Saturday, June 09, 2012

Let’s Take Full Inventory of Our Economy

I am always amazed how we talk of economy however pay little attention exactly how we account for stuff. For examples hydraulic frac­tur­ing or "fracking" for natural gas is becoming popular however we still in the dark about its by-products and how they impact our environment. We do understand the price of gas yet we know nothing about their true environmental cost. Few Americans have any idea the value of conservation since we have invested little in profiting from pollution prevention by advocating waste reduction.

Years ago World Resources Materials Flow report (DONALD ROGICH, AMY CASSARA, IDDO WERNICK, MARTA MIRANDA 2008,WRI:ISBN 978-1-56973-682-1 tracked the ebb and flow of how stuff goes through our economy and out into the environment. For example of these 169 materials are toxic substances— such as arsenic, cadmium, lead, mercury, and others—whose life cycle, reflect the strengths and weaknesses in our national regulatory policies and procedures. Material flows are key indicator of the amount of materials consumed to produce a dollar of GDP.

According this study the U.S. showed more efficient use of fossil fuels, metals and minerals, and renewable resources. However, the trend in per capita consumption of material (a coincident indicator) is increasing, with a rise of some 23 percent over the study period. If the U.S. economy were solidly on a path to sustainability, this indicator would be declining. Meanwhile, total consumption of materials (a lagging indicator) grew 57 percent over the study period, to 6.5 billion metric tons in 2000.

If the United States had been a sustainable economy during this period, we would have avoided the creation of 25 billion tons of waste (and its subsequent disposal into our air and water and onto our land). Certainly in the last few years our economy has not grown and thus we have wasted less. When we become motivated to improved resource management and to shift to environmentally preferable materials a new prosperity will follow. Meeting this challenge will require new approaches and increasingly complex, far-reaching partnerships among government, business, and civil society.

Material flows accounting can provide the common scorecard that all the parties need to facilitate these collaborations and make them successful over the long haul. What is lacking is the political will to conserve. Ironically you would think this be the case since sustainable and efficient economy would be something valued by we, the American people.

The United States needs, and deserves to have, official accounts that capture material flows (and their environmental consequences) as well as they do financial flows. For example if we explore the life cycle of a material like petroleum then we will also see the ramifications of heavy metals and other materials that is hazardous to human health and the environment. Such data on wastes released to the environment in the United States are still largely nonexistent.

It is wise to incorporate material flows analysis since these accounts for the goods into and out of the economy. Also this inventory can act as a fire alarm for potential threats to human health and undesirable changes in natural resources. Without such a detailed database on materials use and consumption, we will continue to be in the dark regarding environmental matters.

 It is time our country takes a deeper inventory of what natural resources we have. Establishing a national material accounting system could enable more effective decision making in both the public and private sectors. Once we can best fully capture the physical and chemical changes observed in materials across time and space in our country we will understand why true full cost accounting is vital for our future economy.


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