Chapter 2

Economic Doctrine in Delusion

Introduction

Economic doctrine excels in manufacturing myth on defining growth and development while dismantling the enormously truth behind innocence and incompetence. It looks an aberration whispering beneath mysterious confidence in denying economic interpretation of factors of production in terms of profit, leaving aside repercussions of pollution and environmental degradation. The failure to act on the reality that the environment is the source of all economic development is not a passive oversight or ignorance. It is a deliberate action, structural, and manufactured denial necessary to maintain the dominant economic paradigm. The global environmental crisis is the product of an active, intentionally constructed, and fiercely defended system designed to make the foundational elements of our survival—the environment—invisible to the dominant economic logic. Economic doctrine establishes fundamental truths of denial through a set of deeply embedded, structural rules, metrics, and power dynamics.

The Tyranny of Mainstream Economics: A World Without Nature

The modern concept of "economic growth" is built on the assumption that the services that are provided by nature are free and limitless. In fact, it offers the single largest, most valuable subsidy to the global economy. According to ecological economist Robert Costanza, in his study in 2014, the total value of the world's ecosystem services at $125 trillion per year, which is larger than the entire global Gross Domestic Product (GDP). These services are broadly divided into provisioning services, regulating services, supporting services, and cultural services. The provisioning services are direct products such as food (crops, fish), fresh water, wood, and raw materials. The regulating services include pollination, climate regulation (carbon sinks), water purification, and flood control. The supporting services are soil formation, photosynthesis, nutrient cycling and other services which are recurrent in nature. The cultural services are non-material benefits such as recreation, tourism, and spiritual well-being.

A world "without nature" amounts to a world where this $125 trillion/year subsidy vanishes. It delays economic growth, and it may destabilise the entire global economy. It would be the endeavour to transition from an economy of growth and consumption to an economy for which there is a need to pay for the services the planet once provided for free.

It is learnt that between $235 and $577 billion (U.S.) worth of annual global food production relies directly on insect and animal pollinators. According to a study conducted in 2008, it accounts for 9.5% of the total value of world agricultural food production. In the absence of natural pollinators, the global supply of fruits, nuts, and many vegetables would collapse.

Natural ecosystems include forests and wetlands, which act as free water purification plants. In the absence of them, the capital expenditure to replace every natural water cycle on Earth is incalculable, running into the quadrillions, and the energy costs alone would consume the majority of our power generation. "Economic growth" becomes impossible with the investment of 100% of capital in the basic tasks of creating drinkable water and edible food.

The economy survives effectively within a stable climate, and it is assured by nature freely. The ocean and forests absorb approximately 30-50 % of all anthropogenic CO2 emissions. Thus, nature contributes to reducing climate change to that extent. In the absence of mangroves, wetlands, and coral reefs, the global insurance industry would collapse. The cost of damage to coastal infrastructure (ports, cities, power plants) would erase all economic gains and trillions of dollars to spend on building concrete walls to protect against storms.

Economic growth depends on human capital—a healthy, educated, and productive workforce. A world without nature destroys the very foundation of human health. Nature is the planet's pharmaceutical library. Almost 80% of registered medicines are from nature, either derived from nature or from nature’s compounds. Access to nature is directly linked to human mental and physical health. The World Bank has estimated that the collapse of key ecosystem services (like wild pollination, marine fisheries, and forests) would cost the global economy 2.3% of its GDP annually by 2030. This is a conservative estimate that assumes only a partial collapse.

Soil is a living super-ecosystem. A single handful of healthy soil contains more living organisms (microbes, fungi) than there are humans on Earth, and these generate the nutrients (nitrogen fixation, nutrient cycling) our crops need. According to the UN, it can take 1,000 years or more to form just one centimetre of topsoil. It is, for all economic purposes, a non-renewable asset. The global fertiliser industry is already valued at over $200 billion to supplement soil. This cost is for supplementing a working system. The cost to replace the biological function of all global soil is the most expensive in economics.

The world without nature deprives the world of trade through water, air, and roads, and modern economic growth leads to globalisation. Almost 80% of world trade is through sea, amounting to $ 80 trillion. The majority of global ports (e.g., Shanghai, Singapore, Rotterdam) are in coastal areas. Without mangroves, reefs, and stable sea levels, they would be permanently flooded and destroyed. A 2021 report from the European Central Bank (ECB) found that 40% of all assets held by Eurozone banks are exposed to nature-related risks.

Conclusion

The contributions of nature to the world cannot be compensated for by means of technology or means of substitution. Nature plays an important role in carbon capture, up to 30-50% of carbon emissions for free through forests and the ocean. If the technology is used to capture CO2 emissions, a minimum amount of $ 4.5 trillion would be the expenditure. The Gross Domestic Product (GDP) is not the appropriate accounting to calculate natural capital, and for the same the UNO has developed the framework of System of Environmental Economic Accounting (SEEA). The IMF reported in 2021 that the fossil fuel industry receives $5.9 trillion in subsidies annually ($11 million per minute), mostly from the "implicit" subsidy of not paying for its environmental damage. It is also found that the explicit subsidies are over $500 billion per year. In order to achieve the sustainable climate, the efforts of the Task Force on Climate-related Financial Disclosures (TCFD) and the Task Force on Nature-related Financial Disclosures, 2023, are in the proper direction. The Circular Economy is better suited than the Take-Make-Dispose linear economy, as per the Research by the Ellen MacArthur Foundation shows that a transition to a circular economy could generate $4.5 trillion in new economic opportunities by 2030 by decoupling growth from resource consumption. Product Liability is seen now as Extended Producer Responsibility (EPR), which makes the manufacturers responsible for their products after consumption. The Carbon Tax is the price of the polluter pays principle, which encourages faith in sustainable climate and growth. It is important to include the waste as a product cost in the new economic growth model.

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