Sustainability: Market Lessons
Each week we write about the science behind environmental protection. Previous Science Wednesdays.
About the author: Alan D. Hecht is the Director for Sustainable Development in EPA’s Office of Research and Development. He has also served as the Associate Director for Sustainable Development, White House Council on Environmental Quality (2002-2003), and the Director of International Environmental Affairs for the National Security Council (2001-2002).
On October 9, 2007—the same day the stock market soared above 14,000 points—New York Times reporter Michael Grynbaum declared that Federal Reserve officials saw a cloudy economic forecast for months ahead. We all know what happened next. Financial warning signs were everywhere, but appropriate actions were not taken.
What does the financial crisis have to do with environmental sustainability? The clearest link is a critical lesson about the consequences of not paying attention to warning signs. Today nearly all ecosystems in the world are under serious stress:
- Approximately 60 percent (15 of 24) of the ecosystem services examined by the Millennium Ecosystem Assessment are being degraded or used unsustainably.
- The quantity of greenhouse gases in the atmosphere is continuing to rise.
- Signs of water scarcity—rivers running dry, wells going dry, and lakes disappearing—have become commonplace over the last half-century. Reports from WHO, the UN and other sources suggest water scarcity may be the least recognized resource issue facing the world today.
Like the financial world, the environmental world is threatened by collapse. It is time to examine basic principles and take corrective actions, such as making our industrial and energy systems as sustainable as possible. Three things are needed to make sustainability operational: advances in science and technology, implementation of appropriate government regulations and policies, and green business practices.
Regulatory and science agencies like EPA need to follow a broader mandate to undertake core research leading to a better understanding of the interactions among the economy, society, and the environment. EPA core research must expand basic knowledge of the environment, provide practical solutions to problems, and motivate actions. EPA’s Sustainability Research Strategy is a starting point. Its measure of success must be to develop tools, models, and approaches that inform public debate and help businesses make better decisions.
As in all previous financial crises, the stock market will recover. Unfortunately it may be far more difficult to respond as quickly to current and pending environmental crises. The time is clearly at hand to launch corrective actions.
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