economics

Overview

“The wealth of the nation is its air, water, soil, forests, minerals, rivers, lakes, oceans, scenic beauty, wildlife habitats and biodiversity… that’s all there is. That’s the whole economy. That’s where all the economic activity and jobs come from. These biological systems are the sustaining wealth of the world.”  – Gaylord Nelson, activist, politician and founder of Earth Day  

When we think about the economics of a healthy and just planet, we have to understand key concepts. The terms “capital” and “value” typically have one association: money. But a truer reflection of the market would include natural capital. Natural capital is the “world’s stock” of natural assets which include geology, soil, air, water, and all living things. The economy relies heavily on natural capital as the base of almost all products, yet all too often, the economy is still viewed and treated as separate from the environment. 

Unfortunately, our current economic system favors environmentally destructive practices and restricts ethics and conservation efforts in business, exploiting Earth’s natural resources in the name of profit. Concepts like true cost accounting address this by looking at impacts on the environment, climate, biodiversity, and public health when determining an item’s cost. This short film from Lexicon of Sustainability quickly introduces the concept. 

Dr. Jagannadha Pawan Tamvada, Associate Professor at the University of Southampton Business School and Co-Founder of iPowerz, proposes that flawed incentive structures are the root cause of many societal blights. Investments of time, money and energy are allotted into where the most short-term economic profit can be gained, not where best suited for larger systems and timelines, thereby perpetuating environmental degradation and poverty. As opposed to the current worldwide economic culture of extreme self-interest, he calls for us to relate to, question, and converse with one another to build better economic structures that benefit all. In his ICC model for transformation, Dr. Tamvada proposes that we must initiate, create and grow new, original systems collectively.    

Have you ever heard of a circular economy? Right now, society functions primarily within a linear model: create, use, then dispose of products. This causes staggering amounts of pollution, emits vast quantities of greenhouse gases, and necessitates unsustainable natural resource extraction. It also produces tremendous amounts of waste. Conversely, circular economies have three core principles: designing out waste and pollution, keeping products and materials in use, and regenerating natural systems. Switching to a circular economy is critical in limiting global warming to 1.5°C, underscored by a recent UN study. Watch today’s TED talk to learn more!

In the United States, a bold plan of action to address climate change and inequity has been introduced, which involves completely reinventing the American economy. Pioneered by Congresswoman Alexandria Ocasio-Cortez and Senator Ed Markey, the Green New Deal calls for dramatic reduction in greenhouse gas emissions, investment in clean energy, creation of accessible high-paying jobs in similar fields, and ensuring basic human rights of clean air, potable water, and healthy food are afforded to all citizens. But not everyone is on board. Critics claim the Green New Deal will cost trillions of dollars that “should” be used for other things and that moving away from fossil fuels could have catastrophic consequences. It’s an ambitious plan that would require a 10-year mobilization and transformation of the entire economy, but Green New Deal proponents point out that without major changes now, global warming will continue at an exponential rate. The plan is far from perfect, but a vital step in reducing major negative contributors to the climate crisis, centering BIPOC, young and marginalized voices, updating antiquated failing infrastructure, and addressing the most pressing environmental challenges.

While a worldwide transition to a sustainable economy is vital, each individual choice plays a role in the larger system. Everything we buy requires natural resources: trees, water, coal, minerals, all. Our dollar has more power over the fate of our planet than we may believe. Every choice matters, so let’s be conscious consumers! Making decisions that have a net positive impact on the planet takes many forms: 

Conservation. First and foremost, buy fewer things. Consuming less means conserving natural resources and preserving them for generations. Invest in quality items that will last, actually saving money over time. When something breaks, try fixing it before tossing and always repurpose or upcycle “trash” into something useful! Remember, less is more, especially when supporting the planet.

Use your dollar. If you must purchase something new, purchase ethically and sustainably-made products from businesses that offer quality goods with global benefits. The outdoor clothing company Patagonia is a fantastic example of how sustainability and profit can go hand in hand — with a mission to “build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.” Patagonia creates long-lasting goods and offers mending services for their products, uses 100% organic cotton, pays workers an honest wage, and is thriving.

Know your companies. Many responsible businesses elect to become Certified B Corporations or 1% for the Planet members — or both! 1% for the Planet inspires businesses and individuals to support environmental nonprofits through membership and everyday actions. Businesses commit to give back 1% of annual revenue (not profits, but total sales) directly to eco nonprofits. You can become a member too! Yvon Chouinard, the co-founder of 1% for the Planet and Patagonia, describes membership as the “cost of doing business on this planet. It’s not philanthropy— it’s an absolute necessity for us living on this planet. It’s the opposite of doing nothing.” 

Keep it local. Local spending is the lifeblood of a local economy; it keeps neighbors employed, taxes paid, businesses open, and communities alive. The Covid-19 pandemic has hit small businesses extremely hard, with many in danger of closing for good, while most large corporations have managed to survive. Online shopping soared in popularity due to the number of people staying home, producing much more waste through packaging and transportation pollution than local sales. Supporting local businesses bolsters community resilience, helping economies and ecosystems thrive.

Corporations play a huge role in perpetuating climate change and injustice. In many cases, corporations even make money off of what they had a hand in creating. Author Naomi Klein coined the phrase “disaster capitalism” in her book The Shock Doctrine to describe how private contractors profited heavily off of relief work in the wake of Hurricane Katrina and other climate disasters. Thus, said relief work is often performed haphazardly, slowly, and in an inequitable manner, which further incentivizes environmentally destructive policies and actions to which corporations already contribute. Only about 90 companies are responsible for two-thirds of total carbon emissions. The responsibility to effect change does not solely rest on individuals. However, if we use less, consume less, reuse, shift behavior, and pressure businesses to act, we will see how individual action can lead to sizable collective impact.

We can’t talk economics without discussing affordability and accessibility of eco and ethical products, which is why we are proud that our partner Acure continues to bring skin, body and haircare to market that meets a variety of personal budgets and is available at wide-ranging retailers. Prioritizing sustainability in daily behavior and consumer choices is possible with knowledge, planning, intention, and smart budgeting.