getting inside the externalities: a short trip to the heart of €conomic$ failure
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After 40 years of environmental negotiations and the recent inconclusive results of Rio+20, there is an expanding consensus that the current negotiation model composed of a series of subsequent summits and conferences of the parties under the United Nations umbrella has been exhausted. This deadlock lead to a perception that real change is a “political impossibility” and inevitably installed a sense of fatalism. It is starting to be clear that the main obstacle that we are facing is not technological but consists of the construction of a new juridical-economic structure that is able to provide an answer to the global and structural dimension of the current crisis. Within this context, the Common Heritage of Mankind continues to be the only structure that can offer an international juridical framework capable of regulating goods that take us to a dimension of the human condition found outside the material realm, but which does involve the whole of humanity. The proposal to configure the climate system as common to the whole of humanity could serve as a basis to resolve a series of complex operational problems. These include the lack of intergenerational reach of Law that deals with new global phenomena or the global dispersion of positive and negative externalities of countries that affect the common system. The proposed classification would enable accounting and governance of externalities between countries, taking into consideration the actions of past generation and the rights of future ones. The first step consists of finding out how to describe this juridical object, which finds itself both outside and inside of all states, and how to measure and consequently attribute it to someone. This immaterial and intangible nature is that what really unites us all and turns us all global neighbors. The creation of a new Intangible Natural Heritage relative to the climate and ocean systems of which the owner should be all of humanity serves as the structural support that we propose to construct a new economy. http://www.earth-condominium.org/en/conference/earth-condominium-conference/TRANSCRIPT
- 1. GETTING INSIDE THEEXTERNALITIES:A SHORT TRIP TO THEHEART OF CONOMIC$FAILUREA JointVenture byNuno G. Oliveira(ISG Business & EconomicsSchool, PT)& Sander Jacobs(University of Antwerp, BE)
2. Oliveira & Jacobs, 16.01.2013; Earth Condominium Conference, Gaia, PTGETTING INSIDE THE EXTERNALITIES: A SHORT TRIP TO THE HEART OF CONOMIC$ FAILURE 3. Oliveira & Jacobs, 16.01.2013; Earth Condominium Conference, Gaia, PTGETTING INSIDE THE EXTERNALITIES: A SHORT TRIP TO THE HEART OF CONOMIC$ FAILURE 4. Oliveira & Jacobs, 16.01.2013; Earth Condominium Conference, Gaia, PTGETTING INSIDE THE EXTERNALITIES: A SHORT TRIP TO THE HEART OF CONOMIC$ FAILUREAtmosphereLithosphereHydrosphereBiosphereOriginal land cover andderived land usesHuman-madeCapital(Built Capital,Human CapitalSocial Capital)EcosystemServicesHumanImpactsAnthroposphereSolar EnergyNatural CapitalRest oftheWorld 5. Oliveira & Jacobs, 16.01.2013; Earth Condominium Conference, Gaia, PTGETTING INSIDE THE EXTERNALITIES: A SHORT TRIP TO THE HEART OF CONOMIC$ FAILURE 6. Oliveira & Jacobs, 16.01.2013; Earth Condominium Conference, Gaia, PTGETTING INSIDE THE EXTERNALITIES: A SHORT TRIP TO THE HEART OF CONOMIC$ FAILURE 7. Oliveira & Jacobs, 16.01.2013; Earth Condominium Conference, Gaia, PTGETTING INSIDE THE EXTERNALITIES: A SHORT TRIP TO THE HEART OF CONOMIC$ FAILUREApocalypse Soon: Has Civilization Passed the Environmental Point of No Return? Madhusree Mukerjee, Scientific American, 23.05.2012 8. Oliveira & Jacobs, 16.01.2013; Earth Condominium Conference, Gaia, PTGETTING INSIDE THE EXTERNALITIES: A SHORT TRIP TO THE HEART OF CONOMIC$ FAILURE 9. Oliveira & Jacobs, 16.01.2013; Earth Condominium Conference, Gaia, PTGETTING INSIDE THE EXTERNALITIES: A SHORT TRIP TO THE HEART OF CONOMIC$ FAILURE 10. Oliveira & Jacobs, 16.01.2013; Earth Condominium Conference, Gaia, PTGETTING INSIDE THE EXTERNALITIES: A SHORT TRIP TO THE HEART OF CONOMIC$ FAILURE 11. Oliveira & Jacobs, 16.01.2013; Earth Condominium Conference, Gaia, PTGETTING INSIDE THE EXTERNALITIES: A SHORT TRIP TO THE HEART OF CONOMIC$ FAILURE 12. Oliveira & Jacobs, 16.01.2013; Earth Condominium Conference, Gaia, PTGETTING INSIDE THE EXTERNALITIES: A SHORT TRIP TO THE HEART OF CONOMIC$ FAILURE 13. Oliveira & Jacobs, 16.01.2013; Earth Condominium Conference, Gaia, PTGETTING INSIDE THE EXTERNALITIES: A SHORT TRIP TO THE HEART OF CONOMIC$ FAILURE 14. Oliveira & Jacobs, 16.01.2013; Earth Condominium Conference, Gaia, PTGETTING INSIDE THE EXTERNALITIES: A SHORT TRIP TO THE HEART OF CONOMIC$ FAILURE 15. Oliveira & Jacobs, 16.01.2013; Earth Condominium Conference, Gaia, PTGETTING INSIDE THE EXTERNALITIES: A SHORT TRIP TO THE HEART OF CONOMIC$ FAILURE 16. Oliveira & Jacobs, 16.01.2013; Earth Condominium Conference, Gaia, PTGETTING INSIDE THE EXTERNALITIES: A SHORT TRIP TO THE HEART OF CONOMIC$ FAILURE 17. Oliveira & Jacobs, 16.01.2013; Earth Condominium Conference, Gaia, PTGETTING INSIDE THE EXTERNALITIES: A SHORT TRIP TO THE HEART OF CONOMIC$ FAILURE 18. Oliveira & Jacobs, 16.01.2013; Earth Condominium Conference, Gaia, PTGETTING INSIDE THE EXTERNALITIES: A SHORT TRIP TO THE HEART OF CONOMIC$ FAILURE 19. Oliveira & Jacobs, 16.01.2013; Earth Condominium Conference, Gaia, PTGETTING INSIDE THE EXTERNALITIES: A SHORT TRIP TO THE HEART OF CONOMIC$ FAILURE 20. Oliveira & Jacobs, 16.01.2013; Earth Condominium Conference, Gaia, PTGETTING INSIDE THE EXTERNALITIES: A SHORT TRIP TO THE HEART OF CONOMIC$ FAILURE 21. Oliveira & Jacobs, 16.01.2013; Earth Condominium Conference, Gaia, PTGETTING INSIDE THE EXTERNALITIES: A SHORT TRIP TO THE HEART OF CONOMIC$ FAILUREThe Perverse Pyramid: The US Farm Bills skewed system of subsidies helps explain why unhealthy foods are often cheap and plentiful,while healthy foods are more expensive and less available. The priorities in the subsidy system stand in stark contrast to the federalgovernments own advice on nutrition. 22. Oliveira & Jacobs, 16.01.2013; Earth Condominium Conference, Gaia, PTGETTING INSIDE THE EXTERNALITIES: A SHORT TRIP TO THE HEART OF CONOMIC$ FAILURE 23. Oliveira & Jacobs, 16.01.2013; Earth Condominium Conference, Gaia, PTGETTING INSIDE THE EXTERNALITIES: A SHORT TRIP TO THE HEART OF CONOMIC$ FAILUREWell, since most of you came here to attend a lecture from Joshua Bishop 24. Solutions? Protect resources from market failures? Expand market to internalize externalities? A combined solutionOliveira & Jacobs, 16.01.2013; Earth Condominium Conference, Gaia, PTGETTING INSIDE THE EXTERNALITIES: A SHORT TRIP TO THE HEART OF CONOMIC$ FAILURE 25. USA constitution1894forever wild article XIVThe lands of the state, now owned or hereafteracquired, constituting the forest preserve asnow fixed by law, shall be forever kept as wildforest lands. They shall not be leased, sold orexchanged, or be taken by any corporation,public or private, nor shall the timber thereon besold, removed or destroyed.Oliveira & Jacobs, 16.01.2013; Earth Condominium Conference, Gaia, PTGETTING INSIDE THE EXTERNALITIES: A SHORT TRIP TO THE HEART OF CONOMIC$ FAILURE 26. Oliveira & Jacobs, 16.01.2013; Earth Condominium Conference, Gaia, PTGETTING INSIDE THE EXTERNALITIES: A SHORT TRIP TO THE HEART OF CONOMIC$ FAILURE 27. Oliveira & Jacobs, 16.01.2013; Earth Condominium Conference, Gaia, PTGETTING INSIDE THE EXTERNALITIES: A SHORT TRIP TO THE HEART OF CONOMIC$ FAILURE 28. Oliveira & Jacobs, 16.01.2013; Earth Condominium Conference, Gaia, PTGETTING INSIDE THE EXTERNALITIES: A SHORT TRIP TO THE HEART OF CONOMIC$ FAILURE 29. Oliveira & Jacobs, 16.01.2013; Earth Condominium Conference, Gaia, PTGETTING INSIDE THE EXTERNALITIES: A SHORT TRIP TO THE HEART OF CONOMIC$ FAILURE 30. Oliveira & Jacobs, 16.01.2013; Earth Condominium Conference, Gaia, PTGETTING INSIDE THE EXTERNALITIES: A SHORT TRIP TO THE HEART OF CONOMIC$ FAILURE 31. Oliveira & Jacobs, 16.01.2013; Earth Condominium Conference, Gaia, PTGETTING INSIDE THE EXTERNALITIES: A SHORT TRIP TO THE HEART OF CONOMIC$ FAILURE 32. The systems design is into the hands of financialinstitutions which are incentivized by short-termmonetary gains. Free Permits: for polluting companies (Thisprevents investment in clean energy, dividends tocitizens and/or paying down our ecological debtto developing countries) Offsetting: Difficult to track if the offsets aregenuine, therefore false offsets can lead toincreased polluting Distraction: Cap & Trade is a distraction fromsolving the underlying problem of excessivecarbon emissions.Oliveira & Jacobs, 16.01.2013; Earth Condominium Conference, Gaia, PTGETTING INSIDE THE EXTERNALITIES: A SHORT TRIP TO THE HEART OF CONOMIC$ FAILURE 33. Expand the market tointernalize externalities Efficiency Carrying capacity? Social fairness?Oliveira & Jacobs, 16.01.2013; Earth Condominium Conference, Gaia, PTGETTING INSIDE THE EXTERNALITIES: A SHORT TRIP TO THE HEART OF CONOMIC$ FAILURE 34. Expand the market tointernalize externalities Efficiency Carrying capacity? Social fairness?So we need a unit toaccount, evaluate,compare ALL threevalues.ECONOMYOliveira & Jacobs, 16.01.2013; Earth Condominium Conference, Gaia, PTGETTING INSIDE THE EXTERNALITIES: A SHORT TRIP TO THE HEART OF CONOMIC$ FAILURE 35. Money & Sustainability The Missing LinkBernard Lietaer,Christian Arnsperger, Sally Goerner , Stefan BrunnhuberI now understand, as proven clearly in this text, that theprevailing financial system is incompatible with sustainability infive ways: it causes boom and bust cycles in the economy it produces short-term thinking it requires unending growth it concentrates wealth it destroys social capitalDennis MeadowsOliveira & Jacobs, 16.01.2013; Earth Condominium Conference, Gaia, PTGETTING INSIDE THE EXTERNALITIES: A SHORT TRIP TO THE HEART OF CONOMIC$ FAILURE 36. Torekes: a city-based initiative to encourage volunteering while promoting green behaviourand social cohesion in a poor neighbourhood. It has been running since 2010 in the city ofGhent, Belgium. ECOs: a national or Europe-wide system making it possible to fund critical components oflarge-scale ecological projects, such as climate change prevention and adaptation projects. Itwould be An interest-free currency Issued by governments Businesses should contribute proportional to their total sales, payable only in ECOs. Would be seen as a new type of corporate tax on the largest corporations. May require governments to declare war on run-away climate change and BD loss.Oliveira & Jacobs, 16.01.2013; Earth Condominium Conference, Gaia, PTGETTING INSIDE THE EXTERNALITIES: A SHORT TRIP TO THE HEART OF CONOMIC$ FAILURE 37. Oliveira & Jacobs, 16.01.2013; Earth Condominium Conference, Gaia, PTGETTING INSIDE THE EXTERNALITIES: A SHORT TRIP TO THE HEART OF CONOMIC$ FAILURE 38. Sander Jacobs(University of Antwerp, BE)[email protected] G. Oliveira(ISG Business & Economics School, PT)[email protected]