Download Are we collapsing? A review of Diamond's Collapse

Are we collapsing? A review of Diamond’s Collapse
By Scott E. Page
What is all about?
Decline of past civilizations
They did not slowly fall apart
They suffered drastic reduction
in population and productivity
4 books in 1
Collapse and survival of
past civilizations
Techniques used by
scientists
Allegory
How we might save
ourselves
How do we collapse?
By collapse,
Diamond
means
unsustainable
trajectories that
precipitously
fall.
A society output consists of labour and capital
applied to a single natural resource  Q
If Q is renewable, it ↓ from extraction X and ↑ from
regeneration R. Otherwise, it always ↓.
X=R
X>R
Why do we collapse?
Mismanagement
of renewable
natural
resources
Institutional and
cultural failures
Environmental
change
Loss of allies
Gain in enemies
Institutional and cultural failures
Institutional failures refer to poor
institutional choices that result in the
failure to solve collective action
problem
Cultural failures refer to ways of
organizing social and economic life,
ways of seeing the world that create
blind spots and limit opportunities
Institutions and cultures
change very slowly
Climate change
• A change in climate ↓ R
• E must ↓ to maintain sustainability
Discerning climate change is
very difficult now, maybe
impossible for them
Friends and enemies

Decrease of friendly relations with outsiders (trade)

Increase in hostilities with enemies
But irrelevant with environmental stewardship
Youngston and Ohio collapsed when the trade of
steel with friendly neighbours ceased
Poland collapsed when relations with Germany
turned sour and Germany attacked
Friends and enemies
<< It is not that a reduction in trade causes the collapse
but that the collapse causes the reduction in trade >>
As a society begins its collapse, it
has less to trade and therefore
trade falls
Enemy attacks are not
independent of a civilisation
strenght
Anasazi
Inuit
Maya
To summarize
Fluctuations and shifts in R (overharvesting), climate change
and institutional/cultural failure contribute to the collapse
Physical characteristics of a place


A civilisation existing on marginal land,
isolated from others, that does not strictly
control population, that mismanages the
natural resources and suffers climate
changes will probably collapse.
When modern collapses have occured,
those conditions have also existed.
Rwanda
The Big Easter Island
<< The world is one big Easter Island >>
Mismanagement
of renewable
natural
resources
Institutional and
cultural failures
Environmental
change
Loss of allies
Gain in enemies
Institutional and cultural failures
<< Those of us living on the Big Island have
diverse culture and institutions >>
But:


the diversity may be shrinking as market based economies and
democracies forms of governments continue their spread
or it may be increasing as coalescing ethnic identities support
nationalist movements
Climate change
1
Before drouthts or other climate changes were local phenomena.
Now willingness to respond globally to these local catastrophes mitigates their impact.
2
In the past, climate change was an exogenous force.
Now, it is a confusing mixture of exogenous and endogenous forces.
Mismanagement of natural resources
1
2
3
4
• Before the problem was about renewable resources.
• Now it is more about nonrenewable resources.
• Now we have well established property rights.
• Resources are owned and priced
• Deforestation matters less then the destruction of ecosystems.
• However tree re-plantings occure on multiple scale
• The complexity of our environmental interactions far exceeds those of
previous societies.
• We are fundamentally altering multiple ecosystems in myriad ways.
Problems that
arise in complex
systems are
harder to
anticipate and
harder to solve
Failures in group decision making
According to Diamond four types of failurs in groupe
decision making provoke leading societies' failure to
prevent collapse:
1. Difficulty of anticipation
2. Problem complexity
3. Failure to recognize the problem (we have an
abundance of mesures of our invironmental impact)
4. Failure to try to respond (we have too many
problems to fix: terrorism, nuclear weapons etc)
Environmental/technology trade-off


People in the developed world have ecological footprints
nearly three dozen times as large as people living in
more primitive societies.
But if we want Ford and iPod, we need to generate a
little pollution along the way.
Diamond claims that the history of technology
demonstrates that it has created more environmental
problems than it has solved.
Scott E. Page gives technology some chance to save our
modern society.
Environment and political instability

Diamond suggests that those places that are most
politically unstable are also the most environmentally
stressed that today as the past, environental problems
induce political instability.
Political and economic instability allow for unchecked
exploitation
of
resources
and
ecosystem
mismanagement.
Thise twin failings create a positive feedback loop
with extremly sad consequences.
Solutions
PLOTT’S EXPERIMENT
Participants know the probability
distribution over the dividends that
are to be paid each period.
The bubbles emerge anyway.


Standard price bubbles: the price of
the stock exeeds the possible future
value.
Inverted bubbles: the price of stocks
are too low given future demand.
Solutions
NATURAL RESOURCES AND PLOTT’S EXPERIMENT

The value of a unit of virgin forest has
three components:
1) The value of the timber used in production;
2) The value of the ecosystem;
Throughout the increase of our
environmental concern (captured by a
lower discount rate (a higher δ)), we can
change prices of natural resources.
3) The value of the carbon in the trees as a
reducer of global warming.


Diamond: we are in inverted bubble
People are unaware of the second and
the third components of the forest value.
=> systematic underpricing
How can we increase this
concern?
3 Solutions
Bottom up
environmentalism
Letting markets
work
Government
prodding
• Globally fails. Individually even more
harmful. But can be efficient in case of
small comunities in order to solve a
common pool resources problem.
• No free market can solve a common
pool resource problem, but the market
can create incentives that lead to new
technology.
• Can be efficient (gasoline, carbon
taxes)
Ex:
Smoking;
Hispaniola Island:
Dominican Republic
(28% forest, GDPDR
=5GDP Haiti ) vs
Haiti (1% forest).
Conclusions
1
Environmental problems are not the minor ones,
because they can cause the collapse of a society.
2
The importance of government incentives through adequate
policies to avoid the mispricing and mismanagment of natural resources.
THANK YOU FOR
YOUR ATTENTION
Olga Yurchenko and Michele Tuccio