Download The Process of Loss: Exploring the Interactions Between Economic

AMER. ZOOL., 34:145-158 (1994)
The Process of Loss: Exploring the Interactions Between
Economic and Ecological Systems1
RICHARD B. NORGAARD
Energy and Resources Program, Room 100 Building T-4, University of California at Berkeley 94720
Though only a few naturalists have read much economic theory, current understandings of how biological diversity is being lost are
largely framed by the models developed by economists over the past two
centuries. There is more than a touch of irony here. While conservation
biologists are challenging the course of economic development, their perception of the process of biodiversity loss is driven by historic patterns
of economic reasoning that have become a part of popular consciousness.
To be sure, the early economic models were designed to address the
development of agriculture and the use of land. But agriculture is the
most dependent on biodiversity. At the same time, the geographic expansion of agricultural activities and the choice of agricultural technologies
have been the key driving force of biodiversity loss. Laterm economic
models addressed the limits of markets to provide guiding signals for
human interaction with the complexities of ecosystems. Even the way we
frame how we should respond to the greatest long-term threat to biodiversity, the likelihood of climate change, is rooted in the economics of
more than half a century ago.
This article elaborates these economic framings of the interaction of
economic systems with the environment and discusses their policy implications. One of the major problems is that even existing economic understandings of the processes of biodiversity loss are only accepted within a
part of the economics profession because these understandings conflict
with political ideologies held by most American economists. Thus processes of biodiversity loss are maintained, not for a lack of knowledge,
but for a desire among people to maintain simple views of biological
systems. Even the patterns of reasoning held by economists who do ponder
biological systems, however, are inadequate. The paper concludes with
suggestions of additional ways of modeling the interactions between human
activity and biological systems which may provide further insight into
how we might better maintain biological diversity.
SYNOPSIS.
THOMAS MALTHUS AND POPULATION
GROWTH
Reverend Thomas R Malthus (17661834) argued that human populations were
capable of increasing exponentially and
would do so as long as sufficient food and
other essentials of life were available (Maithus, 1963). He further hypothesized that
people could expand their food supply
arithmetically through new technologies and
the American Society of Zoologists, 27-30 December
1992, at Vancouver, Canada.
expansion into new habitats. Given the geometric potential of population and arithmetic food
constraint, population periodicall
y surpasses food supply. At these times,
Malthus argued, people would ravage the
land
> 8° t o w a r o v e r food > a n d succumb to
disease and starvation (Fig. 1). Human
numbers would consequently drop to sustamable levels whence the process would
re eat a ain
P
8 - Whether or not one finds our
demographic history consistent with Malthus's model, it has become a part of human
consciousness, making it difficult to contemplate, let alone dlSCUSS, the issues Of
population increase and its effects on bio-
145
146
RICHARD B. NORGAARD
Population
Food
Production
time
FIG. 1. Thomas Malthus's model of population growth and collapse.
diversity without his framing coming to
mind. The success of Malthus's model stems
from its simplicity. But the dynamics of
population growth and how people depend
on the environment are much more complex than Malthus's model. Thus, while
Malthus provided us with a powerful model,
its simplicity restricts its usefulness for policy making beyond the obvious prescription
that fewer people would probably be better.
DAVID RICARDO AND THE PATTERN OF
HUMAN EXPANSION
David Ricardo (1772-1823) introduced a
second model of how economic activity
relates to the environment, not because he
was concerned with environmental degradation or human survival, but rather because
he was justifying why landlords received a
rent from their ownership of land (Ricardo,
1926). Ricardo argued that people would
logically initially farm the land which produced the most food for the least work. As
population increased, farming would extend
to less fertile soils requiring more labor (Fig.
2). Food prices would have to rise to cover
the cost of the extra labor on the less fertile
land, and higher food prices, in turn, would
induce a more intensive use of labor on the
better land. This model indicates how
increasing population drives people to farm
in previously undisturbed areas, how higher
food prices lead to the intensification and,
in modern agriculture, the greater use of fertilizers and pesticides on prime agricultural
lands, and how fluctuations in food prices
can result in the periodic entry and exit of
farmers on the extensive margin and shifts
practices on the intensive margin. Ricardo's
model of how agricultural activities are patterned on the land in response to population
growth and changes in food prices are critical to our understanding of the complex
interrelations between human survival and
biodiversity.
KARL MARX AND THE STRUCTURE OF
OWNERSHIP AND CONTROL
Karl Marx (1818-1883), among his multiple critiques of capitalism, addressed how
economic inequities generated by the concentration of land and capital among a small
portion of society affected how economies
worked (Marx, 1954). Neoclassical models
also readily show that peasants or others
who work land and interact with biological
resources owned by someone else have little
incentive to protect them (see: Bator, 1957;
THE PROCESS OF LOSS
147
FIG. 2. The "step-function" illustrates increasing labor required to produce a unit of food on lower quality
land, resulting in better quality land earning a rent, shaded area, as poorer quality land is brought into production
over time.
Williamson, 1986). Landlords can only
counteract this lack of incentive by diverting labor from other productive activities
and employing it to monitor and enforce
their interests in protection, a diversion that
would not be necessary with a more equal
distribution of control. Furthermore,
especially wealthy landlords may have little
interest in protecting a particular land or
biological resource for their descendants
when they hold land in abundance.
It has long been known that how economies allocate resources to different material
ends depends on how resources are distributed between people, i.e., owned by or otherwise under the control of different people,
in the first place. Imagine two countries with
identical populations and identical resources
allocated by perfect markets. In the first
country, rights to resources are distributed
between people approximately equally,
people have similar incomes, and they consume similar products, perhaps corn,
chicken, and cotton clothing. In the second
country, rights are concentrated among a
few people who can afford luxury goods such
as beef, wine, caviar, fine clothes, and ecotourism, while those who have few rights to
resources, living on their labor alone, consume only the most basic of goods like rice
and beans. In each country, markets efficiently allocate resources to the production
of products, but how land is used, the types
of products produced, and who consumes
them depends on how rights to resources
are distributed. For different distributions
of rights, the efficient use of resources differs.
The consequences of concentrated ownership and control, perhaps intuitive to
many, owes its history to economic thinking
and modeling. Questions of equity are
extremely important to the process of biodiversity loss and to its eventual protection.
The occupation and ecological transformation of the Amazon has been partly
driven by the concentration of the ownership of land in the more productive regions
of Amazonian nations and partly driven by
the political power of the rich which enabled
them to obtain subsidies to engage in largescale cattle ranching. The on-going effort to
establish international agreements on the
management of biodiversity has been
repeatedly forestalled by debates over the
ownership and control of biological
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RICHARD B. NORGAARD
FIG. 3. Market distortion due to an external cost.
resources. But it is not simply a debate over
fairness. The structure of the global economy and how specific economies interact
with nature in the future will depend on
whether nations of origin or Northern commercial interests which will likely discover
new uses for heretofore unused species
receive the "rent" from biological resources.
A. C. PIGOU AND MARKET FAILURE
Alfred C. Pigou (1877-1959) formally
elaborated how costs which are not included
in market prices affect how people interrelate with their environment. External costs,
or externalities, are external to markets and
hence do not affect how markets operate
when in fact they should. Consider, for
example, pesticide use in agriculture and the
associated loss of biodiversity. In Figure 3
below, So illustrates the willingness of farmers to supply food at different prices while
D is the demand curve illustrating the willingness of people to purchase food at different prices. The market clears at the price
Po and quantity Qo. Now, imagine that we
could measure the value of biodiversity lost
through pesticide use and add this to the
cost of pesticides. This would reduce the
quantity of food that farmers could produce
at any given price, shifting the supply curve
to S,, the price of food to P,, and the quantity of food supplied and demanded to Q,.
By including the cost of lost biodiversity
through farmers' decisions to use pesticides,
we internalize a cost which was previously
external to the market and affect how the
market operates. Following the logic of Pigou
and numerous environmental economists
since, biodiversity is not adequately protected because its value is not included in
the market signals which guide the economic decisions of producers and consumers and thereby the overall operation of the
economic system.
Pigou also elaborated what has mistakenly come to be known as "The Tragedy of
the Commons" (Hardin, 1968). Resources
open to access by multiple users without
adequate rules governing their use will be
overused. Both traditional and modern
societies typically develop rules for the use
of resources held in common. Societies in
transition between traditional and modern
form frequently experience the tragedy of
open access when neither traditional nor
modern regimes of management prevail.
Similarly, resources on frontiers beyond the
control of governments, resources of the
open sea, and wildlife which cross national
boundaries are frequently open-access
REUENUES AND COST
THE
149
PROCESS OF LOSS
TOTAL
* COST
...
/ MAX./
/ RENTS \
\
Ej
FISHING EFFORT
TOTAL
\ REUENUES
E2
FIG. 4. Excessive fishing effort in an open-access fishery.
resources (Berkes, 1989). Open access has
led to the extinction of diverse species and
the genetic impoverishment of many.
H. Scott Gordon (1954) formulated the
problem as shown in Figure 4. Imagine an
open-access fishery with total costs and total
revenues from fishing effort as shown. Profits or rents from the fishery are maximized
at level of effort E, but with unrestricted
access, people would put more effort into
fishing, until the level of E2 where no rent
would be earned from fishing and no one
would consider additional fishing worth the
effort since costs would now be greater than
revenues. Since more fish are caught at
greater levels of effort, over fishing is more
likely to occur in an open-accessfisherythan
in a fishery managed as a commons.
HAROLD HOTELLING AND THE EFFICIENT
USE OF RESOURCES OVER TIME
Harold Hotelling developed a model of
efficient resources use over time that helps
explain how species are driven to extinction
(Hotelling, 1931). According to Hotelling's
model, even when market prices fully reflect
the value of a biological resource, it will be
efficient to exploit a species to extinction or
totally degrade an ecosystem if its value over
time is not increasing at least as fast as money
deposited in an interest bearing bank
account. The logic is distressingly simple. If
the value of the biological resource is not
increasing as fast as the rate of interest, both
an individual owner of a biological resource
and society at large would be better off
exploiting the resource faster and putting
the returns from the exploitation in the capital market where it would be invested in
the creation of human-produced capital
which earned a return greater than the rate
of interest. In this view, biological resources
are a form of natural capital which can be
converted into other forms of capital and
should be so converted if they do not earn
as high a return as other forms of capital.
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RICHARD B. NORGAARD
CTS
$
niB I
/
10
h
tine
Fio. 5. Commercial and non-commercial tree growth and harvest time.
This argument both describes why economically rational owners of biological resources
exploit them to extinction or destruction
and prescribes that they "should" do so. So
long as markets reflect true values, historic
and ongoing losses of genetic, species, and
ecosystem diversity are efficient and
"should" occur.
Biological resource management,
biodiversity loss, and the rate
of interest
Hotelling's argument highlights the
importance of interest rates in the management of biological resources. It has long been
argued, for example, that trees which grow
slower than the rate of interest will never
be commercial. Imagine that it costs $ 10 to
raise and plant a tree seedling. Imagine that
the rate of interest is 8%. An entrepreneur
has the choice of putting $10 in the bank
earning 8% or planting the tree and harvesting it at a later date. Each year, the
money in the bank (MIB in Fig. 5) increases
in value: to $10x(l.08) or $10.80 at the end
of the first year, to $10x(l.08) 2 or $11.66
at the end of the second year, to $ 10 x (1.08)3
or $12.60 at the end of the third year, etc.
So long as the value of the tree grows faster
than the money in the bank, it is a commercial tree species (CTS) and it pays to
invest in the tree. Eventually, of course, the
tree would begin to grow more slowly and
when it is only growing in value as fast as
money in the bank (th in Fig. 5), it pays to
cut the tree (Fig. 5). But if the tree never
grows in value faster than money in the bank,
it is a non-commercial tree species (NCTS),
and it never pays to plant the tree in the
first place. Slow growing trees such as teak
and many other hardwoods will be cut down
and not replanted when interest rates are
even moderately high. The World Bank
considers returns of 15% to be acceptable
and hence has rarely financed timber projects except those with very fast growing species such as eucalyptus. Historically development aid has financed the replacement of
natural forests of mixed species by monocultural forests of fast growing species on
this understanding of economic efficiency.
Clearly the level of the rate of interest
affects how biological resources are managed and hence the rate of ecosystem transformation and species extinction. This has
led economists and biologists alike to question whether the rate of interest generated
in capital markets is the socially correct rate.
Might capital markets work imperfectly,
THE PROCESS OF LOSS
generating rates of interest which are too
high and hence leading to excessive biodiversity loss (Marglin, 1963; Goodland and
Ledec, 1987)? There are good reasons to
expect that lower rates of interest would
favor the conservation of biodiversity,
though there are situations when this would
not be the case (Markandya and Pearce,
1988). This has not been simply an academic argument. The World Bank now realizes how its own evaluation policies have
hastened biodiversity loss and, in part for
this reason, no longer finances the transformation of natural forest habitat.
Preserving biodiversity as an option
Behind the logic of Hotelling's argument,
there are many assumptions about the characteristics of natural capital and humanproduced capital, future technological
developments, the limits of peoples' ability
to comprehend social and ecological complexities with respect to how the future will
unfold, and the appropriateness of current
peoples exposing future peoples to the risks
of not having biological diversity they might
later find of value. This has led economists
to argue, given the irreversibility of biodiversity loss (Fisher and Hanemann, 1985),
that it is appropriate to maintain biological
diversity as an option even though narrow
economic reasoning suggests otherwise.
Better-safe-than-sorry reasoning has led to
the introduction of option value and safe
minimum standards in the economic interpretation of how biological resources should
be managed (Bishop, 1978).
POLICY IMPLICATIONS
Each explanation of the process of loss
indicates possible ways the process could be
slowed or halted.
Incorporation of species into the
market system
The logic of market failure has led economists, and increasingly biologists as well,
to argue that species need to be incorporated
into the market system (Hanemann, 1988;
McNeely, 1988). For those species where it
is possible to give private individuals of local
communities the rights to their use, their
exploitation by others will be averted, the
151
owners may benefit from conserving the
species and thereby choose to do so, and
consumers will pay a higher price reflecting
the costs of managing the species in a more
sustainable manner. It is important to keep
in mind, however, that incorporating species into the market system may not result
in their conservation and indeed could even
accelerate their extinction. Species within
the market system, for example, will not be
conserved if their value is expected to grow
at less than the rate of interest unless other
controls are also put on their harvest.
Strengthening common management
Where species cannot be assigned to individuals, common management institutions
are appropriate and may need strengthening. In some cases, traditional institutions
can be maintained in the face of modernization. In other cases, new institutions will
be needed. Common management institutions may be communal, regional, national,
or global.
The valuation of biodiversity
Even when species cannot be better conserved in the market or better managed
through commons, knowing their value can
help convince people and their political representatives that the species deserves protection. Valuation can also improve costbenefit analyses for development projects
which threaten species. Techniques for valuation include determining people's willingness to pay to maintain species through
questionnaires and through analyses of their
expenditures to observe the species (Brown
and Goldstein, 1984; Randall, 1988). While
several techniques are proving interesting,
valuation is by no means an easy task and
estimates should be used cautiously. A major
difficulty is related to the systemic nature
of economics, ecosystems, and the process
of loss. Market systems related everything
to everything else. When the price of oil
changes, for example, the price of gasoline
changes the demand and hence the price of
products which use gasoline such as automobiles changes, the demand for and hence
the price of goal changes, etc. Prices bring
markets to equilibrium and their flexibility
is essential to this task. Similarly, the value
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RICHARD B. NORGAARD
of any given species will depend on the
availability of a host of other species on
which it is dependent as well as other species
which may be substitutes or complements
in use. To think that a species has a single
value is to deny both ecosystem and economic system interconnections. Nevertheless, the valuation of genetic diversity, species, and even ecosystems can assist us in
understanding their importance and conveying this understanding to the public and
in the political process.
A N INTERIM SUMMARY OF THE
PROCESS OF LOSS
The foregoing presents a summary of the
history of models developed by economists
for comprehending how people interact with
the environment. These understandings are
generally shared among environmental
economists and have become a part of the
understanding of conservation biologists and
environmental policy analysts. Several
caveats must be kept in mind, however.
First, the models have been presented in
their most simple form to highlight each
model's special contribution to our understanding of the process of biodiversity loss.
It is important to keep in mind that the
different processes each model emphasizes
are interactive. In reality, we are dealing
with Malthus's concern with population
growth, the patterns of land-use suggested
by Ricardo's model, the maldistribution of
rights to biological resources highlighted by
Marxian thinking, the problems of open
access and other forms of market failure
identified by Pigou, and questions as to the
appropriateness of interest rates as well as
the level of information about the future
used by economic factors as highlighted by
Hotelling's model. Reducing the rate of biodiversity loss will almost always entail multiple instruments for adjusting economic
decision-making. A single instrument, such
as the inclusion of the values of biological
resources in the cost-benefit analyses of
development projects, will rarely be sufficient alone.
Second, environmental economists, conservation biologists, and environmental
policy analysts share these understandings
of how biodiversity is lost, but the consensus
does not extend to economists, policy makers, and political representatives in general.
Each of the foregoing models complicates
or raises questions about the general model
of neoclassical economics. Hence, each
complicates and questions the general policy conclusions of neoclassical economics.
In light of these models, for example, the
general "rule" that minimizing government
interference in markets and trade does not
hold. Maurice M. Kelso aptly titled one of
his papers: "Natural Resource Economics:
The Upsetting Discipline" to emphasize this
very problem (Kelso, 1977). Most economists still minimize the complexities of how
economies interact with environmental systems because if they conceded that such
complexities were important, economic
analysis would be much more difficult and
would result in much more complex economic policies. General economic theory
books, whether beginning or advanced,
rarely refer to environmental complexities
as a special problem, let alone as a general
problem (Varian, 1984; Kreps, 1990; Stiglitz, 1992).
Thus, the understanding of the process of
biodiversity loss that exists is not effective
because economics as the science of systems
is relatively insignificant compared to economics as political ideology. Biodiversity is
being lost, in part, because most economists, policy analysts, and politicians refuse
to admit complexities that confound or blatantly contradict their political economic
worldview. In short, the process of loss is
intimately related to human beliefs that the
world is a very simple system which people
can control, is very resilient to human interaction, and has infinite potential for human
exploitation through new knowledge and
technologies (Beckerman, 1972; Becker,
1991). These beliefs are deeply rooted in
economic thinking and blind economists to
their own more sophisticated models which
complement biological understanding.
Third, though the economic explanations
of the process of biodiversity loss are quite
helpful, they have serious weaknesses. On
the one hand, a concerted effort is needed
to bring what is now conventional understanding among environmental economists
into the mainstream of economics, policy
THE
Utility o f Current
PROCESS OF LOSS
153
Generation
FIG. 6. A move from Points A to B, towards the frontier, increases efficiency. A move from Points B to C,
along the frontier, affects equity.
analysis, and political discourse. On the
other hand, our understanding of the process of loss needs further improvement. New
directions are discussed below.
THE
RIGHTS OF FUTURE GENERATIONS
The politics of conservation has been
largely about the rights of future generations. Our concern with conserving biodiversity over the long run is rooted in our
concern for future generations (Partridge,
1981; Weiss, 1989; Norton, 1986, 1991;
Laslett and Fishkin, 1992). Economists have
also pondered how economic logic treats
future generations, as evidenced by their own
concern with the ethics of discounting costs
borne and benefits received by future generations. The models economists have
developed and advocated for use in the policy process to date, however, have implicitly
assumed that current generations hold all
rights to resources. These models are
designed to show how current peoples can
efficiently exploit resources rather than how
they can be shared with future generations
and efficiently be used between generations.
Environmental economists, though concerned with the future, have followed this
tradition in economic thinking, false to their
own theory, of looking for the efficient allocation of resources when there are many
depending on how we care about the future
by extending rights to, or protecting existing
rights of, future generations. Recently, however, economists have constructed models
which allow them to understand how
resources can both be efficiently used and
shared between generations.
The relation between allocative efficiency
and the intergenerational distribution of
resource rights is illustrated in Figure 6
(Howarth, 1990; Howarth and Norgaard,
1990, 1992; Norgaard and Howarth, 1991).
The utility or welfare possibility frontier U
indicates the highest utility possible for people in each future generation given the util-
154
RICHARD B. NORGAARD
ity of people in the current generation. Each
point on this frontier results from an efficient allocation of resources between uses
associated with different distributions of
resource rights between generations. Clearly,
there are many possible efficient allocations.
Where an efficient economy is located on U
is determined by the initial distribution of
rights to productive assets, including natural assets. A society which accepts the obligation of sustaining itself over generations
must operate above the 45° line in Figure
6. To assure sustainability, each generation
must transfer sufficient assets to the next
generation so that the next generation is as
well off as it is.
The models of environmental, resource,
and development economists to date, even
in the most recent literature on sustainability, are inappropriate for addressing intergenerational equity. The emphasis has been
on internalizing externalities to increase
efficiency, on moving the economy from a
position such as that at Point A in Figure 6
toward a position such as Point B. There is
a different set of prices for goods traded in
the market and for non-market goods for
each point on the utility frontier in Figure
6. Biological resource valuation as currently
conducted, for example, derives prices which
would move an economy towards Point B,
increasing efficiency, helping future generations relative to Point A, but not necessarily making the economy sustainable.
Wholly new ways of thinking about environmental valuation will be needed. The
new models have an exciting theoretical
result. When the current generation decides
to assure assets for future generations, the
rate of interest goes down. Economists have
been reasoning backwards in their search for
reasons interest rates perhaps should be
lower in order to protect future generations.
When we decide to protect future generations, interest rates become lower.
The new models elaborating the relationship between efficiency and intergenerational equity highlight how economic reasoning must work in conjunction with ethical
criteria exercised through politics. While
many economists will continue to argue in
political arenas that protecting biological
resources for future generations is ineffi-
cient, their arguments violate economic
logic. There are more efficient and less efficient ways to protect biological resources,
but caring about the future is not a matter
of economic efficiency alone.
FUTURE DIRECTIONS FOR RESEARCH
There are some critical issues that are still
not addressed by our formal understanding
of the relationships between economic and
environmental systems. In each case, some
research has been done and many have an
intuitive grasp of the issues. Further formal
modeling, however, is needed.
The globalization of the economy
The interface between the environment
and the modern global economy is clearly
different than that of historically more
regional economies. While considerable
environmental concern has been expressed
in hemispheric and global trade negotiations, we are surprisingly ill-equipped to
understand how the globalization of the
economy relates to environmental management.
The global economy is rationalized
around the assumption of individualism as
much as around the logic of trade. The logic
of trade is simply that when two choosers
choose to enter into an exchange, it is
because it makes each of them better off.
To argue that free trade is good policy, one
must also assure that there are no costs and
benefits external to those who choose. Economists have always assumed that it is individuals and corporations who should be free
to choose. But the logic of trade is indifferent
to whether the choosers are individuals,
communities, bioregions, or nations. The
association of trade with individualism
reflects the dominant premise in modern
political thought. It reflects western culture
rather than economic logic. The difference
between individual and community interest, of course, is intimately tied to the systemic character of environmental systems.
Nature cannot readily be divided up and
assigned to individuals, hence the failure of
markets.
"Free to choose" as individualist ideology and its use to justify the expansion of
exchange across communities opens up new
THE PROCESS OF LOSS
155
VALUES
KNOWLEDGE •
ENVIRONMENT f-
• ORGANIZATION
TECHNOLOGY
FIG. 7. The Coevolutionary Development Process.
opportunities for market failures. Spatial
economic expansion increases the social
phenomena labelled "distancing" by sociologists (Giddens, 1990), the increased separation of individual action from its social
and environmental consequences, creating
externalities and increasing the difficulty of
internalizing them. Exchange theory
assumes away distance while western political philosophy assumes away community.
To the extent that environmental problems
are more easily perceived and controlled at
local and community levels (Dryzek, 1987),
unsustainable interactions between the
economy and environment result from too
much distancing. Similarly, trade shifts the
nature of risk much like it opens up the
possibilities for externalities (Norgaard,
19896). Formal models are needed to elaborate how trade and distancing can create
market failures and to highlight appropriate
geographic scales for different human activities. The arguments raised by those advo-
cating bioregionalism (Sale, 1991) are incorporated in the informal understanding of
conservation biologists but have yet to be
formalized in economic thinking.
The coevolution of modern societies
We, Homo sapiens, distinguish ourselves
from other species in terms of the nature
and extent of our knowledge and the ways
in which we use knowledge to devise technologies and organize our activities. We are
also the only species known to have initiated the wholesale extinction of other species. These distinctions are undoubtedly
related and slowing biodiversity loss will
ultimately depend on our uncovering and
transforming these relations.
Consider development as a process of
coevolution between knowledge, values,
organization, technology, and the environment (Fig. 7). Each of these subsystems is
related to each of the others yet each is also
changing and affecting change in the others
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RICHARD B. NORGAARD
through selection. Deliberate innovations,
chance discoveries, and random changes
occur in each subsystem which affects the
distribution and qualities of components in
each of the other subsystems. Whether new
components prove fit depends on the characteristics of each of the subsystems at the
time. With each subsystem putting selective
pressure on each of the others, they coevolve
in a manner whereby each reflects the other.
Thus, everything is coupled, yet everything
is changing (Norgaard, 1993).
Environmental subsystems are treated
symmetrically with the subsystems of values, knowledge, social organization, and
technology in this coevolutionary explanation of development. New technologies, for
example, exert new selective pressures on
species, while newly evolved characteristics
of species, in turn, select for different technologies. Similarly, transformations in the
biosphere select for new ways of understanding the biosphere. For example, the
use of pesticides induces resistance and secondary pest resurgence, selecting both for
new pesticides and for more systematic ways
of thinking about pest control. Pests, pesticides, pesticide production, pesticide
institutions and policy, how we understand
pest control, and how we value chemicals
in the environment demonstrate an incredibly tight coevolution in the second half of
this century (Brown, chapter 2, 1991). In
the short-run people can be thought of as
interacting with the environment in response
to market signals or their absence. The coevolutionary model, however, incorporates
longer-term evolutionary feedbacks. To
emphasize coevolutionary processes is not
to deny that people directly intervene in and
change the characteristics of environments.
The coevolutionary perspective puts its
emphasis on the chain of events thereafter—
how different interventions alter the selective pressure and hence the relative dominance of environmental traits which, in turn,
select for values, knowledge, organization,
and technology and hence subsequent interventions in the environment.
From the coevolutionary perspective, we
can see more clearly how economies have
transformed from coevolving with their
ecosystems to coevolving around the com-
bustion of fossil hydrocarbons. In this transformation, people have been freed from
environmental feedbacks on their economic
activities that they experienced relatively
quickly as individuals and communities.
The feedbacks which remain, however,
occur over longer periods and greater distances and are experienced collectively by
many peoples, even globally, making them
more difficult to perceive and counteract
(Norgaard, 1993). By tapping into fossil
hydrocarbons, western societies freed themselves, at least for the short to medium term,
from many of the complexities of interacting with environmental systems. With an
independent energy source, tractors replaced
animal power, fertilizers replaced the complexities of interplanting crops which were
good hosts of nitrogen fixing bacteria with
those which were not, and pesticides
replaced the biological controls provided by
more complex agroecosystems. Furthermore, inexpensive energy meant crops could
be stored for longer periods and transported
over greater distances. Each of these accomplishments was based on the partial understanding of separate sciences and separate
technologies. At least in the short run and
"on the farm," separate adjustments of the
parts seemed to fit into a coherent, stable
whole. Agriculture transformed from an
agroecosystem culture of relatively self-sufficient communities to an agroindustrial
culture of many separate, distant factors
linked by global markets. The massive
changes in technology and organization gave
people the sense of having control over
nature and being able to consciously design
their future while in fact problems were
merely being shifted beyond the farm and
onto future generations.
This explanation of the unsustainability
of modern societies then is simply that
development based on fossil hydrocarbons
allowed individuals to control their immediate environments for the short-run while
shifting environmental impacts, in ways
which have proven difficult to comprehend,
to broader and broader publics, indeed the
global polity, and on to future generations.
Working with these collective, longer term,
and more uncertain interrelationships is at
least as challenging as environmental man-
157
THE PROCESS OF LOSS
agement has been historically. People's
confidence in the sustainability of development is directly proportional to their confidence in our ability to address these new
challenges.
The coevolutionary perspective helps us
see that the problem of biodiversity loss is
not simply a matter of establishing market
incentives to adjust how we interact with
nature. Our values, knowledge, and social
organization have coevolved around fossil
hydrocarbons. Our fossil-fuel driven economy has not simply transformed the environment, it has selected for individualist,
materialist values; favored the development
of reductionist understanding at the expense
of systemic understanding; and preferred a
bureaucratic, centralized form of control
which works better for steady-state industrial management than for the varied, surprising dynamics of ecosystem management. And the coevolutionary framing
highlights how our abilities to perceive and
resolve environmental problems within the
dominant modes of valuing, thinking, and
organizing are severely constrained.
CONCLUSIONS
Like the multifaceted, hierarchical nature
of biodiversity itself, the loss of biodiversity
has many, nested explanations. From a systemic perspective, how we value, know,
organize, and do things have coevolved in
a manner which reduces biological diversity
and will ultimately result in our demise. At
the same time, there is fortunately sufficient
diversity in modern understandings that
some foresee this fate and are drawing on
more sophisticated ways of knowing and
exploring alternative ways of organizing and
doing things. From this perspective, it is
clear that modern societies put too little
value on the future, modern peoples are
responding to an incomplete set of price signals and are consequently interacting with
biological resources in ways which destroy
them. While economic reasoning emphasizes price signals, we have a residual sense
of how communities can influence values
and behavior. To stem the loss of biodiversity, we need to reverse the process of
distancing over time and space through bet-
ter price signals and better communities,
from local to global, so that individual
behavior is more consistent with ecological
complexities.
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