place. By limiting availability of resources it will create an involuntary compliance society through policy, that will create a more beneficial society, because humans are animals, and animals naturally adapt to changing environments. This idea is very primitive in its development, but is one option of many that are possible to begin the decrease of our current consumption rates, all leading to a more sustainable human society.

     The topic of reducing consumption rates is very complex, seeing that a majority of the world’s population currently lack the basic consumption practices that are necessary for a prosperous standard of living, which should be every inhabitant’s right. But at the same time countries like the U.S., China, Europe, India, and several more countries are consuming at rates that are considerably unsustainable. So what is right? Should we instead concentrate on equitable resource allocation before limiting scales of resources, that way consumption rates may balance themselves out as basic resources are distributed equally among the more than 7 billion humans, and further tens of billions of species that inhabit the Earth.

Thank you for your interest, please comment and subscribe.

Onward,

Hayden van Andel