Abstract
Earth systems science maintains that there are nine “planetary boundaries” that demarcate a sustainable, safe operating space for humankind for essential global sinks and resources. Respecting these planetary boundaries represents the “strong sustainability” perspective in economics, which argues that some natural capital may not be substituted and are inviolate. In addition, the safe operating space defined by these boundaries can be considered a depletable stock. We show that standard tools of natural resource economics for an exhaustible resource can thus be applied, which has implications for optimal use, price paths, technological innovation, and stock externalities. These consequences in turn affect the choice of policies that may be adopted to manage and allocate the safe operating space available for humankind.
Highlights
There is a growing scientific literature emphasizing that human populations and economic activity are rapidly approaching and even exceeding the limits of key sub-systems and processes of the global environment, which could lead to abrupt phase changes, or “tipping points” in the Earth system [1,2,3,4,5,6]
We suggest that respecting planetary boundaries conforms to the “strong sustainability” perspective in economics, which argues that some natural capital may not be substituted and are inviolate [9]
This approach suggests that economic wealth comprises three distinct assets: manufactured, or reproducible capital; human capital, which are the skills, education and health embodied in the workforce; and natural capital, including land, forests, fossil fuels, minerals, fisheries and all other natural resources, regardless of whether or not they are exchanged on markets or owned
Summary
There is a growing scientific literature emphasizing that human populations and economic activity are rapidly approaching and even exceeding the limits of key sub-systems and processes of the global environment, which could lead to abrupt phase changes, or “tipping points” in the Earth system [1,2,3,4,5,6]. This literature has identified “nine such processes for which we believe it is necessary to define planetary boundaries: climate change; rate of biodiversity loss (terrestrial and marine); interference with the nitrogen and phosphorus cycles; stratospheric ozone depletion; ocean acidification; global freshwater use; change in land use; chemical pollution; and atmospheric aerosol loading.” [2] These implications in turn affect the choice of policies that may be adopted to manage and allocate the safe operating space available for humankind
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