Inorganic / Non-renewable resources.
It is very difficult to wear out an atom of the stable isotopes of non-radioactive matter listed
in the Periodic Table. For example the two Hydrogen atoms that combine with an Oxygen atom to
form the water (H2O) that makes up 60% of our human body is about 13.4 billion years old. The
Oxygen atom is a bit younger, but at least 4.56 billion years old. A molecule of water (a particular
set of hydrogen and oxygen atoms) can be as old as 4.56 billion years or have been born a moment
ago in your body when a glucose molecule combined with 6 oxygen molecules to form 6 molecules of
CO2, 6 of water and some useable energy in the form of Adedenisine Triphosphate(ATP).
Glucose + oxygen --> carbon dioxide + water + energy (ATP which stands for adedenisine
triphosphate)
C6H12O6 + 6O2 --> 6CO2 + 6H2O + energy (ATP)
However humans do ‘lose’ these basic elements. On a finite planet there is a finite amount of every
element. We address an example using the element AU (Gold) in another section of this reframing
discussion. Within about 25 years, we will have “mined” essentially the known gold reserves on the
planet. From that point on, for the next 20 million generations, we would have to assume that the
loss or hoarding of any atom of gold is a loss of the element to the commons and it is no longer
available for future generations.
Estimates of resource depletion are based on the calculation of resource rents. An economic rent
represents the "excess" return to a given factor of production. Rents are derived by taking the
difference between world prices and the average unit extraction or harvest cost (including a "normal"
return on capital).
If this is like “No more mine-ing – just “Our owe-ing /Returning” then great. The percent of these
resources that are recycled vs lost or tossed into the ocean/landfill, etc should be recorded
somehow.
Finally, global pollution damages from carbon dioxide emissions (and other GHGs such as methane)
are deducted. This in effect attempts to account for the amount of ‘burning’ that is conducted –
any burning of ancient hydrocarbons is definitely forbidden and a deduction of the planets net
savings. The burning of biomass is not the same thing. So there are acceptable and unacceptable
CO2 emissions.
Negative adjusted net savings rates imply that "extended wealth" is in decline, and as such provide a
warning of non -sustainability.
How does this indicator compare with standard measures of saving and investment in national accounts?
World Bank computed ANS for developed countries such as France and the United States shows that changes over time are almost exclusively driven by gross savings, while the gap in levels between ANS and gross
savings is due mostly to capital consumption and human capital accumulation whereas, according to the
index, natural capital changes play only a relatively marginal role. Moreover, the ANS figures show that most
developed countries are on a sustainable path, while many emerging or developing countries are not. This
result illustrates how absurd the ANS is as an indicator of sustainability.
ตารางแผนที่
This kind of approach appeals to many economists, as it is grounded on an explicit theoretical framework.
However, the current methodology underlying empirical calculations has well- known shortcomings: the
relevance of the ANS approach crucially depends On what is counted (the different forms of capital passed
on to future generations), namely, what is included in "extended wealth," and on the price used to count and
aggregate in a context of imperfect or indeed non-existent valuation by markets-the problem that we already
mentioned when discussing the implicit prices used by composite indicators. Indeed the price assigned to
these resources / forms of capital can completely reverse the resulting outcome – how convenient the ANS
calculations are for the so called ‘developed’ countries!
Indeed, a major shortcoming of ANS estimates is that the adjustment for environmental degradation is only
limited to a restricted set of pollutants, the most significant one being carbon dioxide emissions. The
authors acknowledge that the calculations do not include other important sources of environmental
degradation, such as underground water depletion, unsustainable fisheries, soil degradation and a fortiori
biodiversity loss. This is a major omission.
For those natural assets that are taken into account, pricing techniques remain the major issue. For
exhaustible resources, the World Bank's estimates of ANS rely on current prices that do not in any way
represent their true value – the price of petroleum for example has nothing to do with actual costs because
of so many externalities. When the Real World reparation and replacement costs are added to the ancient
hydrocarbon extraction /burning industry, the ANS will show a dramatic reversal – ‘developed nations will be the most UNsustainable. In theory, the use of market prices to evaluate flows and stocks is warranted only
in a context of perfect markets, which is clearly not the case in reality, and especially not for natural
resources, where externalities and uncertainties are paramount. Exactly. Further, market prices for fossil
energy sources and other minerals have tended, in recent years, to fluctuate widely, causing significant
swings in measures of ANS based on current market prices and this has very strongly reduced the practical
relevance of the ANS for concerned countries. My previous point exactly.
1.
As for pricing environmental degradation, things turn out to be even trickier because of the absence of any
market valuation that could be used as a starting point: in theory, we must evaluate so-called "accounting
prices" by modeling the long-term consequences of given changes in environmental capital and how they
impact future well-being. But practical implementation raises considerable problems. Under the current
state of the art, the prices used to value carbon emissions in existing estimates of ANS are not able to give it
any significant role in the global assessment of sustainability, and this casts doubts on the usefulness of the
indicator as a' guide for policy. (Emphasis is mine) If we were to address the externalities and tack on a
carbon burning fee – a Pigouvain tax based on the combination of the reparation costs to re-sequester the
carbon dioxide emissions released during the extraction/refining / transportation/ final burning process AND
add in the replacement costs for returning like amounts of energy to the planet that is being extracted –
energy derived from renewable sources and conveniently saved in a formed equally as safe and durable and
compact as the ancient hydrocarbon, then the price of consuming ancient hydrocarbons would be better
represented and it turned the ANS over on its head.
Finally, by computing ANS per country we miss the global nature of sustainability. Indeed, one may feel
uneasy when faced with the message conveyed by ANS about resource-exporting countries (e.g., oil). In
these countries, from the ANS perspective, non-sustainability stems from an insufficient rate of reinvestment
of the income generated by the exploitation of the natural resource: "overconsumption" by importing
countries is not an issue at all. Developed countries, which are generally less endowed with natural
resources but richer in human and physical capital than developing ones, would then appear unduly
sustainable. As a consequence, some authors have argued in favor of imputing the consumption of
exhaustible resources to their final consumers, i.e., the importing countries. Exactly. If scarcities were fully
reflected in the prices at which exhaustible resources are sold on international markets, it is true that there
would be no reason for making such a correction. However, when prices are non-competitive, the importing
country pays less for its imports than would be required; it will have a responsibility in global
non-sustainability that is not captured by the money-value of its imports. Low prices allow such countries to
overconsume and to transfer the long-term costs of this overconsumption to the exporting countries. Good
discussion that to me totally negates the current use of ANS as a useful indicator of sustainable living.
Footprints
Although apparently quite different from "extended wealth" notions, various attempts at measuring
sustainability through the use of "footprints" are also inspired by the general approach of comparing current
flows of consumption and their effects on certain dimensions of the environment with an existing stock. In
this sense, they may also be regarded as "wealth" measures. However, the focus is exclusively on natural
capital, and the valuation convention differs from the ANS one in that no market prices are explicitly used.
The Ecological Footprint (hereafter EF) measures how much of the regenerative capacity of the biosphere is
used up by human activities (consumption). It does so by calculating the amount of biologically productive
land and water area required to support a given population at its current level of consumption. A country's