1. Summary and Conclusions

2. What I hoped you learned in this course...

3. The Nature of Reality  The earth is finite  The laws of thermodynamics apply  The economic system is a subsystem of the global ecosystem

4. The Order of Analysis  Desirable ends (ethics, psychology, sociology, etc.)  Scarce resources (ecology, physics)  Nature of scarce resources (ecology, physics, economics)  Allocation (economics, politics)  We can only decide how to allocate after we know what we want, and the resources we have to attain it.

5. Desirable ends: What makes people happy?  Money? (Not very, and only relative wealth once basic needs are met) (Not very, and only relative wealth once basic needs are met)  Desiring less The aspiration gap The aspiration gap  Friends and family  Community  Helping others  Getting old  Keeping lists of things for which you’re grateful

6. Satisfaction and income

7. What makes people unhappy?  Pursuit of material gain “young adults who focus on money, image and fame tend to be more depressed, have less enthusiasm for life and suffer more physical symptoms such as headaches and sore throats than others.” Kasser, T. (2002). The High Price of Materialism. Cambridge, MIT Press.  Comparing yourself with others Status is a never-ending tread-mill Status is a never-ending tread-mill

8. Economics Should be a Science, not an Ideology  Science: empirical testing of hypotheses and theories  Ideology: refuse to test hypotheses, or refuse to discard them when empirical evidence contradicts them  Starting from the assumption that markets (private property rights) are always best is ideology  Starting from assumption that socialism (public property rights) is always best is ideology

9. The Economic system is inherently complex  We depend on natural resources, and must understand both physics and ecology  Some resources meet the criteria for efficient market allocation, most do not  Human desires are complex  Human motivations are complex  Markets are never perfect

10. Market model is super-simplified  Natural resources are infinite  Most goods and services fit the market model  Only $$ matters, more is always better Calories model of nutrition Calories model of nutrition  Only concern is efficient allocation

11. Therefore, economists must look at:  Ecological Sustainability  Social Justice  Efficient Allocation

12. Trade-offs Conventional course  Clear understanding of over-simplified market system  Indoctrination into dominant paradigm  Faith based  Better prep for advanced NCE This course  Fuzzy understanding of complex system  Adequate exposure to ask questions, decide for yourselves  You must test theories against experience  Adequate prep for EE and NCE

13. “Sometimes, it is better to be vaguely right than precisely wrong” Amartya Sen

14. What has my generation done for the world?  We’ve inherited more from the past generations than all others  We’ve taken more from future generations than all others Half of all oil ever used was used in your life time Half of all oil ever used was used in your life time Under business as usual, ¾ of all oil ever to be used will be used in my lifetime Under business as usual, ¾ of all oil ever to be used will be used in my lifetime

15. What must your generation do?

16. Would Addressing Ecological Problems be be a Sacrifice?  Stern review on climate change estimates that investing 1% of annual GNP required to stabilize climate  Would returning to your living standard in July be a sacrifice?  Economists say yes—the cost of mitigating climate change is too high  Could we solve the problem with 1% of GNP?

17. Would Addressing our Problems be a Sacrifice?  Over 90% reduction in fossil fuel use required  Per capita income (adjusted for inflation) in 1969 was <1/2 of today’s GDP, and poverty was lower  We could live at 1969 standard with 1/2 of current CO2 emissions With European efficiency levels, we could have a 1969 lifestyle with ¼ of current emissions With European efficiency levels, we could have a 1969 lifestyle with ¼ of current emissions With proper incentives in place, we could do much, much better With proper incentives in place, we could do much, much better

18. How Miserable was Life in 1969?: The Genuine Progress Indicator

19. How do We Get There?  Information flows Transparent government Transparent government Independent media Independent media Education Education  Changing the rules Democratic control over our shared natural and cultural heritage Democratic control over our shared natural and cultural heritage Cooperative provision/management of non- rival resources Cooperative provision/management of non- rival resources Just distribution of resources provided by nature and society Just distribution of resources provided by nature and society

20. How do We Get There?  Changing the goals—what is desirable? Shared vision of a sustainable and desirable future. Shared vision of a sustainable and desirable future. Continuous economic growth is undesirable Continuous economic growth is undesirable Doom and gloom doesn’t win converts Doom and gloom doesn’t win converts  Changing the paradigm—what is possible? Economy is sustained and contained by the global ecosystem Economy is sustained and contained by the global ecosystem Continuous economic growth is impossible Continuous economic growth is impossible Macroallocation is central problem Macroallocation is central problem

21. Summary and Conclusions  We have the knowledge and policies to build a sustainable economy  One of the most powerful (and most neglected) tools is developing and communicating a shared vision of a sustainable and desirable future  Another powerful tool is the democratic process, which we have abandoned in this country

22. Summary and Conclusions  The first steps (maybe the first 2/3 in the US) can be cost free (no changes in QOL, education, health, happiness) with current technology, or even beneficial e.g. Less fossil fuels = more health: mental, physical, financial, environmental e.g. Less fossil fuels = more health: mental, physical, financial, environmental  Appropriate policies provide incentives for better technologies  The remaining 1/3 can be cost free with new technologies

23. Summary and Conclusions  Sustainability is not a sacrifice: our current lifestyle is  Naïve and utopian? So were the ideas of democracy, an end to slavery, women's rights So were the ideas of democracy, an end to slavery, women's rights It's naïve and utopian to think we can survive without making these changes It's naïve and utopian to think we can survive without making these changes

24. Take Home Message for Course: Sustainability does not Require Sacrifice, Economic Growth Does

25. Course Number: 90162  Comments are helpful Best aspect of course Best aspect of course Worst aspect of course Worst aspect of course  Please hand evaluations in to volunteer TA