The Economics Pillar:
last revision - May 16, 2007
Go To Earthmodal Homeclick here to return to earthmodal home

Source
United Nations Conference on Environment & Development
Rio de Janerio, Brazil, 3 to 14 June 1992

operations note: for download and reference see Mandates (this site).

AGENDA 21
Chapter 2
INTERNATIONAL COOPERATION TO ACCELERATE SUSTAINABLE DEVELOPMENT IN DEVELOPING COUNTRIES AND RELATED DOMESTIC POLICIES

2.1. "In order to meet the challenges of environment and development, States have decided to establish a new global partnership. This partnership commits all States to engage in a continuous and constructive dialogue, inspired by the need to achieve a more efficient and equitable world economy, keeping in view the increasing interdependence of the community of nations and that sustainable development should become a priority item on the agenda of the international community. It is recognized that, for the success of this new partnership, it is important to overcome confrontation and to foster a climate of genuine cooperation and solidarity. It is equally important to strengthen national and international policies and multinational cooperation to adapt to the new realities.

2.2. "Economic policies of individual countries and international economic relations both have great relevance to sustainable development. The reactivation and acceleration of development requires both a dynamic and a supportive international economic environment and determined policies at the national level. It will be frustrated in the absence of either of these requirements. A supportive external economic environment is crucial. The development process will not gather momentum if the global economy lacks dynamism and stability and is beset with uncertainties. Neither will it gather momentum if the developing countries are weighted down by external indebtedness, if development finance is inadequate, if barriers restrict access to markets and if commodity prices and the terms of trade of developing countries remain depressed. The record of the 1980s was essentially negative on each of these counts and needs to be reversed. The policies and measures needed to create an international environment that is strongly supportive of national development efforts are thus vital. International cooperation in this area should be designed to complement and support - not to diminish or subsume - sound domestic economic policies, in both developed and developing countries, if global progress towards sustainable development is to be achieved."
Source
Millennium Ecosystem Assessment  (new window, website)

operations note: see Assessment (this site) for complete download of this document
save these sections to subdirectory ../mea

Ecosystems and Human Well-being: A Framework for Assessment;
Millennium Ecosystem Assessment ; authors, Joseph Alcamo [et al.] ; contributing authors, Elena M. Bennett [et al.].Copyright © 2003 World Resources Institute;
A Report of the Conceptual Framework Working Group of the Millennium Ecosystem Assessment

“The first product of the Millennium Ecosystem Assessment (MA), a four-year international work program designed to meet the needs of decision-makers for scientific information on the links between ecosystem change and human well-being”—Pref.

Chapter 1
"A society’s “natural capital”—its living and nonliving resources—is a key determinant of its well-being. The full wealth of a nation can be evaluated only with due consideration to all forms of capital: manufactured, human, social, and natural. (See Figure 1.1.) Historically, given the abundant supply of natural capital and the application of new technologies to enhance the production of certain services, humanity has been remarkably successful in meeting growing demands for particular services. Between 1967 and 1982, for example, conversion of native ecosystems to agricultural ecosystems, combined with a 2.2-percent annual increase in cereal yields, led to net increases in per capita food availability even though there was simultaneously a 32-percent increase in world population (Pinstrup-Andersen et al. 1997). But despite the success in meeting growth in aggregate demand, there have been significant problems in meeting demands in particular regions. Moreover, increased supply of certain goods, such as food, has often meant a trade-off with the supply of other ecosystem services, such as protecting water quality or supplying timber."

FIGURE 1.1 Society’s Productive Base
Four Types of Capital


Four types of Capital

operations note: this document is downloaded in Assessment (this site)

Ecosystems & Human Well-being: Synthesis
3. How have ecosystem changes affected human well-being and poverty alleviation?

The degradation of ecosystem services represents a loss of a capital asset (C5.4.1). (See Figure 3.1.) Both renewable resources such as ecosystem services and nonrenewable resources such as mineral deposits, soil nutrients, and fossil fuels are capital assets. Yet traditional national accounts do not include measures of resource depletion or of the degradation of renewable resources. As a result, a country could cut its forests and deplete its fisheries, and this would show only as a positive gain to GDP despite the loss of the capital asset. Moreover, many ecosystem services are available freely to those who use them (fresh water in aquifers, for instance, or the use of the atmosphere as a sink for pollutants), and so again their degradation is not reflected in standard economic measures.
    When estimates of the economic losses associated with the depletion of natural assets are factored into measurements of the total wealth of nations, they significantly change the balance sheet of those countries with economies especially dependent on natural resources. For example, countries such as Ecuador, Ethiopia, Kazakhstan, Republic of Congo, Trinidad and Tobago, Uzbekistan, and Venezuela that had positive growth in net savings (reflecting a growth in the net wealth of the country) in 2001 actually experienced a loss in net savings when depletion of natural resources (energy and forests) and estimated damages from carbon emissions (associated with contributions to climate change) were factored into the accounts. In 2001, in 39 countries out of the 122 countries for which sufficient data were available, net national savings (expressed as a percent of gross national income) were reduced by at least 5% when costs associated with the depletion of natural resources (unsustainable forestry, depletion of fossil fuels) and damage from carbon emissions were included.
Source
World Resources Institute   (new window, website)

"The World Resources Institute's mission is to move human society to live in ways that protect Earth's environment and its capacity to provide for the needs and aspirations of current and future generations.

operations note: for download of this document see Governance (this site)

Managing Ecosystems to Fight Poverty: The Wealth of the Poor
United Nations Development Programme, United Nations Environment Programme, World Bank,  World Resources Institute

Chapter 4:  Four Steps To Greater Environmental Income For The Rural Poor

1. Manage Ecosystems Better for Higher Productivity
Improve the stewardship of ecosystems by adopting an ecosystem approach to management—recognizing the complexity of ecosystems and living within their limits. Good stewardship brings higher productivity, which is the foundation of a sustainable income stream.

2. Get the Governance Right to Insure Access to Environmental Income
Confer legally recognized resource rights (such as individual or communal title, or binding co-management agreements). Where possible, decentralize ecosystem management to the local level (community-based natural resource management), while providing for regional or national coordination of local management plans. Empower the poor through access to information, participation, and justice. Create local institutions that represent their interests and accommodate their special needs.

3. Commercialize Ecosystem Goods and Services to Turn Resource Rights and Good Stewardship Into Income
Improve the marketing and transport of nature-based goods produced by the poor. Make credit available for ecosystem-based enterprises. Capture greater value from the commodity chain. Partner with the private sector. Take care to keep successful commercial activities sustainable.

4. Tap New Sources of Environmental Income Such as “Payments for Environmental Services”
Make the newly developing market of payments for environmental services more pro-poor by expanding the array of eligible activities and payment schemes. Look upon ecosystem income as a portfolio of many different income sources. Diversify this portfolio to reduce risk and enhance the bottom line.

Source
United Nations Environment Programme
Biodiversity  (new window, website)

operations note: this document is downloaded in Worldviews (this site)

Cultural and Spiritual Values of Biodiversity: A Complementary Contribution to the Global Biodiversity Assessment; Compiled and Edited by Darrell Addison Posey, and Oxford Cenre for the Environment, Ethics and Society, Intermediate Technology Publications, UNEP 1999

Chapter 1: Introduction
The Global Balance Sheet

Although international efforts to recognize indigenous, traditional and local communities are welcome and positive, they are pitted against enormous economic and market forces that propel globalization of trade. Critiques of globalization are numerous (e.g. Korten 1995), and point to at least two major short-comings: (i) value is imputed to information and resources only when they enter external markets; and (ii) expenditures do not reflect actual environmental and social costs. This means that existing values recognized by local communities are ignored, despite knowledge that local biodiversity provides essential elements for survival (food, shelter, medicine, etc.). It also means that the knowledge and managed resources of indigenous and traditional peoples are ascribed no value and assumed to be free for the taking. This has been called "intellectual terra nullius" after the concept (empty land) that allowed colonial powers to expropriate "discovered" land for their empires. Corporations and states still defend this morally vacuous concept because it facilitates the "biopiracy" of local folk varieties of crops, traditional medicines, and useful species.
    Even scientists have been accomplices to such raids by publishing data they know will be catapulted into the public domain and gleaned by "bioprospectors" seeking new products. They have also perpetuated the "intellectual terra nullius" concept by declaring useful local plants as "wild" and entire ecosystems as "wildernesses", often despite knowing that these have been molded, managed, and protected by human populations for millennia. It is also common for scientists to declare areas and resources "wild" through ignorance or negligence--without even basic investigations into archaeological or historical records, or to actual human management practices. The result is to declare the biodiversity of a site as "natural", thereby transferring it to the public domain. Once public, communities are stripped of all rights to their traditional resources.
    It is little wonder then, that indigenous groups in the Pacific region have declared a moratorium on all scientific research until protection of traditional knowledge and genetic resources can be guaranteed to local communities by scientists. The "moratorium movement" began with the 1993 Mataatua Declaration (Clause 2.8) Posey & Dutfield 1996, p.205):

A moratorium on any further commercialisation of indigenous medicinal plants and human genetic materials must be declared until indigenous communities have developed appropriate protection mechanisms.

The Mataatua Declaration, in turn, influenced the Final Statement of the 1995 Consultation on Indigenous Peoples' Knowledge and Intellectual Property Rights in Suva, Fiji (Pacific Concern Resource Center 1995), which called for a moratorium on bioprospecting in the Pacific and urged Indigenous peoples not to co-operate in bioprospecting activities until appropriate protection mechanisms are in place. The should:
    To allay these deep concerns, many scientific and professional organizations are developing their own Codes of Conduct and Standards of Practice to guide research, health, educational, and conservation projects with indigenous and local communities (a summary of some of these can be found in Cunningham 1993, Posey 1995 and Posey &, Dutfield 1996). One of the most extensive is that of the International Society for Ethnobiology, that undertook a 10-year consultation with indigenous and traditional peoples as well as its extensive international membership to establish "principles for equitable partnerships". The main objective of the process was to establish terms under which collaboration and joint research between ethnobiologists and communities could proceed based upon trust, transparency, and mutual concerns.

Source
Environmental Law Programme  (new window, website)

"Since UNEP’s establishment in 1972 under UN General Assembly Resolution 2997(XXVII), environmental law has been one of UNEP’s priority areas of focus. Beginning in 1981, UNEP’s Environmental Law activities have been carried out within the framework of strategic Programmes for the Development and Periodic Review of Environmental Law (Montevideo Programme) approved by the Governing Council every ten years. UNEP is currently implementing Montevideo Programme III adopted by Governing Council decision 21/23 on 9 February 2001."

operations note: save this document to the earthmodal bookshelf root directory. This document is referenced in a few sections so it only needs to be saved once

International Environmental Law, third Edition; Alexandre Kiss and Dinah Shelton; Transnational Publishers, Ardsley, NY; 2004 (pdf, New Window, 4 MB)

Quick glance at Table of Contents  (new window, html, this site)

Table of Cases
Introduction
A. Concept and Scope of the “Environment” and “Environmental Law”
B. The Necessity of International Law

PART I: STRUCTURE AND BASIC CONCEPTS
Chapter 1: Foundations of International Environmental Law
A. Religion and Philosophy  (in Worldviews at left)
1. Religious Sources
2. Utilitarianism
3. Equity
a. Intra-Generational Equity
b. Inter-Generational Equity: Rights of Future Generations
c. Inter-Species Equity
B. Science (in Modeling shown above)
C. Economics (extract in this section - below)
D. International Law (in Governance at left)
1. Sovereignty
2. Cooperation
3. Common Concern of Humanity
4. Common Heritage of Mankind
E. Conclusions

C. Economics

The current economic system presents numerous challenges to environmental protection. First, if the earth’s resource base is considered as a whole, the structure and functioning of the marketplace can produce what has long been referred to as the “tragedy of the commons.”42 In addition, the emphasis on free trade in goods and services in the international economic system raises problems of competitive disadvantage and opposition to trade barriers resulting from regulations to protect the environment. Finally, the north-south disparity in economic development and resources creates difficulties for the traditional legal technique of imposing uniform norms and standards through international agreements.

The tragedy of the commons is a consequence of the market of supply and demand, a fundamental principle of liberal economic theory. In an open market, the pressure of demand leads to higher prices as goods become scarce. Prices that are too high deter further purchasers leading to a fall in demand. For many environmental amenities, however, the market system does not work because such resources are considered “public goods” that are free and in principle shared by all. No one legally can prevent another from using air. The lack of a market for public goods means that no price rise signals scarcity due to, inter alia, environmental degradation. Each consumer continues to maximize use until the resource is exhausted. The consequences of this system are perhaps most apparent in regard to exhaustible living resources, such as fish. Unregulated fishing on the high seas leads each vessel to try to obtain the maximum possible catch, leading fisheries to “crash.”43

The same profit motivation likewise produces environmental degradation from pollution. The harmful introduction of substances into the environment results from each person deciding that her or his short term advantage involves discharging pollutants into the commons rather than bearing the cost of purifying emissions before release. If the sole objective of the market is to maximize the wealth of each individual, a system of open and non-regulated access to the commons will invariably result in environmental degradation. The environmental law response has been to formulate the “polluter pays” principle that converts the economic externalities of commons degradation into costs for the polluter.44

The second economic issue is competitive disadvantage: a state taking measures to protect the environment must count the increased costs which are borne by its economy. Distortions are especially felt in an interstate system founded on free trade. The former European Economic Community, now incorporated in the European Union, initially based its environmental protection measures on Article 100 of the Treaty of Rome, which promoted the approximation of national legislation that has a direct effect on the establishment or functioning of the common market. The purpose of approximation is "to eliminate disparities between the legislative or administrative provisions of the Member States which distort the conditions of competition in the Common Market."45 The preoccupation with conditions of competition is evident also in the work of the Organization of Economic Cooperation and Development (OECD)46 and the environmental side agreement to the North American Free Trade Agreement (NAFTA). The latter calls for cooperation to better conserve, protect, and enhance the environment, while avoiding the creation of trade distortions or new trade barriers.47 Chapter 17 describes the current efforts to protect the environment in the context of the international market.

Thirdly, the solidarity imposed by global problems necessitates better cooperation between industrialized and developing countries, North and South.The collaboration of both groups is required to safeguard the planet’s environment. Full collaboration involves assisting poor countries to face the burden of implementing environmental measures that serve to safeguard the biosphere as a whole. In addition, it is now understood that global poverty threatens human existence through its impact on the environment. The result is an increased emphasis on partnership and mutuality in multilateral environmental protection, as well as on the interrelationship of environmental protection and development.48

While these economic challenges are complex and difficult, the field of economics offers possible means to quantify the value of the environment to society, important when decisions are based a cost-benefit analysis. Direct valuation can compute the revenues generated by products extracted from nature, including food, medicine, petroleum and minerals. Indirect methods of estimating substitute markets may measure ecosystem services, which are probably of even greater value. These include the value of coral reefs in protecting shorelines from storm surges and mangroves services in slowing erosion and preventing siltation of coastal waters. Soil provides important ecological services by purifying groundwater and supporting agriculture, honeybees contribute through pollination.

Harder to measure are the life-supporting services provided by the ozone layer, for example, or Antarctica’s contribution to regulating the global climate. Even less quantifiable are such aspects as the aesthetic enjoyment of landscapes and the inherent contribution of each species to the ecosystem in which it lives.49 Nonetheless, various initiatives are attempting to provide better valuation of the environment. The United Nations Statistical Office released a handbook in 1993 setting forth a System of Environmental and Economic Accounting(SEEA). It includes environmental functions and natural resources as assets of production and records depletion of a resource as capital depreciation. The World Bank uses SEEAs in its economic analyses. Some economists suggest an alternative method to directly value the ecological functions that serve to meet human needs from subsistence to identity and freedom, rather than measuring production and consumption.50 Finally, the development of an Environmental Sustainability Index provides a basis for assessing the ability of states to meet the environmental needs of their society in a sustainable manner. The ESI looks at core indicators based on a larger set of underlying variables. It measures five key components of environmental sustainability: natural systems; environmental stresses and risks; human exposure and risks (vulnerability to harm); societal capacity to respond to environmental challenges; and transboundary equity issues (contributions to harm and to solutions of environmental problems).
Source
Environmental Accounting   (new window, website)

"The Environmental Accounting Group focuses its activities on the following areas:
Methodology through the development of concepts and methods and the publication of handbooks and training materials;
Coordination of the activities in the development and standardization of methodologies and implementation practices through active collaboration with other international organizations, countries, NGO’s academia and city groups, in particular the UN Committee of Experts on Environmental-Economic Accounting to which it provides the Secretariat;
Technical cooperation and assistance to countries through workshops and country projects."

Integrated Environmental and Economic Accounting 2003 (SEEA 2003)  (new window, website)

earthmodal note: the System of National Accounts documentation can be found at
http://unstats.un.org/unsd/sna1993/introduction.asp  (new window, subwebsite)


Handbook of National Accounting: Integrated Environmental and Economic Accounting - 2003; (new window, 5MB, pdf)
United Nations, European Commission , International Monetary Fund, Organisation for Economic, Co-operation and Development, World Bank; Series F, No.61, Rev.1 (ST/ESA/STAT/SER.F/61/Rev.1); 2003

Quick glance at Table of Contents  (new window, html, this site)

(System of Environmental and Economic Accounting)

A Introduction  
1   The objective of this handbook
1.1. The effect of mankind's activity upon the environment has been an important policy issue throughout the last part of the twentieth century. On the one hand there has been growing concern about the impact of each country’s economic activity upon the global and local environment. On the other hand there has been increasing recognition that continuing economic growth and human welfare are dependent upon the services provided by the environment. These services include the provision of raw materials and energy used to produce goods and services, the absorption of waste from human activities, and the basic roles in life support and the provision of other amenities such as landscape.

1.2. These concerns translate into questions about whether environmental endowments are being used responsibly. Is their use posing a threat to economic development now, either by being used up too quickly with no prospect of replacement or by generating a level of pollution which threatens human health and the existence of species? Even if current behaviour does not pose such a threat at present, would it do so if continued without change into the future? These are the basic questions underlying the desire for sustainable development.

1.3. The purpose of this handbook is to explore how sets of statistical accounts can be compiled which will permit investigation and analysis of the interaction between the economy and the environment. Only by integrating the two areas can the implications for sustainability of different patterns of production and consumption be examined or, conversely, can the economic consequences of maintaining given environmental standards be studied. Policy makers setting environmental standards need to be aware of the likely consequences for the economy. Those determining the development of industries making extensive use of environmental resources either as inputs or sinks, need to be aware of the long-term environmental effects.

1.4. The topic is wide and the handbook extensive. While significant progress has been made in the last few years, this is an area where active research and investigation is still proceeding. Where best practices have emerged, these are reported. When there is still a division of opinion about how best to proceed, the alternatives are presented with arguments for and against each option. Nevertheless wherever possible this handbook presents harmonised approaches, concepts and definitions which should provide the basis for the development of standards, and it contains advice on how to compile environmental accounts and carry out analysis based on them.

2  The structure of the chapter
1.5. Section B looks at the question of sustainability. The three most common interpretations of sustainability, the so-called three-pillar approach, the ecological approach and the capital approach, are presented. The usefulness of the SEEA as a framework for operationalizing each of the three is discussed.

1.6. Section C shows how four categories of accounts run through the handbook. These are
1) physical and hybrid flow accounts;
2) accounts that portray the environmental transactions in the existing System of National Accounts (SNA) in more detail;
3) environmental asset accounts in physical and monetary terms; and
4) accounts that show how existing SNA aggregates can be modified to account for depletion and degradation of the environment and for environmental defensive expenditure.

1.7. Section D gives a very quick overview of each of the following chapters setting these in the context of the four accounting categories given in Section C.

1.8. Section E looks at a number of issues related to implementing the system including noting present limitation and areas for future work.

B  Sustainable development and the SEEA


1.9. Many of the concerns related to resource depletion and environmental degradation are reflected in the concept of sustainable development. In its most widely accepted formulation, that of the Brundtland Commission, it is stated that:
"Humanity has the ability to make development sustainable -- to ensure that it meets the needs of the present without compromising the ability of future generations to meet their own needs." (World Commission on Environment and Development, 1987, p. 8).

1.10. The Brundtland Commission left its definition intentionally vague so that the concept of sustainable development would not be confined to any particular category of needs. While this is helpful in terms of the simplicity and wide appeal of the message, the Brundtland definition offers little in the way of a measurable objective for sustainable development. Not surprisingly, in the time since the Brundtland report, researchers from many disciplines have attempted to operationalize the concept. Their goal has been to understand its implications for the current and future path of development. The result has been the emergence of a number of diverging views of sustainable development. Broadly speaking, three currents of thought are evident within the range of views, which can be referred to for convenience as the three-pillar approach, the ecological approach and the capital approach. The basic tenets of each of these approaches are presented below and the applicability of the SEEA to their measurement is discussed.
1  The three-pillar approach to sustainable development
1.11. A widely held view of sustainable development is that it refers at once to economic, social and environmental needs. According to this view there must be no single focus (or object) of sustainability, but instead all of the economic, social and environmental systems must be simultaneously sustainable in and of themselves. Satisfying any one of these three sustainability "pillars" without also satisfying the others is deemed insufficient for the following reasons. First, each of the three pillars is independently crucial. Second, each of the three pillars is urgent and little time is available for debating which one should be addressed first; they must therefore be addressed simultaneously. Finally, the three pillars are interconnected. There is, therefore, a risk of unwittingly causing (or worsening) problems in one system while attempting to correct problems in another. The only sure way to avoid this is to integrate decisions such that effects in all three systems are considered before action is taken (Robinson and Tinker, 1998).

1.12. The three-pillar approach to sustainable development is wide-ranging and complex. The SEEA has a great deal to offer with regard to certain elements of the approach and less to offer for others. Clearly, the SEEA provides for the compilation of much information relevant to environmental and economic systems, but it offers relatively little for understanding social systems. As for the interactions between the three pillars, the SEEA has clearly a great deal to say about the interaction of environmental and economic systems (indeed, it is about little else), but offers less with respect to economic/social interaction or social/environmental interaction.

2  The ecological approach to sustainable development1

1.13. Central to the ecological view of sustainable development is the notion that economic and social systems are sub-systems of the global environment. It follows that sustainability in the economic and social spheres is subordinate to sustainability of the environment. Development, from the ecological viewpoint, is seen to refer to the "capacity of [an ecosystem] to respond positively to change and opportunity" or the "maintenance of [ecosystems"] dynamic capacity to respond adaptively" (Golley, 1990). The key property to be sustained then is the capacity of ecosystems to respond with resilience to external perturbations and changes.

1.14. A strong current within the ecological viewpoint is the notion that the “health” of ecosystems must be protected and enhanced if they are to exhibit the resilience that is necessary for sustainability. Ecosystem health is a metaphor derived from the human health sciences that is difficult to define precisely. In simple terms, it can be thought of as a “resource” that enables ecosystems to adapt and evolve in the face of changing circumstances.

1.15. The ecosystem health approach to sustainable development implies measurement within two broadly defined categories. The first includes measures of the “pressures” placed on ecosystems by human activities (material and energy extraction, physical restructuring, pollutant emissions, human appropriation of space and ecosystem productivity, etc.). These pressures are often the cause of reduced ecosystem health as manifested in degraded service flows and/or reduced management options. The second category includes measures of the responses of ecosystems to these human pressures. The response measures can be of four types: measures that describe the state of the ecosystem; measures that describe the causes of changes in the state of the ecosystems; measures that describe the likely changes in ecosystems in the face of known pressures; and measures of the capability of ecosystems to deal with imposed pressures.

1.16. Despite the utility of the SEEA for addressing the data needs of the ecological approach to sustainable development, the system’s full power (which lies in the integration of environmental and economic data) is not fully exploited by an approach focussed exclusively on ecosystems. This power is best exploited by the last of the three broad approaches to sustainable development noted above, the capital approach.

1 This section draws heavily upon Rapport, 1995.
3  The capital approach to sustainable development
1.17. The capital approach to sustainable development is most closely associated with the thinking of economists on the subject, although the approach goes well beyond what is typically the domain of economics (see, for example, Daly and Cobb; 1989; Pearce et al., 1989; Pearce and Turner, 1990; Victor, 1991; El Serafy, 1996). It borrows the concept of capital from economics, but broadens it in a variety of ways to incorporate more of the elements that are relevant to the sustainability of human development. In doing so, it takes concepts from the physical sciences (especially ecology and geography) and from the non-economic social sciences and integrates them within a framework based on capital.

1.18. Although one finds a certain amount of disagreement among economists regarding sustainable development, substantial agreement exists on one point: sustainable development is closely related to the long-standing economic concept of income. Most economists refer back to Hicks’ (1946) definition of income in this regard: income is the maximum amount an individual can consume during a period and remain as well off at the end of the period as at the beginning.

1.19. The Hicksian concept of income is easily explained with a simple example. Imagine an individual whose only source of income is a stock portfolio valued at $1 million at the beginning of a year. This is a very well managed portfolio, paying its owner a net return of 10% annually. The investor’s annual income in this case is $100 thousand, as this is the maximum amount that she can consume in a year without depleting her capital investment (that is, her stock portfolio).

1.20. Although there are obvious and important differences between the economic affairs of an individual and those of an entire nation, the above definition of income applies equally well to both. The income of a nation can thus be defined as the amount that it can collectively spend during a period without depleting the capital base (or wealth) upon which it relies to generate this income.

1.21. The advent of sustainable development has altered the way in which many economists think about national income and its relationship to national wealth. In the past, economists tended to focus on produced capital as the underpinning of wealth and, therefore, of income. To the extent that natural resources were considered at all, they were seen to be free gifts of nature in effectively limitless supply. In recent years, with the emphasis of sustainable development on the preservation of the productive capacity of the environment, many economists have argued that the contribution of a nation’s natural capital cannot be ignored in discussions of the sustainability of national income and wealth. Others have added that human capital and social capital must also be considered. This has led to the following interpretation of sustainable development from a capital standpoint: Sustainable development is development that ensures non-declining per capita national wealth by replacing or conserving the sources of that wealth; that is, stocks of produced, human, social and natural capital.

1.22. Although human and social capital are important topics and are currently the subject of considerable debate and research, they clearly do not fall within the rubric of integrated environmental and economic accounting. For this reason, they are considered no further here. Likewise, produced capital is not treated at great length in the SEEA and readers interested in learning more about it are referred to other sources, in particular the SNA.2 Where the SEEA does offer a great deal is with respect to the measurement of natural capital. The remainder of this section is therefore devoted to a discussion of natural capital and its relationship to sustainable development, and to what the SEEA offers by way of a measurement framework for natural capital.

Natural capital and sustainable development 

1.23. Natural capital is generally considered to comprise three principal categories: natural resource stocks, land and ecosystems. All are considered essential to the long-term sustainability of development for their provision of “functions” to the economy, as well as to mankind outside the economy and other living beings. It is helpful to consider these functions as falling into one of three groups: Resource functions cover natural resources drawn into the economy to be converted into goods and services for the benefit of mankind. Examples are mineral deposits, timber from natural forests, and deep sea fish; Sink functions absorb the unwanted by-products of production and consumption; exhaust gases from combustion or chemical processing, water used to clean products or people, discarded packaging and goods no longer wanted. These waste products are vented into the air, water (including sea water) or are buried in landfill sites. These three destinations are often referred to as “sinks”; Service functions provide the habitat for all living beings including mankind. Some aspects of habitat are essential, such as air to breathe and water to drink. These are called survival functions. If the quantity and quality of survival functions are diminished, biodiversity of species is threatened, not excluding the human species. Some service functions are not essential in the same way but improve the quality of life, for example by providing a pleasing landscape for leisure pursuits. These are called amenity functions and affect mankind only (or at least are the only ones measurable to us in human terms).

1.24. According to the capital approach, the long-term sustainability of development is seen to depend upon the maintenance of natural capital (in addition to the other forms of capital). If stocks of natural capital decline to the point where they are no longer able to adequately provide the functions listed above, any pattern of development that relies on these functions is not sustainable. Of course, this is not to say that some other pattern of development is not possible, only that change will be required to either 1) eliminate the need for a particular natural capital service or 2) find a means of replacing the natural capital service with a service of produced capital.3

2 Produced capital is treated in two elements of the SEEA framework. The first is in the asset accounts, where cultivated natural resources are treated as produced capital and the second is the environmental protection and resource management accounts, where produced capital employed for environmental purposes is measured.
3 Sewage treatment plants are a good example of the latter. Because sewage production far exceeds that which rivers could accept without suffering a dramatic decrease in functioning, society has been forced to divert financial and human resources away from other purposes into the production and operation of sewage treatment plants. These plants do nothing more than replace the waste assimilation service that the natural capital (the river) cannot provide at current levels of sewage production.

1.25. Even if many researchers accept the basic idea that sustainable development requires maintenance of natural capital, the relationship between natural capital and other types of capital remains a matter of debate. Although there is agreement that all forms of capital are important when considering sustainability, there is a divergence of opinion as to whether the various forms are complements or substitutes (especially as to whether natural capital can be replaced by other forms). Many researchers argue that produced and human capital are very often, if not always, substitutes for natural capital. Society has, they note by way of example, employed produced and human capital to devise chemical fertilizers that substitute for the natural fertility of soil. Even soil itself can be replaced in a limited way through the use of hydroponics. History is full of similar examples where technological advancement has allowed substitution of scarce resources with those that are more abundant. Many would claim there is every reason to believe that such advancement will continue, even at increased rates, in the future.

1.26. Others argue that the possibilities for substitution are more limited, even completely absent in some cases. Many forms of capital, they argue, are of value only when combined with another form. For example, a fishing fleet (produced capital) is essentially worthless unless combined with healthy fish stocks (natural capital) to exploit. In this case, the fishing fleet and the fish stocks are said to be complementary. But this is just a limited example of complementarity, where a subset of one type of capital is complementary with a subset of another type of capital. Another possibility is that a certain form of capital provides a service that is essential to the functioning of the entire planetary system and for which there exists no known substitute. Although examples of this type of capital are few (and there may be no absolute example), global atmospheric systems that provide the services of protection from solar radiation and climate regulation come close.

1.27. The controversy over the degree of substitutability for natural capital has translated into a continuum of capital-based approaches to sustainable development. At the opposing ends of this spectrum are found the concepts of weak and strong sustainability.

Weak sustainability seeks to maintain from year-to-year the per capita income generated from the total capital stock available to a nation (measured in monetary terms). No regard is given to the composition of this stock, as it is assumed that all forms of capital are substitutes for one another. Weak sustainability clearly allows for the depletion or degradation of natural resources, so long as such depletion is offset by increases in the stocks of other forms of capital (for example, by investing royalties from depleting mineral reserves in factories).

Strong sustainability requires that all forms of capital be maintained intact independent of one another. The assumption implicit in this interpretation is that different forms of capital are mainly complementary; that is, all forms are generally necessary for any form to be of value. Produced capital used in harvesting and processing timber, for example, is of no value in the absence of stocks of timber to harvest. Only by maintaining both natural and produced capital stocks intact, the proponents of strong sustainability argue, can non-declining income be assured.

1.28. Regardless which position is accepted between these two extremes, the effect of an increasing population is the same. Not only must capital stocks be non-diminishing, but they must in fact grow at the same rate as the population if per capita income is to remain constant. Of course, the effects of technological change may mean that the population can grow faster than capital stocks with no reduction in income earning potential if technology allows more productive use to be made of existing stocks. 

Weak and strong sustainability: Implications for natural capital

1.29. The same basic principle is apparent in both the weak and strong interpretations of sustainability: development must be compatible with long-term maintenance of capital stocks. The implications of this principle for natural capital differ depending upon which interpretation one accepts however.

1.30. Under a regime of weak sustainability, natural resource stocks may be depleted, and environmental systems degraded, but only if this depletion/degradation is offset by equivalent or greater increases in other forms of capital. That is, so long as there is no reduction in total capital, development is assumed to be sustainable.

1.31. Since it is the total capital stock that is to be maintained, all forms of capital must be measured using the same yardstick. Practically speaking, this implies measurement of natural capital in monetary terms.

1.32. Strong sustainability requires that natural capital stocks be maintained intact independent of other forms of capital. In practice, this requires invoking certain principles for the use of natural capital. Inherent in these principles is the notion that prudence should be applied when making decisions about natural capital. Our limited scientific understanding of the environment requires that this be so. While it may eventually turn out not to be necessary to maintain a particular form of natural capital, it is dangerous to assume this and foreclose future options. Sustainability, we are reminded, is a problem over the long run as much as or more so than one concerning the current period. The caution called for by strong sustainability is often expressed in terms of the “precautionary principles” expressed below:

1.33. Because strong sustainability requires the independent maintenance of capital stocks, there is no reason why all forms of capital must be measured using the same unit of measure. This allows for measurement of natural capital stocks in physical units as well as in monetary units. Physical measurement of natural capital is often straightforward. Stocks of many natural resources (for example, subsoil and timber assets) can be measured using simple physical units. Measuring the natural capital represented by environmental systems, the waste assimilation capacity of a river system for example, is much more difficult. The SEEA includes accounts designed to measure such ecosystem services, but it must be noted that current knowledge and experience in this field is limited. The ecosystem accounts presented in the SEEA should then be viewed as works in progress. They will evolve along with understanding of ecosystems and the services they provide.
4  The SEEA as a framework for measuring sustainable development
1.34. It is clear from the foregoing that the SEEA can serve as at least a partial framework for measuring sustainable development from all three of the broad approaches noted. The system has not been designed to serve any particular perspective and, indeed, should be of considerable value regardless of the user’s particular point of view on the concept. This said, it is clear that the focus of the SEEA on macro-level accounts integrating environmental and economic data makes it particularly useful from the perspective of the capital approach. The SEEA has the capacity to respond to data needs across the full range of views within this approach. How this is so will be made clearer in the next section, in which the SEEA accounting system is described in its broad outlines.

C  An overview of the SEEA accounting system

1.35. The SEEA is a satellite system of the SNA that comprises four categories of accounts. The first considers purely physical data relating to flows of materials and energy and marshals them as far as possible according to the accounting structure of the SNA. The accounts in this category also show how flow data in physical and monetary terms can be combined to produce so-called “hybrid” flow accounts. Emissions accounts for greenhouse gases are an example of the type included in this category. The accounts of this category are outlined in chapters 3 and 4 of the handbook.

1.36. The second category of accounts (chapters 5 and 6) takes those elements of the existing SNA which are relevant to the good management of the environment and shows how the environment-related transactions can be made more explicit. An account of expenditures made by businesses, governments and households to protect the environment is an example of the accounts included in this category.

1.37. The third category of accounts in the SEEA comprises accounts for environmental assets measured in physical and monetary terms. Timber stock accounts showing opening and closing timber balances and the related changes over the course of an accounting period are an example. These accounts are described conceptually in Chapter 7.

1.38. The final category of SEEA accounts considers how the existing SNA might be adjusted to account for the impact of the economy on the environment. Three sorts of adjustments are considered; those relating to depletion, those concerning so-called defensive expenditures and those relating to degradation. Chapters 9
and 10 cover this material.

1.39. The objectives and usefulness of the accounts in each of these categories are discussed in more detail below.
 A note on terminology
1.40. The various accounts of the SEEA may be expressed in either physical or monetary units, or both. The accounts expressed in physical terms may employ any of the linear, volumetric, areal or mass units used in the International System of Units (for example, metres, litres, hectares or kilograms). For convenience, all such accounts are referred to generically as “physical accounts” in this handbook. The accounts expressed in monetary terms are, of course, presented using only currency as the unit of measure. These accounts are referred to generically in what follows as “monetary accounts”. The use of “monetary” in this case is to be interpreted as synonymous with “economic value” as the latter is understood in economic theory. In particular, the measures included in the monetary accounts of the SEEA should be taken to reflect the objective weighting that is brought to bear through the use of socially determined relative prices.
1  Category 1: Physical and hybrid flow accounts
1.41. Many environmental data sets are now available which show the extent to which the precautionary principles listed earlier are respected. Often different data sets are collected and published for different sorts of environmental resources. The physical flow accounts of Chapter 3 bring a set of common measuring tools to bear on these presently disparate data sets. The framework chosen is that of the SNA. The objective is to see the extent to which the economy is dependent on particular environmental inputs and the sensitivity of the environment to particular economic activities.

1.42. Bringing the data together in a framework using common classifications helps to highlight any inconsistencies and gaps in the overall picture. It also allows links to be made to other economic series. Does an industry which is environmentally sensitive play a particularly large role in international trade of the country or provide many employment opportunities? If common units can be used, the possibility of aggregation and the presentation of simple indicators are facilitated.

1.43. Once the physical data are aligned with economic classifications, an obvious next step is to compare the physical quantities with the matching economic flows. This is developed in the SEEA by means of hybrid accounts (Chapter 4), which make up the remainder of the first category.

1.44. Hybrid environmental accounting is a means of confronting physical information about the use of environmental resources with information in both physical and monetary terms about the processes of economic production. It is the combination of different types of units of measure that leads to the name “hybrid” accounting.

1.45. The key sustainability policy goal to which hybrid accounts respond is the desire to maintain or improve economic performance while simultaneously reducing or eliminating the impact on the environment. This process is sometimes referred to as "decoupling". Decoupling can be brought about by changing consumption and production patterns away from materials with environmentally damaging consequences, by adopting new technologies which make more efficient use of environmental resources or which reduce the damage brought about by existing production patterns.
2  Category 2: Economic accounts and environmental transactions
1.46. The environment is not only used as an input by the economy. Increasingly, activities are undertaken and products are made with the deliberate intention of relieving pressure on the environment. Thus, as well as using the hybrid accounting structure to examine where pressures exist, it is also desirable to identify where expenditure is undertaken to alleviate or rectify these pressures. This is the objective of the accounts described in Chapter 5.

1.47. As well as direct intervention in the state of the environment via environmental protection expenditure, it is increasingly common for more environmentally friendly behaviour to be encouraged by means of economic instruments. These may be taxes to discourage consumption by increasing prices or they may be means of controlling property rights and access to environmental media by means of selling licences and permits. Measuring the use of these types of instruments is the objective of the accounts in Chapter 6.

1.48. The relationship of the accounts in this category to the measurement of sustainability is somewhat indirect. Clearly, expenditures made to reduce the pressure on the environment are an important measure of the human response to the sustainability challenge. However, the level of the expenditures themselves does not reveal directly whether development has become more sustainable or not. In order to assess this, one must turn to other categories of accounts within the system. What the accounts in this category do allow, however, is an assessment of the economic costs and benefits, including their sectoral impact, of reducing human impact on the environment. This is very important information for those interested in analysing sustainability from a fiscal perspective.
3  Category 3: Asset accounts in physical and monetary terms
1.49. The environment can be thought of in natural capital terms as a collection of assets of various types. As noted earlier, natural capital falls into three broad categories: natural resources, land and ecosystems. Category 3 of the SEEA includes asset accounts in physical and monetary terms for each of these three broad categories. The methods for compiling these accounts are described in Chapter 7.

1.50. When natural resources are used in a production process, they are embodied in the final good or service produced. The price charged for the product contains an element which implicitly covers the value of the natural resource. Establishing this implicit element is at the heart of valuing the stock of the resource and seeing the full role of the resource in the production activity of extracting the resource and making it available to other units in the economy.

1.51. The asset accounts of the SEEA are highly relevant to the measurement of sustainable development from the capital perspective. Natural resources, land and ecosystems represent the stocks that provide the many environmental inputs required to support economic activity. If such activity is to be sustainable, the capacity of natural capital stocks to furnish these inputs must be maintained over time or the economy must find a substitute for the natural capital which is capable of delivering an equivalent input. If both of these conditions are not met the current pattern of development is not sustainable.

1.52. The debate between the concepts of weak and strong sustainability mentioned earlier is germane here. The weak sustainability viewpoint is essentially one of technological optimism in which it is assumed that the economy will always find a substitute for any scarce resource given the right price signal. The strong sustainability viewpoint takes the position that it is imprudent to assume that the economy will always find a substitute for natural capital because
1) the past technological successes do not assure success in the future; and
2) we do not know all there is to know about natural capital functioning and, therefore, we risk unexpectedly losing key inputs if we allow natural capital to be depleted or degraded.

1.53. Whatever perspective one takes on weak and strong sustainability, the asset accounts of the SEEA are fundamental to understanding the evolution of sustainability. Clearly, if one assumes a position of strong sustainability, the direct measures of natural capital provided in the asset accounts provide essential information. Even if one assumes a weak sustainability perspective, one would still wish to know how much natural capital is being consumed so that this can be compared with investments in other forms of capital to assess whether total capital is being maintained.

1.54. The asset accounts are also relevant to the intra- and intergenerational equity issues of sustainable development. In a number of countries, natural resources are owned and controlled by the government on behalf of the population at large. It is thus important to be able to see where income arises from the use of the resource and how it is apportioned between the extractor and the owner.
4  Category 4: Extending SNA aggregates to account for depletion, defensive expenditure and degradation
1.55. The final category of the SEEA (chapters 9 and 10) deals with the extension of the existing SNA aggregates to account for depletion and degradation of natural capital, as well as for so-called defensive expenditures related to the environment. Not every statistical office will be in a position to make such extensions (as they are data intensive and methodologically complex) and not every one will wish to (as they can be controversial). Nevertheless, it is the logical culmination of the SEEA to explore the possibilities as well as to note the theoretical, practical and institutional hurdles to doing so.

1.56. The use of resource functions raises the question of whether the resource is being depleted and if so whether the allowance in the economic accounts to maintain produced capital intact (the consumption of fixed capital) should be augmented by a term which might be called the consumption of natural capital.

1.57. Some of the expenditure in the economy relates to attempts to avoid using the sink function of the environment. This includes environmental protection expenditure and may include other expenditure of a type which might be described generally (albeit not very precisely) as defensive expenditure.

1.58. Putting a value on the actual use of the sink function remains a much more difficult problem than the two just mentioned. While it might be possible to make some order of magnitude estimates for marginal changes in the use of the sink function, comprehensive estimates go beyond standard accounting into the realm of modelling.

1.59. Like the asset accounts of Chapter 7, the extended aggregates presented in the SEEA are highly relevant to the measurement of sustainability from the capital perspective. However, unlike the asset accounts, which are relevant from both the weak and strong sustainability perspectives, the accounts in category 4 implicitly adopt the perspective of weak sustainability. The aggregate measures that are described in the SEEA can only be constructed by first valuing all forms of natural capital and then aggregating the value of natural capital with the value of produced and financial capital already included in the SNA.

Source
Economic and social development  (new window, website)
One of the UN's central mandates is the promotion of higher standards of living, full employment, and conditions of economic and social progress and development. As much as 70 per cent of the work of the UN system is devoted to accomplishing this mandate. Guiding the work is the belief that eradicating poverty and improving the well-being of people everywhere are necessary steps in creating conditions for lasting world peace.

Development Policy and Analysis Division  (new window, website)
The Development Policy and Analysis Division aims to contribute to a strengthening of international cooperation for the economic and social development of all countries and to foster their effective integration into the world economy in the context of the UN Development Agenda. The Division’s core functions include:

 World Economic and Social Survey  (new window, website)

The World Economic and Social Survey (WESS) provides objective analysis of pressing long-term social and economic development issues, and discusses the positive and negative impact of corresponding policies. The analyses are supported by analytical research and data included in the annex.

World Economic and Social Survey 2006:
Diverging Growth and Development  (new window, 4,901 KB, pdf)

Overview
By many measures, global income inequality is high and rising

By many measures, global income inequality is high and rising. In 1950, the average Ethiopian had an income 16 times less than that of someone living in Europe or the United States of America. Half a century later, Ethiopians have become 35 times poorer. Most of the world’s poorest nations are falling behind in more or less similar degrees. The main reason is that in the industrialized world the income level over the last five decades has grown steadily, while it has failed to do so in many developing countries, especially over the past quarter of a century. Not more than a few developing countries have been growing at sustained rates in recent decades, but these include, most notably, the world’s two most populous countries, China and India. Considering that these two countries alone account for more than one third of world population, inequality across the globe is beginning to decline. When these countries are left out, however, international income inequality is seen as having continued to rise strongly from already high levels (see fi gure O.1).   

Figure O.1.
GDP per capita in selected developing regions and China relative to that in the developed world, 1950-2001


These developments are at odds with the conventional economic wisdom regarding how income differentials among countries change over time in a more integrated world economy. During the 1980s and 1990s, there had been a belief that giving more space to the global market would lead to a closing of the income gap between poor and rich countries. In reality, income convergence took place only for a small number of countries, but this did not happen in the case of many others, despite the fact that countries across the globe had opened up their trade and financial systems to the global market.

Inequality matters

The World Economic and Social Survey 2006 focuses on the causes and implications of the income divergence between countries. High income inequality also prevails within many countries. This is a problem not only because it signals injustice, but also, and in developing countries particularly, because unequal opportunities make it much more difficult as economic potential stays unutilized to achieve the Millennium Development Goals. We are concerned here, however, with the rising inequality between countries. About 70 per cent of global income inequality is explained by differences in incomes between countries. While this does not make the disparities within countries any less important, it is striking that the probability of having a better living standard to a very large extent appears to be conditioned by where one happens to live.
    World markets are far from equitable and there are several conditions that do not favour a narrowing of the income divergence between countries. Richer countries have better “endowments” which give them preferential access to capital markets and make them less vulnerable to shifts in global commodity markets. Global investors generally prefer countries with greater wealth and better-developed human capital, infrastructure and institutions, which ensure lower investment risk. Poorer countries have less diversified economies and export structures, making them much more vulnerable to shifts in commodity prices and to shocks in international financial markets. Developing countries also have less of a voice in the negotiation processes setting the rules governing global markets. The Monterrey Consensus of the International Conference on Financing for Development (United Nations, 2002a) recognized this weakness and gave a clear mandate to the international community to improve the participation of developing countries in global decision-making. However, there has been very limited progress in this area.
    Widening global disparities in turn may be harmful to growth itself. Reduced access to a stable source of international fi nance and a weaker bargaining position in international trade will leave some of the economic potential of poor countries underutilized and this should be considered a welfare loss for the world economy at large. Lower growth further obstructs efforts to eradicate poverty. In some cases, the lack of poverty reduction and high within-country inequality also have been shown to foment conflict and social instability.   
    Ignoring the slow development of a large number of countries means ignoring one of the main sources of growing world income inequality. To redress this will require both domestic and international policy efforts.

Diverging patterns of economic growth

Rising inequality between countries is the result of differences in economic performance over several decades. Broadly speaking, the income gap between the industrialized economies and developing countries was already very high in 1960 and has continued to widen since then. At the same time, however, the growth experiences among the developing countries have differed greatly. Widening income disparities among developing countries became prominent after 1980 as the result in part of a limited number of success stories of sustained economic growth, most of them in East Asia. In other parts of the world, a much larger number of countries have suffered growth collapses with long-lasting impacts on living conditions. During the past 25 years, the number of cases of growth collapses has increased, whereas the frequency of cases of successful growth has diminished. In the 1960s and 1970s, nearly 50 out of a sample of 106 developing countries had experienced one or more prolonged episodes of high and sustained per capita income growth of more than 2 per cent per year (see figure O.2). Since 1980, however, there are only 20 developing countries that have enjoyed periods of sustained growth. In contrast, no less than 40 developing countries suffered growth collapses, that is to say, periods of five years or longer during which there had been no growth or a decline in per capita income. Such growth failures have been most frequent among the least developed countries and countries in sub-Saharan Africa. In the preceding decades, growth collapses had rarely occurred and had affected fewer than 10 countries.

Figure O.2.


Source
Canadian Economics Association  (new window, website)

"With around 1400 members across the country and from abroad, the Canadian Economics Association (CEA) is the organization of academic economists in Canada.  The Association has for its object the advancement of economic knowledge through the encouragement of study and research, the issuing of publications, and the furtherance of free and informed discussion of economic questions. The Association as such will not assume a partisan position upon any question of practical politics nor commit its members to any position thereupon."

Natural Capital Index of Canada: A barometer of the stock of natural resources  (new window, 449KB, pdf)
Kazi N. Islam, Economist, Statistics Canada; Ottawa, 2006


Figure 1 indicates that the Laspeyres index overestimates the trend whereas the Paasche index underestimates the trend, especially when the indexes diverge from each other. For almost a decade starting from 1981, the natural capital index had been steady around 97%, implying that the extractions and additions had been canceling each other. The index dropped slightly in 1998, and bounced back to 100% again in 1989 mainly due to a huge increase in the physical stock of potash. Since 1990, the index had steadily declined, and in 2005 the index stood at 87%, or a 13% drop from the 1990 level.
This drop implies that Canada’s natural capital stock has been declining almost 1% each year since 1990. In other words, addition or regeneration of natural capital is about 1% less than the rate of depletion, and this gap can be a source of concern. In order to unearth the underlying reasons for this drop, the various subcomponents of the natural capital are examined. . . .
earthmodal note: see also section Governance (this site) document World Resources 2002-2004: Decisions for the Earth: Balance, voice, and power -Chapter 6: Driving business accountability

Getting Business on Board
"The link between business and environmental governance is simple. Businesses are among the world’s most influential institutions. As society’s mechanism for production and consumption, their decisions have significant environmental effects. Those decisions have ever-greater reach as companies globalize and national resources are privatized. Better environmental governance simply isn’t possible without business on board. That means sharing information with stakeholders, making decisions in an open and transparent process rather than behind closed boardroom doors, and actively seeking investments that can benefit both the environment and the bottom line."

Gund Institute for Ecological Economics  (new window, website)
"The Gund Institute for Ecological Economics transcends traditional disciplinary boundaries in order to address the complex interrelationships between ecological and economic systems in a broad and comprehensive way."

earthmodal note: for a series of videos and other presentations on the subject see the following website

Beyond Environmentalism: Envisioning a Sustainable and Desirable Future   (new window, website)
Rubenstein School of Environment and Natural Resources
Gund Institute for Ecological Economics

UN Economic and Social Council (ECOSOC) (new window, website)

ECOSOC was established under the United Nations Charter as the principal organ to coordinate economic, social, and related work of the 14 UN specialized agencies, functional commissions and five regional commissions. The Council also receives reports from 11 UN funds and programmes. The Economic and Social Council (ECOSOC) serves as the central forum for discussing international economic and social issues, and for formulating policy recommendations addressed to Member States and the United Nations system. It is responsible for:

It has the power to make or initiate studies and reports on these issues. It also has the power to assist the preparations and organization of major international conferences in the economic and social and related fields and to facilitate a coordinated follow-up to these conferences. With its broad mandate the Council's purview extends to over 70 per cent of the human and financial resources of the entire UN system.

United Nations Department of Economic and Social Affairs (DESA) (new window, website)

The United Nations Department of Economic and Social Affairs (DESA) and its predecessors have helped countries around the world meet their economic, social and environmental challenges for more than 50 years.

DESA’s mission - to promote development for all - reflects a fundamental concern for equity and equality in countries large and small, developed and developing.

Within the framework of the United Nations Development Agenda, DESA works on issues ranging from poverty reduction, population, gender equality and indigenous rights to macroeconomic policy, development finance, public sector innovation, forest policy, climate change and sustainable development. The Department also supports the effort to achieve the Millennium Development Goals, a set of time-bound targets, which put the eradication of poverty at the centre of the global partnership for development.

United Nations Conference on Trade and Development (UNCTAD) (new window, website)

Established in 1964, UNCTAD promotes the development-friendly integration of developing countries into the world economy. UNCTAD has progressively evolved into an authoritative knowledge-based institution whose work aims to help shape current policy debates and thinking on development, with a particular focus on ensuring that domestic policies and international action are mutually supportive in bringing about sustainable development.

The organization works to fulfil this mandate by carrying out three key functions:


World Trade Organization  (new window, website)

"The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations. At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations and ratified in their parliaments. The goal is to help producers of goods and services, exporters, and importers conduct their business."

World Bank  (new window, website)

"The World Bank is a vital source of financial and technical assistance to developing countries around the world. We are not a bank in the common sense. We are made up of two unique development institutions owned by 184 member countries—the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). Each institution plays a different but supportive role in our mission of global poverty reduction and the improvement of living standards. The IBRD focuses on middle income and creditworthy poor countries, while IDA focuses on the poorest countries in the world. Together we provide low-interest loans, interest-free credit and grants to developing countries for education, health, infrastructure, communications and many other purposes."
The International Monetary Fund  (new window, website)

"The IMF is an international organization of 184 member countries. It was established to promote international monetary cooperation, exchange stability, and orderly exchange arrangements; to foster economic growth and high levels of employment; and to provide temporary financial assistance to countries to help ease balance of payments adjustment."