Robert Costanza• VC’s Chair in Public Policy

Crawford School of Public Policy

Australian National University

Canberra ACT 0200, Australia

• Editor in Chief, Solutions (www.thesolutionsjournal.org)

The Circular Bioeconomy and

Grand Societal Challenges

Opportunities and Challenges of Sustainable Forest Bioeconomy

13.12.2017 Wanha Satama, Helsinki, Finland

Human influence on the earth system is now so large, that a new geologic epoch (the Anthropocene) has begun. We now live in a “Full World”

Business as usual is not an option

To create a sustainable and desirable Anthropocene, we need to think, act, finance, and govern differently

Vision Tools &Analysis

Implementation

SustainableWellbeing

How the world isHow we would like it to be

PLANETARY BOUNDARIES: THERE ARE FUNDAMENTAL ECOLOGICAL CONSTRAINTS

Rockström, J., et al. 2009. A safe operating space for humanity. Nature 461:472-475

Steffen, W., J. Rockström, and R. Costanza. 2011. How Defining Planetary Boundaries Can Transform Our Approach to Growth. Solutions. Vol 2, No. 3, May 2011

We need a third movie…

We need a third movie and a new vision and narrative…

Society

Environment(the rest of Nature)

Economy

A sustainable and desirableeconomy-in-society-in-the rest of nature.

A Wellbeing Economy

Overlapping Ideas

Wellbeing Economy

Circular BioEconomy

Ecological Economy

Ecological Civilization

Steady State Economy

Doughnut Economy

Regenerative Economy

Lagom Economy

food

energy

water

leisureparticipation

health

community

education

fairness

income

security

identity

freedomecoservices

Elementsof well-being& Quality of

Life

The Sustainable

and Desirable

“doughnut”(after: K. Raworth. 2012. A safe

and just space for humanity: can

we live within the doughnut?

Oxfam International)

Integrated Questions/Goals:

• Ecologically Sustainable Scale

• Socially Fair Distribution

• Economically Efficient Allocation

UN Sustainable Development Goals (SDGs)

TRANSFORMING OUR WORLD:

THE 2030 AGENDA FOR SUSTAINABLE DEVELOPMENT

Eco

log

ical

Eco

no

mic

s

Fra

mew

ork

UN

SD

Gs

Figure 2. The relationship of the 17 UN Sustainable Development Goals (SDGs) to the framework of ecological economics and the

overarching goal of a sustainable, equitable and prosperous system (Costanza et al. 2016. Modelling and measuring sustainable wellbeing in

connection with the UN Sustainable Development Goals. Ecological Economics. 130:350–355.

Overarching Goal:A prosperous, high quality of life that is

equitably shared and sustainable

Natural

Capital/Ecosyste

m Services

Sustainable Scale:

Staying within planetary

boundaries

Social

Capital/Commun

ity

(Surveys)

Fair Distribution:

Protecting capabilities for

flourishing

Net Economic

Contribution

(GPI 2.0)

Efficient Allocation:

Building a living economy

6.Water &

sanitation

for all 13. Urgent

action on

climate

change

15.Conserve

terrestrial

ecosystems

1.End

poverty

for all2.End

hunger

for all

3.Ensure

healthy

lives for

all 4.Ensure

equitable

quality

education

for all

5.Achieve

gender

equality

10. Reduce

inequality

within and

among

countries

14. Conserve

marine

ecosystems

16.Promote

justice and

accountable

institutions 17. Strengthen

global

partnerships

7.Ensure

access to

sustainable

energy 8.Promote

inclusive

economic

prosperity

9.Build resilient

infrastructure

11.Build

resilient

and

sustainable

cities

12.Ensure

sustainable

consumption

patterns

167 Targets, 300+ Indicators

Ecosystem Services: the

benefits humans derive from

functioning ecosystems

Missing: Interaction with other forms of capital

BuiltCapital

Human Capital

Sustainable Human

Well-Being

EcosystemServices

Natural Capital

Social Capital

Inter-action

XFrom: Costanza, R., R. de Groot, P. Sutton, S. van der Ploeg, S. Anderson, I.

Kubiszewski, S. Farber, and R. K. Turner. 2014. Changes in the global value of

ecosystem services. Global Environmental Change 26:152-158.

Natural Capital is everything in the world that

humans do not have to produce or maintain – the

“gifts of nature”.

生物多样性和生态系统服务的跨政府平台

0

500

1000

1500

2000

2500

3000

3500

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

NumberofArclesPublishedon"EcosystemServices"

Year

NumberofAr clesPublishedon"EcosytemServices"inSCOPUS

Total as of 3/7/2017 = 17,899

有关生态服务的文章

NATURE VOL 387 15 MAY 1997

The value of the world’s

ecosystem services and

natural capitalRobert Costanza, Ralph d’Arge, Rudolf de Groot,

Stephen Farber, Monica Grasso, Bruce Hannon,

Karin Limburg, Shahid Naeem, Robert V. O’Neill,

Jose Paruelo, Robert G. Raskin, Paul Sutton &

Marjan van den Belt*. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

For the entire biosphere, the value (most of which is

outside the market) is estimated to be in the range of

US$16–54 trillion per year, with an average of US$33 trillion

per year.

2nd most cited article in the Ecology/Environment area according

to the ISI Web of Science with more than 7500 citations – which

puts it in the top 0.01% of all papers ever published.

Valuing

…we estimated the loss of eco-services（生态服务损失） from 1997 to 2011 due to land use

change（土地使用变化） at $4.3–20.2 trillion/yr.

全球生态系统服务价值改变

Focus on GDP growth

Focus on Well-being

Market ForcesThe market knows best

Inequality not addressed

Fortress WorldEveryone for themselves

Limited Governance

Policy ReformNeed planning and governmentEquity maintained

Great TransitionWe’re all in this togetherGovernance at many levelsStewardship and sharing

CommunityIndividualism

From: Kubiszewski, Costanza, Anderson, and Sutton. (2017). The Future of Ecosystem Services: Global Scenarios and National

Implications. Ecosystem Services. 26:289-301.

Market Forces

Com

mu

nityIn

div

idu

ali

sm

Focus on GDP growth

Focus on Well-being

Fortress World Great Transition(SDG world)

Policy Reform

全球生态服务价值年度总量

From: Kubiszewski, Costanza, Anderson, and Sutton. (2017). The Future of Ecosystem Services: Global

Scenarios and National Implications. Ecosystem Services. 26:289-301.

Market

Forces

Fortress

World

Policy

Reform

Great

Transition

-100 -90 -80 -70 -60 -50 -40 -30 -20 -10 0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180

Percent Change in 2050 from 2011 Ecosystem Service Values生态服务价值

From: Kubiszewski, Costanza, Anderson, and Sutton. (2017). The Future of Ecosystem Services: Global

Scenarios and National Implications. Ecosystem Services. 26:289-301.

Some mistaken identities concerning

ecosystem services and valuation

• Economics “the Market”

• Valuation Privatization, Commodification, or Trading

• Expressing values in monetary units Market or exchange values

Also, we cannot avoid valuation:decisions about ecosystem are implicit valuations

Use of Valuation Appropriate valuesAppropriate spatial

scalesPrecision Needed

Rising awareness and interest Total values, macro aggregates Regional to global Low

National income and well-being accounts

Total values by sector and macro aggregate

National Medium

Specific policy analysis Changes by policy Multiple depending on policy Medium to high

Urban and regional land use planning

Changes by land use scenario Regional Low to medium

Payment for ecosystem services Changes by actions due payment Multiple depending on system Medium to high

Full cost accounting Total values by business, product, or activity and changes by business, product, or activity

Regional to global, given the scale of international corporations

Medium to high

Common asset trusts Totals to assess capital and changes to assess income and loss

Regional to global Medium

Range of uses for ecosystem services valuation

From: Costanza, R., R. de Groot, P. Sutton, S. van der Ploeg, S. Anderson, I. Kubiszewski, S. Farber, and R. K. Turner. 2014. Changes in the

global value of ecosystem services. Global Environmental Change 26:152-158.

Rival

Non-rival

Non-ExcludableExcludable

Market Goods

and Services(some provisioning

services)

Common Pool

Resources(some provisioning

services)

Congestable

Services(some recreation

services)

Public Goods

and Services(most regulatory and

cultural services)

EcoServices Classified According to Rivalness and Excludability

From: Costanza, R., 2008. Ecosystem Services: Multiple classification systems are needed. Biological

Conservation 141:350-352

Property Rights Regimes are Important

Claim the Sky!www.claimthesky.org

By asserting that we all own the atmosphere as a

common asset, we can begin to use the Public Trust

Doctrine and the legal institutions surrounding property

rights to protect the climate, charge for damages, and

provide rewards to those that improve this shared

resource, by creating an Earth Atmospheric Trust.

We find that the maximum potential

of Natural Climate Solutions is 23.8

petagrams of CO2 equivalent

(PgCO2e) y−1 (95%CI 20.3–37.4)

by 2030

This is ≥30%higher than prior

estimates,

About half of this maximum (11.3

PgCO2e y−1) represents cost-

effective climate mitigation,

assuming the social cost of CO2

pollution is ≥100 USD MgCO2e−1

by 2030.

Source: Griscom et al. PNAS (2017)

In a word, businesses profit by calculating

and paying only a fraction of the costs

involved. Yet only when “the economic and

social costs of using up shared environmental

resources are recognized with transparency

and fully borne by those who incur them, not

by other peoples or future generations”, can

those actions be considered ethical.

Pope Francis, ENCYCLICAL LETTER

LAUDATO SI’ - ON CARE FOR OUR COMMON HOME

“A good ecological environment is the most

universal common good, the most universal

aspect of people’s wellbeing”

“We would rather have clear water and green

mountains than mountains of silver and gold”

President Xi Jinping

Creating an “ecological civilization”

“The modernization that we pursue is one characterized by harmonious coexistence between man and nature. In

addition to creating more material and cultural wealth to meet people’s ever-increasing needs for a better life, we need

also to provide more quality ecological goods to meet people’s ever-growing demands for a beautiful environment.”

“To reform the environmental regulation system. China will establish regulatory agencies to

manage state-owned natural resource assets and monitor natural ecosystems. China will develop

a nature reserves system composed mainly of national parks.”

President Xi Jinping, 19th Party Congress

http://www.thefifthestate.com.au/articles/ken-henry-on-advancing-

australias-natural-capital/82531

“We all know that farmers go through dry and wet times. There

will be drought. But when the drought breaks:

- if you have invested in your built capital – your pumps will be

working,

- if you’ve invested in your human capital, you’ll have staff to

operate your machinery and the know-how to run your

business commercially,

- and if you’ve taken care of your natural capital – managed your

weeds, your water retention and your soil health – you will be

well positioned to take advantage of future commercial

opportunities.

Natural capital is not a footnote in a business

plan, it is a core asset on the balance sheet.

That’s true for an individual business; and it is

true also for the nation.”

Source: Deaton, 2008.

Indicator UnitsIndic

atorsExplanation

Area

coverageTime

Genuine Progress

Indicator (GPI)$ 26

Personal Consumption Expenditures weighted by income distribution, with volunteer and

household work added and environmental and social costs subtracted.

17 countries

+ regions

1950-

present

Genuine Savings $ 5Level of saving after depreciation of produced capital; investments in human capital; depletion

of minerals/energy/forests; and damages from air pollutants are accounted for

140

countries1970-2008

Inclusive Wealth $ 8 Asset wealth including, built, human, and natural resources 20 countries 1990-2008

Australian Unity Well-

Being IndexIndex # 14 Annual survey of various aspects of well-being and quality of life Australia

2001-

present

World Values Survey Index # 100's Periodic (5 so far) survey of a broad range of social, environmental, and economic variables 73 countries 1981-2008

Gallup-Healthways

Well-Being IndexIndex # 39

Annual survey in six domains: live evaluation, physical health, emotional health, healthy

behavior, work environment, and basic assets

50 states in

US

2008-

present

Gross National

HappinessIndex # 33

In-person survey in nine domains: psychological well-being, standard of living, governance,

health, education, community vitality, cultural diversity, time use, ecological diversity Bhutan 2010

Human Development

Index (HDI)Index # 4 Index of GDP/person, spending on health and education, and life expectancy

177

countries

1980-

present

Happy Planet Index Index # 3 HPI = subjective well being * life expectancy / ecological footprint153

countries3 yrs

Canadian Index of

Well-BeingIndex # 80

Includes community vitality, democratic engagement, education, environment, population,

leisure, living standards, and time useCanada

1994-

present

National Well-Being

IndexIndex # 5

proxies for built, human, natural and social capital with weights based on regression with

subjective well-being56 countries 1 yr

OECD Better Life

IndexIndex # 25

Includes housing, income, jobs community education, environment, civic engagement, health,

life satisfaction, saftey, and work-life balance

36 OECD

countries1 yr

Well-Being of Nations Index # 63 63 indicators in 20 domains weighted and ranked180

countries1990-2000

Sustainable Society 150

GPI /capita for the 17 countries for which it has been estimatedFrom: Kubiszewski, Costanza et al. 2013. Beyond GDP: Measuring and Achieving Global Genuine

Progress. Ecological Economics 93:57-68

From: Kubiszewski, Costanza et al. 2013. Beyond

GDP: Measuring and Achieving Global Genuine Progress. Ecological Economics 93:57-68

Economic growth Un-Economic growth

To create a sustainable and desirable

economy-in-society-in-the rest of nature

requires:

Breaking our addiction to the "growth at all costs"

economic paradigm, to fossil fuels, and to over-

consumption

A key step in the therapy is building a shared vision of

a more sustainable and desirable future that focuses

on the wellbeing of all life

Wellbeing

Economy

Alliance

(WE All)At a meeting in Glasgow, Scotland, in Oct.

2017, a group of five governments

(Scotland, Sweden, Costa Rica, Slovenia,

and New Zealand) committed to creating

the Wellbeing Economy Alliance.

What is a wellbeing economy?

A wellbeing economy has the fundamental goal of

achieving sustainable wellbeing with dignity and fairness

for humans and the rest of nature. A wellbeing economy

achieves the SDGs. (This is in stark contrast to current economies that

are wedded to a very narrow vision of development—indiscriminate growth

of GDP.)

A wellbeing economy recognizes that the economy is

embedded in society and nature. It must be understood and

managed as an integrated, interdependent system.

To achieve a wellbeing economy, a major transformation of our

world view, society and economy are needed to:

a. Stay within planetary biophysical boundaries – a sustainable size of the

economy within our ecological life support system.

b. Meet all fundamental human needs, including food, shelter, dignity,

respect, education, health, security, voice, and purpose, among others.

c. Create and maintain a fair distribution of resources, income, and wealth –

within and between nations, current and future generations of humans and

other species.

d. Have an efficient allocation of resources, including common natural and

social capital assets, to allow inclusive prosperity, human development and

flourishing. A wellbeing economy recognizes that happiness, meaning, and

thriving depend on far more than material consumption.

e. Create governance systems that are fair, responsive, just and accountable

Current Economic Model Green Economy Model Ecological Economics Model

Primary policy goal More: Economic growth in the conventional

sense, as measured by GDP. The assumption is

that growth will ultimately allow the solution of

all other problems. More is always better.

More but with lower environmental

impact: GDP growth decoupled from

carbon and from other material and

energy impacts.

Better: Focus must shift from merely growth to “development” in the real

sense of improvement in sustainable human well-being, recognizing that

growth has significant negative by-products. More is not always better.

Primary measure of

progress

GDP Still GDP, but recognizing impacts

on natural capital.

Index of Sustainable Economic Welfare (ISEW), Genuine Progress Indicator

(GPI), or other improved measures of real welfare.

Scale/carrying

capacity/role of

environment

Not an issue, since markets are assumed to be

able to overcome any resource limits via new

technology, and substitutes for resources are

always available.

Recognized, but assumed to be

solvable via decoupling.

A primary concern as a determinant of ecological sustainability. Natural

capital and ecosystem services are not infinitely substitutable and real limits

exist.

Distribution/poverty Given lip service, but relegated to “politics”

and a “trickle-down” policy: a rising tide lifts

all boats.

Recognized as important, assumes

greening the economy will reduce

poverty via enhanced agriculture and

employment in green sectors.

A primary concern, since it directly affects quality of life and social capital

and is often exacerbated by growth: a too rapidly rising tide only lifts yachts,

while swamping small boats.

Economic

efficiency/allocation

The primary concern, but generally including

only marketed goods and services (GDP) and

market institutions.

Recognized to include natural capital

and the need to incorporate the value

of natural capital into market

incentives.

A primary concern, but including both market and nonmarket goods and

services, and effects. Emphasis on the need to incorporate the value of

natural and social capital to achieve true allocative efficiency.

Property rights Emphasis on private property and conventional

markets.

Recognition of the need for

instruments beyond the market.

Emphasis on a balance of property rights regimes appropriate to the nature

and scale of the system, and a linking of rights with responsibilities. Includes

larger role for common-property institutions in addition to private and state

property.

Role of government Government intervention to be minimized and

replaced with private and market institutions.

Recognition of the need for

government intervention to

internalize natural capital.

Government plays a central role, including new functions as referee,

facilitator, and broker in a new suite of common-asset institutions.

Principles of

governance

Laissez-faire market capitalism. Recognition of the need for

government.

Lisbon principles of sustainable governance.

Market Forces

Com

mu

nityIn

div

idu

ali

sm

Focus on GDP growth

Focus on Well-being

Fortress World Great Transition(SDG world)

Policy Reform

Scenarios for Australia in 2050: A synthesis and public opinion surveyhttp://www.anuscenarioplanning.com/

Focus on GDP growth

Focus on Well-being

Free EnterpriseThe market knows best

Inequality not addressed

Strong IndividualismEveryone for themselves

Limited Governance

Coordinated ActionNeed planning and governmentEquity maintained

Community WellbeingWe’re all in this togetherGovernance at many levelsStewardship and sharing

CommunityIndividuals

Costanza, R., I. Kubiszewski, S. Cork, P. Atkins, A. Bean, A. Diamond, N. Grigg, E. Korb, J. Logg-Scarvell, R. Navis, and K. Patrick, Journal of Future Studies 19: 49-76 (2015)

www.anuscenarioplanning.com

Preferences for the four scenarios among Australians (n= 2,083)

Papers mentioned in this presentation can be downloaded from:

www.robertcostanza.comThank You