Circular realities pt 2: An Economy must learn from its ecology
Economists need to develop a new vocabulary to explain how the economy can operate within boundaries of Earth.
Economics must learn from Ecology and Biology to understand both technical and biological cycles in the economy. This article attempts to outline a conceptual apparatus for an economy in harmony with nature.
The linear economy is draining nature’s resources at a level far beyond its capacity to reproduce the goods we are sustained by. All too long, it has paid off to produce cheap goods that are short lived, which because it’s often unrepairable, must be discarded and replaced by something new.
Sustainable production systems must transition rapidly from linear value chains into circular value loops. The economy must seek to live up toits unique ability to maintain value in allresources, where materials and waste are regenerated through use, rather than deteriorating at the end ofuse and accumulating in wasterock. In Nature’s ecosystems, there are no landfills, or final sinks. Forests do not need sewage systems and oceans are not filled with fish sludge.
In the transition from a mass consumption economy to a regenerative economy, there is considerable potential for learning from nature. Nature already has an amazing ability to exploit waste as raw materials.
“Money makes the world go round,” sang Liza Minnelli and Joel Grey in the 1972 classic Cabaret. While financial flows are in continuous exchange in the economy, the circular economy seeks to make the linear material flows go in round as well.
Fundamentally, life on Earth goes on a cycle. In a way, we can say, “molecules make the world go round.” Nutrients constantly alternate between life forms and the world’s biomass is in an annual cycle of uptake, growth and degradation: plants grow up inspring, and decompose in autumn. What are the main processes in this exchange?
One thing the nascent Earth System Science has taught us, as was the economist Kenneth Boulding, is that all planets, including Earth and its biosphere, are a closed, isolated system. This means that in principle there is no exchange of materials with anything outside the planet. The soil receives sunlight from the outside. With the help of metabolism, chemical components are circulated around the system, including through photosynthesis, which leads to a continuous exchange of the building blocks of the soil; the elements.
The paradox of the linear economy is that by a combination of a large extraction of raw materials, high consumption and a rampant production of waste, it has caused otherwise completely natural elements, such as carbon, lead and fluoride, to become environmental problems.
Take climate change, for example: The climate is gradually changing as we humans add more and more carbon molecules to the atmosphere by consuming fossil fuels. Thus, we have turned the otherwise vital greenhouse gas CO2, which in a delicate atmospheric balance has ensured a very favorable climate for life on Earth over the past 10,000 years, into a polluting force. The same is true for the element fluoride. Nature uses organic fluoride in several ways — take the compound sodium fluororacetate, which is a natural pesticide. The synthetic fluoride compounds we humans have used perfluorinated alkyl substances (best known as PFAS), do not decompose into nature and are put on the Norwegian priority list of highly harmful pollutants.
The increasing use of pollutants over the past 50 years is the result of production systems that are disconnected from nature’s own systems. American architect Bill McDonough , theman behind the manger-to-manger design school, argues that the problem stems from a design flaw. According to this school, any toxin is simply a material in the wrong place. In this way, all forms of pollution are also a lack of a systematic design,on nature’s terms.
The circular economy takes this inward by keeping everything from chemical components to finished products in circulation, as long as possible. The circular economy’s three main objectives are to 1) downsize the resource output, 2) extend the life-cycle and 3) close the cycle of materials in the economy. Where direct reuse of mineral or synthetic materials is not possible, the materials must be reprocessed industrially before new use. Where the materials are mainly untreated, organic compounds, they can be returned in nature, for example, as compost or fertilizedelectricity to the soil.
Conventional economic terminology often comes into short to explain these processes. We must therefore develop a new vocabulary, inspired by ecology,to explain how the economy can operate within the earth. Like ecosystems, the circulareconomy will also be characterized by non-linear, cyclical and complex interconnections.
19th-century botanists and biologists, ranging from Linnaeus to Darwin, described the evolution of nature as a linear process, denoted in the Latin phrase ’natura non facit saltus’. Now we know that nature, on the other hand, does not change in straight lines, but in jerks and naps. This means that small changes can have self-reinforcing feedback effects, often described in system theory as the domino effect. If, for example, a bee population in a part of the country falls below a critical level, the entire balance of the ecosystem will shift, and the landscape can tip from lush meadow to shrine. This means that natural loss in one place will not necessarily be able to be remedyed with measures another, contrary to conventional economic theory of replaceable resources.
This also makes it difficult to calculate natural stocks that we consider other capital. The British Dasgupta Review, mentioned in the previous section, explains the problem well: “[the pricing system in the economy] cannot help in our dealings with the biosphere as nature’s processes do not meet the technical conditions of production capacity required for markets to operate efficiently.” They point out that natural capital is typically mobile and “volatile”, being characterized by nonlinear production patterns and that standard accounting rules, such as depreciation of value, cannot be applied.
As useful the Economics mantra of stability, small margins and running at full capacity has been to the growth adventures of the 20th century, the logic of efficiency has made us ill-equipped to operate on nature’s term. Nature does not produce goods in a steady, predibtable or reliable pace. Forcing nature to perform ‘at full efficiency’, for example through fast-growing uniform monocultures, reduces the ecosystem’s ability to withstand shocks and extreme events, such as a droughts and floods.
Just as the economist recommends a financial investor to spread risk in a broad portfolio, we should manage nature in order to have ‘eggs in several baskets’. This is what we refer to as biological and functional diversity, which constitute nature’s built-in buffers against external stressors and abrupt changes, which there will only be more of as a result of rapid climate change.
If you impose economic principles on nature to run at full capacity for long periods of time, biodiversity will be eroded. The same phenomenon also applies to many social and technical systems (for example, a steam boiler may implode if conditions become too static).
Nature depends on a multitude of species, roles and functions, extra capacity and redundancy to be able to withstand drastic changes in the environment — and to take up more of our emissions.
Here Nature can teach us a lot when devising circular economy strategies. Can we actively seek to further develop nature’s built-in ability to regenerate itself? The sociologist Bruno Latour and the climatologist Tim Lenton have referred to this as an upgrade of the Earth’s operating system, a kind of Gaia 2.0, based on the thinking of James Lovelock. In this way, the admonition can go from “do the least amount of damage”to “do as much good as possible”.
Fundamentally, it is about shifting the Economics discipline from studying the economy and society in isolation, as separate from its ecology, but rather seeing these in interconnected. We simply need better descriptions of the relationship between Economics and Ecology.
In Western culture, humans have for centuries been described as a lonely thinking being on a ‘desolate planet’. Nature was a place “out there,”separated from us. This view is now beginning to change, as we havewe can see the dramatic changesthat we inflict on the earth and our localenvironment,withour own eyes.
The aforementioned Bruno Latour in his book,”We Have Never Been Modern”, traces this back to the Cartesian distinction between a Self and the Outside World (originally proposed by the 17th century philosopher Rene Descartes). This has led to a tendency to study everything from an anthropocentric perspective, where humans (the self) are at the center. Without first seeing how people, society and the economy are part of Nature, we cannot meaningfully see the connection between human (own) actions and influences on the environment (the outside world).
Nature as a whole, made up of ecosystemer, animals, people and society, is a wonderfully complex and highly sophisticated system. These are systems characterized by nonlinear, cyclical and tightly intertwined processes. Precisely because these processes operate across the economic sectors, disciplines and conceptual schema we generally use to describe the world, it is high time that the Economics profession develops methods and models that are able to describe this. Only in this way we can start to devise a new story about the economy; as part of a larger cycle of resources, materials and molecules that make it all go ‘round.