Who needs GDP? Focus on Well being and Ecological integrity!

Last week, Sigrid Stagl from the Vienna University of Economics and Business gave an interesting talk on ecological economics as part of the “Future Lectures” series. Based on the lecture series’ underlying theme of sustainability, earth system boundaries and human interference, she focused on two aspects of climate change and how ecological economics fits into the picture here.

Firstly, Stagl talked about the current state of climate change research, mentioning the well-known and worrying scientifc consensus that we’re seeing more extreme weather and climate events and that we’re on course to an average 4.6 degree temperature increase until the end of the century. In fact, according to Carbon Tracker’s “Unburnable Carbon 2013” report, we could only burn 20% of the existing fossil fuel reserves (amounting to 565-886 Gt CO2) if we want to achieve the 2-degree target. As Stagl noted, to have resources but not to use them is a new challenge for humanity.

Secondly, Stagl discussed the concept of green growth and its two dimensions of scale and intensity where we can either produce less or reduce carbon intensity (ghg emissions per GDP) to achieve green growth. Looking at various countries, she made clear that most countries failed in getting on a green growth path in the past and that achieving the 2-degree target would mean that we have to get from up to 768 grams of ghg emissions per dollar of GDP to somewhere between 6 and 36 g/$.

So, faced with the scientific numbers, a resources challenge that humanity has never faced before and a drastically needed decline of carbon intensity, one could think that there’s not much room left for optimism, especially as from a traditional business and finance perspective businesses have an incentive to burn all fossil fuel reserves if they want to maximize shareholder value.

This is where ecological economics steps in. In contrast to traditional economics which considers economic activity in a rather static input-output model embedded into a given social and physical context, ecological economics takes a more comprehensive and integrated view.

By putting well being and ecological integrity instead of GDP into the center of the model, it defines societal goals, services and what matters to people such as social justice, resilience, livelihoods and life satisfaction. On the other hand, the whole system is embedded into a socio-ecological basis, defined by socio-economic and environmental targets as well as further societal goals based on negotiations, governance processes and decisions on limits.

This leaves us with an option space for stock-flow interactions that are delivering services within the framework of social and planetary boundaries, societal goals, and the main goals of well being and ecological integrity. While this is a rather theoretical description, it provides us with a framework for analysis and decision-making for more and more entrepreneurs who are driven by social and ecological motives, as we can also see in the growing number of social businesses in Vienna.

In order for this complex and interconnected framework to work, we also need some principles to stick to. So, here’s Stagl’s Epistemology for Ecological Economics:

  1. Our scientific knowledge is always subject to strong uncertainty.
  2. We can never prove that we have discovered the truth in or scientific understanding.
  3. Understanding and interpreting reality is in part a social progress in which knowledge is often contested.
  4. Knowledge comes in different forms and is not the exclusive domain of the expert; indigenous and lay knowledge may challenge or complement expert knowledge.
  5. Knowledge is subject to reasoned critique and empirical investigation.
  6. Critique can take a variety of forms leading to the need for plural methods.
  7. Advancing knowledge requires accepting and rejecting information and being open to revising beliefs.

Finally, here’s a short video interview with Sigrid Stagl:

Posted on January 15, 2014 in Sustainability

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About the Author

Andreas Lindinger is a Vienna-based business consultant, sustainability expert and urban thinker passionate about livable cities, sustainable transportation, renewable energy and civic engagement. Andreas offers a transdisciplinary business, finance and sustainability background, industry expertise in energy, mobility and environmental consulting and broad international experience gained in Vienna, Vancouver, Berlin and Dublin. Make sure to also check out Vienncouver.com and to follow @lindinger on Twitter.

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