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Summary and Conclusions What I hoped you learned in this course... The Nature of Reality The earth is finite The laws of thermodynamics apply The economic system is a subsystem of the global ecosystem The Order of Analysis Desirable ends (ethics, psychology, sociology, etc.) Scarce resources (ecology, physics) Nature of scarce resources (ecology, physics, economics) Allocation (economics, politics) We can only decide how to allocate after we know what we want, and the resources we have to attain it. Desirable ends: What makes people happy? Money? Desiring less (Not very, and only relative wealth once basic needs are met) The aspiration gap Friends and family Community Helping others Getting old Keeping lists of things for which you’re grateful Satisfaction and income What makes people unhappy? Pursuit of material gain “young adults who focus on money, image and fame tend to be more depressed, have less enthusiasm for life and suffer more physical symptoms such as headaches and sore throats than others.” Kasser, T. (2002). The High Price of Materialism. Cambridge, MIT Press. Comparing yourself with others Status is a never-ending tread-mill Economics Should be a Science, not an Ideology Science: empirical testing of hypotheses and theories Ideology: refuse to test hypotheses, or refuse to discard them when empirical evidence contradicts them Starting from the assumption that markets (private property rights) are always best is ideology Starting from assumption that socialism (public property rights) is always best is ideology The Economic system is inherently complex We depend on natural resources, and must understand both physics and ecology Some resources meet the criteria for efficient market allocation, most do not Human desires are complex Human motivations are complex Markets are never perfect Market model is super-simplified Natural resources are infinite Most goods and services fit the market model Only $$ matters, more is always better Calories model of nutrition Only concern is efficient allocation Therefore, economists must look at: Ecological Sustainability Social Justice Efficient Allocation Trade-offs Conventional course Clear understanding of over-simplified market system Indoctrination into dominant paradigm Faith based Better prep for advanced NCE This course Fuzzy understanding of complex system Adequate exposure to ask questions, decide for yourselves You must test theories against experience Adequate prep for EE and NCE “Sometimes, it is better to be vaguely right than precisely wrong” Amartya Sen What has my generation done for the world? We’ve inherited more from the past generations than all others We’ve taken more from future generations than all others Half of all oil ever used was used in your life time Under business as usual, ¾ of all oil ever to be used will be used in my lifetime What must your generation do? Would Addressing Ecological Problems be be a Sacrifice? Stern review on climate change estimates that investing 1% of annual GNP required to stabilize climate Would returning to your living standard in July be a sacrifice? Economists say yes—the cost of mitigating climate change is too high Could we solve the problem with 1% of GNP? Would Addressing our Problems be a Sacrifice? Over 90% reduction in fossil fuel use required Per capita income (adjusted for inflation) in 1969 was <1/2 of today’s GDP, and poverty was lower We could live at 1969 standard with 1/2 of current CO2 emissions With European efficiency levels, we could have a 1969 lifestyle with ¼ of current emissions With proper incentives in place, we could do much, much better How Miserable was Life in 1969?: The Genuine Progress Indicator How do We Get There? Information Transparent government Independent media Education Changing flows the rules Democratic control over our shared natural and cultural heritage Cooperative provision/management of nonrival resources Just distribution of resources provided by nature and society How do We Get There? Changing the goals—what is desirable? Shared vision of a sustainable and desirable future. Continuous economic growth is undesirable Doom and gloom doesn’t win converts Changing the paradigm—what is possible? Economy is sustained and contained by the global ecosystem Continuous economic growth is impossible Macroallocation is central problem Summary and Conclusions We have the knowledge and policies to build a sustainable economy One of the most powerful (and most neglected) tools is developing and communicating a shared vision of a sustainable and desirable future Another powerful tool is the democratic process, which we have abandoned in this country Summary and Conclusions The first steps (maybe the first 2/3 in the US) can be cost free (no changes in QOL, education, health, happiness) with current technology, or even beneficial e.g. Less fossil fuels = more health: mental, physical, financial, environmental Appropriate policies provide incentives for better technologies The remaining 1/3 can be cost free with new technologies Summary and Conclusions Sustainability is not a sacrifice: our current lifestyle is Naïve and utopian? So were the ideas of democracy, an end to slavery, women's rights It's naïve and utopian to think we can survive without making these changes Take Home Message for Course: Sustainability does not Require Sacrifice, Economic Growth Does Course Number: 90162 Comments are helpful Best aspect of course Worst aspect of course Please TA hand evaluations in to volunteer