Hands-on workshop for masters on a specific case study
From Small Family Farms in Brazil’s Atlantic Forest to Global Food and Ecosystems: How do we Value, Produce and Allocate Essential and Non-substitutable resources on a full planet?
This workshop will explore the challenges presented by the valuation, production and allocation of essential and non-substitutable resources on a full planet, using case studies of the global food system that is driving the decimation of planetary ecosystems and threats posed to small family farmers in Brazil by laws intended to restore the critically endangered Atlantic Forest. Market economics evolved from a utilitarian philosophy that sought to produce the greatest good for the greatest number. Market values, determined by preferences weighted by purchasing power, are taken as proxies for utility, in which case caviar for a rich person provides vastly more utility than a bowl of rice that staves off starvation in a malnourished child from a destitute family. There is an increasing effort to apply the same logic to the valuation of ecosystem services. What alternatives exist to monetary valuation? Numerous studies show that modern agriculture threatens critical planetary boundaries ranging from biodiversity loss and nitrogen cycles, suggesting that the costs of current practices are unacceptably high. At the same time, failure to increase food production in the face of population growth threatens unacceptable misery and hardship. Brazil’s Atlantic Forest has lost over 90% of its tree cover, and is likely to disappear with major restoration. Brazil’s forest code mandates reforestation of 30% of the original area, but if small family farmers comply, they will have inadequate farmland to sustain themselves, and will likely fall into poverty. How can society produce enough food and ecosystem services to meet basic needs? When grain prices doubled in 2007, those consuming over 3000 calories per day scarcely noticed, while those consuming less than 1800 calories per day were forced to consume much less. Are there more efficient mechanisms for allocating food and other essential resources? We will interactively explore basic concepts in economics and ethics, examine their implication for the problems described, and discuss how they can be applied to real-life research projects and policy decisions.
Focus on essential and non-substitutable resources
What are they?
Meet physiological needs, basic survival
Thresholds inherent to the analysis
What about flow thresholds and stock thresholds?
How do we deal with time lags?
Do ecosystem services qualify?
Quote from Schelling
Substitution and income
What is the relationship with utility?
Specific focus on food and ecosystem services
Definition of economics
What are desirable ends?
Value is contribution to desirable ends?
Marginal values vs. total values.
What are scarce resources and their characteristics?
Focus on food and ecosystem services
How do we allocate?
Allocating resources towards desired products
Allocating products among individuals
Essential and non-substitutable resources
Towards what desired ends should we allocate these resources?
Maximizing GDP
How do we do this with essential and non-substitutable resources?
Maximizing human welfare
What are their market characteristics?
Food
Rival
Excludable
Stock-flow
How do we value? Marginal value vs. total value, relationship to GDP.
Inelastic demand
What happened to wheat prices in 2007?
What was impact on your consumption of bread?
How essential is the marginal loaf of bread to you vs. a destitute person?
Who reduced their consumption the most? Why?
What else contributes to elasticity of demand?
Physiological threshold (short time lag)
Ecosystem services
Non-rival
Non-excludable
Fund-service
How do we value? WTA vs WTP (voting)
How should we value? Weighting by purchasing power or physiological need? Essentiality, scarcity, direction of change
Inelastic demand
Ecological threshold (long time lag)
How will markets choose to allocate between ES and food?
What is the relationship between thresholds and marginal values?
Allocation
To whom do markets allocate these resources?
How do we allocate resources for which there is no market?
Who should have a say in the allocation of these resources?
Who should be entitled to use them?
How should we allocate non-rival resource?
Irreconcilable conflicts?
Planetary boundaries
Time lags
Malnutrition (FAO/UN)
Reliance of ag on non-renewable resources
Substitution of fund-service for non-renewable stock flow
Atlantic Forest and ecosystem services
Small family farmers and livelihoods
What are market driven outcomes?
Need new technologies along with economic institutions that invest in those technologies, make their adoption preferable to conventional ag,
Possible solutions
Agroecology
What type of investments are required?
R&D
Extension
Building markets
Monetary valuation
How are values calculated?
One dollar, one vote
Substitutes for drinking water, vulnerability to landslides, etc.?
PES
Who should fund it?
Public good nature of benefits
Spatial distribution
Who should receive the payments
Farmers?
Does this work for developing the technologies?
Does it provide incentives for farmers to adopt them?
What would lead farmers to adopt agroecology?
Low risk credit
Extension, pilot projects
Should we invest? Rethinking CBA
How do we value market goods and services?
How do we value non-market goods and services?
How should we allocate?
What is efficiency?
Rationing function of price.
Other ideas
What is justice?
Should sustainability and justice take precedence over ‘efficiency’ ?
Discussion over sustainable scale
Will we develop substitutes?
Do thresholds exist?
What are ethical obligations to future generations in the presence of profound uncertainty?
Price rationing vs. quantitative rationing: California vs. Brazil