Ecological Economics - Sustainability requires...

For three centuries the imperatives of the financial system
and the market have structurally locked humanity into extracting
material wealth from the planet at an exponentially growing rate.
This material wealth, consisting of renewable, replenishable and
non-renewable forms of natural capital, is being rapidly
depleted.
    Once useful in a world for from ecological limits, these
institutions now threaten the survival of humanity by continuing
to deplete the ecological and material basis of our existence. 

   Sustainability requires that humanity live within the carrying
capacity of the planet.  This requires remaining stocks of
renewable and replenishable natural capital be liquidated no
further so humanity can meet its material needs from the
sustainable flow of natural income these stocks can generate
without being further liquidated.   Indeed, sustainability will
require that some of these critical stocks be replenished.

   In economic terms, sustainability requires humanity to live
off the relatively limited and fixed sustainable flow of
‘interest’ or natural income generated by each type of critical
natural capital so the stock of each type does not diminish
through time.
    This ensures each successive generation, indefinitely into
the future, will have no less natural capital to meet their
material needs than each preceding generation (intergenerational
equity).  Policy-wise, sustainability requires humanity to live
within an ecological/material 'budget constraint' limited to the
sustainable flow of each type of critical natural capital. 

   Reasons why this cannot be achieved within the above-mentioned
institutions are now addressed.  Further reasons lie beyond the
length constraint of this paper.
   Suffice to say, they arise out of inconsistencies between the
abstract world of neoclassical economic theory and the
thermodynamic and biophysical realities and laws of nature. 

   All money in the world's financial system for the past 3
centuries (fractional reserve banking) exists as interest-bearing
debt so the money supply grows exponentially at around 6%
compounding based on the empirical data.  This locks the economy
into exponential growth so the interest on debt can be paid -
otherwise the economy collapses.

   Essentially the financial system is a pyramid scheme.

   The absurdity of this system is such that if one cent were
compounded at 6% for 1992 years it would grow to $2.5 x 1048 in
1992 years - equivalent in value to 100 000 galaxies, each of 1
billion stars made of pure gold at $328 US an ounce! 

  Money (i.e. debt) is not wealth but simply a claim on wealth.
Wealth is the natural capital of our planet.  In the simplest
analysis the root of the sustainability problem is an
exponentially growing set of claims (money) on a finite (and
indeed dimini****ng) pool of natural capital.

In 1926 Frederick Soddy explained the delusion on which our
economic system is based: “The ruling passion of the age is to
convert wealth into debt in order to derive a permanent future
income from it” in the illusion “people can live off the interest
of their mutual indebtedness”. 

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adapted from 2003 ISOS Paper: 
   Only when the last tree has died … will we 
   realise we can’t eat money
      Richard Sanders 



from www.quest2025.net/files/Nub%20of%20Sustainability.doc 
and email   (the pdf version contains references)
  http://legalminds.lp.findlaw.com/list/ecol-econ/pdf00008.pdf

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the General Sustainability Formula

 S=E/PC, sustainable if S is larger than one.

--    S=E/PC, sustainable if S is larger than one.

--    Sustainability = Ecosystem vigor  ÷  (Popul X per capita
ConsumptionWaste stream)

--   http//www.psnw.com/~bashford/e-sust-f.html

S is Sustainability.  -The ability of a habitat to maintain a
given population or system. 

E is Ecosystem vigor.  -Capacity of (re)cycling of the C, of
healing, of resilience, of "production." 

P is Population.    -The Number of Individuals.

C is per capita ConsumptionWaste stream.    -Similar to
ecological footprint.