A Critique of Conventional Environmental Accounting

The japanese government was the first state in the world to adopt environmental accounting and it has implemented the most extensive changes to date. The main reason for this change had nothing to do with a desire to protect the environment or the Planet but with national security and economic realities. Japan has a very limited supply of conventional indigenous energy resources and, after the oil price rises of the early 1970s, the government forced the country’s manufacturing industries to adopt stringent energy conservation measures to ensure that imported energy was used as efficiently as possible. The goal was to prevent the export of manufactured goods from becoming too expensive. Japan now produces a larger gdp using much less energy. It has become the world leader in energy conservation.

Despite japan’s remarkable achievement in energy conservation the country’s attitude toward the Earth has not changed. Its multi-national corporations continue to be one of the world’s biggest ecological vandals outside its own borders. What is more, the fact that japan has made such huge energy efficiency gains has not had the slightest impact on american and european governments, industries or economists.

Michael meacher, minister for the environment, has promised that the labour government will adopt a series of environmental measures as an alternative to gdp, "Television news may never be the same again. If Britain’s environment minister, michael meacher, gets his way, bulletins will be followed not just by the weather forecast, pollen count warnings and reports on the interest rate, but also by updates on the state of the countryside, air pollution levels, water quality, the health of wildlife, climate change, the rate at which we are using up natural resources and even income distribution and trends in death rates by social class. The aim, says meacher, is to create a complete picture of the nation’s well being by presenting pointers to environmental and social performance alongside economic statistics. With this in mind, the government is developing a set of 8-10 ‘sustainability indicators’ to entice the public with easily digestible bites of information condensed from the original detailed scientific data. Hillier (head of environmental statistics at the detr) admits it will not be easy to fulfil meacher’s instructions to boil down the 120 indicators produced in 1996 by former environment secretary john gummer, to help the government track its environmental progress, into a handful that "encapsulate sustainable development."" Fred pearce points out, "The indicators are supposed to guide britain towards sustainable development but the worrying fact is that there has been no attempt to define what the country needs to do to become sustainable."

Charlotte denny and john vidal believe, "Fifty years later, the international bodies which set the rules to ensure that nations calculate their GDP the same way - the United Nations, the International Monetary Fund and the OECD - have recognised that the lack of any framework for accounting for environmental damage is a major shortcoming. In 1993 they recommended that countries should develop a parallel set of accounts to describe the impact of the economy on the environment.." These authors are living in a world of fantasy. The world’s leading eco-nazis have done nothing to protect what is left of the Earth’s life support system.

"The oecd itself now produces a twice yearly set of 33 environmental pointers allowing officials to compare trends across 23 member states in western europe, north america and asia."

"The World Bank has expanded its definition of wealth to include produced assets, natural capital, and human and social capital, with the latter generally being the major component of national wealth (World Bank 1997b)."

"The german and dutch governments are planning to follow britain’s lead in testing out a clutch of headline indicators. The european environment agency is developing databases to measure environmental trends across the continent. And world bank experts are trying to produce workable global measures of natural and social wealth. Most governments and agencies are producing indicators based on a model of environmental problems originally devised by the oecd .."

1.3.2: The Incorporation of Social Factors into Gdp (Social Pricing).

A number of commentators and organizations are trying to include social factors in gdp.

Wall resurrects the old benthamite utilitarian calculus, "A Green society ... replacing the measurement of GNP with indices of human and ecological health and happiness."

The new economics foundation recommends the inclusion of a wide range of social factors in measurements of gdp, "The New Economics Foundation believe that factors besides money should be taken into account to put the raw GNP statistics into better perspective. Changes in the levels of such things as poverty, insanitary and polluted water supplies, illiteracy, mineral depletion, pollution and species extinction rates should all be compared with economic growth to help us to read between the lines of the GNP accounts. Where possible, factors like pollution, deforestation and fish stock depletion, which betoken impoverishment, should be entered as costs and subtracted from the GNP total, revising the original GNP figure downwards."

One of its researchers, victor anderson, has suggested 16 indicators should be included, "Up until now, unfortunately, most of the writing on the subject of alternative indicators has been arcane. Victor Anderson concludes that a full new system would need at least 16 forms of well-publicized social, economic and environmental indicators. These are:

"The new economics foundation (nef), in conjunction with the stockholm environment institute, has summarized some of the earlier work on more adequate indicators of welfare. The team has used and modified the index of sustainable economic welfare (isew). Contrasting gnp with isew reveals that the earlier correlation between gnp and isew collapsed in the mid-70s. This goes far toward explaining the seeming paradox of, say, american politics today, that while the official statistics show the economy growing vigorously, most people seem to feel that they are simply running harder to stay in the same place or are even slipping backwards. (Isew is conceived) as a substitute for gnp."

"Various proposals have been made as regards some comprehensive replacement for GNP. These include the Physical Quality of Life Indicator (which gives much greater weight to factors like housing, health and education, as a counter-balance to increases in flows of money) and the Basic Human Needs Indicator devised by the United Nations."

"The most widely respected indicator is the UN Development Programme’s human development index (HDI), calculated annually since 1990. The HDI integrates a wide range of welfare statistics such as life expectancy, educational attainment, GDP (reduced by factors such as poverty levels) and deprivation."; "The concept of development was defined in the 1950s and 1960s as a largely economic process, in which wealth would trickle down and improve human welfare. Today this has now given way to much broader definitions of development. UNDP has focused on human development and issued a series of Human Development Reports exploring critical issues such as gender inequality, growth, poverty and consumption patterns (UNDP 1998 and previous years). It also calculates a human development index based on life expectancy, adult literacy, school enrolment and GDP per capita (see bar chart). "

"National and international statistics record some of the parameters of quality of life (e.g. health care provision, life expectancy, disease incidence, water and sanitation provision, settlement conditions, food availability, levels of environmental pollution and degradation, employment and education). But there is no established overall Quality of Life Index that compares with GNP in the economic field and provides a better measure of the success of development."

Wall has not suggested any way of measuring human happiness. This is hardly surprising since it is not possible to do so. Furthermore he doesn't indicate whether priority should be given to human health or the health of the Earth. He makes no recognition of the fact that in the over-industrialized nations most policies designed to increase human happiness are now decreasing the Planet’s health. In addition, large numbers of people seem to get huge amounts of pleasure out of destroying the Earth’s life-support system and murdering, maiming, and mutilating, the Animals protecting the Earth’s life-support system.

It's all too easy to appreciate the need to incorporate social factors into gdp but, unfortunately, it is theoretically impossible to do so. Firstly, there are so many social factors which could be included it would be impossible to incorporate them all. Secondly, there is no objective way of determining the weighting of each factor. Finally, the greater the number of social factors and the greater the complexity of the weighting needed to assess the importance of social factors, the greater the necessity for a monstrously complex computer programme to calculate the results. The bureaucracy needed to administer this system would be of a similar size.

Politically, the efforts made to incorporate social factors into gdp are a diversion from the more pressing issue of determining the nature of sustainability in order to stop the destruction of the Earth's life support system. The more time spent analyzing human factors, the less time there is for analyzing geophysiological factors - as is evident from the fact that none of the above analyses suggest any means for measuring the state of the Earth’s health. This is not to say that human factors are unimportant but that this method of creating global justice will not succeed. Social issues can be taken into account only after the Earth’s needs have been determined. Once this has been done countries could establish regional Wood economies so that the people could take democratic decisions about the allocation of their Carbon resources.

1.3.3: The Incorporation of Environmental Factors into Gdp (Environmental Costing/Pricing).

Attempts have been made to incorporate environmental factors into gdp. Pricing the environment means calculating the financial cost of damaging the environment. There are a number of advocates of environmental pricing.

"Adjusted National Product - extends the notion of capital goods to cover our ‘natural capital’ provided by the environment - the water, soil, forests and atmospheric services on which we all depend. ANP would therefore provide a much more realistic picture."

"Of course, there are limits to such an approach (quantifying the environment) in the very fact that money cannot measure everything. It seems impossible and yet we need to be able to do this because money has become the value measure of things. If we wish to protect whatever is precious to us we have to estimate a cash value."

The odums are two of the leading proponents of using energy prices as a means of measuring environmental phenomena, "If one were asked to pick out a single common denominator of life on earth, that is, something that is absolutely essential and involved in every action large or small, the answer would have to be energy. .. it has been HT Odum who has developed most fully the concept of energy as the common denominator in ecology and the link between ecosystem and economic system."

Eugene p odum provides an example of how environmental pricing with an energy analysis could be used, "Since money and energy are related, using energy as a basis for evaluating and allocating goods and services of all kinds is a logical approach. For example, to evaluate the total worth of an estuary, the total energy flow in terms of embodied energy (which represents all of the work of the ecosystem) would be determined, then this energy value would be converted to monetary units on the basis of the ratio between energy and money in the production of market goods. If it takes 104 Calories to produce one dollar in the local or national economy (ratio of per capita energy consumption to per capita income, for example) then an energy flow of 1000 x 104 = 107 Calories per acre per year would indicate a value of $1,000 for all the goods and services produced during that year. Prorated over a period of years, the acre of estuary would have a value equivalent to tens of thousands of dollars in the market economy."

"In some ways, it’s the world turned upside down: Surinam richer in national wealth per person than Belgium, Gabon than New Zealand, Botswana than Saudi Arabia. Developed by the World Bank, a new system of measuring wealth attempts to go beyond traditional gauges like gross national product. The system is laid out in a World Bank publication released this week called ‘Monitoring Environmental Progress: A Report on Work in Progress’. The system quantifies three types of capital: manmade (the traditional measure of what a country produces ..); natural (the value of land and water and the riches they hold); and the human (the value of people’s ability to produce, how well they’re educated, how well they’re fed)." It’s a shame this hasn’t changed its investment strategy.

"We would like to suggest an alternative to gdp, which we have named the genuine progress indicator or gpi. We took many factors into account in developing the gpi.

Despite the following quote which seems to question whether it is feasible to price the environment, these authors support such costing, "Fully costing environmental damage involves putting a price on even more intangibles. For example, how should we value the potential loss of an unspoilt landscape or an endangered species? Global warming is hard to price because it means making judgments about the value of damage in the future."

By far the most ambitious project to include environmental factors in gdp accounts is the work of robert costanza .. "a fifteen year study led by robert costanza, university of maryland, into the price of the world’s ecosystems. His team which included 13 ecologists and economists around the world valued the world’s lakes and rivers at £2,771,000,000,000/yr (if ecosystems charged for their services). The team divided the goods and services the Earth provides into 17 categories ranging from climate regulation and water supply to biological control and food production. It was then divided into different ‘biomes’ such as grasslands, ocean and temperate forests. Figures were then calculated for different services. For example, if a section of forest is worth £1000, the price people would be prepared to pay to keep it would be £1200. The ecological value of the Forest is therefore £2200. The final figure for the earth’s services was £54 trillion/yr - double the world’s combined gnp at £29 trillion."

Most of the theories highlighted above measure only a few environmental factors. It is not clear why these factors are chosen rather than others. Only one group has attempted to measure all the Earth’s ecological habitats.

It is theoretically impossible to give an accurate financial value to one particular ecological habitat, Animal species or environmental service, without also giving a financial value to all other habitats around the Earth. The inevitable outcome of such partial analyses is that estimates differ enormously, "Andrew stirling, a former greenpeace director .. has reviewed a number of attempts to assign monetary values to environmental effects, and noted results that differ by a factor of fifty thousand. "Rather than making spurious claims to objectivity," he argues, "policy-makers should acknowledge that calculation is subordinate to judgment.""

Environmental pricing can be criticized for using only a small number of environmental factors but, on the other hand, if it tried to evaluate a larger number of environmental factors it would fail. The Earth provides a vast range of environmental services so trying to evaluate them all would be impossible both practically and theoretically. Even if the impossible was possible, the result would be so complex as to be incomprehensible, "But, as Victor Anderson has argued .. the more changes you make, the less sure you can be of what ANP is really measuring."; "The complexity of quantifying and evaluating so many environmental variables is such that, even if a way to calculate a figure could be devised, it is highly likely that it would be sketchy and questionable."

Jonathon porritt is critical of theories which price environmental factors but leave out human welfare, "What’s more, ANP is not so very different from GNP in one crucial respect; everything still has to be calculated in some monetary value. All those things so damagingly left out by GNP in terms of human welfare and quality of life are still left out, even after adjustment. Victor Anderson suggests that the only solution to this is to develop an expanded framework of economic indicators, covering three separate areas; financial indicators, natural indicators (reflecting the state of the planet) and human indicators." Environmental pricing is complicated enough but attempting to price humans as well would make matters far worse.

Assume, however, that it was possible to price the Earth and thus all environmental habitats. This would almost inevitably mean that governments around the world would started raising money through environmental taxes. This would create the danger that the money raised would be used not to repair damage to ecological habitats (or carry out Reforestation schemes) but to finance major construction projects inflicting further damage on the Earth’s life support system. Unless the money raised through environmental pricing is used to restore the Earth's life support system then it would be self-defeating. Ultimately, all that environmental pricing is likely to succeed in doing is making it little more expensive to destroy the Earth - it doesn’t stop the process of ecological destruction.

There are a number of reasons why theoretically it is not possible to measure the environment with money.

* Firstly, there is little connection between money and the environment. The gap between money and the real world has widened since the abolition of the gold standard, "When money was disengaged from the Gold Standard, there was no longer any connection whatsoever between money and physical assets."; "But because money is no longer based on reality, it has come solely to represent itself and can now be multiplied without any relation to the real world. The recent struggle of governments and banks to bring currency values under control exposed the horrible fact that currency speculators today spend $600 billion a day on the markets, dwarfing most government economies, yet contributing absolutely nothing to the planet except the making of more money."; "Only a fraction, perhaps only 10% of the £900 billion exchanged each day on the world’s currency markets are now used for facilitating trade. The rest is traded for risk management or profits."

* Secondly, money cannot be used as a measure because it is continually expanding, "At present banks can expand the money supply almost indefinitely through lending and the creation of credit; in essence banks lend out 8 or 9 times the money they have deposited with them."; "According to new figures from the Bank of England, the turnover in foreign exchange in London is now $464 billion in a single day: 60% higher than in 1992. Globally, the daily figure is considerably more than $1 trillion." Money would be an elastic calibration of Planetary phenomena.

It might be countered, however, that if money expanded at a regular and constant rate then it might be possible to use it even though this would involve complicated computations. Unfortunately, money expands erratically, "The growth in trade flows may be surprisingly large but they are dwarfed beside the scale of financial flows whose destabilizing growth has mushroomed over the last few years. In 1991, for example, the last year for which there are figures, $7 trillion of "financial derivatives" were traded in the world’s financial markets. This market, no more than cheapskate instruments in which to bet on future prices in the money, currency and stock markets, scarcely existed 10 years ago." Money accumulation is a gigantic, chaotic, process.

* Thirdly, if money is used to measure environmental phenomena it would be necessary to know exactly how much money is in circulation around the world. The price of the Earth would have to be relative to the quantity of global money - it would, after all, be nonsensical to calculate that a Forest was worth £10 when there are hundreds of billions of pounds more money in circulation than had been used to estimate the value of that Forest. But it is impossible to determine exactly how much money exists. Firstly, vast sums of money are used in black markets around the world and cannot be measured. One estimate puts the figure at $500 billion worldwide. In other words, if a measure is to function properly it must be highly visible so that it can be used reliably by everyone around the world. But, money is not wholly visible. It is impossible to measure money so it is absurd and futile to believe it could be used as a measure of anything. Secondly, the amount of money that exists is determined not by the number of notes and coins but the speed with which notes and coins are in circulation which is once again almost impossible to measure.

* Finally, it has to be asked what is meant by environmental pricing? Does it mean that pollution and ecological devastation should be made more expensive? But if this was the case, whilst it would deter many developers it would not deter those who could bear such costs. Or, does it mean that such a high price should be put on ecological habitats that nobody could afford to destroy it so that it could continue to play its full role in the Earth’s life support system? But if this is so, why waste time pricing this ecological habitat when it would be quicker to just ban humans from using it? There is a huge risk in putting a price on a habitat because doing this will inevitably make it vulnerable to developers. Assume that an extremely high price was placed on a particular habitat with the intention of deterring developers. It is quite feasible that a consortium of developers would then collectively raise the capital to develop the site. If a group of developers were able to meet the price of even the most costly ecological habitat then the whole environmental pricing system would collapse. It is unlikely that environmental pricing could put enough habitats beyond the price of developers to protect the Earth’s life support system.

The absurdities of environmental pricing become transparent only when the nature of the best possible environmental pricing system is outlined. This would require the following steps:-

* determining how much money should be allocated to all parts of the Earth’s life support system to ensure they could continue to survive without being bought and destroyed by developers. This would require pegging the value of the ecological habitats at such a level that there was no way that any group of developers could combine to buy, and destroy, that habitat;

In reality, environmental price fixers haven't even contemplated such an approach because none of them seem to appreciate the need for understanding how the Earth works before trying to put a price on it. This is a bit like gambling on Horses that have never left their stables. If the price fixers don’t understand the geophysiological significance of a particular habitat how is it possible for them to even start to calculate its financial value? Environmental pricing is just a fraud designed to make people think that something is being done to protect the Earth when in reality it is being exploited as ruthlessly as before.

Pricing the Earth is doing things the wrong way around. The Earth must determine the value of the world’s commodities rather than human currencies determining the state of the Earth .. "money is not the currency of nature, nor does nature obey the laws of modern economics." Environmental pricing is a fraud to keep environmental economists in well paid jobs. It has been admitted that, "Pricing natural capital, especially non-marketable natural capital, so far offers an intractable problem .." The phrase "so far" is a joke - as if one day someone is going to produce a precise figure for the monetary value of the Earth. This isn’t science but escapist fantasy. The theoretical impossibility of pricing the Earth is only a manifestation of the general fact that the only connection between money and the Earth’s life support system is that money destroys the environment and, as a consequence, the greater the amount of money around the world the greater the ecological destruction.

Given the difficulties of pricing the environment there are those who seek to use energy prices to represent the environment. Such an analysis would use only those forms of energy which had a price tag i.e. fossil fuels; it would ignore priceless energy e.g. organic waste.

Some commentators use the Carbon content of marketable energy resources as a means of measuring the stabilization of the climate, "The key indicator for measuring progress in stabilizing climate is the carbon efficiency of the world economy - the value of goods and services produced per unit of carbon emitted. From 1950-1979 carbon efficiency increased little. After the second oil price hike, it increased much more rapidly - raising economic output per kilogram of carbon emitted from $2.67 in 1979 to $3.19 in 1991."

This approach is inadequate because it ignores the role played by Forests in the Earth’s life support system and the role of deforestation in destabilizing the climate. Carbon efficiency could go on increasing ad infinitum but it would not protect the Earth’s life support system if the Earth was denuded of Forests. The political demands for energy efficiency are just another evasion of the need to protect the Earth’s life support system. Just because efforts are being made to reduce pollution from a particular energy source doesn’t make this source of energy environmentally friendly. Trying to protect the Earth’s life support system through energy efficiency is like saying that as long as alcoholics only drink half of what they used to then they are well on the way to recovery.

1.3.4: Conclusion.

The attempts to price the environment have not succeeded and never will. Most of them are not even designed to do so. They are just publicity stunts designed by economists to cover up the destruction of the Earth. It is difficult to disagree with beckerman when he argues .. "attempts to adjust GNP for changes in natural capital and the using up of resources may well be a useful exercise in some small developing countries that are heavily dependent on a limited resource base. But for large industrial countries, let alone for the world as a whole, it is a waste of time." Environmental pricing is a complete and utter waste of time. It is imperative not merely to abandon efforts at environmental pricing but to abolish gdp, money and capitalism.

1.4: Cost-Benefit Analysis.

When a new construction project is proposed everyone involved, from the construction company, the company that will eventually own the new construction, to national/local government, looks at the project from their own particular perspective. Most want to ensure that the project is going to make a profit but national/local government has to try and balance the interests of the wider electorate by asking whether the project is going to improve life for those affected. Theoretically it is possible to use the quantifying capability of gdp to measure the economic viability of a proposed construction project. However, given gdp’s odd accounting quirks and given that the project requires speculation about future economic conditions as well as consideration for social and environmental factors, conventional economists were forced to design a new accounting system to try and determine whether a project would produce more benefits than costs. Although cost-benefit analysis (cba) is similar in many ways to gdp it is a much wider type of analysis than gdp and has been purposely designed to evaluate single construction projects. It is, however, a tool created and used by conventional economists.

1.4.1: The Old Cost-Benefit Analysis.

In the 1980s a number of government departments in brutland adopted cbas in response to public criticisms that their assessment of policy options were solely concerned with enhancing the profits of multi-national corporations. Cbas were introduced to take into consideration some of the factors excluded by conventional economic accounting. However, cbas didn’t bring about any significant reforms. It gradually became apparent that cbas were a public relations exercise to defuse public anxieties over the environmental impacts of new construction projects. Far from protecting the environment they boosted environmental destruction. For example, britain’s department of transport (dot) relied extensively on cbas. Every single analysis it carried out into a new road scheme concluded the construction should go ahead. However, in the early 1990s, after a series of protests, the dot acceded to public pressure and agreed to not merely to take the environment into account but to give environmental factors a financial value. A few years later, after cbas continued to give the go-ahead to construction projects damaging the environment, public pressure was exerted on the dot to find out what these values were. The dot was eventually forced to admit that the monetary values it had assigned to the environment were all negative - thereby encouraging continued road construction. The same applies to the maffia running the department of agriculture, food, and fisheries .. "has consistently used spurious cost-benefit analyses to justify the drainage of wet meadows and the reclamation of salt marshes."

Cbas fell into disrepute so conventional economists developed a new cost-benefit analysis which allegedly provided a means for protecting the environment. It might have been thought that, after the debacle over cbas, conventional economists would have fallen into disrepute alongside their accounting methodologies but, just like jeffrey archer, the scoundrels just kept coming back with a new image which was supposed to be free of the corruption of their last image.

1.4.2: The New Cost-Benefit Analysis.

The new cba was created by david pearce and colleagues at the centre for the social and economic research of the global environment (cserge). It tries to promote both economic growth and environmental protection. There are two main differences between the old and the new types of cba. Firstly, the new version has given up the idea of finding an objective value for environmental phenomena and ‘measures’ the environment subjectively by asking eco-nazi consumers to estimate what they would be willing to pay to protect parts of the environment threatened by development. Secondly, the new analysis has adopted a global perspective although it is still far from being a global analysis.

The new cba promised .. "a proper valuation of the environment as a major feature of sustainable development." But, "This does not mean we should automatically introduce actual, positive prices for environmental functions wherever we can." Pearce proposed to give notional monetary values to the environment when assessing the relative advantages and disadvantages of a proposed development project. These values would be measured by asking people what they would be willing-to-pay to protect it. Thus a Copse or Forest would supposedly be preserved if people said they were willing to pay enough to protect it.

One of the problems of conventional cbas was that the pollution costs measured were only those affecting the country in which the cba was carried out rather than the entire planet. The drawback of this approach were transparent. Cbas of acid rain were able to conclude it was not causing serious damage but this was only because a significant proportion of the pollution was being blown out of britain and was affecting other countries. It should have been obvious from the start that cba could be realistic only if it measured the global impact of pollution.

"Yet such an analysis (cost-benefit analysis) could be a powerful tool of ecological protection."

1.4.3: Geocentric Criticisms of the New Cost-Benefit Analysis.

Asking people how much they would be willing to pay to preserve a particular environment indicates that cba is oriented towards money, human interests, and economic growth rather than the viability of the Earth’s life support system. The fact that such an analysis would mean that the rich would be able to save a local greenfield site by putting a high price on their environment, whilst the poor would not, is an important, but not a crucial, point. The critical issue is that cba does not evaluate the cost of the Earth’s life support system.

Although the new cba has a global perspective it does not have a geophysiological analysis. Whilst it may be practicable to ask local people how much they are willing to pay to preserve a local greenfield site, it would be far less practicable to get the world’s population to put a price on the Earth’s life support system.

A major theoretical flaw of cba is that asking people how much they would be willing to pay for a particular piece of the environment when they do not know how much they would be willing to pay for the Earth’s life support system is like asking people to buy a car wheel without being told the cost of the entire car.

Cba deals with environmental issues on an ad hoc, piecemeal, case by case, basis without any reference to, or understanding of, the Earth life sustaining processes. Without an understanding of the Earth’s life support system to indicate how much land needs to be set aside for Forests which are needed to stabilize the climate, it is quite possible for cbas to give the go-ahead for developments on an endless number of sites until eventually the Earth’s life support system for humans collapses.

If an attempt was made to ask everyone to price all the Earth’s habitats this would lead to an enormous amount of bargaining because 6 billion people around the Earth would want to give the highest price to the protection of local habitats but would be far less interested in most other habitats.

Even if all ecological habitats were priced this would still not prevent a geophysiological collapse. Assume that a price had been set for an ecological habitat. Whilst this might deter some developers it would not necessarily deter others. Around the world there are many rich corporations who might be willing to pay above the green market price to develop a particular green site. The only way to prevent this would be by making the most critical ecological habitats priceless so they couldn’t be bought and developed - thus making cba redundant. Secondly, there may be occasions where people are not willing to pay enough to protect a vital part of the Earth’s life support system. Preserving a vital habitat such as Forests should not be a question of human preference. Saving the Earth’s life support system is a necessity because without it humans couldn’t survive. What cost-benefit analysts seem unable to realize, because they do not understand how the Earth works, is that unless the Earth’s life support system is made priceless then humans will destroy themselves.

Another liability of this so-called green cba is that it has been designed to allow proposed developments to override protection given to the environment because the advantages of proceeding with a development project will always be greater than the advantages of not proceeding with it. This is true in terms of:-

The fundamental theoretical inadequacy of cbas is that they are designed to improve conditions for humans without knowing whether, as is all too likely, this runs counter to the health of the Earth. What is needed is a theory that protects the Earth’s life support system and provides for human needs within this geophysiological context. Asking questions such as, 'How much will it benefit people/society?' or, 'how much profit will it make?' or ‘how many jobs will it create?’ are dangerous. It is ecocidal to put human interests before those of the Earth. The vital questions that must be asked about a proposed development project are:-

The criterion that should be used to decide whether a construction project should go ahead on a sustainable planet is simple and doesn't require the sort of pseudo mathematical calculations suggested by cba. It is whether a region has enough Carbon credits to afford the development. If it doesn’t then it wouldn’t be allowed to build any more construction projects no matter what those construction projects might be. To allow regions to go ahead with construction projects when they don’t have enough Carbon credits would be ecocidal.

The preservation of the Earth must come first. The well being of the Earth must come first. The health of the Earth must come first. The wealth of the Earth must come first. Humans have to take second place to the care and preservation of the Earth. Economics (and cba) are designed to maximize human welfare. Eco-nomics is designed to maximize the Planet's health and welfare because humans will survive only if the Planet survives.

The new cba is just as much of a sham as the old one. If the real costs to the Earth’s life sustaining processes were considered then the vast majority of the construction projects proposed in this country, which is a heavy Carbon debtor, would be rejected. So, pearce has to invent a device for overcoming this unfortunate restriction. He recommends that cba should be applied only to a series of proposed developments. This means that the environment's interests can be taken into consideration by rejecting one of the projects whilst allowing the others to proceed, "We conclude that the 'compensatory project' idea has the potential for modifying project appraisal so as better to represent the sustainable development ideal." It is not the Earth that is being compensated but eco-nazi developers.

For example, suppose that proposals for 10 construction projects are put forward for greenfield sites covering a total of 400 hectares. The compensation caveat would mean they could all proceed except one. If this rejected proposal covered 40 hectares then it could be deduced that cba legitimizes the cementation of nine-tenths of the Planet's surface. One wonders what state the Earth would be in after nine-tenths of it had been asphyxiated? If this planetless methodology is ever adopted by the cicl service it will be interesting to see what the proportion of accepted to rejected proposals turns out to be. More than likely the same piece of land will be included time and time again in every developers' portfolio to ensure their real projects are given the go-ahead without any serious limitations to constant development. Estate agents have their ransom strip wease; developers would have a ‘pearce plot’ to enable them to proceed with countless developments.

The old cba was a pseudo-scientific jumble of codswallop designed to stifle public opposition to Earth-wrecking construction projects. Its successor has the same objectives but is just more devious. It gives an economic value to environmental factors using the most highly sophisticated, computer-aided, mathematical, models but, ultimately, it never amounts to anything more than the subjective guess work of the cost benefit analyst whose job it is to ensure that development projects proceed as usual. Various criteria, formulae, or guidelines have been adopted to make it seem as if the analysis is objective but they have all been rigged to ensure the go-ahead for construction projects. Government estimates for 'favoured' capital intensive development projects (like concord, the humber bridge, the dome, the scottish parliament) always underestimate the cost involved. Conversely, those for 'non-favoured' projects e.g. wave power, are always overestimated. This indicates the high level of political corruption involved in cba. As far as developers are concerned, what was wrong with the old cba was that too many people came to realize it was nothing more than outright quackery so a new system was needed to restore public confidence in the planning process before giving them the go-ahead for the construction project. Cba is dangerous quackery because it allows britain which has emasculated its share of the Earth’s life support system to continue further construction projects. What this country must do to play its part in protecting the Earth’s life support system is carry out wholesale deconstruction of its industrial infrastructure, and then implement widespread Reforestation schemes, before the Earth starts to burn.

The new cba has been designed to protect capitalism not the environment. It protects multi-national corporations which are primarily responsible for the geophysiological disasters looming on the horizon. And, it protects an economic system that can't survive without destroying the Earth. For cost benefit analysts, the real world is capitalism not the Earth. Cost benefit analysts are more worried about the collapse of capitalism than the collapse of the Earth's life support system for humans. What they don't seem to appreciate is that humans can survive the collapse of capitalism but they can't survive the collapse of their life support system. People can live without capitalism, but they can't live without the Earth. Cost benefit analysts extol the virtues of those who keep them in luxury - they do not sing the praises of the Earth’s life sustaining processes. They are masters in the art of rationalization not reason i.e. fakers, capitalist sentimentalists.

1.3: Reforms to GNP.

1.3.1: State Reforms of Gross Domestic Product.