planet-earth-lowtouch-banner Kenneth E. Boulding () was a British economist, educator, systems scientist and interdisciplinary. “Spaceship Earth”: Boulding, Kenneth E.(). Period of local pollution. Period of global ruin of human sustainability. The capability of nature to clean up by. Abstract. The work of Kenneth Boulding is sometimes cited as being foundational to the understanding of how the economy interacts with the.
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Since its publication, this essay has had a profound influence on much of our thinking about the global economy and sustainability. In perhaps the most famous passage of the essay, Boulding describes the open economy of the past—with its seemingly unlimited resources—and contrasts it with the closed economy of the future.
He wrote, “I am tempted to call the open economy the ‘cowboy economy,’ the cowboy being symbolic of the illimitable plains and also associated with reckless, exploitative, romantic, and violent behavior, which is characteristic of open societies. The closed economy of the future might similarly be called the ‘spaceman’ economy, in which the earth has become knneth single spaceship, without unlimited reservoirs of anything, either for extraction or for pollution, and in which, therefore, man must find his place in a cyclical ecological system which is capable spwceship continuous reproduction of material form even though it cannot escape having inputs of energy.
First, as he emphasized in his opening sentence, transitioning to a more sustainable economy requires humankind to rethink its relationship with nature: However, this is not a task for government alone—as the main players in global markets, large corporations, producers, and investors have the most important economic impact on the environment and face significant risks from increasing ecological scarcity.
Large kennth, producers, and investors face significant risks from increasing ecological scarcity. If the world is looking for a new set of economic principles to guide the global economy on a more prosperous and sustainable path, it should therefore look not just to governments and international policymakers.
Businesses and private enterprises also have the responsibility and the means to instigate economic change.
Piloting “Spaceship Earth” into a Circular Economy – Artemis Water Strategy
For example, nearly two-thirds of historic carbon dioxide and methane emissions globally can be attributed to just 90 producers of fossil fuels and cement. The private sector is beginning to take a lead in fostering global environmental responsibility and stewardship. Ahead of the opening of the Paris climate change conference in DecemberBill Gates of Microsoft, Mark Zuckerberg of Facebook, and other high-tech entrepreneurs announced the formation of the Breakthrough Energy Coalitionwhich will fund a worldwide public-private partnership among governments, research institutions, and investors to finance clean energy innovation and low-carbon development around the globe.
In some areas, corporations are taking action on climate and energy issues absent government mandates. According to that report, companies worldwide impose a price on carbon in their internal operations and investment decisions and companies are directly engaging with policymakers in support of carbon pricing legislation.
Sony Corporation, for example, achieved its target of a 30 percent reduction in greenhouse gas emissions from to Aggregate reductions by these corporations will amount to million metric tons of carbon dioxide equivalent MtCO2e —or 2 percent of the world total.
Piloting “Spaceship Earth” into a Circular Economy
Momentum exists in other sectors as well. Increasingly, investors and insurers are requiring better quantitative assessments of environmental risks for investment portfolios —risks arising from climate change, natural resource scarcity, and pollution—and are incorporating these assessments in their long-term investment bouldint. For example, in a survey of 36 global financial institutions by the Finance Initiative of the UN Environment Programme, 75 percent stated that they monitor environmental risks to transactions, and 42 percent accounted explicitly for such risks bpulding their credit assessments.
These examples represent a promising start of a new sustainable trajectory for the global economy, but more widespread adoption of such initiatives by the private sector is needed. The focus on innovation by the Breakthrough Energy Coalition, for example, highlights the potential for interaction between the private sector and government. Technology spillovers are critical but present a particular challenge: Realizing the benefits of technology spillovers therefore also depends on an important and complementary role for government in supporting private sector initiatives in green innovation.
Such public support could be funded through the removal of environmentally harmful subsidies. Since the early s, such backing has enabled Japan to develop and maintain eartg competitive edge in green innovationand to become a global leader in green manufacturing, especially for consumer durables, motor vehicles, parts and accessories, electrical equipment, and other special-purposes machinery.
After Japan, Germany has the strongest international record in green innovation, and continues to be well ahead of other European countries in kennetb manufacturing, especially the production of wind turbines and solar panels.
Assessments for Burkina Faso, Ghana, Peru, and Senegal demonstrate that government policies can assist dissemination through private-public partnerships and illustrate the benefits to industry of reducing resource use and environmental impact, improving the effectiveness of industrial zoning and environmental regulations, applying more widespread and systemic reviews of the resource efficiency of imported technology, providing financial assistance for the adoption of renewable energy technologies, encouraging greater uptake of environmental management standards, and identifying and supporting green industry supply chains with export potential.
Government also has a role to play to encourage more widespread adoption of green financing and investment principles. Here, priority should be given to ensuring that the rules governing financial systems support investment decisionmaking that accounts for environmental sources of risk and opportunity.
As prudential authorities and regulators of financial systems, central banks can advance this objective by establishing requirements for environmental risk management and reporting, incorporating impacts of natural disasters and climate change considerations into financial stress tests across institutions, adjusting capital provisioning to account for underpriced environmental risks, initiating prudential reviews of the impact of sustainability factors on financial stability, and stimulating markets for specific assets such as green bonds through asset purchases.
Common international approaches are needed to evaluate environmental impacts and inform decisionmaking. Because banks and investors rely extensively on company disclosures to evaluate environmental risk, a need exists for common international approaches with standardized data and risk measures to evaluate environmental impacts and inform decisionmaking.
This requires governments to coordinate and develop common practical frameworks, methodologies, and tools to provide a systematic approach to monitor and integrate environmental factors into credit and investment risk assessments. Already, there are efforts to develop international guidelines and common policy and legal frameworks.
The G20 has also launched the Green Finance Study Group, co-chaired by China and the United Kingdom, to explore ways of mobilizing private capital for green investments. In recent years, the opportunities for businesses to capitalize on these initiatives have proliferated.
If we hope to achieve more sustainable economic development, these new economic principles must create sufficient incentives for future expansion in production and consumption, as well as investment decisions, to be decoupled from increased resource use, wasteful production, and pollution. Now we must urgently tackle the next challenge, of fostering these new principles to accompany the vision.
Innovation, technological adoption, and financial investment—led by private enterprise with support from public policy and the right incentives—can launch the spaceship earth on a more sustainable and prosperous path. Barbier is the John S. Burgess is an assistant lecturer in the Department of Economics and Finance at the University of Wyoming. In the face of uncertainty about future policies to address climate change, companies are using internal carbon pricing in their strategic planning to manage regulatory risk and explore future scenarios for potential investments.
Environmentalism in the United States historically has been divided into two camps: A pioneer in environmental economics, John Krutilla helped define the field by accounting for the concerns of each side. Barbier and Joanne C. Policies and Levers These examples represent a promising start of a new sustainable trajectory for the global economy, but more widespread adoption of such initiatives by the private sector is needed.
For more information about this article and others—including links, interactive features, and references—view Resources online at www. About the Author Edward B.
The Economics of the Coming Spaceship Earth
More from Resources Magazine. Joseph Kruger In the face of uncertainty about future policies to address climate change, companies are using internal carbon pricing in their strategic planning to manage kenmeth risk and explore future scenarios for potential investments. Spencer Banzhaf Environmentalism in the United States historically has been divided into two camps: Subscribe to Resources Magazine Sign up to receive each new issue of Resources via email.