Delta Scan: The Future of Science and Technology, 2005-2055: Economics as if Nature Mattered

Key Pages

Category:
Science and Technology

Domain:
Economics

Keywords:
Corporate responsibility - environment, economics, environmental economics

Outlook:
Crisis and pragmatism could encourage more economists to account for ecological costs and to rethink the role of natural systems in understanding markets and growth.

Summary Analysis:
Neoclassical welfare economics has placed little value on the services provided by ecosystems. Ecological economics, on the other hand, understands the economy as a subsystem within the larger global ecosystem. New evidence of the pressure being placed on the Earth's resources, and political action aimed at mitigating the impact of human activity on the environment, is likely to force the "dismal science" to broaden its worldview to encompass ecological concerns. As more economists rethink the role of natural systems in understanding markets and growth, a fundamental shift may take place in mainstream economic thought, which largely sees the economy as a self-contained system.

Implications:

Increasing use of the triple bottom line as the new metric for corporate success
Increasing demand for scientist-economists

Early Indicators:

Convocation of the Kyoto Summit on Global Climate Change and adoption of the resulting protocols by many nations
Acknowledgment of the importance of environmental concerns to economic thought in the G8 2005 agenda
California’s air pollution control, coordinates air policy in metropolitan districts since 1947
The US NSF's funding of 5 centers to examine climate change policy decision-making processes 'in the face of irreducible uncertainty'
Increasing drive toward zero-footprint corporations (for example, Interface Rugs)
The Economist's devotion of its April 23, 2005, cover story to environmental economics

What to Watch:

NSF directs funding toward development of an environmental economics.
New journals on environmental economics are founded in the next decade.

Parallels/Precedents:

Adoption of any heterodox idea into economics over the last 50 years

Enablers/drivers:

Improvements in environmental and ecological accounting techniques
Continuing development of technologies to remotely sense environmental data
Increasing evidence of the economic impact of global warming
Advent of business partnerships with environmental activists
Continuing development of climate modeling tools and economic modeling tools
Engagement of the field of conservation biology with economic policy and urban planning to maximize productivity of ecological services

Leaders:
Institutions:

European Association of Environmental and Resource Economists (EAERE) [link]
Latin American and Caribbean Association of Environmental and Resource Economists (ALEAR) [link]
South Asian Network for Development and Environmental Economics (SANDEE) [link]
Nature Valuation and Financing Network, Wageningen University, The Netherlands [link]
The Centre for Social and Economic Research on the Global Environment, University of East Anglia, UK [link]
Beijer Institute of Ecological Economics, Sweden [link]
Fondazione Eni Enrico Mattei, Italy [link]
Centre for Environmental Economics and Policy in Africa, South Africa [link]
University of Maryland (the work of Herman Daly and Peter Brown)
Oberlin College (the work of David Orr)
Green College, Oxford University (the work of Norman Myers)
Roanoke College (the work of Sabine O'Hara)
Rensselaer Polytechnic Institute (the work of John Gowdy)
Dartmouth College (the work of Richard Howarth)
Boston University (the work of Cutler Cleveland)
University of Vermont Law School (the work of Karin Sheldon)
Stanford University (the work of Stephen Schneider) [link]

Figures:

Sources:

Ecosystems and Human Well-being: A Framework for Assessment. Millennium Ecosystem Assessment (2003). Washington, DC: Island Press.
Pagiola S., von Ritter K., Bishop J. “How much is an Ecosystem Worth?” Biodiversity Economics 2004 [link]
Turner, K et al "Valuing Nature: Lessons Learnt and Future Research Directions" Ecological Economics. 2003. Vol 46. pp 493-510 [link]
Gowdy, John and Erickson, Jon. 2004. "The approach of ecological economics." Rensselaer Working Papers in Economics: Troy, New York. [link]
Daily, G C and Ellison, K. 2002. The New Economy of Nature: The Quest to Make Conservation Profitable. Washington, DC: Island Press.
"Stanford Center for Conservation Biology" Stanford Center for Conservation Biology [link]
"Pollution Abatement and Control in OECD Countries." Environment Policy Committee, Environment Directorate, OECD. 17 July 2003.
Little Green Data Book. The World Bank (2004). [link]
"International Society for Ecological Economics" International Society for Ecological Economics [link]
Interview with Pam Matson, 1 Aug 2005.
"The Growing Field of Environmental Economics." The Economist 23 April 2005.
"Climate Change A Focus Of New NSF-Supported Research On How Decisions Are Made In A World Of Uncertainty." Science Daily, 29 September 2004. [link]

At A Glance:
When:
21–50 years +

Where:
Global

How Fast:
Years

Likelihood:
Medium

Impact:
Medium-Low

Controversy:
High

Related Outlooks:

About this outlook: An outlook is an internally consistent, plausible view of the future based on the best expertise available. It is not a prediction of the future. The AT-A-GLANCE ratings suggest the scope, scale, and uncertainty associated with this outlook. Each outlook is also a working document, with contributors adding comments and edits to improve the forecast over time. Please see the revision history for earlier versions.

Category:	Science and Technology
Domain:	Economics
Keywords:	Corporate responsibility - environment, economics, environmental economics
Outlook:	Crisis and pragmatism could encourage more economists to account for ecological costs and to rethink the role of natural systems in understanding markets and growth.
Summary Analysis:	Neoclassical welfare economics has placed little value on the services provided by ecosystems. Ecological economics, on the other hand, understands the economy as a subsystem within the larger global ecosystem. New evidence of the pressure being placed on the Earth's resources, and political action aimed at mitigating the impact of human activity on the environment, is likely to force the "dismal science" to broaden its worldview to encompass ecological concerns. As more economists rethink the role of natural systems in understanding markets and growth, a fundamental shift may take place in mainstream economic thought, which largely sees the economy as a self-contained system.

	Implications:	Increasing use of the triple bottom line as the new metric for corporate success Increasing demand for scientist-economists
	Early Indicators:	Convocation of the Kyoto Summit on Global Climate Change and adoption of the resulting protocols by many nations Acknowledgment of the importance of environmental concerns to economic thought in the G8 2005 agenda California’s air pollution control, coordinates air policy in metropolitan districts since 1947 The US NSF's funding of 5 centers to examine climate change policy decision-making processes 'in the face of irreducible uncertainty' Increasing drive toward zero-footprint corporations (for example, Interface Rugs) The Economist's devotion of its April 23, 2005, cover story to environmental economics
	What to Watch:	NSF directs funding toward development of an environmental economics. New journals on environmental economics are founded in the next decade.
	Parallels/Precedents:	Adoption of any heterodox idea into economics over the last 50 years
	Enablers/drivers:	Improvements in environmental and ecological accounting techniques Continuing development of technologies to remotely sense environmental data Increasing evidence of the economic impact of global warming Advent of business partnerships with environmental activists Continuing development of climate modeling tools and economic modeling tools Engagement of the field of conservation biology with economic policy and urban planning to maximize productivity of ecological services
	Leaders:	Institutions: European Association of Environmental and Resource Economists (EAERE) [link] Latin American and Caribbean Association of Environmental and Resource Economists (ALEAR) [link] South Asian Network for Development and Environmental Economics (SANDEE) [link] Nature Valuation and Financing Network, Wageningen University, The Netherlands [link] The Centre for Social and Economic Research on the Global Environment, University of East Anglia, UK [link] Beijer Institute of Ecological Economics, Sweden [link] Fondazione Eni Enrico Mattei, Italy [link] Centre for Environmental Economics and Policy in Africa, South Africa [link] University of Maryland (the work of Herman Daly and Peter Brown) Oberlin College (the work of David Orr) Green College, Oxford University (the work of Norman Myers) Roanoke College (the work of Sabine O'Hara) Rensselaer Polytechnic Institute (the work of John Gowdy) Dartmouth College (the work of Richard Howarth) Boston University (the work of Cutler Cleveland) University of Vermont Law School (the work of Karin Sheldon) Stanford University (the work of Stephen Schneider) [link]
	Figures:
	Sources:	Ecosystems and Human Well-being: A Framework for Assessment. Millennium Ecosystem Assessment (2003). Washington, DC: Island Press. Pagiola S., von Ritter K., Bishop J. “How much is an Ecosystem Worth?” Biodiversity Economics 2004 [link] Turner, K et al "Valuing Nature: Lessons Learnt and Future Research Directions" Ecological Economics. 2003. Vol 46. pp 493-510 [link] Gowdy, John and Erickson, Jon. 2004. "The approach of ecological economics." Rensselaer Working Papers in Economics: Troy, New York. [link] Daily, G C and Ellison, K. 2002. The New Economy of Nature: The Quest to Make Conservation Profitable. Washington, DC: Island Press. "Stanford Center for Conservation Biology" Stanford Center for Conservation Biology [link] "Pollution Abatement and Control in OECD Countries." Environment Policy Committee, Environment Directorate, OECD. 17 July 2003. Little Green Data Book. The World Bank (2004). [link] "International Society for Ecological Economics" International Society for Ecological Economics [link] Interview with Pam Matson, 1 Aug 2005. "The Growing Field of Environmental Economics." The Economist 23 April 2005. "Climate Change A Focus Of New NSF-Supported Research On How Decisions Are Made In A World Of Uncertainty." Science Daily, 29 September 2004. [link]

At A Glance:	When:	21–50 years +
	Where:	Global
	How Fast:	Years
	Likelihood:	Medium
	Impact:	Medium-Low
	Controversy:	High