Summary and Summary and ConclusionsConclusions

What I hoped you learned in this What I hoped you learned in this course...course...

The Nature of RealityThe Nature of Reality

The earth is finiteThe earth is finite The laws of thermodynamics applyThe laws of thermodynamics apply The economic system is a subsystem of the The economic system is a subsystem of the

global ecosystemglobal ecosystem

The Order of AnalysisThe Order of Analysis

Desirable ends (ethics, psychology, Desirable ends (ethics, psychology, sociology, etc.)sociology, etc.)

Scarce resources (ecology, physics)Scarce resources (ecology, physics) Nature of scarce resources (ecology, Nature of scarce resources (ecology,

physics, economics)physics, economics) Allocation (economics, politics)Allocation (economics, politics) We can only decide how to allocate after We can only decide how to allocate after

we know what we want, and the resources we know what we want, and the resources we have to attain it.we have to attain it.

Desirable ends: What makes Desirable ends: What makes people happy?people happy?

Money?Money? (Not very, and only relative wealth once basic needs (Not very, and only relative wealth once basic needs

are met)are met) Desiring lessDesiring less

The aspiration gapThe aspiration gap Friends and familyFriends and family CommunityCommunity Helping othersHelping others Getting oldGetting old Keeping lists of things for which youKeeping lists of things for which you’’re gratefulre grateful

Satisfaction and incomeSatisfaction and income

What makes people unhappy?What makes people unhappy?

Pursuit of material gainPursuit of material gain““young adults who focus on money, image young adults who focus on money, image and fame tend to be more depressed, and fame tend to be more depressed, have less enthusiasm for life and suffer have less enthusiasm for life and suffer more physical symptoms such as more physical symptoms such as headaches and sore throats than others.headaches and sore throats than others.”” Kasser, T. (2002). The High Price of Materialism. Cambridge, MIT Press.Kasser, T. (2002). The High Price of Materialism. Cambridge, MIT Press.

Comparing yourself with othersComparing yourself with others Status is a never-ending tread-millStatus is a never-ending tread-mill

Economics Should be a Science, Economics Should be a Science, not an Ideologynot an Ideology

Science: empirical testing of hypotheses Science: empirical testing of hypotheses and theoriesand theories

Ideology: refuse to test hypotheses, or Ideology: refuse to test hypotheses, or refuse to discard them when empirical refuse to discard them when empirical evidence contradicts themevidence contradicts them

Starting from the assumption that markets Starting from the assumption that markets (private property rights) are always best is (private property rights) are always best is ideologyideology

Starting from assumption that socialism Starting from assumption that socialism (public property rights) is always best is (public property rights) is always best is ideology ideology

The Economic system is inherently The Economic system is inherently complexcomplex

We depend on natural resources, and We depend on natural resources, and must understand both physics and ecologymust understand both physics and ecology

Some resources meet the criteria for Some resources meet the criteria for efficient market allocation, most do notefficient market allocation, most do not

Human desires are complexHuman desires are complex Human motivations are complexHuman motivations are complex Markets are never perfectMarkets are never perfect

Market model is super-simplifiedMarket model is super-simplified

Natural resources are infiniteNatural resources are infinite Most goods and services fit the market Most goods and services fit the market

modelmodel Only $$ matters, more is always betterOnly $$ matters, more is always better

Calories model of nutritionCalories model of nutrition Only concern is efficient allocationOnly concern is efficient allocation

Therefore, economists must Therefore, economists must look at:look at:

Ecological SustainabilityEcological Sustainability Social JusticeSocial Justice Efficient AllocationEfficient Allocation

Trade-offsTrade-offsConventional courseConventional course

Clear understanding of Clear understanding of over-simplified market over-simplified market systemsystem

Indoctrination into Indoctrination into dominant paradigmdominant paradigm

Faith basedFaith based

Better prep for advanced Better prep for advanced NCENCE

This courseThis course Fuzzy understanding of Fuzzy understanding of

complex systemcomplex system

Adequate exposure to Adequate exposure to ask questions, decide for ask questions, decide for yourselvesyourselves

You must test theories You must test theories against experienceagainst experience

Adequate prep for EE Adequate prep for EE and NCEand NCE

““Sometimes, it is better to be Sometimes, it is better to be vaguely right than precisely wrongvaguely right than precisely wrong””

Amartya SenAmartya Sen

What has my generation done for What has my generation done for the world?the world?

We’ve inherited more from the past We’ve inherited more from the past generations than all othersgenerations than all others

We’ve taken more from future generations We’ve taken more from future generations than all othersthan all others Half of all oil ever used was used in your life Half of all oil ever used was used in your life

timetime Under business as usual, ¾ of all oil ever to Under business as usual, ¾ of all oil ever to

be used will be used in my lifetimebe used will be used in my lifetime

What must your generation do?What must your generation do?

Would Addressing Ecological Would Addressing Ecological Problems be be a Sacrifice?Problems be be a Sacrifice?

Stern review on climate change estimates Stern review on climate change estimates that investing 1% of annual GNP required that investing 1% of annual GNP required to stabilize climateto stabilize climate

Would returning to your living standard in Would returning to your living standard in July be a sacrifice?July be a sacrifice?

Economists say yes—the cost of Economists say yes—the cost of mitigating climate change is too highmitigating climate change is too high

Could we solve the problem with 1% of Could we solve the problem with 1% of GNP? GNP?

Would Addressing our Problems be Would Addressing our Problems be a Sacrifice?a Sacrifice?

Over 90% reduction in fossil fuel use Over 90% reduction in fossil fuel use requiredrequired

Per capita income (adjusted for inflation) in Per capita income (adjusted for inflation) in 1969 was <1/2 of today’s GDP, and poverty 1969 was <1/2 of today’s GDP, and poverty was lowerwas lower

We could live at 1969 standard with 1/2 of We could live at 1969 standard with 1/2 of current CO2 emissionscurrent CO2 emissions With European efficiency levels, we could have With European efficiency levels, we could have

a 1969 lifestyle with ¼ of current emissionsa 1969 lifestyle with ¼ of current emissions With proper incentives in place, we could do With proper incentives in place, we could do

much, much bettermuch, much better

How Miserable was Life in 1969?: How Miserable was Life in 1969?: The Genuine Progress IndicatorThe Genuine Progress Indicator

How do We Get There?How do We Get There?

Information flowsInformation flows Transparent governmentTransparent government Independent mediaIndependent media EducationEducation

Changing the rulesChanging the rules Democratic control over our shared natural Democratic control over our shared natural

and cultural heritageand cultural heritage Cooperative provision/management of non-Cooperative provision/management of non-

rival resourcesrival resources Just distribution of resources provided by Just distribution of resources provided by

nature and societynature and society

How do We Get There?How do We Get There?

Changing the goals—what is desirable?Changing the goals—what is desirable? Shared vision of a sustainable and Shared vision of a sustainable and

desirable future. desirable future. Continuous economic growth is undesirableContinuous economic growth is undesirable Doom and gloom doesn’t win convertsDoom and gloom doesn’t win converts

Changing the paradigm—what is Changing the paradigm—what is possible?possible? Economy is sustained and contained by the Economy is sustained and contained by the

global ecosystemglobal ecosystem Continuous economic growth is impossibleContinuous economic growth is impossible Macroallocation is central problemMacroallocation is central problem

Summary and ConclusionsSummary and Conclusions

We have the knowledge and policies to We have the knowledge and policies to build a sustainable economybuild a sustainable economy

One of the most powerful (and most One of the most powerful (and most neglected) tools is developing and neglected) tools is developing and communicating a shared vision of a communicating a shared vision of a sustainable and desirable futuresustainable and desirable future

Another powerful tool is the democratic Another powerful tool is the democratic process, which we have abandoned in this process, which we have abandoned in this countrycountry

Summary and ConclusionsSummary and Conclusions The first steps (maybe the first 2/3 in the The first steps (maybe the first 2/3 in the

US) can be cost free (no changes in US) can be cost free (no changes in QOL, education, health, happiness) with QOL, education, health, happiness) with current technology, or even beneficialcurrent technology, or even beneficial e.g. Less fossil fuels = more health: mental, e.g. Less fossil fuels = more health: mental,

physical, financial, environmentalphysical, financial, environmental Appropriate policies provide incentives Appropriate policies provide incentives

for better technologiesfor better technologies The remaining 1/3 can be cost free with The remaining 1/3 can be cost free with

new technologiesnew technologies

Summary and ConclusionsSummary and Conclusions

Sustainability is not a sacrifice: our current Sustainability is not a sacrifice: our current lifestyle islifestyle is

Naïve and utopian?Naïve and utopian? So were the ideas of democracy, an end to So were the ideas of democracy, an end to

slavery, women's rightsslavery, women's rights It's naïve and utopian to think we can survive It's naïve and utopian to think we can survive

without making these changeswithout making these changes

Take Home Message for Take Home Message for Course: Course:

Sustainability does not Sustainability does not Require Sacrifice,Require Sacrifice,

Economic Growth DoesEconomic Growth Does

Course Number: 90162Course Number: 90162

Comments are helpfulComments are helpful Best aspect of courseBest aspect of course Worst aspect of courseWorst aspect of course

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