The Living Planet Report (2): Ecological Footprint makes for nice reading but abominable science

WWF’s latest Living Planet Report presents a bleak picture, some hopeful trends, an awfully bad indicator and lots of pious words on sustainable development.

Oh boy: the Ecological Footprint

NGOs like WWF love indicators like the Ecological Footprint. Its message seems simple: if we want to continue living the way we do now, we need more planets to offset all the bad thing we do. Alas, it is one of the worst concoctions that ever came out of an econophobic environmentalist’s imagination. At best it tells us things we already know. At worst it suggests policies that are harmful to people AND the environment. It is claptrap. Trash. Ecological Footprint is evil. The objections are legion, but the main ones are:

  • EF tells us nothing about how “bad” or how “serious” impacts are;
  • It depends strongly on carbon emissions and makes wildly strong assumptions on how carbon emissions are mitigated;
  • It is biased against cities and trade.

Ecological Footprint does not tell us how bad impacts are

Suppose we have two pollutants. One will, if it reaches a certain concentration, kill all life on the planet. Theoretically we can reduce its concentration with some technology that takes very little space, but because we think it is too expensive we haven’t installed it yet. (Let’s say we can install some device on the North Pole that sucks the pollutant out of the air.) The other pollutant causes a nasty rash among a small share of the population. Reducing its concentration requires the planting of huge areas of forest, but we can use these forests also for recreation, timber, and all other kinds of uses. Which pollutant should be banned?

EF would say: ban the second pollutant. Not because that pollutant causes a rash, not because EF aims to kill all life on the planet, but because mitigating that pollutant’s emissions takes more hectares than mitigating the first pollutant. So one problem with EF is that it ignores how a given activity affects our well-being, or that of future generations. All that matters is how far we are from a steady state, and this “how far” is measured in hectares. Why hectares? Are they such good indicators of the well-being of humans, or life on Earth in general? No. But it gives you pretty pictures: you can show your readers a picture of Earth besides one or two other planets and tell people we also need the other planets. And then your readers can say: “Oh no! We need two more!” It’s a great propaganda tool.

Ecological Footprint depends strongly on carbon emissions

In fact, EF ignores toxic substances altogether, because, you guessed it, they are so difficult to translate into hectares. The only exception is carbon emissions: after all, we could in theory plant trees to absorb and store carbon. (Please don’t start now that carbon is not a pollutant but plant food, and that anthropogenic global warming is a leftist conspiracy to take away your SUV. Conspiracy theories give me a rash.) This is what the EF assumes: that we need to grow trees in order to absorb all the carbon we emit. No wonder carbon makes up about 50% of the global Ecological Footprint! In case you haven’t noticed: the fact that 50% of the EF is caused by carbon emissions is not the result of the gravity of human-induced climate change (which I agree is serious), but of the assumptions that the EF makes on how we should mitigate those emissions (which may be or may not be realistic but is in NO way related to the consequences of human-induced climate change). Moreover, there are many ways of mitigating carbon emissions, many of which take less space than planting trees: Carbon Capture and Storage, for instance.

Ecological Footprint is biased against cities and trade

If the LPR simply presented the EF as an indicator of whether we can keep up current consumption rates indefinitely or not, it may not necessarily be wrong, although it would be useless: we already know from IPCC, IUCN, and other bodies that we are having impacts that are drastically altering ecosystems, and are likely to limit future generations’ well-being. The problem so far seems to be that it is presented as a quantitative measure of how bad things are, which it is not. However, the LPR (as well as the EF’s proponents) go further than that: they claim cities are evil, and they base that claim on cities’ Ecological Footprint.

The reasoning is like this. Imagine a city that covers 100 km2. Of course it cannot exist on its own: after all, it is a city, population density is high, so it is impossible to feed all the city folk by growing food on the mere 100 km2 covered by that city. So it buys food from the rural areas around it. The inventors of EF claim this is a bad thing. Our imaginary city could have an ecological footprint several times its physical surface area, because all that farmland provides food to the city. So according to EF’s proponents it is unsustainable, and should reduce its footprint to something more in line with its physical size. Cities are parasites on their surroundings, the EF folks claim.

This ‘parasitism’ is nothing more than trade. A farm’s footprint is smaller than its physical area because it only uses a fraction of the food it produces: the rest is sold, mainly to city folk. This is good: farmers can specialize in farming, city folk can specialize in activities for which it pays to be close to other people, such as trade, banking, research, and education. Throughout history, cities have been hotbeds of innovation, of revolution, of new ideas being spawned, spreading, and finding fertile ground.

No wonder EF is also biased against international trade: densely populated countries (read: countries where land is in short supply) like Singapore and The Netherlands import a lot of food and timber from countries that have lots of land. This way everybody can do what he or she is best at. Really, you don’t want to live in a world where everybody grows his own food, fetches his own water, generates his own energy, builds his own house, and pulls his own teeth. Trade enables division of labour, which enables us to do a lot more with the same resources.

Better indicators? Prices!

If EF is so bad, is there any other way to express the state of the world’s environment in one figure? The short answer is: no. The issues are too diverse, and too numerous to be translated in a single figure. The long answer: what should such an indicator reflect? At least it should reflect how serious the issues are, because policy makers will set their priorities with the help of the indicator. Prices may be imperfect reflections of what people want, but they are still way better than an arbitrary variable like surface area. (Why not Joules? Or grams? I know: less pretty pictures.) The indicator should also reflect not only our current happiness, but also our impact on the future. So a country that throws a big party squandering its natural resources should have a lower value than a country that uses the same amount of resources more wisely. The first issue is not in EF, and the second issue only partially (and using, as I said, a poorly suited unit). Gross National Income, which is widely used by economists but also criticized by ecologists, is also a very poor indicator of wealth, mainly because it ignores natural resource depletion. But there are better, less well-known indicators: the latest edition of The World Bank’s Little Green Data Book presents not only Gross National Income of different countries and regions, but also their Adjusted Net National Income, which is GNI minus consumption of fixed capital, and depletion of energy resources, minerals, and forests. And thankfully, the word “footprint” is nowhere to be found.

Living Planet Report (1): Living Planet Index paints a bleak picture, but be careful with your interpretation

WWF’s latest Living Planet Report presents a bleak picture, some hopeful trends, an awfully bad indicator and lots of pious words on sustainable development.

The Living Planet Index

The bleak picture is painted by the overall trends in The Living Planet Index, a weighted average of the abundance (or density, or another indicator of well-being) of a ‘basket’ of species. You can argue about the weights each species gets, of course, but the overall message is that most of the species they monitor are still in decline.

The hopeful trends are in the North: rich country LPIs are rising. There could be many reasons for this. Unsurprisingly, the LPR claims that the rising trends in the North are only possible because rich countries ‘export’, as it were, the damaging activities necessary for their consumption to poorer countries. I don’t doubt this is one of the drivers, but I can’t help thinking that it also matters that as we grow richer, we start caring more for the environment. Whether this means that we should all be poor (little consumption of natural resources) or rich (high preference for conservation) is a very, very old discussion in environmental economics.

The LPR also states that just because things are getting better, that does not mean they are going well. The report rightly points towards the fact that Atlantic cod stocks in some places are only a few percent of what they were mid-nineteenth century. Although cods stocks are improving, they could have been a lot better (i.e., we could have had a lot more bacalau than we’re having now). Be careful, however, not to interpret this as that we should strive for pre-industrial levels for all species. After all, this would mean that we should never fish at all. The report does not make this claim explicitly, but such claims are made in other indicators. It is important to keep in mind that biomass levels that give us Maximum Sustainable Yield generally lie at about 20%-50% of what the biomass would have been if we did not fish at all. So if a stock is at 5% of its pre-fishing level it could be at about 10% of its optimal size. Always keep in mind: what do we want? Pre-industrial or even pre-human biomass levels are poor benchmarks for that.

Next post: Oh boy. They’re using the Ecological Footprint

Why economists argue with ecologists (3): consequences versus deontology

A fundamental difference between economists and ecologists is that economists tend to approach environmental pollution as an allocative issue, whereas ecologists tend to approach it as a moral issue. Or, more accurately, economists take a consequentialist approach whereas ecologists tend to be more deontologist.

There are many examples to illustrate this, but none is as sharp as the debate on emissions trading. It used to be no more than a smart idea to limit pollution in an efficient manner, but it has evolved into a political minefield where the Left sees it as a sell-out to Wall Street, whereas the Right sees it as a communist takeover of the economy. The idea is simple: we limit emissions to, say, 100 units, and so we distribute 100 units of emission rights among polluters. Want to pollute more? Then buy rights from another polluter, who will then have to take additional emission reduction measures. You bet he will only agree to that transaction if you pay him more for his right to pollute than it costs him to reduce his pollution by one additional unit. Moreover, you will only agree if the price you pay for the right is lower than it benefits you to increase your pollution. In other words, you can have a voluntary transaction that makes both parties better off without further damaging the environment. This is a way of achieving what economists call allocative efficiency: we shuffle around resources and other inputs to achieve the maximum output at minimum costs, where costs include environmental damage as well as wages and all. An economist would say: we have the same environmental quality, but we increase welfare – what’s not to like?

A lot, an ecologist would say. Besides issues with regard to enforcement, windfall profits, etc., an ecologist would also have objections of a moral nature. Here are a few of the objections I’ve heard from students and researchers:

  • How can you give somebody a right to pollute? Nobody should have any right to pollute the environment.
  • Under such schemes companies can just pay some money and go about their dirty business. They should give a good example to others.
  • It’s immoral to commodify the environment.
  • Tradable emission permits are a modern version of medieval indulgences.

I can think of a lot of misguided objections to emissions trading, but these objections are not among them. They are moral objections that are valid within a given moral framework, which may not be my moral framework, but a valid one nonetheless. You hear similar arguments in the debate on economic valuation of the environment, biotechnology, and to some extent Payments for Ecosystem Services (wait until you propose hunting as a source of conservation funding). In all of these examples economists stress the allocative issue: “look, we clean up the environment right? That’s what you want, right? So why not make sure that we do this efficiently through emissions trading / cost-benefit analysis / GMOs / hunting concessions?” On the other hand, ecologists tend to stress the moral side of the issue: “rights to pollute / pricing nature / genetic modification / hunting is plain wrong and we shouldn’t do it.”

Beneath the economist’s allocative approach lies the philosophy of utilitarianism. In a nutshell, utilitarians argue that an action is morally right whenever it maximizes the sum of all happiness. This also means that utilitarians judge an action purely by its consequences, whereas other moral philosophies (also called deontological ethics) judge the action itself.

In other words, economists take a consequentialist approach to environmental problems, whereas ecologists tend to be more on the deontological side. Note that the moral objections to emissions trading listed above focus on the trading itself rather than its consequences. The economist’s reply will always point to the consequences.

Maybe it is due to my economics training, but I’m more on the consequentialist/utilitarian side. The deontological argument can become self-defeating, for instance when opposition to hunting leads to habitat degradation. If we have to choose between an ailing population of an endangered species without hunting and a thriving population that pays for its own conservation through hunting, I’d choose hunting anytime.

Illegally obtained evidence in whaling research?

Apparently some biology journals refuse to publish research on whales if data for that research come from commercial whaling, as this paper in the ICES journal describes. Frankly the authors (all from a Norwegian research institute) are not happy with that.

I am no legal expert so I don’t know whether such research is a case of illegally or improperly obtained evidence. I understand why such evidence is not accepted in court: you don’t want to encourage police officers breaking the law themselves to catch a criminal. By the same token, you don’t want to encourage researchers breaking international treaties for their research.

Nevertheless, I have mixed feelings about the international whaling bans. I once made this picture on the Bergen Fish Market:

Yes, I tried whale meat. It’s not exactly a delicacy. I also asked what species it was and they told me it was minke whale. If you check minke whale in the IUCN Red List you will find the species is not threatened in any way. But what about the species next to the whale meat? There are many different eel species, but the eel you buy in most shops is European Eel – critically endangered, according to the IUCN Red List.

Why do we eat eel, which is on the brink of extinction, while we get so upset about minke whale, which is so abundant? I admit: smoked eel tastes much better than whale meat.