The Science of Sustainability

Introduction

Learning Objectives

1. Discuss the key interrelationships among human, earth, and natural systems and why these are important for sustainable businesses.
2. Explain the main ways that businesses and individuals affect ecosystems and the environment.
3. Understand the energy use by businesses in modern society and why this is relevant for sustainable businesses.

Sustainability involves having an understanding of the relationship between business, humanity, and nature. Clean air, drinkable water, food, clean environment, and shelter are fundamental to human survival and to business existence. Natural resources are often taken as a given and not appreciated for how essential they are to human well-being and survival and to business operations. Think for a moment, what life would be like if we did not have clean air to breathe, clean drinking water, or food to eat. And what would businesses do without all these resources and without healthy and productive people and workers. These are all resources originating from natural systems.

Sustainable businesses are concerned about the impact of their organizations on the environment, society, and future generations. To ascertain how humans and business operations impact the natural environment, it is important to understand basic concepts of earth, atmospheric, and ecological systems as well as social and political systems.

Sustainability has evolved into a broad science integrating earth system (e.g., air, water, agriculture) disciplines with social sciences, including economics and sociology, to understand the complex cultural, environmental, and economic interrelationships that exist among humans, human organizations, and natural systems. Intergenerational equity, or the concept of fairness and justice between different societal groups and future generations, is a key area of concern in the societal component of sustainability.

This chapter integrates discussion of the environment, society, and economics. It begins by discussing two contrasting perspectives of human economic interaction with the environment. One view highlights the ecological limits to growth, and the other highlights how human invention and ingenuity seeks to remove limits to growth. We suggest that these two views are not mutually exclusive - that there are limits to growth but that some of these limits can be addressed and overcome through human and business innovation and adaptation.

The chapter then gives an overview of how earth and natural systems work. This will include descriptions of earth system components and then a focus on threats to well-functioning earth systems. The chapter concludes with a discussion of sustainability science areas that are particularly relevant to business, including how sustainability concepts are being integrated into the economy.

Source: Saylor Academy, https://saylordotorg.github.io/text_the-sustainable-business-case-book/s06-the-science-of-sustainability.html
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2.1 Sustainability Economics

Learning Objectives

1. Discuss two common views of growth and be able to describe the key features of both views.
2. Understand how both views of growth are relevant for sustainable businesses.

Limits to Growth Concept

The limits to growth concept posits that unlimited economic growth is not possible - that at some point the world's growing population will consume too great a quantity of natural resources (such as clean water and fossil fuels) for human society to exist. Reverend Thomas Robert Malthus (1766–1834) raised the issue of the growing population in the context of limited food resources in his "An Essay on the Principle of Population". He postulated that "population, when unchecked, increases in a geometric ratio. Subsistence increases only in an arithmetical ratio". In other words, that human growth would outpace the ability of natural resources to keep up. This was in contrast to the overall positive sentiment of the era of continued human progress and improvement, and he viewed humans to "be condemned to a perpetual oscillation between happiness and misery, and after every effort remain still at an immeasurable distance from the wished-for goal". As a reverend, Malthus sought to explain why there was poverty and misery, and he believed the reason to be directly attributable to shortages of resources (means of sustenance, such as food).

The limits to growth perspective reached the global public with the 1972 publication of Limits to Growth, a research study by the Massachusetts Institute of Technology (MIT) Systems Lab, released by the Club of Rome. Since its publication, the book has sold millions of copies in thirty different languages.

MIT scientists ran a computer simulation of an integrated global model (called World3) that linked the world economy with the environment. The five main variables in the model were world population, industrial production, food production, resource consumption, and pollution. The authors explored interrelationships and feedback patterns by altering growth trends among the five variables.

The model predicted that continued growth in the global economy would lead to global population and economic collapse in the mid-twenty-first century as a result of increased ecological damage and decreased resources. They also found that collapse could be avoided with changes in policy, behavior, and technology.

The study presented, what was for many at the time, a novel finding that the demands of the human population could exceed the carrying capacity of the earth. The MIT group identified the need to stabilize growth so that humans could live within the ability of the earth's natural system to provide a sustainable yield of resources essential to human life. They found that technology alone could prolong but not prevent a system collapse. In an increased technology scenario in which 75 percent of materials were recycled, pollution reduced to 70 percent of 1970 levels, and agricultural land yields increase 100 percent, world collapse was pushed off to the end of the twenty-first century.

Here is an illustrative example of the concept of limits to growth. Assume that five acres of grassland is required to sustainably feed one cow annually. This means that five acres is able to regenerate itself and support the grazing of one cow and that this same cycle of growth and consumption can occur year after year. In other words, the carrying capacity of five acres of grassland is one cow. If you were a farmer with one hundred acres of grassland and you had one cow, there would be more than enough grass available to feed that one cow and have the grass regenerate itself for perpetuity. The farmer could add up to twenty cows on the one hundred acres and every year the grassland would produce enough grass to feed all twenty cows.

Now suppose the farmer wants to increase his annual profits, and he adds another ten cows to the one hundred acres. There probably is enough grass to feed those cows for that year, but now the overgrazing is compromising the ability of the grass to replenish itself. The resource base degrades because the demands on the grassland are greater than its capacity. Perhaps the next year only 90 percent of the grass grows back, and it is not as healthy as before. Continuous overgrazing further degrades the grassland until it is no longer capable of supporting any cattle.

What would happen instead if the farmer believing that he can push profits even further decided to increase the herd size each year by another ten cows? Then the degradation of grassland will proceed at an even faster rate. Even if the farmer does achieve some short-term profitability increase by exploiting the grassland, it is at the expense of productive grassland in the future. Once damaged, it may take years or decades for the grassland to recover or it may never return to its former productive capacity.

This example illustrates the basic concept of limits to growth - that at some point rising resource demand runs into some very hard resource limitations.

No Limits to Growth Concept

It can be argued that throughout most of the nineteenth and twentieth centuries the dominating paradigm in the United States and Europe and most of the developed world has been that there were few limits to economic growth and that economic growth is always desired".

No limits to growth" is not an articulated theory per se, but it is, to a significant degree, implicit in modern economic thinking. "No limits" thinking highlights the efficacy of the private market. Underpinning "no limits" is the idea that resource scarcity - a major factor in "limits to growth" thinking - can be effectively addressed by economic laws of supply and demand. Laws of supply and demand do work; as resources become scarce, the market will reduce use by increasing the price of those resources.

The market and laws of supply and demand can serve to reduce demand for scarce resources and guide resource allocation to technology and innovation investments that can help address scarce resource concerns. Technology can help reduce resource demand through more efficient use of those resources. For example, a programmable thermostat can more efficiently heat and cool homes than a traditional thermostat. Increased prices will also favor substitution where another resource may be used in place of the scarce resource. An example of this would be building materials or furniture that no longer are produced using 100 percent real wood, as wood has become more scarce and expensive, but instead use wood-laminate and alternative composite materials.

Julian Simon (1932–98), a professor of business administration at the University of Maryland, is often cited in relation to the cornucopia theory - that there are no physical limitations on economic growth or human population. In Simon's book The Ultimate Resource (published in 1983), he states, "The supply of natural resources is infinite. Almost all trends in environmental quality are positive…There is only one scarcity: Human brain power 'the Ultimate Resource'". He argued that human ingenuity combined with the correct market signals (pricing) would allow for humans to continually grow economically and the overall human condition would continue to improve, not worsen. He believed that increased consumption would heighten scarcity, which would translate into higher prices, in the short term. This would in turn stimulate entrepreneurship to seek new ways to satisfy shortages. Society eventually ends up better off than if the original shortage had not occurred.

Neoliberalism is a view of the global economic system that holds to the overall tenets of no limits to growth and cornucopian theory. In this view, the private sector, not government, should determine economic and policy priorities. Consistent with a cornucopian viewpoint, neoliberalism views business entrepreneurship (unfettered from government regulations and trade restrictions) as being able to make society better off by letting the marketplace determine the use of resources.

Related to this view of unlimited economic growth are consumerism and the underlying assumption that more consumption is always better for the economy. Consumerism is the belief that our economic systems should favor consumption and that the consumption should be for goods and services that are in excess of basic material needs for survival. Consumerism not only attempts to meet material needs and wants but allows for continuous economic growth. Christine Frederick (1883–1970), a home economist, discussed the need for planned obsolescence in an industrial economy stating, "The way to break the vicious deadlock of a low standard of living is to spend freely, and even waste creatively". In 1955, economist Victor Lebow observed, "Our enormously productive economy…demands that we make consumption our way of life…we need things consumed, burned up, replaced and discarded at an ever-accelerating rate.

Currently, 70 percent of the $14 trillion US economy is driven by consumer spending. A focus on consumption, however, puts tremendous demand on natural resource systems. Natural resources are required to extract, produce, and transport the goods that we purchase, and the extraction, production, and transportation of these goods often release pollution and toxic chemicals in the process. Consumerism is not just limited to the United States, but as globalization of the economy continues, it is becoming universal across the world. Emerging economies such as China, India, Brazil, and Russia have experienced significantly increased demand for goods and services by consumers.

In the chapter on entrepreneurship, innovation, and sustainability, the market opportunities created by scarce resources are highlighted. The chapter will discuss how market signals regarding scarce resources can provide business opportunities for sustainable businesses.

Reconciling Limits and No Limits to Growth

The two views of limits to growth are both important for the business context of sustainability. Both views, at a fundamental level, influence sustainability discussions at a personal, business, and societal level. The earth does have limited resources and human activity can negatively impact the environment. Market forces are often effective in providing signals to society of resource scarcity and the need to change, innovate, and adapt. But even with the overall efficacy of markets, there are limits to the efficacy of the market perspective. Markets often fail to properly price natural resources that are treated as free goods, and this makes limits to growth a reality. Both arguments make important points that frame discussions of sustainability.

Tragedy of the Commons

An important concept relevant for sustainability is the "tragedy of the commons". This phrase was coined by the ecologist Garrett Hardin in a 1968 article in Science. The tragedy of the commons describes a situation where different parties share a common good (such as open public land), and acting independently in their own self-interest, they will ultimately overexploit and deplete or destroy the shared resource. The tragedy is that the individuals acting in a way that they believe is in their own best interest end up acting in a way that is detrimental to their collective and individual long-term best interests.

There are numerous examples of tragedy of the commons in modern life and the environment, including polluting the atmosphere, overharvesting fish stocks (see "What Happened to All the Fish" as follows), and polluting waterways. Related to our cattle example in the limits to growth discussion mentioned previously, tragedy of the commons can be illustrated in a simplified example involving cattle. If several cattle herders share a common (publicly shared) area of land and all herders are entitled to let their cattle graze on that land without restriction, there is the potential for tragedy of the commons to occur.

For each individual herder, it is in their self-interest to maximize their profitability by placing as many cattle as possible on the land. There is no direct incremental resource cost to the herder for each cow they add to the shared land, and the herder has increased revenue through greater cattle sales. If each herder acted in this manner, the quality of the common resource can be either temporarily or permanently damaged as a result of overgrazing if the total cattle population exceeds the carrying capacity of the shared land. Once carrying capacity is exceeded, all are negatively impacted, including, ironically, the herders who added to their cattle stock.

In this system, each herder receives all the benefits from adding additional cattle, while the resource damage to the common land is shared by all herders. What should also be noted is there is no economic incentive in this example for a herder to withhold cattle from the land because even if one herder chose not to add additional cattle over concern about damaging the shared land, there is nothing to prevent another herder from adding more cattle resulting in the same end result of a depleted resource.

Key Takeaways

• There are two main views of economics as pertains to sustainability: limits to growth and no limits to growth. Both views have merits in terms of explaining the interaction of society and environment.
• The limits to growth concept argues that our current society is living beyond what Earth is capable of providing and that we must change to live within the context of what Earth can provide.
• The no limits to growth concept argues that market signals and technological innovation can overcome limits to growth in natural systems.
• Tragedy of the commons occurs often in shared environmental resources, and understanding the system dynamics is essential to sustainability of shared natural resources.
• Consumerism is a factor in driving economic growth in modern economies and, as a result, resource depletion.

Exercises

1. Discuss the merits of both limits to growth perspectives.
2. In an online journal, find an article that illustrates an example of tragedy of the commons. Identify the "commons," the individual actors, and the consequence of the situation.

2.2 Life and Climate System of Earth

Learning Objectives

1. Understand basic concepts of Earth's history and ecology.
2. Identify key natural resources.
3. Understand the interaction between ecosystem services and human well-being.

Brief History

The earth has sustained a wide and abundant variety of life for millions and millions of years, with the origin of life on Earth estimated to have begun 3.5 billion years ago. Humans only arrived in the last 500,000 years, or 0.01 percent of the total history of life on the planet. The forms of life and the climate have changed continuously and sometimes drastically over that time. The earth's history is divided into three geological eras, but the most recent and the one that we currently live in is the Cenozoic, which began 65.5 million years ago. The most significant features of the Cenozoic era are a long-term cooling of the earth, the rise and diversification of mammals, and the evolution of humans. Previous eras featured a much warmer planet, a different atmospheric system, and a wide variety of life.

A significant feature of the climate over the last 2.6 million years has been "ice ages," which are a continuous fluctuation between relatively cold (glacial) and warm (interglacial) periods. Glaciations are periods of extremely cold climate where a greater portion of the earth is covered with ice and snow. Interglacials are intermittent warming periods between glaciations, which feature a melting and retreat of ice from large portions of Earth. In the last 800,000 years there have seen eight glacial cycles - one occurring about every 100,000 years - with the last glaciation ending about 12,500 years ago. Currently we are in an interglacial time period. This last interglacial period is known as the Holocene and features the rise of modern human civilization and the current climate and earth system.

The glacial cycles are the result of a complex interaction of factors, including atmospheric composition (such as the concentration of carbon dioxide and methane), variations in the earth's orbit, movement of tectonic plates, and changes in solar output. Of the different factors, periodic changes in the earth's orbit, tilt, and precession (wobbling around its axis) are believed to be a major driver for ice ages when they occur in a specific combination that reduce the amount of sunlight reaching the earth. These changes are also known as Milankovitch cycles, named after the Serbian mathematician who theorized that these orbital changes were the cause of the ice ages. It is important to understand natural past climate change in the context of man's impact on global climate change, which will be discussed later on in this chapter.

Ecology

Ecology is the study of life forms and their interaction and their relationship with the environment with a focus on how biological systems remain diverse, healthy, and productive. Ecosystems are the "webs" or complex patterns of interactions among a network of life in a specific place on Earth. Wetlands, forests, grasslands, coral reefs, and coastal estuaries are all examples of ecosystems. They are an interaction of living (biotic) and nonliving (abiotic) elements in a specific geographic area.

Healthy ecosystems are important to human society as they provide life-sustaining goods and services, including clean air to breathe, clean water to drink, plants and animals as food sources, and raw materials for clothing and shelter. The goods and services produced by natural systems that benefit humans are called ecosystem services. These goods and services lack a formal market and are not included in traditional economic measures like GDP. They are often viewed as "public goods" or societal benefits.

Environmental changes can impact the life that an ecosystem can sustain. Severe or rapid changes can reduce the carrying capacity of an ecosystem and result in the loss of living organisms. Severe and permanent loss of animal species is called extinction. In the history of Earth there have been five major mass extinction events - meaning large number of species have died off dramatically: Ordovician (450 million years ago), Devonian (375 million years ago), Permian (251 million years ago), Triassic (205 million years ago), and Cretaceous (66 million years ago). The worst mass extinction is believed to be the Triassic extinction when over 90 percent of species on Earth died off. Evidence suggests that it can take millions of years for new species to recover after a mass extinction event.

In addition to these more well-defined mass extinction periods, there are many other extinction events that have occurred over the course of Earth's history. Causes of past mass extinction have included dramatic changes in climate (warming or cooling), atmospheric changes, dramatic changes in sea level, changes in oxygen levels in the sea, and changes in land structure.

Currently, the Holocene extinction is occurring. This is a widespread extinction that has been ongoing for approximately the last ten thousand years. It is estimated that currently up to 140,000 species are lost every year. The Holocene extinction is characterized by human-driven activities, including habitat loss, overpredation, and, most recently, human-induced climate change. During the last century the rate of decrease in biodiversity has been increasing.

Ross MacPhee and Clare Flemming of the department of mammalogy at the American Museum of Natural History researched mammal extinctions since 1500 AD. They identified ninety species of mammals that have become extinct during the modern era of European expansion. This is 2 percent of all mammal species on Earth. The natural rate of mammal species extinction is estimated to be one mammal species every 400 years, the loss of 90 species in 500 years is a 7,100 percent increase over the natural rate. Examples of animal species that have become extinct due to human activity include the dodo bird, Falkland Islands wolf, Atlas bear, eastern cougar, passenger pigeon, and the western black rhinoceros.