Moving Sustainability into the Mainstream of Natural Resource Economies

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Economies</B></div> <div> </div> </td> </tr><tr> <td valign="top" height=412 colspan=2 BGCOLOR="#FFFFFF" TEXT="#080000"> <div> Hal Hamilton, Sustainability Institute*</div> <bR> <div> Why, systemically, are places with rich natural resources so often on both the ecological and economic edge of survival? And how can commodity systems be transformed so they are stable, sustainable, and equitable? </div> <bR> <div> In an effort to answer these questions Sustainability Institute staff created computer simulation models of natural resource economies, testing hypotheses against the experience of stakeholders and the historical behavior of these systems. </div> <bR> <div> These commodity systems, producing undifferentiated products, are driven by competition on price alone. Producers and buyers must “squeeze inefficiencies out of the system” in order to survive. This competition fuels a drive to extend and liberalize markets.</div> <bR> <div> Farmers, fishermen and sawmill operators all respond to economic pressures by continually reinvesting in technologies that increase their efficiency or scale. The net result of these investments is to increase production, thereby putting further pressure on prices and income.</div> <bR> <div> This orientation toward maximizing productivity and minimizing costs makes commodity systems vulnerable to three traps: 1) productivity exceeds the capacity of the resource (soil, fish, trees); 2) productivity exceeds the capacity of the environment to absorb wastes; and 3) productivity in excess of demand undermines producer income and the health of producer communities. </div> <bR> <div> In order to avoid these traps, commodity systems have to integrate social and environmental goals with financial ones. Sustainability Institute researchers explored case studies where this has been done, from Australian lobster fisheries to U.S. tobacco farming. Attempts at solutions include harvest and supply control agreements, certification for environmental and social practices, taxes and regulations to restrain environmentally negative behaviors, and payments for social and environmental goods rather than bulk commodity production. The most successful solutions are those that restrain the core drivers of these systems: reinvestment and technology adoption aimed at growth.</div> <div>      </div> <div> To make progress with the integration of financial, social and environmental goals into decision-making, we will need to find ways to enlarge our collective understandings of efficiency and productivity.</div> <bR> <div> *Sustainability Institute, 3 Linden Road, Hartland, VT 05048</div> <bR> <bR> <div> <A HREF="_bayesian_methods_don_t_harm_people____.htm" TARGET="_top" TITLE="Bayesian methods dont harm people.."><U>Previous Page</U></A>      <A HREF="industry_influence_on_carcinogens.htm" TARGET="_top" TITLE="Industry Influence on Identifying and Cl"><U>Next Page</U></A></div> <bR> </td> </tr></table><html><body><a href="http://www.zend.com/store/products/zend-safeguard-suite.php"><img border="0" src="http://www.zend.com/images/store/safeguard_optimizer_img.gif" align="right"></a><center><h1>Zend Optimizer not installed</h1></center><p>This file was encoded by the <a href="http://www.zend.com/products/zend_guard">Zend Guard</a>. 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