What would it mean to recognize the price and value of nature?

16 February 2021

Dr. Trevor Hancock

699 words

Last week I provided an overview of Professor Partha Dasgupta’s report for the UK Treasury on the economics of biodiversity and the value of nature. This week, I want to share his proposals for change and relate them to several important current issues.

In the Headlines’ version of his report, Professor Dasgupta’s first message is simple: “Our economies, livelihoods and well-being all depend on our most precious asset: Nature”. So what would it mean to actually recognize this and incorporate nature into our economies and societies?

Not surprisingly, as an economist, he believes “the solution starts with understanding and accepting a simple truth: our economies are embedded within Nature, not external to it”. A number of important implications flow from this, one of which is that we need to change the way we measure what we do.

Today our primary measure of economic success is the GDP. But since it “does not account for the depreciation of assets, including the natural environment”, Dasgupta writes, “it therefore encourages us to pursue unsustainable economic growth and development”. So we need to replace the GDP with a more meaningful measure such as the Canadian Index of Wellbeing, the Genuine Progress Indicator or some other measure of inclusive or comprehensive wealth.

BC’s NDP government was supposed to have been developing a report on replacing the GDP in BC as part of their agreement with the Green Party. The report is long overdue and seems to have stalled. Premier Horgan and Finance Minister Selina Robinson need to read the Dasgupta Review and make this a priority.

A related issue, also a hot topic in BC, concerns subsidies. Because we do not have to pay for many of our biosphere’s services, Professor Dasgupta explains, they are in effect free. In fact, he goes on to say, it is even worse than that: “Governments almost everywhere amplify adverse environmental externalities by paying people more to exploit the biosphere than they do to protect it”, through subsidies to various resource use and extraction industries, including agriculture and fossil fuels.

So we need to remove these “perverse subsidies”, which amount to about US$500 billion globally. Moreover, he points out, “it has been estimated that to protect 30 percent of the world’s land and ocean . . .  by 2030 would require an average investment of US$140 billion annually” – so transferring less than one third of those subsidies to ecosystem protection would not only protect but would restore nature.

In fact, Dasgupta notes, “as part of fiscal stimulus packages in the wake of COVID-19, investment in natural capital has the potential for quick returns”. This fits well with the calls from many quarters for a green, healthy and just recovery, a ‘Green New Deal’; all these ideas should be incorporated in federal and provincial ‘build back better’ budgets currently under consideration.

But if all this is to come to pass, we also need profound changes in our institutions and in the core values that underpin our society and drive our economy. So it is encouraging that Dasgupta has an entire section in his report on education, and another on the sacred in nature.

Throughout his report, Dasgupta repeatedly refers to our attitude, rooted also in our economics, that we are detached from nature, not embedded within it. This he attributes to our separation from nature, especially as a result of urbanization. So he proposes “Every child in every country is owed the teaching of natural history, to be introduced to the awe and wonder of the natural world, to appreciate how it contributes to our lives”.

But, he adds, “connecting with Nature needs to be woven throughout our lives”. Part of that is to recognize that nature has intrinsic worth; “Many people, perhaps in all societies, locate the sacred in Nature”, he notes, suggesting “Nature’s transcendence gives it a value that is independent of us”.

And he ends on a note of optimism, suggesting that if we have been smart and powerful enough to cause so much harm to nature so quickly, surely we can use that same ingenuity “to bring about transformative change, perhaps even in just as short a time. We and our descendants deserve nothing less”.

© Trevor Hancock, 2021


Dr. Trevor Hancock is a retired professor and senior scholar at the University of Victoria’s School of Public Health and Social Policy.


Nature’s high price and inestimable value

(Published as ‘Our economic system needs to recognize the price – and value – of nature’)

Dr. Trevor Hancock

9 February 2021

701 words

A cynic, Oscar Wilde wrote, is someone who “knows the price of everything and the value of nothing”. On that basis, our dominant economic system – corporate capitalism – is beyond cynical. It  takes Wilde’s aphorism one giant step further because it doesn’t even know or take into account the price of everything, never mind recognise and account for that which is priceless.

That, if not quite in those words, is the conclusion of a startling review of the economics of biodoversity by the distinguished Cambridge economics professor Sir Partha Dasgupta. Startling not just because of what he says, but because of who commissioned his report: The Chancellor of the Exchequer (read ‘Minister of Finance’) in Boris Johnson’s UK government. So this week I am taking a side trip on the road to Doughnut Economics to consider his important report; next week I will look at how we will have to change.

What Professor Dasgupta has to say is both simple and profoundly important: We have not correctly included either the price or the value of nature in our economic models and practices, or in the price of our goods and services. Instead we treat them as an ‘externality’, by which he means “the unaccounted-for consequences for others, including future people, of actions taken by one or more persons”. In other words, we gain at the expense of people elsewhere, future generations and, he might have added, other species.

The result of ignoring the harm to nature (and, he might also have added, harm to people’s health and the social wellbeing of communities) caused by our economic system and way of life, he writes, is that “while humanity has prospered immensely in recent decades, the ways in which we have achieved such prosperity means that it has come at a devastating cost to Nature.”

In fact, he reports, “between 1992 and 2014, produced capital per person doubled, and human capital [health, education, aptitude and skills] per person increased by about 13 percent globally”. However, he adds, “the stock of natural capital per person declined by nearly 40 percent”. Moreover, we should note this is only over 22 years; the decline since the onset of the ‘great acceleration’ in human impact in the 1950s is far greater.

The result is that “many ecosystems, from tropical forests to coral reefs, have already been degraded beyond repair, or are at imminent risk of ‘tipping points’. These tipping points could have catastrophic consequences for our economies and well-being.” Sadly, as he notes, this “is what economic growth and development has come to mean for many people”.

But even if we could include the cost of ecological harm in the price of our goods and services, that would not be enough; Professor Dasgupta notes “Nature is more than an economic good: many value its very existence and recognise its intrinsic worth too”.

This view is evident in a 2018 report from the International Institute for Sustainable Development (IISD) on the measurement of ‘comprehensive wealth’, by which they mean the combination of five forms of capital: Produced (infrastructure, buildings and machinery), natural, human, financial (stocks, bonds and cash) and social capital.

While some forms of natural capital – so-called market natural assets such as the minerals, fossil fuels, timber, water resources and fish we extract) can be expressed in monetary terms, other forms of natural capital – a stable and warm climate and key ecosystems such as forests, wetlands, grasslands, lakes/rivers and the oceans – “are, effectively, priceless”.

That is because the latter  “are critical to well-being. Any degradation in them imposes direct and irreplaceable costs on well-being, and their monetary value is, therefore, not relevant”. So while we may be able to measure and account for some forms of natural capital, those ecosystem ‘goods and services’ that are critical to our wellbeing “cannot (and should not) be included in aggregate measures of comprehensive wealth”.

In other words, it is not enough to understand the price of nature, we need to recognise that it is to a significant degree priceless, of inestimable value. As a society, we need to know not just the price but the value of nature, and we need an economic system that recognises and incorporates this.

© Trevor Hancock, 2021


Dr. Trevor Hancock is a retired professor and senior scholar at the University of Victoria’s School of Public Health and Social Policy.

Achieving high human potential is true prosperity

3 February 2021

Dr Trevor Hancock

700 words

Last week I suggested that true prosperity is doughnut-shaped, but I did not define what I mean by ‘true prosperity’, nor what Doughnut Economics means for this region. I will explore the first of these topics this week and the second next week.

One understanding of true prosperity can be found in many faiths, where it is not primarily about material wealth but about mental, social and spiritual wealth. For example, Paramhansa Yogananda, the first Indian yoga master to live and teach permanently in the West, wrote in 1939 that true prosperity is “being able to supply your mental and spiritual needs, as well as the physical”, and that it involves having “at your command the things that are necessary for your existence”.

The things that are necessary for your existence are the basic human needs of clean air and water, shelter, sufficient food that is safe and nutritious, education, good basic health care, an adequate income to ensure these and a safe and supportive community. These and other ‘social determinants of health’ are what Kate Raworth means by the social foundation in her model of Doughnut Economics.

In the mid-20th century the social psychologist Abraham Maslow proposed a hierarchy of human needs: First people must satisfy such basic physiological needs as hunger, thirst and bodily comforts (being warm and dry, for example), then ensure their safety and security. The third and fourth sets of needs are a sense of acceptance, belonging and being loved, followed by a sense of self-esteem – feeling competent, gaining respect and recognition.

But beyond these foundational needs, Maslow suggested that people have a need for what he called self-actualisation. There are several aspects to this, including being knowledgeable and curious, having an appreciation of beauty, finding self-fulfillment and realizing one’s potential, and finally what he called transcendence – helping others to achieve their own self-actualisation.

These concepts are very much how I understand health, as indeed does the World Health Organisation: “A state of complete physical, mental and social wellbeing” (to which some would add spiritual wellbeing), or the achievement by everyone of the highest human potential of which they are capable. Clearly, while it takes a certain amount of wealth to ensure the social foundation, it is not necessary to accumulate vast amounts of ‘stuff’, of bling, to achieve this state, as it is largely non-material.

But the other key element of Raworth’s Doughnut model is the ecological ceiling. We cannot meet human needs for all in ways that undermine the ecological systems that are the ultimate determinants of our health.  As the Centre for the Understanding of Sustainable Prosperity at the University of Surrey in England puts it: “Our guiding vision for sustainable prosperity is one in which people everywhere have the capability to flourish as human beings – within the ecological and resource constraints of a finite planet”.

Those constraints are very real and increasingly apparent. We see it in the changing climate and the decaying oceans, in the depletion of key resources and the pollution of ecosystems and food chains, and in the loss of natural habitat and the extinction of species. Already we exceed the planet’s limits, and yet we have more people wanting more stuff and an economic system demanding more growth.

Which of course takes us to Gandhi, who said “The world has enough for everyone’s need, but not enough for everyone’s greed.” Or as Herman Daly, one of the key thinkers in the area of ecological economics, puts it in his foreword to the 2017 book Enough Is Enough: “Enough should be the central concept in economics. Enough means ‘sufficient for a good life’” And he added “this raises the perennial philosophical question, ‘What is a good life?’” – a question I have tried to answer above.

So what would it mean to redesign our economy and society to ensure human flourishing for all within the ecological and resource constraints of the Earth? That is the question that the Green New Deal and similar proposals for a sustainable, just and healthy post-Covid recovery seek to answer. It is the central question of our time, including right here in the Greater Victoria Region, and the topic for next week.

© Trevor Hancock, 2021


Dr. Trevor Hancock is a retired professor and senior scholar at the University of Victoria’s School of Public Health and Social Policy.

True prosperity is doughnut-shaped

Dr Trevor Hancock

26 January  2021

701 words

It will come as no surprise to fans of the British satirical fantasy writer Tom Holt that economics has something to do with doughnuts. In his YouSpace series, a doughnut is the wormhole to an alternate reality, a parallel universe inhabited by elves, goblins, gnomes, dwarves and other fairytale characters who are ripe for exploitation.

In The Outsourcerer’s Apprentice, for example, entrepreneurs discover they can outsource work to these folks and pay them next to nothing, buy property very cheaply and generally make a pile of money on the backs of the powerless and economically uninformed. Sound familiar?

But back here in the real world (where economics can seem just as mystical, magical and nonsensical as over there), we have our own very different version: Doughnut Economics. What’s more, it is being applied locally, in Nanaimo – so why not here?

The concept is the brainchild of Kate Raworth, who describes herself as a ‘renegade economist’. With a Masters in Economics for Development from Oxford, she spent a couple of decades working in international development, including 10 years as a Senior Researcher at Oxfam.

However, as she comments in a recent interview with Time Magazine, she was frustrated by conventional economics, which “emerged from an era in which humanity saw itself as separated from the web of life” and harm to that web of life is seen as an ‘externality’, something she calls the “ultimate absurdity”. In reality, as she realised from a 2010 report on planetary boundaries, we are exceeding what she calls the environmental ceiling

But she also knew from her work in development that a certain level of economic activity is need to ensure basic human needs – shelter, clean water, sanitation, food, education, good basic health care and so on – are met. She calls this the social foundation.

So she drew two circles and thus the Doughnut was born. Inside the inner circle is the social foundation, and that circle has to be large enough to meet everyone’s basic needs. The outer circle defines the environmental ceiling; exceeding that puts us into an unsustainable ecological overshoot.

Between the two – in the body of the doughnut – is what she calls the “sweet spot”; an economy which is neither too big (as it is in high-income countries) nor too small, as it is in low-income countries. This is an economy fit for the 21st century, one that will “meet the needs of all people within the means of the living planet”.

While originally published in a 2012 paper, the concept really took off when her book was published in 2017. Now a Senior Research Associate at Oxford University’s Environmental Change Institute, she has created the Doughnut Economics Action Lab (DEAL) to turn “Doughnut Economics from a radical idea into transformative action”. 

One of the five core themes for DEAL’s work is ‘Cities and Places’, and in 2019 DEAL collaborated with the C40, a network of 97 of the world’s largest cities  that is focused on climate action, and Circle Economy to launch the Thriving Cities Initiative and apply the Doughnut Economics framework at a city level.

The process begins with a single core question that is essentially the same as the focus of our One Planet Region work: “How can our city be a home to thriving people, in a thriving place, whilst respecting the wellbeing of all people, and the health of the whole planet”? This is explored in more detail in four areas – social and ecological requirements at the local and global scale – and results in the creation of a ‘City Portrait’ that “invites a city to create and pursue a more holistic vision of what it means to thrive”.

The City of Amsterdam has really taken this on, adopting the Doughnut Economy framework as the basis for its post-Covid recovery, Meanwhile closer to home, on 14th December 2020 the City of Nanaimo adopted the framework as “a cohesive vision for all city initiatives and planning processes”, the first Canadian city to do so.

So next week, I will explore in more depth what this might mean for this region and what we can learn from Amsterdam, Nanaimo and other cities that are starting to adopt this approach.

© Trevor Hancock, 2021


Dr. Trevor Hancock is a retired professor and senior scholar at the University of Victoria’s School of Public Health and Social Policy.