It’s true, you can’t put a price tag good health.  But if anyone is equipped to talk about the value of human well-being and how it is impacted by ecosystems, it’s Dr. Robert Costanza. In 1997, Dr. Costanza and colleagues broke ground with an article in the journal Nature that attempted to quantify the economic value of the natural world. Co-founder and past-president of the International Society for Ecological Economics, Dr. Costanza is now University Professor of Sustainability and Director of the Institute for Sustainable Solutions at Portland State University. He is also founding editor in chief of Solutions a hybrid academic/popular journal. Previously, he was Gund Professor of Ecological Economics and director of the Gund Institute for Ecological Economics at the University of Vermont.

Dr. Costanza’s transdisciplinary research integrates the study of humans and the rest of nature to address research, policy and management issues at multiple time and space scales. His work has garnered awards such as a Kellogg National Fellowship, the Society for Conservation Biology Distinguished Achievement Award, a Pew Scholarship in Conservation and the Environment, the Kenneth Boulding Memorial Award for Outstanding Contributions in Ecological Economics, and honorary doctorates fromStockholmUniversityand the Ecole Normale Supérieure de Lyon.  Dr. Costanza is the author or co-author of over 400 scientific papers and 22 books. He is also currently a Distinguished Research Fellow at Ecological Economics Research center New Zealand (EERNZ), Massey University, Palmerston North, New Zealand, a Senior Fellow at the National Council on Science and the Environment, Washington, DC, and a Senior Fellow at the Stockholm Resilience Center, Stockholm, Sweden.

A great deal of your career has been focused on the valuation of biodiversity and the services provided by ecological systems. Can you tell us about any new or recent research related to the health costs associated with degraded ecosystems?

I just returned from China, where we are setting up a joint research center with the Chinese Academy of Sciences on ecosystem services. One of the things they are very concerned with is air quality, particularly around Beijing. Part of the problem there is the dust that blows in from the Loess Plateau, which is the result of the lack of vegetation to hold the soil. There is a massive replanting program there to reestablish vegetation that will hold the soil, which will improve air quality, which will contribute directly to human health in Beijing.

There is a perceivable connection between ecosystem health and human health, and there is a lot of research going on around the world these days on the complexity of that connection. Part of the challenge is that as the connection is not very direct. It’s not as easy to see and make policy on as some other issues. There is a certain amount of scientific research that has to go into establishing, understanding and modeling that connection. As we develop better methods to do that, we get a better handle on how those connections work. Think about smoking and health. We didn’t realize the connection between smoking and lung cancer for quite a while. Epidemiological data established that connection, and then the tobacco industry fought those findings for a long time.

It’s amazing how far we’ve come in terms of our ability to observe, model and understand some of these complex connections between how natural ecosystems function and human health and, more broadly, human well-being.

The health aspect is important, but the other side of this is the better understanding of human psychology and what actually contributes to people’s well-being, or quality of life. That research goes well beyond the conventional, economic paradigm which can be summarized as: “the more stuff we have, the better off we are.”

We can now actually observe people’s brain function and see what parts of their brain light up when they’re happy. We can observe-almost directly-what causes people to experience happiness, and it’s actually much more related to giving than taking. Being a part of a well-functioning social group causes some people to be happy, so social capital contributes a lot to people’s sense of well-being. Being out in nature contributes to well-being. Health, or how people feel individually, certainly also contributes to a sense of well-being. Better understanding all of those complex connections is needed if our goal really is to create a world where humans can thrive sustainably.

You have said that the real purpose of economy is “to sustain human well-being.”  How badly is the conventional notion of economy failing in this purpose, and what will it take to get others to define the economy differently?

The notion of a rational economic actor, which has been the basis for a lot of economic theory, is rapidly being eroded as we recognize that that’s just not the way people behave. In fact, there have been some experiments that have shown that the only people who behave that way-super rationalistic and individualistic-are economists.

The reality of the situation is much different. We’re learning a lot more about how people really behave through the “science of happiness,” positive psychology and behavioral economics, and experiments about how people really behave in certain situations.

There is also the growing recognition that there are different types of goods and services that require different kinds of institutions to manage. Markets work pretty well for private goods, but lots of things that are important to human well-being, like our natural capital assets and ecosystem services-a good climate and water, for example-are public goods. They need different kinds of institutions to manage them.

Speaking of public goods…you recently participated in a roundtable session with Elinor Ostrom, known for her analysis of governance of  common property (and for being the first female recipient of the Nobel Prize in Economic Sciences).  Tell us about that.

We had a great workshop on the topic of common property and managing ecosystem services. Her point is that for many of these common pool resources and other kinds of public goods, we need different kinds of institutions. People have historically developed those kinds of institutions, largely through participation and cooperation, not the typical competitive market model that underlies a lot of conventional economic thinking.

At the micro level, there are a lot of good ideas coming out of that. If we’re going to better manage common property resources, we’re going to need different kinds of institutions that recognize how people actually behave.

At the macro level, we also need to recognize what our goal really is and what our measures of macro behavior are in order to measure progress toward that goal. Take Gross Domestic Product (GDP), for example. GDP was never designed as a measure of economic well-being. It really only measures economic activity, and some of that activity is not necessarily what we want. The GDP doesn’t subtract any of the bad stuff from the good stuff. If there’s an oil spill, someone has to go clean that up. That’s more activity, and that leads to more GDP, so that’s “good for the economy?” But in reality, we would have been better off had we not lost those resources in the first place.

There have been some attempts to redefine those goals. One is called the Genuine Progress Indicator (GPI). It tries to adjust GDP and ask “what is the net benefit?” It starts with personal consumption, but then it weights that by income distribution, which is a huge factor in determining societal well-being. There is a book called The Spirit Level (by Richard G. Wilkinson and Kate Pickett) that plots the relationship between income distribution and a whole range of social problems in different, developed societies. It shows a very strong correlation. The worse the income distribution, the worse the problems. So there is a direct effect on well-being, and health is a part of that. Obesity, longevity…all of those things are correlated with wealth distribution. The GPI includes that. We know that a dollar’s worth of income to a rich person doesn’t produce as much additional welfare as it does for a poor person. The GPI adjusts for that. It also adds things that are left out of GDP, like the value of household labor and volunteer work, and subtracts a bunch of things that are in there and shouldn’t be, such as the cost of crime, the loss of natural capital from air and water pollution, etc. The GPI is not a perfect indicator by any means, but it’s certainly a lot better approximation to a real indicator of welfare rather than just activity.

Who is using the GPI?

The state of Maryland has adopted the GPI as one of their official progress indicators. Other states like Vermont and Oregon are considering it. What’s interesting about the GPI is that it shows a very different picture [than GDP] of what has happened in the last several decades. In the U.S., with the exception of the last few years, GDP has been going up quite exponentially. The GPI was highly correlated with GDP from around 1950-1975. But since 1975, GPI has been relatively flat while GDP has been growing. All the negative components, the costs of that economic growth, are now beginning to outweigh the benefits.

What are we really trying to achieve? Do we want genuine progress-greater quality of life and human well-being-or do we just want to produce more and more stuff?  Most people would agree it’s the former, but we’ve kind of lost sight of that. We’ve become addicted to this model of growth at all costs, and that needs to change.

It’s been 14 years since your landmark paper, “The value of the world’s ecosystem services and natural capital” was published in Nature. Were values of health and mental health benefits delivered by nature included? If so, how have they changed since then?

They were included in some of the studies that we synthesized as part of that paper. Certainly, you could argue that they weren’t completely or adequately included. The science is progressing quite rapidly, so there is much better recognition now of some of those connections. I don’t think we’ll ever pinpoint all of them with a high degree of accuracy–or that we’ll necessarily need to.

We need to recognize that those connections exist and also acknowledge our current and ongoing ignorance about what exactly the connections are and how big they are. But then we need to try to err on the side of caution instead of waiting to “prove” before we act. That’s another major shift that needs to occur. We need to change the burden of proof away from the public and towards the parties that stand to gain from a particular activity.

One idea we’ve proposed to address this is the idea of an environmental assurance bond. When there’s a new activity being proposed, the proposer should post a financial bond large enough to cover the worse case damage. Then, it’s the responsibility of the proposer to either demonstrate that those impacts are not going to happen, come up with a different process that is not inherently as risky, or recover some fraction of the bond when its clear that the worst case has not occured.  There is a paper in Solutions titled “The Perfect Spill” about the BP oil spill and how we might prevent those kinds of things from happening in the future if we implement that kind of bonding system. If BP had to post a bond to cover the worst case damages-and we now have a pretty good idea what they are-they would’ve been a lot more careful in how they drilled. They may not have even done it at all because of the inherent risks and potential damages to society at large. We need to get those risks to the environment and society onto the table so that the economic actors and agents are required to take them more fully into account when they make decisions.

Nuclear power is another major area where this kind of idea could be implemented. We had a paper on nuclear power in Solutions about the Fukushima Daiichi disaster and how that might motivate us to incorporate the full cost-including the risk of accidents and the cost of waste disposal-into the price of electricity from nuclear power. If you did that, you’d see that nuclear power is not cheap.

What are some of the things you’re working on right now?

I’m working on a scenario planning exercise for the state of Oregon. We’re plotting out some plausible alternative futures going into the next century and putting these alternatives back out to the public in the form of a survey that asks, “What kind of future do people in Oregon really want?” We want to get the full range of possibilities. People don’t really recognize the choices we need to make right now and what the implications of those choices are.

We’re also working on ecosystem services and natural capital-all the benefits derived from natural ecosystems-and how to quantify, model and use that information to better manage the systems. In November, we’re doing a special issue of the journal Solutions on ecosystem services. We will explore how ecosystem services have contributed and could contribute to solving the problems of managing our natural resources sustainably for the benefit of everyone-now and in the future.

You have spoken about the need to create a new economy; a new system that could sustain itself. You stressed the need to first create a positive, shared vision of such a system – something you say the environmental movement has failed to do. You said, “The worst thing you can do when trying to help an addict overcome their addiction is them they’re doing the wrong thing. That immediately causes a defensive reaction.” 

Can you articulate your vision? Does the connection between ecological and human health factor into that? How will your vision overcome the failure of the environmental movement in the past to present something positive?

There is a piece in Solutions in which I attempt to articulate that vision as a narrative. The way we usually end up articulating these visions is through graphs, charts, and numbers, and that doesn’t engage very many people. To engage the general population, you really need to create a much more vivid narrative of what life would be like in these alternative futures. That’s what I tried to do. I hope we can do a lot more of that.

Scenario planning is one approach to that. Instead of having one vision of how we really want things, this process involves creating a number of alternative, plausible future scenarios. Often, it ends up being four different scenarios, because that’s how many people can handle, and it also usually covers the spectrum of possible futures. We say, “Here’s how the future could be, and which of these futures we end up in depends a lot on the choices we make right now.”

We are trying to do this here in Oregon, and I think we can do something like that at multiple scales. Businesses use this process quite a lot to do their future planning. In fact, it started with some work at Shell Oil back in the 1970s and was applied in post-apartheid period in South Africa very effectively.

These visions need to be fleshed out in detail and with enough vividness so that people can imagine themselves living there. That’s a challenge for scientists, certainly. That’s an area where collaboration among scientists and filmmakers, writers and others who can vividly paint pictures will be important.

I’d like to see some Hollywood movies that are set in a sustainable, desirable future, rather than the dystopias we always see. If we can show people some possibilities, then we can start to work out the details. We can start asking, “What does this mean in terms of people’s quality of life, jobs, livelihood, and human health?” We can create a society in which people are healthier, live more fulfilling lives, and have more job security and more fulfilling jobs. Maybe they aren’t working as hard. Maybe they’re not consuming as much stuff. But maybe that’s not what they need. It’s probably a world in which the distribution of income is narrower, where people are consuming less material goods, but spending more of their time engaging in social interactions.

That theme comes out in many of the articles in Solutions, including one by Jeffrey Hollender, the former CEO of Seventh Generation.

How important is the integration of academic disciplines in the development and communication of future scenarios?

It is extremely important, because I don’t think any one scientific discipline can solve these problems. We have to think about an integrated picture. If you’re designing a future world or trying to plot multiple scenarios, you have to look at how that whole system functions. In order to describe it, you’re going to need more communication skills than the average academic brings to the table.

That’s one of the things we’re trying to do with Solutions. We’re trying to get transdisciplinary teams to write the papers, but also engage journalists and writers.

To what degree to you see the medical community (both practitioners and medical schools) participating in these visioning workshops and exercises?

I think they are extremely important participants. Individual human health is a major component of people’s sense of well-being. We have to learn how to improve that and do it in a way that are much less resource intensive and more sustainable..

I’ve been involved with a group called Ecosystem Health, which puts out a journal (EcoHealth) which focuses on just those kinds of linkages. We’re already finding, for example, that climate change is already having a huge impact on mortality and morbidity around the world. If we can quantify what that impact has already been, then conversely, we can look at the benefit of preventing further deterioration of the climate.

All of these things are connected, yet our academic institutions are not very connected. They are split up into disciplinary silos. One of the things we’re trying to do here at the Institute for Sustainable Solutions is to overcome that by being a catalyst to better integrate all of our intellectual resources.

One of the most effective ways of doing this is through “problem-based” courses. The idea is to focus on the problem a community faces and bring together stakeholders, students and faculty from the multitude of disciplines that impact that problem, and actually try to solve the problem on the ground.  It requires blurring the boundaries between academic research, teaching, outreach and service. Everyone works together to solve a common problem, rather than defending their intellectual turf. I think that’s an effective way to overcome barriers and engage people from the medical community–or any community that bears on the problem at hand.

How are issues like environmental justice and women’s rights folded into the development of a vision for a desirable future?

Going back to what contributes to human well-being, one of the core things that we haven’t adequately recognized is the issue of fairness. People are much happier, and can build social capital much more effectively, if they feel like the system is fair. So issues like environmental justice, ethnic diversity, and income distribution are all critical towards creating a more sustainable, desirable society.

There have been some very interesting experiments with something called the “ultimatum game.” It’s a lab experiment involving, for example, ten dollars, and two people. One person is given the money and instructed to propose how to share it with the other person. If the other person agrees to the proposal, they both get the money. If they don’t agree, nobody gets anything. The standard economic model would say you should propose giving the other person one penny. Obviously, one penny is better than nothing and the person should prefer one penny to zero. But in reality, all over the world in all different cultures, no one will accept a distribution that’s very far from 50-50. Our desire for fairness is inherent. If there isn’t fairness, our ability to build good social relationships, which contributes to social capital, deteriorates.

Conventional economic ideas say, “Let’s just increase the size of the pie. If everyone has more, it’s not important how it’s distributed. The poor will get more as well.” But the relative income, or relative rates of consumption, affects people’s sense of well-being much more than their absolute rates of consumption.

Robert Frank from Cornell has written good books on this, including one called Luxury Fever. He refers to the “consumption arms race.” The only reason people want 10,000 square foot houses is that their neighbors have them, not because they need that much space. People’s sense of their own well-being is based on their relative consumption of goods like cars and houses. I believe that desire to consume more and more had a lot to do with the housing bubble. There are ways to control arms races. We could tax that kind of consumption more heavily and reduce it, which would allow people to spend their time on non-conspicuous kinds of consumption, like participating in social goods and providing social capital.

How do you define social capital?

All of the interactions among people, through formal and informal networks and institutions. It’s not individual health and well-being, but the health and well-being of groups of people. Your email network is a form of social capital, for example. So is your community at various scales, from your local neighborhood, to your city, to your nation.

We humans are very good at building social capital within our perceived groups, but we’re not very good at building social capital across groups. The scale of our living has increased, and we’re now at the global scale. How do we build social capital at this larger scale? How to do things that benefit the whole planet is a challenge, but it’s not insurmountable. We need to think of ourselves as planetary citizens.

The journal Solutions is intended to be a forum for the discussion and development of “seriously creative ideas” for solving the world’s integrated ecological, social, and economic problems.  Since the magazine’s launch in January 2010, have any of these ideas specifically involved enhancing or restoring ecological systems with the dual aim of improving human health?

Both individual human health (human capital) and the health of groups of people (social capital) are the essence of some of the benefits of natural ecosystems. The special ecosystem services issue of Solutions  will definitely cover this.

Is there any place in the world where, in your opinion, natural and social capital are appropriately factored into the economy? 

Scandinavia seems to be much closer than most other places in getting the balance right. They have a much better appreciation of social and natural capital, and the gap in income distribution is much smaller than that in the U.S. There are places within the U.S. that are closer to an appropriate balance. Vermont has done a much better job in that regard. Oregon, where I am now, is a leader in thinking about sustainability and bringing all of these issues–social, environmental and human health–to the table as we strive toward societal well-being.

I recently visited Bhutan, where they have declared that their goal for national development is “gross national happiness,” as opposed to gross national product. So there are even some whole countries that are taking a more radical approach. I think that model may have significant influence on much larger countries. For example, French President Nicholas Sarkozy’s ongoing commission on alternatives to GDP has recognized that there is a need for a better measure of progress.

There is a growing recognition among many countries that we need to change some fundamental things about what our goals are, how we measure progress, and how we arrange our societies in order to better get there.

We’re hoping to have a series of workshops in Bhutan to build a better global consensus on what some of these global measures should be. A lot of where we are today with our economic policies and ideas is based on what happened at the Breton Woods conference that took place in New Hampshire in the post-war 1940s.  It’s when the World Bank and the IMF were set up. It is also where the GDP was agreed upon as a measure of progress. It was an appropriate vision for the time. As I said, GDP and GPI were highly correlated from about 1950 until 1975. The problem is that we just haven’t recognized that we’re now in a new era. Our natural and social capital are now the limiting factors, whereas during the post-war period, it was the built capital.

We need to envision a more balanced, more mature economy. With regards to economy, we’ve been in a period of adolescence. Now we have to level off and stop growing, but continue to develop and improve. No one would like to see his or her body continue to grow indefinitely. You want to stop at some point and say, “OK, now it’s time for other things to happen. It’s time to improve quality rather than quantity.” That’s where I think the future lies.

Most of our readers are somehow involved in the practices of ecological restoration, conservation planning and/or regenerative design. Any final words of advice for them?

We need better, more general definitions of ecosystem health.  Conservation planning should take into account biodiversity, ecosystem functioning, and ecosystem services – not the least of which are the human health benefits.  Basing ecological restoration on returning the system to some prior or more “pristine” state is not really appropriate, realistic, or desirable. Humans have been integral parts of the global ecosystem for over 200,000 years and we need to design a system going forward that allows humans and the rest of nature to both thrive.  That will require novel approaches, a new conception of the economy and novel ecosystems. It will require stabilizing human population and a refocusing on quality of life, not just GDP. It will require a better, more integrated understanding of humans embedded in ecological systems. It is the grand challenge for humanity at this juncture.  It is easy to be pessimistic, but I am hopeful that we can rise to this challenge and create a better, more sustainable world.

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