General comments on the book chapter

I agree with many of the comments and critiques already posted here; in particular, I find this approach to measuring “sustainable development” to be a novel and promising approach, though the current attempts to operationalize it suffer from a multitude of problems.  I am also supportive of Adam’s recommendation about incorporating the CHES framework into the chapter, as this would certainly make the methodology more tangible and less abstract to readers.

However, my own personal recommendations for the chapter are in response to Bill’s explanation of the dual uses of this framework.  To summarize, Bill explained that these metrics can be used to either:

1.       Determine if a previous period of development was “sustainable”; or

2.       Assess whether a proposed policy intervention would result in a “sustainable” development trajectory/outcome

As far as I can tell, the chapter (and the article by Arrow et al.) only attempt calculations of the first.  The chapter applies this framework to assess the sustainability of growth in sub-Saharan Africa, Bangladesh, India, Nepal, Pakistan, and China from 1970 to 2000, while Arrow et al. analyze the sustainability of development in the US, China, Brazil, India and Venezuela from 1995 to 2000. 

My own intellectual interests and academic biases make the second use of the framework far more interesting to me—assessing whether a proposed policy or intervention will actually result in a sustainable trajectory/outcome.  Although both pieces acknowledge the possibility of doing this, neither reading actually works through such an example.

Therefore, my personal recommendation would be to provide a worked example of the second application in the chapter—or, at the very least, in an appendix.

The Minnesota group had a general discussion about the metrics in sustainable development.

We all agreed that most of the studies, including the literature mentioned in the chapter, did not include shadow prices for various ecosystem services, but considered mostly commodities such as forests, oil, and minerals for which  we already have market prices. There is still a huge gap between ecology and economics with regards to calculating shadow prices for the evaluation of sustainable development.

         That is why inclusive wealth is an important concept for the measurement of sustainable development in that it makes us consider all the aspects that affect human well being both now and into the future. The problem is how we measure the V in the condition for sustainable development, which is dV/dt >=0. Traditionally, there are ways in environmental economics to measure the values of ecosystem services such as revealed preference and stated preference approaches. But there are a lot of limitations that make those methods difficult to be implemented. It is also not easy to estimate what the future value will be because of the variability of ecosystem services, as we have discussed in the previous chapters (i.e., dynamics, uncertainties).

         There are two important issues in valuation, which are aggregation of different capital (e.g., food, health, and biodiversity) and imposing different weights when the aggregation occurs. The Mexico group expressed their view of incommensurability of different economic, social, and environmental accounts. But our group agreed on the necessity of aggregation of different sectors because of existing tradeoffs  among those sectors and policy implications that require evaluations in an aggregate level. Weighting becomes a crucial component when we aggregate different capital. Weighting has been quite arbitrary in most of the studies that were not based on the  inclusive wealth concept. It is the representation of relative contribution to the well being of people, establishing relative value or price for different capital. When it comes to the determination of the weight for the natural capital, it can be underestimated because a large proportion of people may not care about natural capital.

          There can be two ways that can explain why people care less about natural capital. One is that people do not realize the existence of natural capital service although their utilities are augmented from using it. For this case we need to make this clear that we are benefiting from natural capital services to have at least some positive weight for the natural capital. The other explanation is that people fundamentally do not care about natural capital except for the food and health that seem directly related to their utility. This point was discussed when we were talking about the human capital, health in particular. In fact, the figures show that a lot of government budget has been spent on human health issues as opposed to the expenditure on biodiversity, for example. It needs to be emphasized that we need to preserve natural capital that does not seem to directly affect our utilities because it can be important for the future resilience of natural capital services. Again, positive weight should be imposed for such natural capital services.

           In terms of representing the value of particular ecosystem services, there is a political aspect of it that we cannot ignore. It is whether we want the value to be monetized or to be quantified in an alternative way. Politicians tend to like it to be in monetary terms, while the general public might not. For example, it may sound very different when we say that the Amazon has an economic value worth of 6 billion dollars, compared to saying that it has a value worth of saving thousands of people. This might become an important issue when we think of public unawareness about the ecosystem services as the reason for environment being the last thing to consider in our priority list.

            Lastly, we had brief comments about our role as scientists especially in this “difficult” sustainable development research as mentioned in the chapter. We may not possibly get any kind of perfect solution that would solve all currently existing problems. Our goal is to bring forward full knowledge of ecosystem services, causes, effects, and consequences so that we can manage to keep dV/dt >=0 as Hamilton and Clemens did their “bold and first pass approach at a difficult research” with many caveats in their research.