Another very closely related topic to Ecological Intelligence, is assessing the true costs of stuff. David Bainbridge has written a great book about this topic called, "True Cost Accounting". Inserting some of the first chapter, as I don't think it is officially published yet. Edit, it has now been published online, you can download the whole book in chapters here
http://www.sustainabilityleader.org/Sustainability_Leader/About_me.html
Chapter 1. The Causes of the Crisis
There is also waste, in the sense of injury to the sum of total economic satisfaction, when one generation, though not destroying more stuff than it itself obtains, uses up for trivial purposes a natural product which is abundant now, but which is likely to become scarce and not readily available, even for very important purposes, for future generations.
—Arthur C. Pigou (1932)
The world is in a set of increasingly severe and
interlocked economic, social, and environmental crises.
The financial markets are in steep decline, fisheries are
collapsing, resources are running short, food supplies are
failing, and droughts, floods, and severe storms continue
to cause catastrophic losses. Many of the world’s
governments are running large deficits and throwing
hundreds of billions into the financial markets in an
attempt to stem the decline, with little effect (Figure 1.1).
Note: current efforts may reduce the rate of decline or may increase it,
but policy changes as of early March, 2009 are unlikely to offset
remaining problems in residential and commercial real estate,
industrial and commercial financing, derivatives, and consumer credit.
Figure 1.1. The Dow Jones Industrial Average
To develop solutions that will avert further collapse,
and to repair existing damage, we need to understand and
address the causes of these crises, not just the symptoms.
One of the primary causes of the current problems is a
critical flaw in the market. This was first identified by
British economist Arthur C. Pigou, who affirmed early in
the twentieth century that a market would fail unless it
includes all costs.
Today, many important and large costs are either
uncounted or incorrectly attributed, and as a result the
U.S. and global markets perform very poorly. Social and
environmental costs, referred to as “externalities” by
most economists, are left out of the pricing of goods and
services. These externalities include the very real costs of
pollution, disease, death, community breakdown, and
damage to vital ecosystem services as well as to natural
and social capital. Many of these costs are passed on to
future generations or to the poor and the powerless.
The growing awareness of very serious problems
with local and global ecosystem stability and resource
availability in the scientific and business communities is
encouraging new consideration of the sustainability of
current lifeways, communities, and economy. The critical
flaw of existing economic policy, however, is rarely
addressed. According to an old Dutch saying, “No sense
mopping the floor until you turn off the water.” We need
to “turn off the water” with market reforms that include
all the costs of our choices. Only then can sustainable
solutions for a more secure and prosperous future be
developed.
Our Common Future, a 1987 report of the United
Nations World Commission on Environment and
Development chaired by Norwegian Gro Harlem
Brundtland, defined sustainability as, “development that
meets the needs of the present generation without
compromising the ability of future generations to meet
their own needs.” The report highlights the importance of
addressing the problems of poverty and inequity as
necessary steps in preventing continued environmental
deterioration. Although this is a start, proper accounting
for sustainability is also necessary to ensure that there is
comfortable and safe housing, healthful foods, clean
water to drink, and security even in times of natural
disasters or terrorist attacks.
Reforming the market by itself is not enough. A
sustainable future also demands changes in government
policy that are based on more ethical principles and
proper consideration of future generations. Incentives
must be developed and structured that encourage
conservative and regenerative actions, not speculation
and waste.
People depend on natural systems for air to breathe,
food to eat, water to drink, and materials for building. For
people in many parts of the world, however, modern
conveniences mask the critical connections humankind
has to natural and managed ecosystems. Water comes
from a faucet or in a bottle; food comes prepared,
packaged, and free of dirt; energy flows from a wall
socket from distant power plants; and wastes are simply
flushed away. But even though they may not see it, each
Rebuilding the American Economy ©2009 D.A. Bainbridge 2
individual has an impact on the planet, and the wealthier
the nation the greater the impact.
Almost all of the 6.5 billion people on Earth
participate in the world market at some level. There are
more than 500 million small- and medium-sized
enterprises that trade 5 to 6 million different products
internationally, and almost every one of them can cause
environmental or health problems, depending on the
materials and processes used to make, distribute, and
dispose of them. These enterprises operate in more than
200 countries of differing climates, resources, politics,
economies, histories, and cultural realities; yet each
country depends entirely on the health of a single
system—the Earth. This dependency would not be a
problem if humankind did not take more from Earth than
it gives back, and did not dump more than nature can
absorb. By any measure we are taking too much and
disposing of wastes improperly, leading to global
warming, extensive and often severe health problems,
societal crises, and ecosystem destruction.
On average, each American in 2008 required almost
24 acres (10 hectares) to support his or her lifestyle. This
ecological footprint is unsustainable. At least five more
planets the size of Earth would be needed if everyone on
Earth were to demand as much as we use, while still
leaving some space for nature. Only a handful of
countries are living within their ecological means, and
trends are not encouraging. The global ecological
footprint, for everyone living on Earth, is projected to
increase 50 percent by 2015. The Millennium Ecosystem
Assessment project, composed of 1,360 experts from
around the world, found that two-thirds of the services
provided by nature are in decline. Global environmental
deterioration has accelerated as pollution control efforts
in developed countries have shifted more and more toxic
industrial emissions and effluents to poorer countries.
The apparent “wealth” of many industrialized countries is
based on material flows, pollution, and labor exploitation
in the rest of the world.
Sustainability is not simply about the environment.
To be sustainable a community must have a healthy
economy and programs, policies, and traditions that
provide support for community, safety, cohesion,
cooperation, education, health, and equity. These can be
as elusive as ecological sustainability and will not happen
without more careful consideration of the impacts of the
policies, regulations, and incentives that determine
market forces. Decisions need to be made to improve the
triple bottom line (social, economic, and environmental),
while respecting the 3Ps—people, prosperity, and planet.
The current “race to the bottom” is moving
production to countries with little or no environmental or
worker protections. Why pay more if a company can hire
a worker for a dime an hour or less? China is beginning
to see many companies fail because small increases in
wages and environmental rules have priced them out of
the market. Wal-Mart and other companies will succeed
in finding those who will work for less elsewhere.
Social and environmental externalities are integral
costs of goods and services and often exceed the
currently counted costs. In many cases, these externalities
have not been studied, because governments and
consumers do not want to know (or pay for) the true costs
of goods and services. By not paying these costs,
consumers and nations become “free riders” who prey on
others and wreak havoc around the world and on future
generations.
The enormous subsidies that result from not paying
true costs also reward powerful interest groups, who
skillfully use their wealth and political influence to
insulate themselves from paying their share of the costs.
One clear example of this in the United States is the
automobile industry.
True Costs: The Automobile in America
The automobile is an essential part of most people’s
lives in the United States. The internal costs of the auto
industry (production, transport, sales, advertising,
facilities, profits) are fairly clear. It is much harder to
identify and understand the true costs, because the
external or uncounted costs of pollution, health impacts,
depletion of non-renewable resources, and so forth, are
not factored in.
The automobile, its parts (air conditioner, tires,
brakes, etc.), its use, and its disposal, creates a wide range
of significant external costs throughout its lifetime. These
costs begin with mining the ore for steel and other metals
and move on to resource processing, parts manufacturing,
automobile assembly, distribution, maintenance,
recycling, and disposal. Oil, gas, and other materials are
extracted and shipped around the world, and leaks and
spills occur at every step. Auto users, automakers, oil
companies, and highway builders all “benefit” from the
true costs not being accounted for. Taxpayers who do not
use cars as well as future generations around the world
will ultimately pay more than their share. Key external
costs of the automobile include health effects, global
warming gases, nitrogen pollution (which damages
ecosystems), accidents and injuries (medical care and
costs), time wasted by traffic congestion, mining damage,
pollution from production facilities, chlorinated
fluorocarbon leaks (from air conditioners) and resultant
ozone layer depletion, wildlife kills, and much more.
The roads, highways, and parking lots needed for
auto use also create very high costs for mining,
construction, maintenance, operation, and disposal. The
construction of streets and parking lots is a key cause of
watershed disruption, blocks wildlife corridors, involves
extensive use of herbicides to control weeds in the rightof-
way, creates serious storm water pollution (laden with
toxics), and increases the urban heat island effect, raising
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