Economics of Resilience in the Natural World

Blogger Barbara Ryan

February 3rd, 2021

 

 

How do you think economics relates to resilience? In short, economics drives policy, and policy will dictate our long term success as we work to protect the Chesapeake Bay and address climate change. 

 

I am a sustainable landscape designer — and an economist. Prior to working in sustainable landscapes, I worked as a professional economist for many years. So I have this habit of thinking about everything, including the natural world, from that perspective. Here are some of the questions I have pondered.   

 

How does economics relate to nature? 

It may come as a surprise that economics explains much of the behavior of the natural world that we seek to protect. The worldly philosophers who created the field of economics began by applying the laws of nature to human beings. These laws, which include concepts like survival, self-interest, natural selection, and competition, all exist in the outdoor world that surrounds us. 

 

Research suggests that flowering species compete for pollinators, and we frequently observe pollinators competing for nectar. Biodiversity reflects competition and unleashes a wealth of environmental benefits. But when biodiversity is diminished by the substitution of exotic plants for the native plants that host our local insects, we no longer have the optimal equilibrium of good and bad bugs.

 

 

 

In nature, as in human life, cooperation is as important as competition. This can be seen in the networks in nature. Just as the Internet draws strength from its worldwide network of human users, trees and other plants are interconnected and derive benefits via their underground mycorrhizal fungi networks. The Social Life of Trees is economic network theory in action – the idea that a shared good, in this case the shared root systems of nearby tree roots, provides benefits that cannot be achieved alone. 

 

 

 

How can economics support resilience and sustainability? 

This is where we need a reset. Conventional economics seeks to maximize growth. But traditional measures of success, such as Gross Domestic Product (GDP), do not take into account the state of our environment, which is typically viewed as just another resource to be allocated. When the goal is simply growth, too often the outcome ignores the finite nature and health of our ecosystem, human wellbeing, and environmental justice. 

 

 

 

Fortunately, this conventional view has been challenged by many who argue that we are at a turning point, and that our economy won’t be viable if our environment is wasted. These newer approaches prioritize protecting the environment and promoting human and social wellbeing over growth. The Circular Economy seeks to replace the traditional linear “make-use-dispose” framework of our system with a “regenerate-by-design” economy that keeps resources in use for as long as possible through recovery, recycling, and regeneration.

 

 

 

What does this mean for those of us in the sustainability field? 

It will be critical to recognize the differences between conventional and sustainable approaches to economics and work together to promote policies that prioritize our environment and environmental justice. We must think about how we can embrace The Circular Economy in our practices. Forming networks can help us advance our common goals through collaboration. Leveraging the tools of economics in what we do helps us do just that. 

 

Here are two examples. First, we need to understand the economics of our industry, including barriers and opportunities, to scale our work for greater impact. This involves understanding demand drivers, how incentives can add value, and how to ensure that our supply channels can serve demand. There is lots of room for growth and many ways to make the most of this opportunity.

 

Another example involves applying economics to sustainable cost analyses. This applies equally to cost-benefit analysis turf conversion to the much broader issue of addressing climate change. Sustainable approaches are often criticized for being too expensive compared to traditional ways. But these comparisons usually do not take into account costs incurred over time or the human and social benefits of sustainable approaches. A more accurate analysis takes into account all benefits and costs, including those that are achieved over time, and social and human aspects. This is not an easy task, but will be worth it in the long run.

 For example, see Schumacher, E.F. (1973) Small Is Beautiful: A Study of Economics as if People Mattered. (London, Blond and Briggs); Daly, Herman E., and Cobb, John B. Jr. (1989, 1994) For the Common Good: redirecting the economy toward community, the environment, and a sustainable future (Beacon Press, Boston); Jackson, Tim (2016) Prosperity without Growth: Foundations for the Economy of Tomorrow (Routledge. London and New York); Raworth, Kate (2017) Doughnut Economics: 7 Ways to Think Like a 21st Century Economist (Chelsea Green Publishing, White River Junction, Vermont).

Barbara Ryan works to promote ecologically responsible approaches to land stewardship in Northern Virginia. She is a sustainable landscape designer and economist. She holds a Master’s in Sustainable Landscape Design, Ph.D., M.A., and B.A. degrees in Economics, and has taught college-level economics. Learn more at www.chainbridgenativelandscapes.com and https://www.instagram.com/chainbridgenatives/.