9 ms·

How should economists think about biodiversity?

73 points by prostoalex 6y ago

chmod775 6y ago
This comes to mind: https://streamable.com/i9scnl https://streamable.com/i9scnl If you're going to put a dollar cost on irreversibly damaging the ecosystem, it's going to be one you can't afford. Not in a thousand years.
- ssivark 6y ago
  It might be safer for biodiversity if economists don't think too much about it :P The biggest source of damage might well be "optimizing" with a badly-framed/biased model... while the short-term "value" can be easily argued for, the long-term costs will typically be underestimated/externalized.
  - deleted 6y ago
    [deleted]
- AnthonyMouse 6y ago
  > If you're going to put a dollar cost on irreversibly damaging the ecosystem, it's going to be one you can't afford. Not in a thousand years. Doesn't work. You're essentially saying to assign the value of infinity. Then if there is a one in a trillion chance of ecosystem damage, you have to refuse even if the alternate is to definitely lose a billion lives. Can't be infinity. At this point you're at the old joke. Man asks a woman if she would have sex with him for a hundred billion dollars. She thinks about it a while and then concedes that yes, she would. The man then asks the woman if she would have sex with him for five dollars. She's offended. She says, what kind of woman do you think I am? The man replies that they've already established that and now they're just negotiating on the price. You can't just use an astronomical number. It has to be as accurate as possible because it's being traded off against other real things of significant importance. If the number is too low, bad things happen. But if the number is too high, different bad things happen.
  - pii 6y ago
    Are you doing the reflexive disagreement thing? "Astronomical" is the cost of putting ecosystems on an irreversible, downward spiral.
    - AnthonyMouse 6y ago
      "Astronomical" isn't an actual number. You still have to decide if it's a billion dollars or a trillion dollars or a billion trillion dollars. It's possible, and harmful, to choose a number which is too large.
      - pyrale 6y ago
        Have you considered that, maybe, economy is simply not the right tool to consider the problem? Your question is like asking "How hard do I need to hit with the hammer on this puzzle to have the pieces fall in place?"
      - pii 6y ago
        I find myself agreeing with you and at the same time thinking that your position is absurd. Let me try to put this into words. I might be missing parts of your point. If we measure out the cost of avoiding total environmental collapse - which also implies human extinction - and we put a finite number on it, we've said 'the survival of human life on earth is worth this much and not more'. It's really hard for me to get my head around the idea that we would find a dollar value that has any meaning that would properly describe the limit of how much humans value their own survival. I wouldn't know where to start, what to measure, or what to exclude. I'd personally be loath to excluding anything, as a fan of existence. I'm not convinced I'm right to think putting a dollar value on existence is folly -- but I can't conceptualize what it would mean.
    - bryanrasmussen 6y ago
      if you can't put a real cost on something you can't actually weigh it, what happens if you say ecosystem damage is astronomical in cost and the loss of jobs if we don't build this dam costs 1.5 million dollars is the dam gets built because nobody has put any sort of measurable cost on what happens if the dam gets built. to win a game you have to play that game.
- RandomLensman 6y ago
  Not in a thousand years, yes. But eventually all ecosystems on earth will end in a few billion years when the sun enters its red giant phase. So irreversible damage is coming absent some intervention. With that happening, "pricing" things will also have to account for whether the actions will lead to some sort of ecosystems lasting longer. The really long term will do amazing things with compounding...
  - federona 6y ago
    You could account for billions of years in terms of money. Where as destroying things in a thousand because that is our business horizon is much more likely, and actually it's more like a year or two from current business practices, maybe a decade for long term thinking. If our business horizon was a billion years, then all the money and economic wealth in the world and quality of life indicators, and jobs would be so minuscule as to be a rounding error.
- toto444 6y ago
  > If you're going to put a dollar cost on irreversibly damaging the ecosystem, it's going to be one you can't afford. Not in a thousand years. Is there such a thing as a change that can't be reversed in a thousand year ? Just think of a scenario in which we stop consuming carbon and plastic overnight for a thousand year.
  - pii 6y ago
    Extinction
shmageggy 6y ago
https://archive.is/09tK8 https://archive.is/09tK8 The (600 page) report, including 100 page abriged version that appears highly readable at a glance: https://www.gov.uk/government/publications/final-report-the-economics-of-biodiversity-the-dasgupta-review https://www.gov.uk/government/publications/final-report-the-... It’s a shame this is getting posted in the middle of the night for much of the western world. IMO this is one of the most crucial things our society must address currently. The inability to properly value natural capitol is a root cause of so many problems. If this report gives a framework for (among other things) properly assessing negative externalities than we can’t afford to ignore it.
- thewarrior 6y ago
  I first realized this while walking through Yosemite national park. I don’t think you can recreate that even if you had a trillion dollars. These sights and areas are literally priceless. The stark fact is that economic growth as we know it today will come to an end at some point on a finite planet like ours. For those who want an extremely meticulous and data driven analysis of the same I recommend reading Vaclav Smils work. I’m just sharing what I learned. There are many websites that calculate your “earth footprint”. Ie how many earths are needed if everyone lived the same as you. My earth footprint was 4 earths ! All 8 billion of us cannot live like Americans or even Europeans. And then there is climate change. There’s no known cheap energy substitutes on the horizon. Tesla’s are for now completely coal powered. The amount hydro carbons consumed is still increasing every year. For things like making steel, fertilizer or cement we cannot even begin to design good scalable solar powered methods. Solar plants have a very low load factor. It often only generates 30 % of its installed capacity. So you need to over build by 3x of what you need. Assuming we also need solar power for cars we are talking about building 10x the capacity of all existing energy infrastructure and not to talk about storage. The existing energy grid is crumbling in many places and we are talking about trillions of dollars in spending to build new high voltage DC transmission to make solar scalable. The world population will be 10-12 billion by 2100. Its hard to imagine how everyone will have a first world lifestyle without completely trashing the planet.
  - ttt0 6y ago
geoalchimista 6y ago
Leave it to ecologists and other biodiversity experts? Not everything warrants an opinion from economists.
- thepangolino 6y ago
  I think everything that can be costed does. After all, human lives have a well established value now. Why not the environment they live in?
  - ehnto 6y ago
    It's not a difficult problem to cost though is it, if we continue on the path we are on and destroy all biodiversity, we'll have killed the planet that sustains us and the side effects will quickly destroy our civilization. Thus the cost is infinite. We can't survive without other life on earth, and life on earth dies without enough biodiversity.
    - dagw 6y ago
      life on earth dies without enough biodiversity. What is "enough" though? 30%, 50%, 90%? And how much are we willing to spend to hit each of those targets. We're obviously not going to spend "infinite" economic resources to protect biodiversity and we've long since accepted that we are willing to sacrifice a bit of 'nature' for a bit of 'comfort' and that won't change. We're now negotiating how much we are willing to give up to save how much of nature, and that is, demonstrably, a very difficult problem.
      - anemoiac 6y ago
        I think it may be helpful to invert the framing of your question - you allude to spending economic resources to protect biodiversity, but aren't we actually talking about spending biodiversity (and other natural resources) to gain economic resources? Your framing takes acquiring economic resources (a.k.a. the destruction of natural resources) for granted, assuming that we're losing, or giving up, something by opting to not destroy some portion of the natural environment for economic gain. Aren't we losing, or giving up, something every time we choose to gain economic resources by destroying part of the natural environment? Logically, both framings are valid, but they don't appear wholly equivalent to me. Perhaps I'm missing something, but economic resources seem far more fungible than natural resources, which seems to imply that the latter framing may be more appropriate. This difference, highlighted here, in this essentially ephemeral internet-space, may seem to occupy the border between semantic and pedantic, but I think it will take on a fundamental role in determining humanity's future prospects. How we define our relationship to the earth determines how we live. Your framing of the economic/environmental calculus seems to represent the status quo, but I don't think it represents a sustainable future for humanity. If/how/when the status quo shifts, I have no idea, but it does seem (from my limited vantage point, anyway) that more and more people are developing sympathy for the notion that modern society doesn't optimize for human well-being.
Proven 6y ago
Keynesians always screw up.
wazoox 6y ago
Jean-Marc Jancovici uses a funny analogy: the ISS cost about $100 billions. It provides a very limited environment for 6 humans. Therefore as a rule of thumb we can extrapolate the value of our existing environment that provides enough for several billions to live on it to $15 billion per person, give or take (actually, Earth is a much better environment than the ISS, which isn't really autonomous anyway). Destroying it for an annual GDP per capita of $12000 seems like a really terrible deal.
- shoo 6y ago
  Trying to value the potential non existence of the environment using money as a measurement seems to rapidly become incoherent: assume there's no environment. ok, so human life can no longer be supported on earth. So there's no one to trade with to exchange money for useful goods and services like oxygen and radiation shielding. The value of money is obviously zero in the limit where the environment no longer exists. Can the analogy be adapted to measure the lifecycle cost of running an ISS terms of physical resources. E.g. what's the minimum size that a self sufficient earth bound country would have to be in order to throw off enough surplus labour and resources to launch and maintain an artificial ISS habitat for 6 people? Would a hypothetical self sufficient New Zealand with 5 million people suffice? Here's an attempt: Apparently ISS cost $100b over 10 years. Call it $10b / year. World GDP is around $90t / year. So ISS costs 1/9000th of world GDP. Under extreme conditions, a human nation can direct maybe 1/3 of national GDP to external government projects (e.g. WW2 total war scenario). So maybe we could have a society of 3 * 1/9000 = 1/3000 of world GDP that could sustain itself and an artificial ISS ecosystem for 6 people. 1/3000 of earth human population is about 2.5 million people say. So a healthy resource rich earth environment + labour of country of 2.5 million people under total war rationing conditions could sustain artificial ISS environment able to support 6 people.
  - wazoox 6y ago
    That's more of a fun answer to those who absolutely want to put a value and make a matter of "fair calculation" of everything, nothing to be taken too seriously. Still, that gives some relief to the absurd notion that drives all economics that only human labour and capital have value, and that resources are infinite and free. Then, that "rational" economic considerations should drive our policies (instead of common, democratic deliberation around our competing wants and wishes, impossible to subsume into any sort of rational calculation). Should we want to consume as much as possible as fast as we can, then disappear from the face of a scorched Earth? Or should we change radically our ways to make human life sustainable on the long term? This isn't a matter of reason, only of collective preference, that can only be decided through debate. The only thing open to calculation is what the future will be, if we do this, or that. But what future we want isn't a rational matter, and shouldn't be dictated by "those in the know", or even worse, "those in power" (irk).
frobisher 6y ago
I recommend simply asking the question, "how should economists think?".
- toto444 6y ago
  You probably don't know much about Economics and have a very distorted view on what it is. You should definitely try reading something like the Undercover Economist by Tim Harford which is a pleasant read and a good introduction to the way economists think. Economists try to understand the world using a very consistent approach. It can seem strange at first but it is very deep. By the way, the way economists think has been deeply influenced by John Von Neumanm who has also had a deep influence on computer science (assuming that's your thing) so you may find some interesting overlap.
  - arethuza 6y ago
    I found License to be Bad a fascinating view of the field of economics: https://www.penguin.co.uk/books/306/306792/licence-to-be-bad/9780141986951.html https://www.penguin.co.uk/books/306/306792/licence-to-be-bad...
dr_dshiv 6y ago
Is there an equivalent to market diversity that could show the health of different markets?

73 points by prostoalex 6y ago

This comes to mind: https://streamable.com/i9scnl https://streamable.com/i9scnl If you're going to put a dollar cost on irreversibly damaging the ecosystem, it's going to be one you can't afford. Not in a thousand years.

ssivark 6y ago
It might be safer for biodiversity if economists don't think too much about it :P The biggest source of damage might well be "optimizing" with a badly-framed/biased model... while the short-term "value" can be easily argued for, the long-term costs will typically be underestimated/externalized.
- deleted 6y ago
  [deleted]
AnthonyMouse 6y ago
> If you're going to put a dollar cost on irreversibly damaging the ecosystem, it's going to be one you can't afford. Not in a thousand years. Doesn't work. You're essentially saying to assign the value of infinity. Then if there is a one in a trillion chance of ecosystem damage, you have to refuse even if the alternate is to definitely lose a billion lives. Can't be infinity. At this point you're at the old joke. Man asks a woman if she would have sex with him for a hundred billion dollars. She thinks about it a while and then concedes that yes, she would. The man then asks the woman if she would have sex with him for five dollars. She's offended. She says, what kind of woman do you think I am? The man replies that they've already established that and now they're just negotiating on the price. You can't just use an astronomical number. It has to be as accurate as possible because it's being traded off against other real things of significant importance. If the number is too low, bad things happen. But if the number is too high, different bad things happen.
- pii 6y ago
  Are you doing the reflexive disagreement thing? "Astronomical" is the cost of putting ecosystems on an irreversible, downward spiral.
  - AnthonyMouse 6y ago
    "Astronomical" isn't an actual number. You still have to decide if it's a billion dollars or a trillion dollars or a billion trillion dollars. It's possible, and harmful, to choose a number which is too large.
    - pyrale 6y ago
      Have you considered that, maybe, economy is simply not the right tool to consider the problem? Your question is like asking "How hard do I need to hit with the hammer on this puzzle to have the pieces fall in place?"
    - pii 6y ago
      I find myself agreeing with you and at the same time thinking that your position is absurd. Let me try to put this into words. I might be missing parts of your point. If we measure out the cost of avoiding total environmental collapse - which also implies human extinction - and we put a finite number on it, we've said 'the survival of human life on earth is worth this much and not more'. It's really hard for me to get my head around the idea that we would find a dollar value that has any meaning that would properly describe the limit of how much humans value their own survival. I wouldn't know where to start, what to measure, or what to exclude. I'd personally be loath to excluding anything, as a fan of existence. I'm not convinced I'm right to think putting a dollar value on existence is folly -- but I can't conceptualize what it would mean.
  - bryanrasmussen 6y ago
    if you can't put a real cost on something you can't actually weigh it, what happens if you say ecosystem damage is astronomical in cost and the loss of jobs if we don't build this dam costs 1.5 million dollars is the dam gets built because nobody has put any sort of measurable cost on what happens if the dam gets built. to win a game you have to play that game.
RandomLensman 6y ago
Not in a thousand years, yes. But eventually all ecosystems on earth will end in a few billion years when the sun enters its red giant phase. So irreversible damage is coming absent some intervention. With that happening, "pricing" things will also have to account for whether the actions will lead to some sort of ecosystems lasting longer. The really long term will do amazing things with compounding...
- federona 6y ago
  You could account for billions of years in terms of money. Where as destroying things in a thousand because that is our business horizon is much more likely, and actually it's more like a year or two from current business practices, maybe a decade for long term thinking. If our business horizon was a billion years, then all the money and economic wealth in the world and quality of life indicators, and jobs would be so minuscule as to be a rounding error.
toto444 6y ago
> If you're going to put a dollar cost on irreversibly damaging the ecosystem, it's going to be one you can't afford. Not in a thousand years. Is there such a thing as a change that can't be reversed in a thousand year ? Just think of a scenario in which we stop consuming carbon and plastic overnight for a thousand year.
- pii 6y ago
  Extinction

shmageggy 6y ago

https://archive.is/09tK8 https://archive.is/09tK8 The (600 page) report, including 100 page abriged version that appears highly readable at a glance: https://www.gov.uk/government/publications/final-report-the-economics-of-biodiversity-the-dasgupta-review https://www.gov.uk/government/publications/final-report-the-... It’s a shame this is getting posted in the middle of the night for much of the western world. IMO this is one of the most crucial things our society must address currently. The inability to properly value natural capitol is a root cause of so many problems. If this report gives a framework for (among other things) properly assessing negative externalities than we can’t afford to ignore it.

thewarrior 6y ago
I first realized this while walking through Yosemite national park. I don’t think you can recreate that even if you had a trillion dollars. These sights and areas are literally priceless. The stark fact is that economic growth as we know it today will come to an end at some point on a finite planet like ours. For those who want an extremely meticulous and data driven analysis of the same I recommend reading Vaclav Smils work. I’m just sharing what I learned. There are many websites that calculate your “earth footprint”. Ie how many earths are needed if everyone lived the same as you. My earth footprint was 4 earths ! All 8 billion of us cannot live like Americans or even Europeans. And then there is climate change. There’s no known cheap energy substitutes on the horizon. Tesla’s are for now completely coal powered. The amount hydro carbons consumed is still increasing every year. For things like making steel, fertilizer or cement we cannot even begin to design good scalable solar powered methods. Solar plants have a very low load factor. It often only generates 30 % of its installed capacity. So you need to over build by 3x of what you need. Assuming we also need solar power for cars we are talking about building 10x the capacity of all existing energy infrastructure and not to talk about storage. The existing energy grid is crumbling in many places and we are talking about trillions of dollars in spending to build new high voltage DC transmission to make solar scalable. The world population will be 10-12 billion by 2100. Its hard to imagine how everyone will have a first world lifestyle without completely trashing the planet.
- ttt0 6y ago

geoalchimista 6y ago

Leave it to ecologists and other biodiversity experts? Not everything warrants an opinion from economists.

thepangolino 6y ago
I think everything that can be costed does. After all, human lives have a well established value now. Why not the environment they live in?
- ehnto 6y ago
  It's not a difficult problem to cost though is it, if we continue on the path we are on and destroy all biodiversity, we'll have killed the planet that sustains us and the side effects will quickly destroy our civilization. Thus the cost is infinite. We can't survive without other life on earth, and life on earth dies without enough biodiversity.
  - dagw 6y ago
    life on earth dies without enough biodiversity. What is "enough" though? 30%, 50%, 90%? And how much are we willing to spend to hit each of those targets. We're obviously not going to spend "infinite" economic resources to protect biodiversity and we've long since accepted that we are willing to sacrifice a bit of 'nature' for a bit of 'comfort' and that won't change. We're now negotiating how much we are willing to give up to save how much of nature, and that is, demonstrably, a very difficult problem.
    - anemoiac 6y ago
      I think it may be helpful to invert the framing of your question - you allude to spending economic resources to protect biodiversity, but aren't we actually talking about spending biodiversity (and other natural resources) to gain economic resources? Your framing takes acquiring economic resources (a.k.a. the destruction of natural resources) for granted, assuming that we're losing, or giving up, something by opting to not destroy some portion of the natural environment for economic gain. Aren't we losing, or giving up, something every time we choose to gain economic resources by destroying part of the natural environment? Logically, both framings are valid, but they don't appear wholly equivalent to me. Perhaps I'm missing something, but economic resources seem far more fungible than natural resources, which seems to imply that the latter framing may be more appropriate. This difference, highlighted here, in this essentially ephemeral internet-space, may seem to occupy the border between semantic and pedantic, but I think it will take on a fundamental role in determining humanity's future prospects. How we define our relationship to the earth determines how we live. Your framing of the economic/environmental calculus seems to represent the status quo, but I don't think it represents a sustainable future for humanity. If/how/when the status quo shifts, I have no idea, but it does seem (from my limited vantage point, anyway) that more and more people are developing sympathy for the notion that modern society doesn't optimize for human well-being.

Proven 6y ago

Keynesians always screw up.

wazoox 6y ago

Jean-Marc Jancovici uses a funny analogy: the ISS cost about $100 billions. It provides a very limited environment for 6 humans. Therefore as a rule of thumb we can extrapolate the value of our existing environment that provides enough for several billions to live on it to $15 billion per person, give or take (actually, Earth is a much better environment than the ISS, which isn't really autonomous anyway). Destroying it for an annual GDP per capita of $12000 seems like a really terrible deal.

shoo 6y ago
Trying to value the potential non existence of the environment using money as a measurement seems to rapidly become incoherent: assume there's no environment. ok, so human life can no longer be supported on earth. So there's no one to trade with to exchange money for useful goods and services like oxygen and radiation shielding. The value of money is obviously zero in the limit where the environment no longer exists. Can the analogy be adapted to measure the lifecycle cost of running an ISS terms of physical resources. E.g. what's the minimum size that a self sufficient earth bound country would have to be in order to throw off enough surplus labour and resources to launch and maintain an artificial ISS habitat for 6 people? Would a hypothetical self sufficient New Zealand with 5 million people suffice? Here's an attempt: Apparently ISS cost $100b over 10 years. Call it $10b / year. World GDP is around $90t / year. So ISS costs 1/9000th of world GDP. Under extreme conditions, a human nation can direct maybe 1/3 of national GDP to external government projects (e.g. WW2 total war scenario). So maybe we could have a society of 3 * 1/9000 = 1/3000 of world GDP that could sustain itself and an artificial ISS ecosystem for 6 people. 1/3000 of earth human population is about 2.5 million people say. So a healthy resource rich earth environment + labour of country of 2.5 million people under total war rationing conditions could sustain artificial ISS environment able to support 6 people.
- wazoox 6y ago
  That's more of a fun answer to those who absolutely want to put a value and make a matter of "fair calculation" of everything, nothing to be taken too seriously. Still, that gives some relief to the absurd notion that drives all economics that only human labour and capital have value, and that resources are infinite and free. Then, that "rational" economic considerations should drive our policies (instead of common, democratic deliberation around our competing wants and wishes, impossible to subsume into any sort of rational calculation). Should we want to consume as much as possible as fast as we can, then disappear from the face of a scorched Earth? Or should we change radically our ways to make human life sustainable on the long term? This isn't a matter of reason, only of collective preference, that can only be decided through debate. The only thing open to calculation is what the future will be, if we do this, or that. But what future we want isn't a rational matter, and shouldn't be dictated by "those in the know", or even worse, "those in power" (irk).

frobisher 6y ago

I recommend simply asking the question, "how should economists think?".

toto444 6y ago
You probably don't know much about Economics and have a very distorted view on what it is. You should definitely try reading something like the Undercover Economist by Tim Harford which is a pleasant read and a good introduction to the way economists think. Economists try to understand the world using a very consistent approach. It can seem strange at first but it is very deep. By the way, the way economists think has been deeply influenced by John Von Neumanm who has also had a deep influence on computer science (assuming that's your thing) so you may find some interesting overlap.
- arethuza 6y ago
  I found License to be Bad a fascinating view of the field of economics: https://www.penguin.co.uk/books/306/306792/licence-to-be-bad/9780141986951.html https://www.penguin.co.uk/books/306/306792/licence-to-be-bad...

dr_dshiv 6y ago

Is there an equivalent to market diversity that could show the health of different markets?