9.1 Natural resources, heritage and capital
Natural resources are resources that exist without any actions of humankind. This includes the sources of valued characteristics such as commercial and industrial use, aesthetic value, scientific interest and cultural value. On Earth, it includes sunlight, atmosphere, water, land, all minerals along with all vegetation, and animal life.
Natural heritage refers to the sum total of the elements of biodiversity, including flora and fauna, ecosystems and geological structures. It forms part of our natural resources.
Heritage is that which is inherited from previous generations, preserved in the present, and passed on to future generations.
Natural capital is the world’s stock of natural resources, which includes geology, soils, air, water and all living organisms. Some natural capital assets provide people with free goods and services, often called ecosystem services. All of these underpin our economy and society, and thus make human life possible.
A distinction is made between renewable natural capital (e.g., forests, farmland, and marine resources) and non-renewable natural capital (e.g., minerals and fossil fuels)
There are two other forms of capital, namely human capital (income over a lifetime) and productive capital (e.g. buildings and infrastructure), i.e. what is commonly referred to as capital.
The value of nature
Under the leadership of the World Bank, the WAVES organization has calculated the values that quantify total global wealth. According to their report, there are three classes of wealth, human capital (the life work output of all people), amounts to over 732 trillion US dollars, generated capital (real estate, machinery, etc.) to 359 trillion US dollars and natural capital to 64.5 trillion US dollars.
Natural capital is divided into US$35.5 trillion of regenerative ecosystems and nearly US$29 trillion of nonrenewable resources (oil, natural gas, coal).
The term “ecosystem services” is relatively new and was first used to identify the value of nature and to draw attention to environmental degradation. Our growing understanding of the true value of nature is concerning when considering the destruction of ecosystems.
Regenerative power of nature
Natural capital can be defined as the world’s stock of natural assets, which includes mineral deposits, soil, air, water, and all living things. From this natural capital, humans derive a wide range of services, often referred to as ecosystem services, that make human life possible. More than half of the world’s GDP is moderately or heavily dependent on nature (World Economic Forum, 20201). The global economy depends on a constant stream of ecosystem services, such as providing resources for consumption, crop pollination, water filtration, waste decomposition, carbon sequestration, and climate regulation… . These interdependencies have been well studied and documented.
In total, over 320 publications were screened covering over 300 case study locations. A selection of 665 value estimates were used for the analysis. Acknowledging the uncertainties and contextual nature of any valuation, the analysis shows that the total value of ecosystem services is consider- able and ranges between 490 $/ha/year for the total bundle of ecosystem services that can potentially be provided by an ‘average’ hectare of open oceans to almost 350,000 $/ha/year for the potential services of an ‘average’ hectare of coral reefs. More importantly, their results show that most of this value is outside the market and best considered as non-tradable public benefits.
In the face of a growing population and ever-increasing consumption, the human impact on air, soil and water is unsustainable. This means that it is foreseeable when these resources will no longer be sufficient to enable all people to live.
9.2 Extraction and extractors
Natural resources are finite. UNAP reports on the consumption of non-renewable or renewable resources. Those who extract them from the earth today get the profits. Everyone else, including future generations, is disadvantaged.
Rebalancing.earth demands that extractors be compensated for mining. This is to make mining financially less attractive and in this way reduce it to a sustainable level.
Oil is a simple example of this. In the case of crude oil, the producers must be compensated for its extraction, as it is a raw material that is considered finite.
Then the crude oil is processed into various products. If it is processed into lipsticks, there is no compensation. If it is processed into plastics, compensation must be paid for plastic pollution. If it is processed into fuel, compensation is required for the emission of CO2 and other greenhouse gases, which we cover in the section on pollution.
The same is true for coal and natural gas. Since only a limited number of large companies operate in all these markets, it is easy to calculate their specific contribution and assign them price tags for their compensation.
It is important to point out that rebalancing.earth in no way blames these companies for their services. The only thing to condemn is corporate behavior that violates applicable law.
Ultimately, it is the consumer who demands the products of these organizations. Once we overcome the injustices of socializing environmental costs, these organizations will naturally shift their business models to a more sustainable approach that will simply be more profitable.
Global raw material extraction has far-reaching consequences for the environment, as WWF reports.
… to extract aluminum, steel, gold and co., forests are cleared, rivers poisoned, people exploited and entire ecosystems destroyed. Irresponsible mining practices have become one of the greatest environmental threats of our time.
Metallic raw materials include all metals or ores from which metals are refined – for example, iron ore (steel), bauxite (aluminum), copper, nickel and gold. They are extracted from the earth’s surface and, unlike renewable raw materials, are non-renewable.
However, it is not only fossil fuels and metals that are extracted from the earth. Non-metallic minerals are a special group of chemical elements from which no new product can be created during melting. Nonmetallic minerals include, for example, sand, gravel, limestone, clay, and marble. These materials lack metallic properties such as good electrical and thermal conductivity, luster, strength, and malleability; however, they are essential to many industries.
The non-metallic minerals industry is best known for the production of cement, ceramics, glass and lime products.
For rebalancing.earth, the consumption of sand and stones is particularly relevant. The effects are manifold, as reported in NATURE:
The desert sand grains are too smooth to be useful, and most angular sand suitable for industry comes from rivers (less than 1% of the world’s land area).
This extraction of sand and gravel has far-reaching impacts on the ecology, infrastructure, and livelihoods of 3 billion people who live along rivers. For example, sand mining on the Pearl River (Zhujiang) in China has lowered groundwater levels, made it difficult to obtain drinking water, and accelerated flow velocities in the riverbed, damaging bridges and dams.
Most of the sand trade is undocumented. For example, between 2006 and 2016, less than 4% of the 80 million tons of sediment Singapore said it imported from Cambodia was confirmed as exported by Cambodia. Illegal sand mining is widespread in some 70 countries, and hundreds of people have reportedly been killed in fights over sand in countries such as India and Kenya over the past decade, including local citizens, police officers, and government officials.
Of course, the construction of housing and other building activities is necessary. However, as can be seen from NATURE’s graphic, sand is also a natural material that belongs to the heritage of mankind and must not be consumed by individuals to the detriment of the general public.
Regeneration and inflated prices
The ability of ecosystems to regenerate what humans demand of those spaces. Life, including human life, competes for space. The biocapacity of a given area corresponds to its ability to regenerate what humans demand. Thus, biocapacity is the ability of ecosystems to produce biological materials used by humans and to absorb waste materials produced by humans, within the limits of current management systems and extraction technologies. Biocapacity can change from year to year based on climate, management, and also what portions are considered useful inputs to the human economy. In the National Footprint and Biocapacity Accounts, the biocapacity of an area is calculated by multiplying the actual physical area by the yield factor and the appropriate equivalence factor. Biocapacity is usually expressed in global hectares.
There are numerous organizations that describe the problem. The Global Footprint Network calculates each year on Earth Overshoot Day that humanity’s resource use exceeds the Earth’s capacity to regenerate those resources in that year. Biocapacity is the ability of ecosystems to produce biological materials used by humans and absorb waste materials generated by humans, under current management practices and extraction technologies. You can calculate on which date of a year the annual regenerative capacity of the Earth was reached. In 2021, it fell on July 29.
Or you can calculate how many Earths a nation would need to sustain its consumption. Germany, for example, puts almost three times the burden on ecosystems as the regenerative capacity of its land mass. The rest is shared with the world.
Strictly speaking, it is not nation-states that are overstressing ecosystems. It is the citizens, and to very different degrees. Of course, Germans are, on average, stronger consumers than Indonesians. But in both societies there are very different groups, as we will see later. And for rebalancing.earth, nationality doesn’t matter. It is about the consumption and pollution of resources by each individual. And every individual should be compensated transparently and fairly for the burdens caused by their personal consumption. Large corporations and nation states can help.
The problem has arisen because ecosystems are interconnected through air and water, and no one is charging a fee. In the past, hardly anyone noticed, and when they did, the impact was downplayed by lobbyists and politicians serving industry. But as pollution increases, the planet is reaching limits that no one can ignore anymore. Because ecosystems are global, those who consume must compensate globally.
9.31 Pollution and polluters
In Europe, enormous progress has been made in reducing pollution compared to the 19th century. Globally, however, we have a much bigger problem today, mainly because of the growing population. And there is still incredible pollution in various forms on land, in the air and in the sea. Landfills, wastewater from industry, oil spills, the pollination of plants with pesticides, and phenomena like the Great Pacific Garbage Patch, to name a few.
Air pollution is defined as a “mixture of particles and gases that can reach harmful concentrations both inside and outside buildings.” There are many different substances that are considered air pollution when they enter the atmosphere, including carbon monoxide (CO), sulfur dioxide (SO2)and particulate matter (PM). Air pollution causes tremendous harm to humanity. This results both from pollutants that people breathe outside their homes and, in many regions of the world, from air pollution within their own homes from house fires. The World Bank has estimated this damage at $8.1 trillion for 2019.
Environmental pollution is the leading cause of disease and premature death. Pollution causes more than 9 million premature deaths (16% of all deaths worldwide). This is three times more deaths than from AIDS, tuberculosis, and malaria combined, and 15 times more than from all wars and other forms of violence. Global health crises such as the current COVID-19 pandemic highlight the need for further action on pollution. Research has shown strong links between air pollution and the incidence of disease and death from COVID-19.
The cause of air pollution is closely related to the causes of CO2 emissions, since a large part also results from the combustion of fossil fuels. Therefore, we will focus on CO2 in the further consideration.
The situation is different for the other harmful greenhouse gases. These are methane (CH4), nitrous oxide (N2O), and ozone (O3), which plays a minor role.
Methane (CH4) is always produced where organic material is decomposed in the absence of air. … above all in agriculture and forestry, especially in factory farming. Another source is sewage treatment plants and landfills.
Nitrous oxide (N2O) enters the atmosphere primarily via nitrogenous fertilizers and factory farming, because it is produced whenever microorganisms break down nitrogenous compounds in the soil.
Methane has 28 times the effect and nitrous oxide 265 times the effect of CO2 in the greenhouse effect. For this reason and the fact that they are not produced by burning fossil fuels, we will consider them separately.
Of course, the elements mentioned are also natural components of the air we breathe. But the dose makes the poison, and the addition of large quantities to the atmosphere leads to dramatic changes in global ecosystems.
Before the industrial age, around 1750, the atmospheric concentration of carbon dioxide (CO2) was 280 ppm for several thousand years. Today it is 410 ppm. This means that for every million molecules in dry air, there are 410 molecules of CO2.
Interestingly, the last time the concentration of carbon dioxide (CO2) in the Earth’s atmosphere was 400 ± 10 ppm, modern humans did not exist. The world’s oceans were then up to 30 meters higher than today, and the global average surface temperature was up to 5°C warmer than today.
Since the impact on climate is as slow as the melting of ice in the Arctic, it will take decades to reach these levels, but it will also take decades to reverse the effects. There is no reasonable doubt that CO2 emissions are dramatically affecting the climate and causing all sorts of negative impacts, so we must fight them as pollution.
Almost three quarters of greenhouse gases are produced in energy generation or through energy consumption. Just under 20% in agriculture, a good 5% in industry and a good 3% in waste management.
For rebalancing.earth, the graphic shows all areas eligible for offsetting. The activists have broken down the share of the most important organizations involved.
So we will have an increase of more than 3 degrees. Probably much more. There are two main reasons for this. One is that the effects of emissions reductions come with a delay of about 20 years. Secondly, at this stage there is no plan to stop emissions, quite the contrary.
Most countries support the production of fossil fuels and have budgeted substantial funds for this in their budgets for the next 10 years. As a result, extraction will increase and CO2 accumulation will continue to rise.
In addition to air pollution, there is pollution of the oceans and other waters, and of the soil. There are numerous highly respected companies that damage the earth for profit. The Toxic 100 Water Polluters Index indicates responsible companies and quantities. There is generally no shortage of evidence and reports of environmentally damaging behavior anymore.
In addition to water pollution, water scarcity is also a major problem for many people. The special thing about this, however, is the extreme imbalance in the distribution of water in nature. In some regions of the earth there is hardly any water, in others there is water in abundance. By climate changes these regions shift additionally, so that no basis for an intervention exists.
With plastics, it’s a different story. Plastics have proven to be extremely useful for all kinds of consumer purposes. Water supply would not be possible in many regions of the world without the use of plastic bottles.
Unfortunately, humanity is not able to recycle plastic on a large scale. Except for deposit systems in a few select countries that work for a minority of bottles. It is, as in many other cases, the consumer who simply wants convenience. Of the 368 million tons of plastic produced worldwide in 2019, almost all of it can also be considered waste. Of the billions of tons of plastic produced in the past, much of it ends up in nature or landfills. In the oceans alone, about 1 million tons end up annually.
Welfare losses due to pollution-related deaths and illnesses amount to $4.6 trillion per year. Low-income countries pay a proportionate 8.3% of their gross national income for pollution-related death and disease, while high-income countries pay 4.5%. Because the report does not take into account the cost of environmental damage caused by pollution, the authors note that this is not the full cost of pollution.
Richard Mercantonio et. al. have show in a recent study that the impact of pollution is highly correlated with the impact of global warming.
Human-produced pollution is destabilizing the entire Earth System [1–3]. This pollution poses severe risk to human health and the contemporary human niche [4–11]. Most research assesses the independent risks of toxic emissions (e.g. fine particulate matter or PM2.5) and non-toxic emissions (e.g. greenhouse gases) and people’s vulnerability to them [9,12,13]. However, these risks are intricately connected and substantially catalyze each other both in the environment and the human body [9–11,14–20].
… we argue that the global risks from toxic pollution and climate change are highly correlated and should be jointly analyzed in order to inform and better target efforts to reduce or mitigate both risks.
The social outcomes and costs associated with these risk factors are as far reaching as the biogeophysical outcomes. The estimated current economic output lost due to the human health effects of toxic pollution is $4.6 trillion annually, or 6.2% of global GDP . The estimated current economic productivity losses from global warming, in just the US and the EU, is $4 trillion.
For rebalancing.earth, we will concentrate on greenhouse gas emissions (GHG) converted to CO2 equivalent as the sole factor.
9.4 The true cost and the true price
We can calculate the costs that nature has to pay for overexploitation and pollution. When we include these costs in all supply chains, we get the true price for all products and services.
The economists at TruePrice.org calculate retail prices for products and services that include environmental and social damage. To better understand this approach, let’s look at cotton production and subsequent T-shirt production in India as an example. After all, nearly 50 million people in India are directly or indirectly dependent on the cotton sector.
In the supply chain for a T-shirt, there are six steps with different impacts on nature and people. For the people, it is mainly the poor pay and poor working conditions that contribute to the end product not being sold at its true price. Scarce water is taken from nature, the air and water are polluted, as well as the soil on the land that is occupied for cultivation purposes.
These are called external costs or externalities. In the following table the most important externalities are listed and explained.
All of these externalities have a value. Recently, there has been a lot of talk about the price of a ton of CO2. A median value for the ton is currently $140. Likewise, one can calculate values for air and water pollution, as well as energy, material consumption, and waste.
If we now calculate the value of the externalities into the product price, we get the true value. Using cotton as an example, the figures are as follows. A kilo of cotton sold at the gate of the farm costs €0.55. If you add the costs of environmental damage and social costs, it is €4.20.
Based on this data, you can now calculate the true value for a T-shirt. The retail price of the average T-shirt is 15$. One T-shirt weighs 200g. The share of the cost of cotton is correspondingly small.
Due to the production process, transportation, and most importantly, the cost of the brand, the store, and the retailer’s profit margin, there are additional costs, which of course include other externalities.
So the true price of the T-shirt will be €22.30. To this is added another €0.70 during use, mainly due to washing.
The difference of €7.30 has not disappeared. It is just not directly visible to the consumer. He only sees it when he turns on the TV and sees a report about the floods in Bangladesh and the people desperately trying to survive in them.
If the consumer had had to pay the true price, he might not have bought his fifteenth T-shirt and thus avoided all the associated environmental damage.
And if he had bought it at the true price after all, the man in Bangladesh would have been better paid and would have been able to afford an apartment that is better protected from climate change. He would have better water to drink because the cotton producer would have money for a sewage treatment plant and his children could go to school to learn something better than cotton farm workers.
Similar to cotton and T-shirts, the same is true for food. In a white paper, the United Nations Food Systems Summit 2021 Scientific Group estimated the annual externalities of food production at US$7 trillion. This means that food is generally sold 30% cheaper than its true price.
All consumers of cheap T-shirts, cheap food and all other products and services that consume or damage the Earth’s natural resources are now receiving a discount at the expense of humanity as a whole. So they also harm themselves.
9.41 TruePrices for natural resources
While we generally claim the right of mankind to all natural resources we can simplify the approach to translate this into practice. We exclude the claim for compensation for the extraction of resources and focus on the compensation for pollution.
9.42 Today’s compensation systems
Today, there are already various systems for offsetting. For example, with some airlines you can offset the individual share of CO2 for which you are responsible as a traveler. For a flight from Frankfurt to Dallas, Texas, 1.07 tons of CO2 are produced. For this ton Lufthansa and its partner COMPESAID charge €535/t, so that for the flight to The Dalles €572 compensation is required.
Compensaid works with the Finnish manufacturer Neste Oil to produce sustainable kerosene from old cooking fats (Sustainable Aviation Fuel (SAF)). This reduces CO2 emissions by 80%, but is currently 2-3 times more expensive than conventional kerosene and not available in large quantities.
CO2 certificate trading is one example of how policy makers are trying to reduce CO2 emissions. Conceived in the Kyoto Protocol in 1997, which was not ratified until 2005, emission rights are distributed to companies that can trade them if they do not use them.
Fifteen years later, no great effect of this approach can be observed. Worldwide, implementation is rather low. There is, however, an EU Emissions Trading System (EU ETS) and now also a German Emissions Trading Authority (DEHSt) at the Federal Environment Agency for national emissions trading (nEHS), but if one compares the planned price development from currently €25 per ton of C02 to up to €65 in five years with the real price of COMPENSAID, one recognizes that large effects are not to be expected. Since the Club of Rome first pointed out the coming risks in 1972, lobby groups have been very successful in delaying and watering down all measures.
The earth has lost its ecological and social balance
Some interest groups privatize the profits and socialize the environmental costs
The negative scenarios of climate change are unfolding
Delayed impacts mislead most people to understand ongoing impacts
Government actions, including UN activities, are not effective stopping it