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The Value Revolution in Economics

The Value Revolution in Economics. Wealth, Indicators & Accounting. Redefining Wealth. Quantitative : Money & Material Accumulation Qualitative : Well-being Regeneration. Quantification & Value. What is measured gets done What gets counted is valued;

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The Value Revolution in Economics

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  1. The Value Revolution in Economics Wealth, Indicators & Accounting

  2. Redefining Wealth Quantitative: Money & Material Accumulation Qualitative: Well-being Regeneration

  3. Quantification & Value • What is measured gets done • What gets counted is valued; What is valued gets counted

  4. Indicators “[If it is to be achieved, the new economic system] will result from our becoming better ecological accountants at the community level. If we must as a future necessity recycle essentially all materials and run on sunlight, then our future will depend on accounting as the most important and interesting discipline.” Wes Jackson, Becoming Native to This Place

  5. Indicators & Value • Expression of potential for a knowledge-based economy • Centrality of end-use: requires more sophisticated monitoring of human need. • also required by the centrality of creativity to qualitative economic development. • Radical potential of eco-literacy: • Murray: Fordist Waste Economy depended as much on deskilling of the consumeras deskilling of the worker. • Deflating Financialization: potential to replace money as key determinant of value • decommodifying money: money as pure information

  6. Indicators & real wealth • Qualitative Wealth is far more complex: requires more quantification • Qualitative Wealth is place-basedor specific to circumstances • Qualitative Wealth is needs-based, requiring examination of consumption. • Accounting takes place on many levels in terms appropriate to that level

  7. A Dashboard for the Cockpit • The ‘Family’ of indicators: • Urban Metabolism or regionalmass balance • Green GDP (e.g. Genuine Progress Indicator—GPI ) • Ecological Footprint • Carbon accounting / carbon footprint • Life-cycle Assessment (products, processes, landscapes) • Industry-based accounts: food, building, forestry, etc. • Local Development Standards • 5 ‘capitals’: personal, professional, spiritual, environmental and financial • Firm sustainability accounting • Sustainable Community Indicators • Risk Assessment, EIA, etc.

  8. Indicators & Trends in Regulation • Raw material for certification systems • Regulation as more civil society-based • Markets as ‘values-driven’ • FSC wood / LEED building / etc. • integrated evaluation / regulation / marketing systems

  9. Entrepreneurial Value Creation Local Food Plus: valuation regulation marketing education

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  11. The Evolution of Indicators • Difficulties with many early indicator sets: • Wish-lists, divorced from solutions or relationships • Either too detailed or too aggregated /oversimplified • Next Generation of Indicators: from “librarians” to “plumbers”

  12. Indicator Design • organized around a purpose • highlight important trade-offs • Varieties: those that… • cause an outcome (e.g. reduce air pollution) • document the outcome (e.g. amount of smog) • react to the outcome (air pollution legislation)

  13. Genuine Wealth Assessment Life-cycle

  14. Business-related Applications Internal accounts Natural Step, ISO 14000, Eco-footprint, Sustainability Reporting Government Regulation Alternative Industry Standards --LEED green bldg.; FSC wood ; B Corporation ; Innovative Business Models: -- B Corporation -- McDonough/Braungart Protocol --Local Food Plus

  15. Business Applications-II • Builds external costs into firm decisions • Essential to Triple Bottom Line • SBLS: can be translated into financial bottom line • Crucial to Stakeholder relationships • Made easier by network support: --market transformation

  16. Business Applications-III • Sustainability accounting : Global Reporting Initiative • Triple Bottom Line accounting • Social accountability reports • Outcome-based reporting & mapping • etc.

  17. Genuine Wealth Applications • All 5 “capitals”: financial, built, natural, social, human • Balance sheet for each • Full-cost sustainable income statement • Progress indicators • Genuine Progress Report

  18. LCA and Product life-cycles:Environmental Lock-in over a Product’s Development Cycle

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