www.ebook3000.com EN CO DA NO NG EOF E M FRE R I YH E E EAL S D THR HOW EAT TH ENS E N OUR EGLE PRO CT O SPE F NA RIT TUR Y E ENDANGERED ECONOMIES www.ebook3000.com GEOFFREY HEAL ENDANGERED ECONOMIES How the Neglect of Nature Threatens Our Prosperity COLUMBIA UNIVERSITY PRESS NEW YORK Columbia University Press Publishers Since 1893 New York Chichester, West Sussex cup.columbia.edu Copyright © 2017 Geoffrey Heal All rights reserved Library of Congress Cataloging-in-Publication Data Names: Heal, G M., author Title: Endangered economies : how the neglect of nature threatens our prosperity / Geoffrey Heal Description: New York : Columbia University Press, [2016] | Includes bibliographical references and index Identifiers: LCCN 2016033451 | ISBN 9780231180849 (cloth : alk paper) | ISBN 9780231543286 (e-book) Subjects: LCSH: Sustainable development | Economic development— Environmental aspects | Climatic changes—Economic aspects | Environmental policy—Economic aspects Classification: LCC HC79.E5 H428 2016 | DDC 338.9/27—dc23 LC record available at https://lccn.loc.gov/2016033451 Columbia University Press books are printed on permanent and durable acid-free paper Printed in the United States of America Jacket design: Marc Cohen www.ebook3000.com To Ann Marie www.ebook3000.com CONTENTS Preface ix ENVIRONMENT AND ECONOMY— NO CONFLICT 1 MARKET MISTAKES AND HOW UNPAID-FOR EXTERNAL EFFECTS ARE KILLING US 15 CLIMATE CHANGE—“THE GREATEST EXTERNAL EFFECT IN HUMAN HISTORY” 31 HOW TO DEAL WITH EXTERNAL EFFECTS 43 SOLVING THE CLIMATE PROBLEM 65 EVERYONE’S PROPERTY IS NO ONE’S PROPERTY 85 VIII CONTENTS NATURAL CAPITAL—TAKEN FOR GRANTED BUT NOT COUNTED 111 VALUING NATURAL CAPITAL 133 MEASURING WHAT MATTERS 159 10 THE NEXT STEPS 185 Notes 203 Index 215 www.ebook3000.com PREFACE I love the natural world, and I love the fruits of economic and technological progress There are those who say that I can’t have both: that economic progress comes at the expense of the natural world and conservation at the expense of progress Fortunately, this is wrong: not only can they go together, but in the long run, they must go together We cannot have sustainable prosperity without the natural world: it provides infrastructure essential to our well-being Why is conventional wisdom so wrong? Because historically there has been a conflict between economic progress and nature, with the former coming at the expense of the latter But this is a historical coincidence stemming from the way in which we have organized our economic activity and not in any way a logical necessity We—humanity—can certainly have progress without the destruction of nature: it is a matter of organizing our economic activity more thoughtfully My aim here is to explain why economic progress and conservation of the natural world must go together, and how to reorganize our economic activities so as to make this possible This book has taken a long time to write: I now don’t fully remember when I started it, probably about 2010 I almost gave up the project when my youngest daughter Natasha died, but eventually realized that she would have wanted it completed In some sense, I have been writing this book all my life: I’ve been a bird watcher and naturalist ever since I can remember, a keen nature photographer since I was at secondary school, and I’ve studied physics and economics: reconciling economic and technological progress with the conservation of nature brings all these parts of my life together NOTES 213  Naomi Orestes and Erik Conway, Merchants of Doubt (New York: Bloomsbury Publishing, 2010) The web site for this book houses a useful collection of documents: http://www.merchantsofdoubt.org/keydocs.html  Dan Kahan, et al., “The Tragedy of the Risk-Perception Commons: Culture Conflict, Rationality Conflict, and Climate Change,” The Cultural Cognition Project at Yale Law School, http://www.culturalcognition.net/browse-papers/the-tragedy-of-the-risk -perception-commons-culture-conflict.html  See Joe Romm, “Foxgate: Leaked Email Reveals Fox News Boss Bill Sammon Ordered Staff to Cast Doubt on Climate Science,” Think Progress, December 15, 2010, http:// thinkprogress.org/romm/2010/12/15/207201/leaked-email-fox-news-sammon-cast -doubt-on-climate-science/  David Hardisty, Eric Johnson, and Elke Weber, “A Dirty Word or a Dirty World?,” Psychological Science, 21, no (2010): 86–92 www.ebook3000.com INDEX ABC Carpet and Homes, 57 achoveta, 96 acid rain, 27; from agricultural runoff, 28; cap and trade system for, 49; from coal, 28–29; as domestic problem, 69 activism approach: for consumers, 56–58, 60–64, 107–8; for investors, 59–60, 61, 64 actuarial calculation, 152 adjusted net savings (ANS), 194; of gross national income, 181; natural capital and, 183; sustainability and, 179–80, 182; World Bank for, 181 agriculture, 23, 127, 150, 170; Catskill watershed and, 117; environmental factors influencing, 2, 9, 18, 28, 37–38; fertilizers in, 19–20; Ogallala Aquifer (High Plains Aquifer) and, 88; rainforests and, 122 air quality measure, 138, 139 Alaska, 19, 103, 174 allowance market, 48 almond orchards, 210n7 Alverson, Bob, 108 American Economic Review, 29 American Water Works Association Journal, 118 “Anatomy of Market Failure,” 15 animals, 40–41, 125, 126, 129 animate natural capital, 177 Annex countries, 73 ANS See adjusted net savings Antarctica, 36 antibiotics, 23–24 antienvironmentalism, 197 appropriators, 92–93 aquifers, 87–88 Arrhenius, Svante, 32, 33 asbestos, 55 aspirin, 129 Atomic Energy Authority (UK), 32 auctioning, 51–52 Australia, 107 automobile industry, 45, 192–93 averting behavior models, 140–41 bacteria, 23–24 Bangladesh, 77 Banzhaf, Spencer, 138 Barbier, Ed, 139, 140 Bator, Francis, 15 battery technology, 78, 79 Bayer Health Care, 130–31 bee population, 121–22 bequest values, 135, 136 biodiversity, 119, 125, 152, 153; Bayer Health Care and, 130–31; economic value in, 124, 127, 134; extinction of, 127; in Namibia, 169; natural capital in, 150, 179; pharmaceutical industry value on, 151; selective breeding and, 150 216 INDEX biomass, 128 biophilia, 114 bioprospecting, 131, 151, 153 Biosphere 1, 113 Biosphere 2, 113–14, 124, 175 biotechnology industry, 128, 129 See also pharmaceutical industry Blair, Tony, 31 Blanchard, Olivier, Bloomberg, 153 Botswana: ANS for, 181, 194; biodiversity in, 169; GDP (1980–2000) for, 180; GDP per capita (1980–2010) for, 167; HDI for, 166, 168; minerals from, 169; natural capital of, 154; Okavango Delta in, 168–69; sustainability of, 168–70 bottom trawling, 98 bottom-up approach, 145 BP (British Petroleum), 5–6, 21, 56 Brazil, 67, 81, 122 Brundtland, Gro Harlem, 159 Brundtland Commission, 159 Brundtland Report, 159, 170 Buchman, Stephen, 121 buffalo, 86–87 built capital, 139, 171 Bush, George H W., administration, 28, 69, 77 bycatch, 100, 101; high-grading and, 97; MSC and, 108; multi-species catch shares and, 103; tragedies from, 98 CAFE See Corporate Average Fuel Economy CAFOs See concentrated animal feeding operations California: air quality measure for, 138; almond orchards in, 210n7; on cap and trade system, 51, 75, 192; forestry offset market in, 158; ozone in, 2; water laws of, 92–93; watershed conservation in, 119 See also Los Angeles California Carbon Market, 158 Campylobacter, 24 cap and dividend, 51 cap and trade system, 30, 48, 64, 81, 191; acid rain and, 49; California on, 51, 75, 192; China for, 194; for common property resource, 101; considerations for, 60, 62, 63; EU and, 192; fossil fuels and, 70; on gasoline (leaded), 49; grandfathering and, 51–52; for greenhouse gas emissions, 47; Kyoto Protocol as, 72–73; market influence on, 49, 53; property rights and, 18; skepticism towards, 50; taxation compared to, 54; valuation and, 145 capital assets, 113, 118, 169, 174 carbon: discount rate for, 148; offset trading on, 74; social cost of, 145; in tropics, 149 carbon capture, 66, 145, 148, 149 carbon credits, 81 carbon cycle, 113, 114, 175 carbon dioxide (CO2), 34, 45, 69, 113–15, 148, 158, 205n2; approaches for reducing, 190; balance between O2 and, 122; climate change and, 31, 32, 33, 42; forest conservation and, 66–67 carbon emissions, 145; CAFE on, 47; charging for, 190; monetizing on, 66–67; tax on, 192 carbon-free energy, 194 carbon-free sources, 78–79, 189–90 carbon market, 53, 74–75 carbon offset, 153, 200–201 carbon tax, 200–201 See also cap and trade Caribbean, 20–21 Carson, Rachel, 13 cash value, 140 catch limits, 106 catch shares See individual tradable quotas Catskill watershed, 164, 175; failure of, 117; pollution from, 117; success of, 118; water quality from, 116 CDC See Centers for Disease Control and Prevention www.ebook3000.com INDEX CDM See clean development mechanism Centers for Disease Control and Prevention (CDC), 24 certification systems, 58 CFCs See chlorofluorocarbons CfRN See Coalition for Rainforest Nations Chagres River, 123 Charles River watershed, 119 cheetahs, 126 Chile, 96 China: for carbon-free energy, 194; on climate change agreement, 195; on energy consumption, 76; on forest conservation, 204n3; GDP growth rate of, 162, 167, 180; greenhouse gases in, 12, 75; HDI for, 166, 168; in Kyoto Protocol, 73–77; National Forest Protection Program in, 204n3; on natural capital, 154; offset trading in, 74; pollution in, 2–3, 12, 29, 195; on renewable energy, 12; Sloping Lands Protection Program in, 204n3; United States and, 195; violations of, 11–12; Yangtze River Valley flood in, 22 chlorofluorocarbons (CFCs), 25–26, 68–69 CITES See Convention on International Trade in Endangered Species Clean Air, Water Quality Act, 197 Clean Air Act, 46, 72; Bush on, 49; by Nixon, 27; for ozone layer, 68 clean development mechanism (CDM), 73, 74 Clean Power Plan, 77 clean technology, 77–78 Clean Water Act (1972), 119, 157 Clean Water Restoration Act, 197 climate change, 191, 195; agriculture and, 37–38; animals and, 40–41; in Antarctic, 36; for Bangladesh, 77; with carbon-free sources, 78–79; carbon market and, 75; CO2 and, 42; coal and, 31; consequences from, 35, 36, 37, 40; deforestation and, 85; discounted value and, 146; disease and, 217 39; droughts from, 35; economic progress and, 32; glaciers and, 34; greenhouse gas and, 31; Montreal Protocol on, 68; ozone and, 69; in Pacific islands, 77; pollutants and, 29, 30; rainfall and, 38; on snowpack, 38; suburbanization and, 85; water vapor and, 34 climate management, 122 climate policies, 82–83, 192; for developing countries, 80; Norway on, 67; Papua New Guinea on, 65–66; Paris and, 67 climate problems, 68; clean technologies for, 77–79; coal as, 186; Fourth Assessment Report (2007) on, 71 Climate Stewardship Act (2003), 208n5 climate system, 111 Cline, William, 38 clouds, 34 CO2 See carbon dioxide coal, 30, 186; acid rain from, 28–29; climate change and, 31, 35; health problems from, 28–29; oil, gas and, 212n3; United States and, 192 coal-fired power stations, 29 Coalition for Rainforest Nations (CfRN), 67, 81 Coase, Ronald, 16–17, 18, 47 coastal zone, 105–6 cod, 95–96 coffee, 57 colony collapse disorder, 143 commercial conservation, 156 commercial value, 155 Commission for the Conservation of Southern Bluefin Tuna, 105–6, 209n13 common property, 7, 8, 108–9; for fisheries, 186; ITQs on, 109; management of, 89–90, 94; oil fields as, 89–90; overuse of, 9, 10, 87; problems of, 85–87, 88; regulatory approach for, 109; taxation approach for, 109 218 INDEX common property resource: cap and trade for, 101; fisheries as, 93, 95–96 competitive economy, competitive extraction, 90 compliance markets, 53 concentrated animal feeding operations (CAFOs), 19, 23–24 cone snails, 130 Conference of the Parties to the UNFCCC (COP 21), 80, 81 Connally Hot Oil Act (1935), 91 Conrad, Kevin, 65, 66 conservation, 14; of natural capital, 113; Roosevelt on, 112, 197; USACE on, 118–19 conservatives, 199 See also Republican Party consumer activism, 56–58, 60–64, 107–8 Convention on International Trade in Endangered Species (CITES), 106, 107 COP 21 See Conference of the Parties to the UNFCCC coral reefs, 20, 21 Corporate Average Fuel Economy (CAFE), 44 Correa, Rafael, 81–82 Costa Rica, 131 costs, See also external costs crop insurance, 152 Croton reservoir and watershed, 116 cumulative emissions, 76 Damanaki, Maria, 193 Dasgupta, Partha, 14 dead zones, 18–20 death spiral, 21 Deepwater Horizon oil spill, 5, 21, 56, 136 deforestation, 85; drinking water and, 21–23; palm oil and, 58; in Panama, 123 Deng Xiaoping, 11, 12 Department of Agriculture, U.S., 133 Department of Energy, U.S., 145 depreciated capital, 164–65 Deschênes, Olivier, 39 de Soto, Hernando, 126 developing countries: climate policy for, 80; Kyoto Protocol for, 77; natural capital in, 139 diamonds, 155, 169 direct use values, 136 discounted value, 145–47 discount rate, 148 disease, 39, 152 dividend, 202 DNA, 128 dogs, 125, 126 domestic problems, 69 drinking water, 21–23 droughts, 35, 37–38, 89, 186, 187, 210n7 drugs, 128–30 Ducks Unlimited, 119 Duke Energy, 53 DuPont, 68–69 Earth, 113–14 Easter Island, 182 economic evaluation, 162 economic performance, 160, 161, 188 Economics of Climate Change, The, 31 Economic Theory and Exhaustible Resources, 14 economic value, 135, 137–38, 144; commercial value vs., 155; of natural capital, 124, 131, 133, 134 economy, 4, 12; capitalist-style, 11; environment and, 1–14; as ethical, 14 ecosystems, 9, 143; diversity and, 128; economic benefits from, 112–13 ecotourism, 153, 156, 169 Ecuador, 81–82 EEZ See exclusive economic zone effort restrictions, 99–100 electric power, 120 emission permits, 52 emissions reductions, 80 www.ebook3000.com INDEX Emission Trading System (ETS), 47 Endangered Species Act, 177, 197 Endangered Species Preservation Act See Endangered Species Act energy consumption, 76 environment, 9, 57, 197; development of, 159; economy and, 1–14; Endangered Species Act (U S.) on, 177; GDP and, 10; health of, 2; legislation for, 198; as natural capital, 111–12, 192; policies on, 189; polluter pays principle for, 6; prosperity and, 185, 188, 202; protection of, 201; restoration of, 156–58; threats to, 182 environmental groups, 74, 176–77 environmental problems, 171, 195–96; free-market ideology and, 199; from property rights, 185; psychology of, 200; Republicans on, 192, 199; technologies for, 60 Environmental Protection Agency (EPA), 38, 133, 192; Catskill watershed and, 116; on CO2 emissions, 145, 190; on fuel efficiency, 44; on greenhouse gas emissions, 46; on ozone layer, 68 Epstein, Paul, 29 ETS See Emission Trading System EU See European Union European Union (EU), 6, 30; cap and trade system for, 192; on greenhouse gas emissions, 45; Kyoto Protocol and, 73 Everard, John, 15, 43 exclusive economic zone (EEZ), 105 exhaustible resources, 173 existence values, 135 external costs, 5–6, 7; acid rain and, 27–28; activism for, 56, 57; available information on, 61; bacteria and, 23; BP and, 56; Catskill watershed as, 117; certification systems for, 58; CFCs as, 26; from coal, 28–30, 186; environmental problems from, 15, 185; from fossil fuel, 27; internalization of, 185; ITQs for, 101; 219 policies towards, 201; regulatory approach regarding, 44; revenue use from, 191; solutions for, 20, 185; from SRI, 59–60; taxation on, 54; on waste dumping, 43 external effects, 15, 111; alternatives for, 63; best approach for, 60–64; certification systems for, 58; coal and, 28–29; examples of, 18, 44; industrial pollution and, 17; waste dumping and, 43 external policies, 62 external pollination, 120 Exxon, 196 Exxon Valdez, 19, 141; on damage to natural capital, 142; legal liability of, 55–56 FAO See United Nations Food and Agriculture Organization fertilizers, 19–20 financial assets, 113 financial capital, 174, 175 financial incentives, 67, 73, 81, 109 fish, 102, 170; as common resource, 101; conservation of, 107–8; throwing away of, 96–98 Fisher, Tony, 37 fisheries, 7–8, 106, 139–40, 209n13; for achoveta, 96; bycatch in, 97–98; catch data on, 104; cod collapse in, 95–96; collapse of, 181; common property for, 93, 95–96, 186; effort restrictions for, 99; in high seas, 105–6; ITQs for, 101–2; management of, 96, 101, 105–6, 193; overfishing of, 95–96 fishing community, 100, 102 Fishing Vessel Owners’ Association, 108 flags of convenience, 105 flooding, 22, 40, 123 flood plains, 118, 119 fluoroquinolones, 24 food, 2, 24, 37, 39, 42, 58, 59, 86, 143 Food and Drug Administration, U.S., 24 food-borne diseases, 24 forest conservation, 66–67, 204n3 220 INDEX forestry offset market, 158 forests, 82; benefits of, 123, 124, 145, 149; carbon capture from, 148, 149; climate policy for, 65–67; preservation of, 122 Forest Stewardship Council, 207n13 fossil fuel, 82, 189–90, 196, 197, 200; compared to CFCs, 69; external costs from, 27; Kyoto Protocol and, 73; natural capital and, 172; renewable energy instead of, 81 fossil water, 87–88, 91 See also water Fourier, Joseph, 32, 33, 34 Fourth Assessment Report (2007), 71 Fox News, 200 fracking, 188 free-market ideology, 196, 199 Friedman, Milton, 199 fuel efficiency, 44 full cost accounting, 4, 201 future generations: built capital vs intellectual capital for, 171; discounted value and, 146; progressive taxation for, 147; weak sustainability and, 176 Gali, Jordi, gasoline (leaded), 49, 63 GDP See gross domestic product genetic diversity, 125, 126 genetic information, 134 genetic variation, 126, 127 Geophysical Research Letters, 206n13 Germany: GDP for, 167, 180; HDI on, 166, 168 giardia, 141 glaciers, 34 global climate policy, 80, 82–83 globalization, 18 Glucobay, 130–31 goods and services See gross domestic product Goulder, Larry, 190 grandfathering, 51–52, 191 grassy stunt virus, 127, 152 Great Barrier Reef, 20–21 greenhouse gases: assessment reports on, 71, 72; cap and trade system for, 47; CDM for, 74; China and, 12, 75; climate policy for, 31, 65–67; from coal, 28; India on, 75; reduction in, 46–47, 192; types of, 33, 34; United States on, 75 Greenland, 36 green national income, 165 Greenpeace, 58 Green Seal, 61 Greenstone, Michael, 2, 39 green taxes, 54 gross domestic product (GDP), 9, 10, 163, 166, 183, 185; Botswana and, 167, 180; capital gains and, 161; Catskill watershed and, 164; China and, 162, 167, 180; on economic performance, 161; Germany and, 167, 180; HDI compared to, 167–68; history of, 162; India and, 164, 167, 180; measurement of, 159; NDP or, 164–65; Papua New Guinea for, 167, 180; rate of growth for, 160; replacement of, 159; for United States, 167, 180 gross national income, 181 groundwater, 88, 89 Gulf of Mexico, 20–21 habitat destruction, 121 habitat for biodiversity, 119 Hamilton, Kirk, 154 Hanemann, Michael, 37 Hansen, James, 190 Harrington, Winston, 141 HDI See human development index heat, 205n2 heat-trapping gases See greenhouse gases Heckadon-Moreno, Stanley, 123 Hicks, John, 178 high-grading, 97 hot-house theory, 33–34 hot oil, 90 human capital, 175 www.ebook3000.com INDEX human development index (HDI): Botswana and, 166, 168; China and, 166, 168; compared to GDP, 167–68; Germany and, 166, 168; India and, 166, 168; Papua New Guinea and, 166, 168; UNDP on, 166; United States and, 166, 168 human living standards, 178 hydropower, 78, 120 ICCAT See International Commission for the Conservation of Atlantic Tuna Icelandic coastal shelf, 103 Illinois, 119 imported water, 92 inanimate natural capital, 176 INBio See Instituto Nacional de Biodiversidad inbreeding, 127 income, 162–63, 178 India, 88; on energy consumption, 76; GDP for, 164, 167, 180; on greenhouse gas emissions, 75; HDI for, 166, 168; on natural capital, 154 Indian Ocean Tuna Commission, 209n13 indirect revealed preference method, 140–41 indirect values, 136 individual tradable quotas (ITQs): benefits of, 104; common property and, 109, 186; EEZ and, 105; for fisheries management, 101–2; Icelandic coastal shelf as, 103; New Zealand coastal shelf as, 103; property rights and, 193 Indonesia, 81 industrial countries, 73, 74, 76 inflation, 162, 163 Inquiry Into the Nature and Causes of the Wealth of Nations in 1776, An, Instituto Nacional de Biodiversidad (INBio), 131 insurance, 151, 152 intellectual capital: examples of, 178; for future generations, 171; natural capital or, 175; wealth and, 179 221 intended nationally determined contributions (INDCs), 80 Inter-American Tropical Tuna Commission, 209n13 Intergovernmental Panel on Climate Change (IPCC), 70, 206n16; in 2013, 35, 36, 40; assessment reports by, 71; on valuation, 137 internalization, 196 International Commission for the Conservation of Atlantic Tuna (ICCAT), 104–5, 209n13 international institutions, 70–71 International Rice Research Institute (IRRI), 127 international travel and trade, 152 investments, 118, 156–58, 175 investors, 59–60, 61, 63–64 invisible hand, 4, IPCC See Intergovernmental Panel on Climate Change IRRI See International Rice Research Institute irrigation canals, 94 Israel, 187 ITQs See individual tradable quotas Japan, 106–7 Jinping, Xi, 195 Johnson, Eric, 200 Johnson, Lyndon, 197 Kalahari Desert, 169 Kerry, John, 47–48 Keynes, John Maynard, 162 Krupnick, Alan, 141 Kyoto Protocol: Annex countries and, 73; as cap and trade, 72–73; carbon market and, 74; CDM of, 73; China in, 73–77; EU and, 73; Obama administration on, 77; during recession (2007–2009), 74–75; success of, 74; UNFCCC and, 72; United States and, 73 222 INDEX landowners, 92–93 Lange, Glenn-Marie, 154 legal liability method: benefits of, 60; BP and, 56; for external effects, 142; Exxon Valdez and, 55–56; tobacco manufacturers in, 55 Lieberman, Joseph, 50, 74–75, 208n5 living natural capital, 175, 176 Lloyd, William Forster, lobster fisheries, 93 logging, 65–66 long-term expenses, Los Angeles, 93; water management for, 91–92 See also California low-profile natural systems, 139 Maine, 93 mammals, 42, 82, 86, 100, 102, 136 management, 187 mangroves: cash value for, 140; destruction of, 139; shrimp fisheries and, 139–40 Mao Zedong, 11 marine protected areas (MPAs), 21, 107, 186 Marine Stewardship Council (MSC), 106, 107–8, 207n13 market: failures of, 3, 15, 85; limitations of, 156 market data, 141 market economy, 4, 6, 188 Marshall, Alfred, 155 Marx, Karl, Massachusetts, 119 Maximum Sustainable Yield (MSY), 193 McCain, John, 50, 74–75, 208n5 McManus, Laura, 130 Meade, James, 17, 162 Melnick, Don, Merchants of Doubt, 197 Merck, 131 methane, 34 metric limitations, 163 Mexico, 140 microbes, 124 MidAmerican Energy, 53 minerals, 169 misery index, 162 Mississippi River Valley, 19 mitigated banking, 157–58 Molina, Mario J., 26 Montreal Protocol on Substances that Deplete the Ozone Layer (1987), 26, 68, 69 motor vehicle exhaust, 35 MPAs See marine protected areas MSC See Marine Stewardship Council MSY See Maximum Sustainable Yield multi-species catch shares, 103 Namibia, 154, 180; ANS for, 181; failures of, 170, 181; sustainability of, 168–69; wealth in, 180 Napa River-Creek Flood Protection Project, 119 NASA See National Aeronautics and Space Administration National Academy of Sciences, U.S., 29, 133 National Aeronautics and Space Administration (NASA), 35 National Forest Protection Program, 204n3 National Institute for Occupational Health and Safety, 99 National Oceanic and Atmospheric Administration (NOAA), 100 National Research Council, 133–34 national wealth, 154 Native Americans, 86 native species, 156 natural assets, 1, 153, 185 natural capital, 9, 10, 131, 156; animate natural capital as, 177; ANS and, 183; in biodiversity, 150, 179; Botswana on, 154; bottom-up approach for, 145; for built capital, 139; China on, 154; depletion of, 172; developing countries and, 139; discounted value and, 147; economic measurement and, 160; ecotourism as, www.ebook3000.com INDEX 153; environmental conservation as, 111–12; environment as, 192; into financial capital, 174; forests as, 123; GDP on, 164; genetic variation as, 126; India on, 154; investments and, 118, 175; Namibia and, 154; National Research Council on economic value and, 133–34; Norway and, 154; Panama Canal and, 123; PNG and, 154; policymakers on, 187; pollinators as, 120; Saudi Arabia and, 154; in selective breeding, 125; soil as, 134; sustainability and, 171, 176; trading of, 179; U S and, 154; watersheds as, 115–16; World Bank on, 154 natural ecosystems, 174, 175 natural environment, 111, 128–30 Natural Resources Defense Council, 24 natural world: collapse of, 1; contributions of, 2; as dividend, 202; industrial world and, Nature, 150 nature tourism See ecotourism NDP See net domestic product near-term profits, Nestlé, 58 net domestic product (NDP), 164–65 New York, 116 New York Times, 48 New Zealand coastal shelf, 103, 107 NGO See nongovernmental group Nixon, Richard, 27, 198 NOAA See National Oceanic and Atmospheric Administration non-food crops, 144 nongovernmental group (NGO), 61 non-use values, 135, 136 northeastern states, 192 Norway: ANS for, 181; Brazil and, 67, 81; for hydropower, 120; income and, 178; natural capital and, 154 Norwegian State Petroleum Fund, 174 no-take areas, 107 223 O2 See oxygen Obama, Barack administration, 77, 195 oceans, 18–21 offset trading, 74 Ogallala Aquifer (High Plains Aquifer), 88 oil, 89; coal, gas and, 212n3; dangers of, 90; leaks, 6; price of, 3; Rockefellers and, 196; Texas and, Okavango Delta, 168–69 Oppenheimer, Robert, 42 orangutans, 1, 58 Organization for Economic Co-operation and Development, 106 overexploitation, 182 overfishing, 20, 96; ecological balance and, 21; in Japan, 106–7 ownership, oxygen (O2), 122, 155, 174 ozone: in California, 2; climate change and, 69; stratospheric, 25, 26 ozone layer, 25–26, 68 Packard, Julie, 97 paleoclimate, 36–37 palm oil, 58, 59, 61 Panama Canal, 123 Panetta, Leon, 97 Papua New Guinea (PNG): climate policy for, 65–66; GDP for, 167, 180; HDI for, 166, 168 Paris, 67 passenger pigeon, 87 PCR See polymerase chain reaction Peru, 96 pesticides, 120, 121, 143 Pew Charitable Trusts, 96 Pew Oceans Commission, 96, 106 pharmaceutical industry, 131, 151 See also biotechnology industry physical capital, 175, 179 phytoplankton, 25 pied flycatcher, 41 224 INDEX Pigou, Arthur Cecil, 15, 16, 18, 30 Pigouvian subsidy, 66–67 Pigouvian taxes, 16, 17, 20, 24, 28, 48, 54–55, 63 plants, 19, 125, 128, 129 PNG See Papua New Guinea polar bears, 42 policies, 187; alternatives for, 201; for climate change, 208n5; for fisheries, 98–101 politics, 195–96 pollination, 142, 145; for bee population, 121–22; ecosystem and, 143; food loss and, 143; for non-food crops, 144; pollinators for, 120, 203n5 pollutants: climate change and, 29, 30; from electric power, 120; for exhaust emissions, 45 polluter pays principle, 6, 50, 54; for full cost accounting, 201; Republican Party for, 198 pollution, 2–3; allowance market on, 48; from Catskill watershed, 117; in China, 12, 75, 195; external costs of, 6, 10, 185; external effects of, 18 See also ozone polymerase chain reaction (PCR), 128 power shortage, 89 power stations, 120 present generation, 147 press, 82 Proceedings of the National Academy of Sciences, 29 progress: in automobile industry, 192–93; in Botswana, 194; in China, 194; for climate change, 191; in climate policies, 192; in fisheries management, 193 progressive taxation, 147 property, 85–87 See also common property property rights, 6–7; cap and trade system and, 18; environmental problems from, 185; ITQs and, 193 prosperity, 185, 188, 202 psychology, 200 public goods, 156 rainfall, 38 rainforests, 122 Ramsey, Frank, 146 rate of growth, 160 Reagan, Ronald, 49 recession (2007–2009), 74–75 REDD See reducing emissions from deforestation and degradation reducing emissions from deforestation and degradation (REDD), 81–82 reducing greenhouse gases, 192 reforestation, 22 regional greenhouse gas initiative (RGGI), 50–51, 52, 192 regulatory approach: CITES as, 107; for common property, 109; considerations for, 60, 62, 63, 64; fuel tax as, 47; for greenhouse emissions, 44–45 renewable energy: costs associated with, 78; instead of fossil fuel, 81; investment for, 82–83; tax credits and, 46 renewable portfolio standards (RFs), 45–46 renewable resources, 8, 12 Republican Party: regarding cap and trade system, 50; on environmental issues, 192, 195–99, 201 Resources for the Future (RFF), 18, 189–90 Reuters, 67 revealed approach, 137 revealed preference study, 141 revenue, 191 revenue investment, 169 RFF See Resources for the Future RFs See renewable portfolio standards RGGI See regional greenhouse gas initiative rifles, 86–87 Rio Earth Summit (1992), 72 Rockefeller, David, 97 Rockefeller family, 196 Roosevelt, Theodore, 112, 170–71, 197 Roundtable on Sustainable Palm Oil, 58 www.ebook3000.com INDEX Rowland, Sherwood, 26 Rufe, Roger, 97 safe yields, 92, 93 Salmonella, 24 Salt Creek Gateway (Illinois), 119 saltwater, 92, 93 Sarkozy, Nicolas, 159, 160 Sathirathai, Suthawan, 139, 140 Saudi Arabia, 165; ANS for, 181; exhaustible resources of, 173; income for, 178; natural capital and, 154; oil revenue for, 172–74; sustainability of, 168, 173–74 Schlenker, Wolfram, 37, 102–3 science, 199 Science, 41 seabed, 98 sea birds/marine mammals, 102 sea levels, 71 selective breeding, 125, 126, 150 self-pollination, 120 Sen, Amartya, 159 shade-growing, 57 shrimp fisheries, 139–40 Sieg, Holger, 138 Silent Spring (Carson), 13 Sloping Lands Protection Program, 204n3 Smith, Adam, 4, 6, 7, 15, 16 Smith, Kerry, 138 snowpack, 38–39 SO2 See sulfur dioxide social capital, 211n3 social cost, 145 socially-responsible investment (SRI), 59–60, 156–57 soil, 22, 123, 134 solar power: alternatives to, 78; capital costs for, 79; forests and, 122 Somare, Sir Michael, 65, 66 sovereign wealth fund (SWF), 173 Spain, 94 species, 125, 202 225 Spofford, Walter, 141 SRI See socially-responsible investment stated-preference approach, 137, 141, 142 Statoil, 174 Stern, Nick, 31 Stiglitz, Joseph, 159 stock market, Stone, Richard, 162 storms, 40 Strand, Ivar, 139, 140 stratosphere, 25, 26 strong sustainability, 175 subsidy, 54–55 suburbanization, 85 sulfur dioxide (SO2), 27, 28, 69 Summary Report for Policymakers, 71 sunscreen, 34 Superstorm Sandy, 37 supply and demand, 155 sustainability: agriculture and, 170; ANS and, 179–80, 182; of Botswana, 168–69; environmentalists on, 176–77; fish catch and, 170; gains, losses in, 171–72; MSC for, 106; of Namibia, 168–69; natural capital and, 171, 176; of Saudi Arabia, 168, 173–74; strong compared to weak, 176–77, 182; substitution for, 175; wealth and, 178, 180 sustainable yield (SY), 101 Sweden, 120, 192 SWF See sovereign wealth fund SY See sustainable yield TAC See total allowable catch tailpipe emissions, 45 tax, 201 taxation approach: cap and trade system compared to, 54; for common property, 109; considerations for, 60, 62, 63 See also Pigouvian taxes Taxol, 129 TEDs See turtle excluder devices temperature, 80 226 INDEX Texas, 8, 90 thermal power stations, 88–89 thermus aquaticus, 128 Tilman, David, 127, 128 tobacco manufacturers, 55 Toman, Michael, 150 top-down approach: for carbon capture, 149; failure of, 80; for natural capital, 145 total allowable catch (TAC), 101–4 total foreign aid (Overseas Development Assistance), 203n6 total value of output, 161 total wealth, 179; evolution of, 178; natural capital in, 154; sustainability and, 182 tourism See ecotourism trading, 179 transportation, 79 trees, 22–23 Tribunal de las Aguas, 94, 109 tropics, 149 troposphere, 25 tuna, 105–6 turtle excluder devices (TEDs), 100 turtles, 98, 100 ultraviolet (UV) radiation, 25 underground reservoirs, 92 UNDP See United Nations Development Program unemployment, 162, 163 UNEP See United Nations Environment Program UNFCCC See United Nations Framework Convention on Climate Change Union of Concerned Scientists, 23, 24, 61 United Nations Development Program (UNDP), 166 United Nations Environment Program (UNEP), 70 United Nations Food and Agriculture Organization (FAO), 152 United Nations Framework Convention on Climate Change (UNFCCC), 67, 72 United States: China and, 195; on coal to natural gas, 192; failure in carbon market, 74–75; fossil fuels in, 196; free-market economy of, 12; GDP for, 167, 180; HDI for, 166, 168; Kyoto Protocol and, 73; natural capital and, 154; politics in, 195– 96; on reducing greenhouse gases, 192 unitization, 90, 91, 109 universalizability, 146 U.S Army Corps of Engineers (USACE), 118–19, 133 use values, 135 utilitarian approach, 135 UV See ultraviolet radiation value added, 29 variability, 125 voluntary market, 53 Wall Street, 48 Walsh, Randy, 138 Waorani Indians, 81–82 waste dumping, 43 water, 92–93, 119; from aquifers, 87–88; in Israel, 187; management of, 91–92; quality of, 20, 116; resources for, 186, 187; safe yield for, 92; supply and demand for, 155; thermal power stations and, 88–89 See also fossil water water basins, 93 waterfalls, 120 watersheds, 115–16, 119; benefits of, 21–23; forests and, 122 water vapor, 34 Waxman-Markey bill, 190–91 weak sustainability, 176 wealth: in Botswana, 180; distribution of income and, 162–63; intellectual capital and, 179; in Namibia, 180; physical capital and, 179; sustainability and, 178, 180 www.ebook3000.com INDEX Weber, Elke, 200 Western and Central Pacific Fisheries Commission, 209n13 wetlands, 115–16; Clean Water Act (1972) for, 157; destruction of, 118; as habitat for biodiversity, 119; restoration of, 20, 118; as water purifier, 119 wild fires, 40, 206n15 willingness to pay measure, 138, 139, 142, 144 willow bark, 129 Wilson, E O., 114, 124 wind power, 77–79 within-species variation, 126, 127 World Bank, 154, 181 world community, 82 World Health Organization, 24 World Meteorological Organization, 70 Yangtze River Valley, 22 Yasuni National Park, 81–82 227 .. .ENDANGERED ECONOMIES www.ebook3000.com GEOFFREY HEAL ENDANGERED ECONOMIES How the Neglect of Nature Threatens Our Prosperity COLUMBIA... reserved Library of Congress Cataloging-in-Publication Data Names: Heal, G M., author Title: Endangered economies : how the neglect of nature threatens our prosperity / Geoffrey Heal Description:... assembling and editing materials from Nancy Brandwein I am grateful to them all www.ebook3000.com ENDANGERED ECONOMIES www.ebook3000.com ENVIRONMENT AND ECONOMY—NO CONFLICT I ’ve gradually noticed the