Sustainable economy

From My Strategy
Jump to navigation Jump to search

Chapter 2 - Society


Previous page: Sustainable societal future - Sustainable economy - Next page: Sustainable finance


Back to Book content or directly to Main Page


.

Welcome to the Sustainable economy page

.

In complex systems, external parameters often determine the phase in which the system operates, that is, its macroscopic behaviour. On top of this, people make decisions, and those decisions have an economic impact, which generates new information. Other information may enter from the outside, and they make new decisions. That is how the economy works.

.

Core ideas

.

Labour, capital and natural resources are complementary rather than substitutable. If you give a baker enough money to double his number of ovens and chefs but tell him he can‘t have more flour and dough, he will struggle to make more bread.

Content source
Energising Money An introduction to energy currencies and accounting - The40foundation

.

Deep dive

.

Short time scale of human energy economic evolution

(You can find more on the Life page)

  • 40.000 years ago, modern man came to Europe as Cro-Magnon man (about 1.200 to 1.600 generations back)
    • Energy search and energy consumption are in balance
  • 10.000 years ago, agriculture was invented (about 300 to 400 generations back)
    • Energy surplus (grains) can be stored
  • 5.000 years ago, the use of writing appeared (about 150 to 200 generations back)
    • Because of access to stored energy, the social system develops: religion, cities, empires, wars
      • Example of how this affects society: Five thousand years ago, the Mesopotamian goddess Nisaba was worshiped as the patroness of agriculture and literacy. The more the writing gained in importance, the more Nisaba's right to exist was also questioned. Until after about a thousand years she turned out to be married to the god Nabu, who became the new god of writing. From an autonomous goddess she was reduced to a faithful and devoted wife, or sometimes even to Nabu's secretary. (Elif Sharak)
  • 1.500 years ago, the demand for energy starts growing (about 60 to 75 generations back)
    • The social system / craftmanship economy develops, enhancing the economy (and vise-versa): feudal system, nation-states, guilds, trade, world travel, colonisation
  • 300 years ago, the search for energy resources started on an industrial scale (about 12 to 15 generations back)
    • Coal, oil, gas are the divers of the current industrial economy

.

New Economic Thinking

A large economy is one of the best examples we have of complex dynamics. There are multiple components arranged in complicated overlapping hierarchies, out-of-equilibrium dynamics, nonlinear coupling and feedback between different levels, and ubiquitous unpredictable and chaotic behaviour.

OXFORD MARTIN SCHOOL
Institute for New Economic Thinking
The Institute for New Economic Thinking at the Oxford Martin School (INET Oxford) is a multidisciplinary research centre dedicated to applying leading-edge thinking from the social and physical sciences to global economic challenges.
https://www.inet.ox.ac.uk/

.

SAGE framework

.

  • S - Solidarity
    • The set of psycho-social mechanisms that creates and maintains pro-social group-level functional organisation
  • A - Agency
    • The exercise of one’s ability to individually or collectively make and enact decisions through one’s effort that are beneficial for life
  • G - Gain
    • GDP per capita
  • E - Environmental connectedness
    • The responsible use, protection, and regeneration of the natural environment, aimed at promoting and preserving the health and stability of ecosystems

.

These measures adhere to the following principles:

  • the measures of economic prosperity should be consistent across countries, enabling cross-country comparisons in the economic, social and environmental dimensions
  • the measures of business prosperity should be consistent across companies in these dimensions, enabling comparisons of business and investor performance across these dimensions; and
  • the measures of economic and business prosperity should be consistent with one another, enabling a meaningful collaboration between government policy, business strategy and institutional investors within a systemic framework serving the needs and purposes of people, now and in the future

.

Content source
https://www.inet.ox.ac.uk/projects/measuring-prosperity-beyond-gdp

.

What science can tell you

.

PLOS ONE
Klaaßen L, Lohmüller C, Steffen B (2024) Assessing corporate climate action: Corporate climate policies and company-level emission reductions.
https://journals.plos.org/climate/article?id=10.1371/journal.pclm.0000458
Chausson A, Smith A, Reger RZ-Z, O’Callaghan B, Mori Clement Y, Zapata F, et al. (2024) Harnessing nature-based solutions for economic recovery: A systematic review.
https://journals.plos.org/climate/article?id=10.1371/journal.pclm.0000281
Pacillo G, Medina L, Liebig T, Carneiro B, Schapendonk F, Craparo A, et al. (2024) Measuring the climate security nexus: The Integrated Climate Security Framework.
https://journals.plos.org/climate/article?id=10.1371/journal.pclm.0000280

.

Nature
Impact of doing nothing about the climate change on economic growth
  • The estimated damage in 2049 amounts to $38 trillion (in 2005 dollars), which corresponds to annual damage the size of the current German economy
  • The costs of doing nothing are already much higher than the costs of taking action. The damages exceed the estimated costs of mitigation to limit global warming to 2 degrees Celsius by a factor of six
  • The damages are mainly caused by changes in average temperature, but also by changes in daily temperature variations, precipitation patterns and extreme weather events
    • The damage caused by daily temperature variations represents the largest increase in total damage compared to models that only consider changes in the average annual temperature. This means that including daily variability, rather than just average temperature, significantly increases damage
  • The impacts of climate change are unevenly distributed. The greatest damage will occur in regions with low latitudes, low historical emissions and low-income levels
The economic commitment of climate change - M. Kotz - Nature - 17 April 2024
https://www.nature.com/articles/s41586-024-07219-0
Budrikis, Z. Too much efficiency leads to delays. Nat Rev Phys 6, 715 - 2024
https://www.nature.com/articles/s42254-024-00787-0#citeas
Moran, J., Romeijnders, M., Doussal, P.L. et al. Timeliness criticality in complex systems. Nat. Phys. 20, 1352–1358 - 2024
https://www.nature.com/articles/s41567-024-02525-w#citeas

.

Do you want to know more?

Energy

EU
ENERGY RESILIENT EU SCENARIO
Study “Energy System 2050 – towards a decarbonised Europe”, we shed light on this question. We highlight five key components which support the 2050 vision: renewable energy, grid infrastructure, sector coupling, hydrogen technology, and joint action at the European level.
https://www.energysystem2050.net/

.