Economic and social solutions to creating sustainable human-environment interactions

Stu Crawford

It is essential for humans to work out a process that they can use to make decisions about resource use and allocation that will result in humans using their environment in a sustainable manner. Human activity is sustainable if it results in human's surviving on our planet in such a way that enhances rather than destroys the functioning of Gaia. At the present time human activity is reducing biodiversity and net primary activity of ecosystems, but humans are capable of interacting with their environment mutualistically and extracting resources in such a manner that they increase the viability of ecosystems instead of reducing it(1). Currently humans are degrading their environment at a rate that will lead to their self destruction. It is necessary for humans to adopt a mutualistic symbiotic relationship between themselves and Gaia if they are to use their environment sustainably.

Because of human activity the planet is in bad shape. According to the Living Planet Index(2), the health of the earth has declined 30% since 1970. About half of earth's land surface has been transformed by human activity, over half of available freshwater is used by humans, humans fix more nitrogen than all natural sources do, and there has been a 30% increase in the concentration of CO2 in our atmosphere since the Industrial Revolution (Vitousek et al, 1997). Because of human activity only one half of the world's original forests remain (WRI, 1997). Humans are driving species to extinction at a rate of four each minute.

Currently humans use or destroy over half of the terrestrial net primary productivity of the planet (Vitousek et al, 1986)(3). But we only use about 8% of this for food, fuel, or construction. We seem to be causing way more destruction than is necessary to support us.

We are not using our planet sustainably. The International Energy Agency (1997) has reported that global energy use has increased 70% since 1971 and is projected to continue this steady increase. By 2010 global energy consumption is to rise another 50%. . In its 1998-99 report the World Resources Institute determined that the amount of energy that the world economy burns every day required the planet 10,000 days to produce.

Our current model of economic development is causing unprecedented damage to our environment. It is resulting in humans utilizing their environment in an inefficient and unsustainable manner. Reforms must be made to correct this.

Approaches to understanding the interaction between humans and the environment can be holistic or reductionist. A holistic approach looks at the way humans interact with our environment. The benefits and costs of different interactions are examined, as well as looking at the way in which we could structure our societies to result in interactions that are beneficial to humans and to the rest of Gaia.

The reductionist approach is to examine humans based on methodological individualism. Humans are examined as individual cells that behave according to specific rational preferences. Looking at those preferences and at the stimuli each human receives can tell us how each human behaves. Building up each individual cell will indicate how the society as a whole will act.

The behaviour of large groups of humans is based on each human as the individual unit of behaviour. Because of this the reductionist approach has the most explanatory power. Because the actors in the human-environment interaction are individual humans, this interaction can be best explained by viewing the interaction between human society and the environment as the activity of individual humans. By breaking interactions down to the level of the individual they can become simple enough to model. These individual interactions can then be built up to explain the interaction of large groups of humans with their environment.

The reductionist approach to explaining human behaviour can work because a small number of identical, simple behaviours exhibited by individuals can result in complex and non-intuitive behaviour of large groups of individuals. Parrish and Edelstein-Keshet (1999) showed that by using simple algorithms for the behaviour of each individual they could explain the behaviour of complex social groups such as fish schools and ant colonies. Theoretical models with attraction/repulsion of individuals and non-local interactions, such as the multi-agent system SWARM which relies on discrete simulations of individuals motion and behavioural rules can be used to create realistic looking behaviour of large groups of bees, fish, etc (Parrish and Edelstein-Keshet, 1999). This shows that complex social interactions can be explained by a small number of behaviours on the part of each individual.

The holistic approach is often referred to as the 'organic' approach in economic literature, and is often disregarded by economists as being of little value in understanding human interactions with their environment (Dr. Peter Ibbott(4), personal communication). But the holistic approach is very valuable in understanding what sort of symbiotic relationship we want between our environment and humans. There is no reason to assume that interactions on the scale of the individual will naturally bring us to a sustainable system of interactions with our environment. The emergent property of the behaviours of individual humans could easily result in unsustainable behaviour, as we see in the world today. If we want to design a sustainable system of human interaction with the environment we must look at the emergent property that we want out of the individual interactions and then design individual interactions that will result in that emergent property.

Although a holistic approach to understanding human behaviour in their environment is needed to identify the emergent interaction necessary for sustainable human behaviour it has less explaining power than a reductionistic approach. Because individual humans are the actors involved the human-environment interaction, the changes to the interaction between a society and its environment that are necessary to create a working mutualistic symbiosis between humans and Gaia must be induced by creating changes in behaviour at the individual level. A holistic approach is necessary to identify the mutualistic interaction that is necessary for sustainable human activity but it is methodological individualism that we can use to build this system.

There are two ways to examine human behaviour with methodological individualism. I will refer to these approaches as the sociological approach and the economic approach.

The sociological approach is to assume that the framing process that humans use to select a behaviour when given a stimulus is plastic. Humans take in a lot of stimuli, sort through it all, and alternately emphasize or omit certain parts of it. An individual's framing process is an interpetive schema that simplifies and condenses reality by selectively punctuating and encoding objects, situations, events, experiences, and sequences of actions within one's present or past environment (Hunt et al, 1994). This allows each individual to assign values to different events, formulate their personal goals, and allocate blame for undesirable situations. An individual's frame dictates how they will react given a certain stimuli by determining how they will view that situation. Various frame alignment processes reconcile the personal identities of different individuals and help to form collective identities. This creates a social environment where individuals in a social group have similar framing processes and react similarly to stimuli (Hunt et al, 1994). In this sociological approach individual's are considered to be rational actors that act selfishly. Individuals are considered to always act in a way that they perceive to be in their self interest, but this perception is very dependent on framing processes, and these framing processes are plastic and dependent on an individual's social environment.

The sociological approach considers that perceived selective incentives are necessary to cause humans to act in certain ways (McCarthy and Zald, 1987). The collective advantages of engaging in sustainable behaviour cannot be considered to be an adequate incentive because the benefit is divided amoung all humans while the cost is born entirely by the individual (McCarthy and Zald, 1987). But certain sociological lines of thought say that selective incentives can include benefits other than material rewards.

Oliver (1980) presented a version of rational choice theory where the selective incentives to individuals were comprised of rewards and punishments for participating/not participating. In his model social approval could be a reward and the withdrawal of rewards of the group could be a punishment. According to this model of human behaviour, rational selfish individuals with certain framing processes may not always act in the manner that will maximize their resource gain.

A similar model was presented by Friedman and McAdam (1992). They postulated that collective identities could act as selective incentives. They claim that individuals have a desire for social attachment and a desire for a new sense of identity. Social networks are seen to provide selective incentives such as social honor and friendships. As with Oliver's model, Friedman and McAdam present a model of human behaviour where humans are rational but are not acting to maximize the resources available to them.

According to the sociological approach of methodological individualism the framing process of all humans is not necessarily an algorithm to increase monetary resources available to them at all costs. Social factors, such as peer pressure, the desire to belong to a group, social obligations, and friendships also have affects on an individual's behaviour given a certain stimulus. And the framing process of humans can be altered to give emphasis to different selective incentives. Framing processes are plastic and dependent to some extent on an individual's social environment.

The economic approach of methodological individualism also assumes that humans behave in a rational manner, but it assumes a much more simplified behavioural algorithm(5) and a behavioural algorithm that does not change (Dr. Peter Ibbott, personal communication). Human behaviour is simplified and non-linear interactions between stimuli are not considered. Decisions are not usually thought to be context specific. Humans are machines that output certain behaviours given certain stimuli inputs, and the algorithm that they use to do this is fixed. Humans are assumed to have a set framework in which they make their choices. This is a western framework where humans are seen to be constantly striving to increase the material resources (measured in dollars) available to them. Because the framing process of each human is constant, if we want to change the behaviour of humans we must then change the input given to each human. The stimuli to each individual human is changed by applying monetary incentives and disincentives. Through regulations, or through ecological fiscal reform (monetary incentives and fines and adjusting prices with taxes) determined by whole-cost accounting the selective incentives to each individual can be changed.

The techniques for adjusting human behaviour within the framing process assumed by the economic model do not seem to be successful in creating sustainable human behaviour. The economic algorithm of adjusting stimuli within an assumed framework of all humans acting to maximize personal material resource gain has been failing to provide sustainable human activity . Several different strategies have been tried for these adjustments within the economic algorithm but they all seem to have a common failing points.

The first failing point of the economic algorithm is that it is not a robust system. It is too sensitive to incomplete information. The ecosystems of the planet are very complex. The interactions within ecosystems and the effects of human behaviour on these interactions are also very complex and continuously changing. Generally, it can be assumed that we do not have complete information when we are making assumptions about our environment. When dealing with a system as complex as the human interaction with our environment, we must be able to use an approximation method. A rough approximation of the appropriate behaviour must be able to be made with the preliminary information in such a way that additional knowledge results in slight refinements of policy. If small amounts additional information consistently result in completely different behaviours the behavioural algorithm will not be efficient when dealing with systems of high complexity and incomplete knowledge. Using the economic framing process with the monetary incentive corrective factors, small deficiencies in knowledge can result in drastically skewed behaviour. When humans are acting to increase monetary gain with the economic algorithm being adjusted to make maximum monetary gain occur when humans act sustainably, small mistakes in the economic algorithm can be very significant.

The second short coming of the economic approach is that it requires large expenditures of a centralized government and so is highly sensitive to changes in the political environment. The authority to impose the necessary adjustments to the economic algorithm requires a central power. And the monetary resources required to do the research necessary for such adjustments also requires a central power. The necessity of this central power makes the economic algorithm very sensitive to political changes that are inevitable in a social system of centralized political power. And the necessity of the central power rules out the possibility of adopting social systems outside of the economic approach that involve decentralized decision making, community empowerment, and self-sufficient economics.

Policy makers in the western world have attempted to make adjustments within the economic algorithm to try to create sustainable human behaviour. In the past environmental policy has relied on command-and-control regulations. But many experts feel that using regulations to create adjustments within the economic algorithm is not sufficient to cause appropriate behaviour. Regulatory actions can result in diminishing returns on pollution control and can focus attention on phantom fears of the public instead of real issues (Sexton et al, 1996). Regulations are also often slow, complex, involve expensive bureaucracy, and invite lawsuits (Smith, 1996). Often they only move problems around instead of solving them as polluters and extractionists find holes in regulations, and they only provide an incentive for compliance (Smith, 1996).

The extreme solution to the problem of ineffective regulatory measures within the economic framework is to just assume that regulations are unnecessary and that entrepreneurial activity can take care of all environmental protection. Anderson and Leal (1997) present a model of enviro-capitalism where they suggest that enviro-entrepreneurs can solve all of our sustainability problems. Entrepreneurs are discovering a growing demand for recreational and environmental amenities. There are monetary incentives to 'produce' wildlife habitat and recreational opportunities and this could result in their protection.

Sensitive areas that need to be protected are simply bought by enviro-capitalists instead of being regulated. The enviro-capitalist can then find some way to earn money off of this investment in an environmentally sustainable manner, which could include donations from environmental groups(6). The enviro-capitalist could also charge user fees for recreational use of land. The general idea is that enviro-capitalists are investing in conservation.

There are substantial problems with this approach (besides the obvious problem that it seems to be a blatant lie propagated by corporate fascist entities bent on destroying the planet for their own personal gain). Enviro-capitalism relies on there being some marketable product on the land that needs to be protected that can be harvested in a sustainable manner. This is not always true. And it does not provide any mechanism to control global environmental issues, such as CO2 emissions or ozone depletion.

A similar solution to enviro-capitalism is the idea of corporate responsibility. It has been presented that pollution is inefficient so corporations obviously want to reduce it (Marcus, 1996). We just have to show them how and they will gladly oblige. And we can provide corporations with even more incentive through green marketing. If consumers actively chose the most environmentally friendly products corporations will go out of their way to become environmentally conscious (Rob MacIntosh(7), personal communication). But again this does not seem to be working. Out of 85 companies that Marcus (1996) studied, even when given help to reduce pollution levels the majority of the companies only reached compliance levels, and only 15% of them engaged in green marketing. And the idea of regulation by green-marketing assumes perfect knowledge on the part of the consumers, a condition that is not likely to be fulfilled.

A more effective way to changing the selective incentives on individuals within the economic algorithm is ecological fiscal reform. Several different reforms could be used (outlined by the Pembina Institute). Taxes on goods and services can be reformed so that value added from labor and knowledge is taxed less heavily than value added from increased material and energy throughputs. The use of scarce natural resources and services (such as using bodies of water or the atmosphere as waste sinks) can be taxed. The use of farm lands for roads and other transportation infrastructure can be taxed, and so can the use of water from limited supplies. Instead of waste disposal and water utility services being paid by taxpayers they can be paid by users according to how much they consume. Environmentally damaging substances can be directly taxed and these funds can be used for the development of ecologically sustainable alternatives. Consumption of material inputs or fuels can be taxed based on their relative level of environmental impact. And finally subsidy reform is very important. Governments often indirectly subsidize companies to engage in environmentally destructive activities by not charging them for the degradation of their environment. And governments will often directly subsidize environmentally destructive activities for reasons ranging from perceived economic benefits to corruption.

The use of ecological fiscal reform requires whole-cost accounting. The value of environmental capital and services, as well as the cost of environmental degradation, must be calculated in order to create the appropriate monetary incentives and disincentives. When the entire value of environmental services and environmental capital resources is known, along with the effect of human activity on this value, intelligent decisions can be made within the economic framework.

This sort of measurement is very difficult. Constanza et al published a report in 1997 that tried to put a price tag on the value of basic ecosystem services. This report synthesized results from more than 100 published studies and used a variety of evaluation methods to look at the value of 17 basic ecosystem services across the planet. The report came up with an estimate for the value of earth's ecosystem services of $33 trillion US. This $33 trillion dollars is a very conservative estimate as it omits all of the processes that we have yet to understand (Pimm, 1997). For comparison the global GNP is about $18 trillion dollars.

There have been various attempts at whole-cost accounting by different countries. The Panel of Integrated Environmental and Economic Accounting (PIEEA) is attempting to develop the US National Income and Products Accounts (NIPA) in such a way as to include natural resources and the environment. They feel that the NIPA should measure as much economic activity as is feasible, whether inside the market place or not. Better natural resource and environmental accounts are beneficial because they will help us determine the sustainability of various behaviours; characterize interactions between the environment and the economy; and provide information on the implications of different regulations, taxes, and consumption patterns.

The PIEEA determined that they should phase natural resources and the environment into the NIPA in three stages. First subsoil mineral assets would be included. Then renewable and other natural resources such as timber. And finally to include non-market environmental assets such as clean air and water.

None of this information was available to the PIEEA. The US only has the barest outline of natural resource and environmental accounts, and only has numerical estimates for subsoil mineral assets. To follow the PIEEA's recommendation they would need to refine the initial estimates of subsoil minerals, construct forest accounts, and then build accounts of agricultural assets, fisheries, and water resources.

Currently, because of the lack of knowledge around environmental accounts, the PIEEA recommends that such environmental accounts not be included in the core of the NIPA. They should be kept in satellite accounts that can be accessed by interested individuals but not actually be part of the economic calculation. This is because of the preliminary nature of the data. But data on such a complex system as the world's ecosystem will always be preliminary! If the economic system cannot handle the preliminary nature of ecological data then it is not robust enough to be used for intelligent resource use decisions.

As it is, the preliminary nature of the data on subsoil mineral assets has created some obviously faulty conclusions. The PIEEA concludes that "[subsoil mineral asset] depletion does not appear to pose a threat to sustainable economic growth" (National Research Council, 1999, pg 5). When the depletion of a non-renewable resource does not have an effect on sustainability there is obviously something wrong with the model being used to calculate economic growth! Because of the lack of robustness of the economic model, incomplete knowledge has resulted in an erroneous conclusion.

The Pembina Institute for Appropriate Development is undertaking a similar effort for Alberta (Anielski et al, 2000). The Pembina Institute is developing the Genuine Progress Indicator (GPI) as a replacement for the GDP as an indicator of economic growth. Traditional measures of economic progress such as the GDP are incomplete measures of economic growth because they fail to account for the depletion and pollution of natural resources, the value of services provided by nature, and many benefits and costs to societal well-being. Environmental and social disasters (such as the Exxon Valdez oil spill or the Montreal ice storm) actually increase the GDP. The GPI is an attempt to have a real measure of prosperity. The GPI considers social, economic, and environmental aspects of wealth, assigns them all a monetary value, and then roles them into one monetary figure that shows how well the nation is doing. Beneficial activities such as volunteer service and caring for children are given monetary value while things like economic disparity, crime, greenhouse gas emissions, and environmental destruction are assigned a cost.

GPIs have been developed for the USA and a few other countries and preliminary work has been done in Canada. The Pembina Institute hopes that after the GPI becomes accepted we can move away from rolling wealth into one lump sum and look at individual aspects of progress, but at the present a single monetary figure is needed for calculations (Mark Anielski(8), Amy Taylor(9), personal communication). Breaking down all costs and benefits to humanity to a single monetary figure is very problematic and because of this the GPI figures for Alberta are very preliminary (Amy Taylor, personal communication).

Whole-cost accounting requires that nations build the environment into their economic calculations. There are three types of interactions that need to be categorized. Additions and subtractions of natural resources need to be accounted for (harvesting, mined, grown). Alterations in the quality of the natural environment that occur in the air, water, and soil must be accounted for. And so must expenditures made to reduce the impact of economic activities on the environment. All of these calculations are very complex and require a lot of research.

Calculating the effect of additions and subtractions to natural resources requires a measure of the amount of environmental capital that is present. The simplest resource to calculate this for are the non-renewable subsoil mineral resources (ore, petroleum, etc.). There is more data available for these resources than for other resources. There is also accepted scientific methods for calculating the amount of these resources and accepted economic methods for valuing them. Subsoil mineral resources are also relatively constant, with the only major additions or subtractions being intentional human mining of the resource. But even with the relative simplicity of measuring subsoil mineral resources, there are several difficulties with economic measurement. Calculations can be complicated by the value of unproven reserves; the impact of ore-reserve heterogeneity on valuation calculations; distortion introduced by associated capital and production constraints; the volatility in the value of mineral assets introduced by short-run price fluctuation; and the difference between the market and social value of the resource.

Calculating the capital value of other natural resources can be more complicated. Even if the quantitative amount of that resource can be calculated, giving that resource a monetary value so its additions and subtractions can be calculated is very difficult. The pricing of some environmental products can be accomplished by valuing a near-market product by comparing it with a market counterpart. This is effective but only works when such a counterpart can be found. If there is no market counterpart, behavioural estimates such as the travel-cost method or hedonic-analysis can be used instead. The travel-cost method measures the value of an ecological recreational resource by measuring how much people will spend (in time or other resources) to get there. Hedonic-analysis measures the value of each component part of the natural resource to individuals. A last option for measuring the monetary value of a natural resource that can be used if the market-based or behavioural-based estimates can not be used is contingent valuation. Contingent valuation uses surveys to determine individuals' stated values for natural resources. This method is problematic because it doesn't seem to be based in any actual behaviour.

Calculating the value of natural resources using market-, behavioural-, or contingent-based estimates is very problematic. Natural resource assets are complex systems of component parts that have value because of the way that they work together. Ecosystem components have value by themselves (eg. a tree), but their emergent properties also have value (eg. value as a watershed). Accounting for both the value of component parts and of emergent properties can be very complicated, especially when there is non-linear interactions between addition and subtraction of component parts and the value of the emergent property(10). Another complication with evaluating natural resources is that they are often subtracted without being harvested. Natural cycles can result in fluctuations of resources, and often human activity results in unintentional degradation of the resource.

Some natural resources are public environmental goods. This would include such things as biodiversity, species preservation, and national parks. Because they are public goods they are difficult to measure. There is no specific benefactor to be factored into the economic equation. And the costs of subtractions from these public environmental goods can be spread out amoung a large number of people and become negligible.

The most difficult complication of valuing additions and subtractions to a natural resource is the difficulty in giving ecological variability a monetary value. Many human activities have little immediate effect on ecosystem functioning, but decrease the stability of ecosystems, increase the probability of deleterious catastrophic events, and reduce the ecosystems ability to recover after catastrophic events(11). Biodiverse ecosystems can better deal with change and are more likely to persist through time. A quote from Naeem and Li (1997): "Biodiversity represents a form of biological insurance". Natural systems fluctuate and infrequent catastrophic events are inevitable. We need the biological insurance of biodiversity for when disaster strikes us. Despite its importance, as of yet I have found no indication of an economic calculation for the value of this biological insurance.

The monetary value of additions and subtractions of natural resources is hard to calculate, but the monetary value of alterations in the quality of the natural environment that occur in the air, water, and soil can be even more complex. The cost in changes in environmental quality is harder to measure because the effects on humans are not well studied. Many of the effects are indirect because the pollutants damage ecosystem services that benefit humans. There are also complex non-linear interactions of pollutants. The formation of many damaging substances depends on the presence of precursor emissions, weather conditions, and the presence of other substances with which the precursor emissions react. These processes can vary on a yearly, seasonally, or even hourly basis. There are threshold effects for many pollutants, and often the effects of a pollutant can vary geographically. Because of these factors placing a monetary value on environmental pollutants can be very difficult.

Ecological fiscal reform requires whole-cost accounting and whole-cost accounting is very complex. Complications arise because of the difficulty in measuring the amount of natural capital, the difficulty in assigning this capital a monetary value, the complexity of the interactions that result in addition and subtraction to this capital. Natural systems are made more complicated to reduce to a monetary figure because of separate values of component and emergent properties, non-linear interactions resulting from the addition or subtraction of component parts, and complex natural cycles independent of human activity. Measuring the value of public environmental goods is problematic and there has yet to be any attempt to value the biological insurance of biodiversity. Because of these complications whole-cost accounting is very difficult to do with any degree of accuracy.

Because of the difficulty of whole-cost accounting, reliable non-market accounts will not be established by the private sector. Non-market accounts are simply too expensive and provide too little benefit. That means that such measurements must be left to a centralized bureaucracy. This leaves these measurements very vulnerable to changes in political climate and in available funding. The unwieldily mechanics needed for such an endeavor are inefficient and fragile. An environmentally sound economic approach simply is not robust enough to deal with the bureaucratic problems of such a mechanism.

Because of the complexity of our ecosystems and the effect of human activities upon them the construction of whole-cost accounting requires large amounts of research and resources. We do not have near the level of knowledge to complete such a momentous task. And ecological fiscal reform built around erroneous non-market accounts of our environment would be of questionable value. But we simply do not have the time to wait until we have more complete knowledge. At the present time approximately four species go extinct every hour (World Wildlife Fund, 2000). At the current rate of human caused ecological destruction we cannot afford inaction. And if we did wait there is no reason to assume that we would ever be able to construct a complete environmental economic account. The economic approach to promoting sustainable human behaviour fails because it is too complex and requires too much knowledge and resources.



The economic approach fails because it only allows for one framing process -- the rational choice framing process of maximizing material resources to that individual. Use of this framework leads to unlimited growth and maximization of resource use. But if we are to use our environment sustainably we must not use this sort of framework. It is necessary for us to look at other framing processes to determine how to use our resources. Economics has to be extended to include notions of human behaviour and not just look at maximizing resources available to each human. Environmental economic reforms to the neo-liberal system to promote sustainable resource use assume the western framing process and do not consider other methods of decision making. They add monetary values for environmental worth into the existing framework of resource maximization, but as such they do not challenge the very framework that the economic approach is built on.

There are other possible framing processes that have had historical success. Gandhi's idea of Swadeshi is one. I am not suggesting that Swadeshi is the only alternative to the neo-liberal economic algorithm, but it is an alternative with some historical backing and an alternative that is based on some ideas of sustainability. Because of this I will briefly outline this alternative to show that there are other decision making processes available to us other than the economic algorithm. The following summary of Swadeshi is taken from excerpts of Gandhi's writings that are published by the Institute of Advanced Studies on their website <www.mkgandhi.org>.

Gandhi considered Swadeshi to be a religious discipline. It is a rule of life to be applied to all situations an individual comes across. The central theme of Swadeshi is that it restricts individuals to the use and service of our immediate surroundings at the expense of the more remote. This makes Swadeshi culturally conservative and economically localist. In politics Swadeshi would have individuals use indigenous institutions. If these were found to be lacking in any respect they should be improved upon. In economics Swadeshi would have individuals use only things that are produced by their immediate neighbors. And individuals should work to make those industries more efficient and complete in any area where the might be found lacking.

Swadeshi dictates that it is each person's duty to find neighbors who can supply our wants. Swadeshi would have every village become an almost self-supporting and self-contained unit, trading only for commodities that are necessary and not locally producible. Each individual would always use home-made things instead of foreign things as long as such use was necessary for the protection of a home industry.

Swadeshi arises out of the philosophy of non-violence. An understanding of economics shows us that buying things from distant people can be harmful because it results in a departure from locally sustainable economies. Non-violence in this case means purchasing everything locally that an individual can. Each individual must not serve a distant neighbor at the expense of the nearest neighbors, and should refuse to buy anything if it injures or interferes with the personal growth of those around them. Swadeshi dictates that it is our immediate duty is to dedicate ourselves to the service of our immediate neighbors.

Gandhi saw that adopting a Swadeshi model of development would result in personal sacrifices to some individuals. But he felt that this was good. Gandhi spoke out against privilege and monopoly. He felt that all material benefits should be shared by everyone. Gandhi saw that this meant that no one person could enjoy an excessively high standard of living. Gandhi advocated a reduction in material possessions so that all people could subsist comfortably.

Gandhi also thought that it was possible to convince people to adopt such sacrifices. He realized the importance of an individual's framing process in dictating their actions. He noted that someone from India of the upper classes would refuse to drink out of the well of an Untouchable even if they were dying of thirst. There are obviously other factors other than resource gain that determine an individual's actions. If the algorithm for resource use becomes a personal philosophy (or 'religion' as Gandhi presented it) that is supported by a social group, individuals will make personal sacrifices.

Swadeshi may be a viable alternative to the economic algorithm. It has local economies being built with the purpose of helping one's neighbor. Economic interactions are not designed to maximize resource availability to each individual but to create the holistic system that everyone wants to see -- a self-sufficient, environmentally sustainable system. Swadeshi is enforced by social selective incentives.

The model of resource allocation decision making that is being used in the western world is severely limited. It assumes a certain, restricted framework of human behaviour where humans act only to increase the availability of material resources to them. Changes to human behaviour within this framework have to be made by an outside agency changing the selective incentives to each individual. This economic algorithm is ineffective because it is not robust when it uses incomplete information and it is too sensitive to political change. This leaves us with the option of altering the human-environment interaction by changing the framing process that each individual uses. There are examples of other decision making algorithms, such as Swadeshi, that could possibly be used to create sustainable human behaviour. To promote sustainable human activity we should reject the economic algorithm focus on developing a new decision making framework.



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1. A local example of how humans can extract resources from their environment while increasing environmental quality is extensive cattle grazing. Properly grazed pasture can have higher biodiversity and higher net primary productivity than ungrazed pasture. Graing can increase biodiversity (Bork, 2000; Rambo and Faeth, 1999; Laycock, 1994) and total plant cover (Bork, 2000; Lauenroth et al., 1994; ).

2. The Living Planet Index is a calculation of the change in the health of the earth's ecosystems (World Wildlife Fund, 1999). To measure the health of the earth's ecosystems the index looks only at the amount deforestation and the decrease in populations of cataloged freshwater and marine fish species. This is a very conservative estimate as it does not include many of the earth's major biomes such as grasslands, and it only accounts for environmental degradation by logging.

3. In 1986 Vitousek et al determined that 40% of the planet's terrestrial net primary productivity was used or destroyed by humans. Since the human population has increased 26% since they did their study, I would extrapolate that now humans probably use or destroy over 50% of the terrestrial net primary productivity of the planet.

4. Economics professor at the University of Lethbridge.

5. If A is preferred over B and B is preferred over C, then A will be preferred over C. And if A is preferred over B, A will always be preferred over B.

6. This type of enviro-entrepreneurial activity is exactly what has recently occurred outside of Waterton. It could also be called blackmail. Jim Garner bought a piece of ecologically-sensitive land on the Waterton Park boundary and is threatening to develop it into a small city. Environmental groups will then buy it from him to have it protected, at a substantial profit to Jim Garner.

7. Senior Strategic Advisor of the Pembina Institute for Appropriate Development.

8. Director of the Green Economics Program at the Pembina Institute for Appropriate Development and a Senior Fellow with the US economic think-tank Redefining Progress in San Francisco.

9. Member of the Green Economics team of the Pembina Institute for Appropriate Development.

10. Additions and subtractions of components of an ecosystem do almost always have a non-linear effect on ecosystem functioning (Tilman et al, 1997). A reduction in biodiversity has little effect on ecosystem functioning in the short term until all species from one functional group are gone. Then further reductions have a drastic effect.

11. In 1958 Elton first proposed that increasing biodiversity in an ecosystem increased the stability of that ecosystem and made it more resistant to change. McGrady-Steed et al have shown that increased species richness decreases variability in aquatic communities. Using microcosms Naeem and Li (1997) have shown that increasing biodiversity increases the reliability of an ecosystem. And Tilman et al (1996, 1997), have shown increased sustainability with increased biodiversity in grassland plots. Tilman et al (1996, 1997) also showed that diverse ecosystems could recover faster from catastrophic events.