Earth, Inc. Shareholder Report: The Bottom Line

Sustainable Human Wellbeing

We examined the impact that each type of capital has on the new bottom line, sustainable human wellbeing. The following shows the state of well being for each region.

North America Regional Summary

North America is dominated by the U.S. in population, economic production, built capital, and consumption. The key factor in regard to the U.S. economy is the high level of fossil fuel consumption combined with nearly 80% U.S. oil depletion by 2000. This demand for oil requires a high level of oil imports primarily from the Middle East where most of the reserves are located. Although U.S. CO2 emissions have continued to rise during the 90's at an average rate of 1.7% per year, one positive development is the decrease in emissions per unit of GDP by approximately 15%. However, GDP/capita was about 3 times larger in North America then the world average and approximately 19 times larger then some nations in Africa.

Expenditure on health care was also significantly greater especially in the U.S. World and North American health care spending have both increased by approximately 50% between 1990 and 1998. The period between 1990 and 2000 also showed a substantial increase in signed treaties in North America, however, that such a variable is very dependent on views of the current administration.

Africa Regional Summary

Africa has some of the economically poorest countries in the world. Between the years of 1991 and 2000 only 3.2% of total world oil consumption occurred in Africa, and that was primarily by 9 countries. In 2000 world per capita GDP was $1,038 for Africa, approximately 19 times less then for North America. Tropical Africa has experienced a steady increase in the amount of carbon it has releasing into the atmosphere, primarily due to increased industrialization and deforestation. Over the 1990-2000 decade Africa also saw a decrease in life expectancy of 2.4 years, primarily attributed to the HIV/AIDS epidemic on the continent.

Middle East Regional Summary

The Middle East is the largest producer of oil in the world. As of 2000, it held 46.6% of the remaining world oil. Between 1990 and 1999 the region saw a 77% percentage increase in CO2 emissions. On a positive note, life expectancy increased by 4.2 years during the decade, largest regional increase in the world even though the health care expenditure was under $500 per capita.

Former Soviet Union (FSU) Regional Summary

The collapse of the Soviet Union and its republics declaring independence in 1990 was not a very smooth process in many respects, which caused many variables to unexpectantly shift and decline. This transition also made data collection in certain areas of this region either impossible or unreliable.

By 2000 the Former Soviet Union held 11.4% of the world's remaining oil, making it the third largest retainer of oil after the Middle East and North America. Between the years of 1990 and 1999 the produced assets of the Former USSR plummeted from just under $3000 to just over $500, an indication of the conditions that the FSU under went during those years. During those same years, it also saw a 38% decrease in CO2 emissions. Some of this seen decreased is due to the lack of data from several regions of the Former Soviet Union in the early 1990's, making a decrease of only 25% more likely. Using the 1992-1999 figures, there is a 28% reduction. FSU is the only world region to experience a decrease in CO2 emissions during this time period, which is due to its declining industrial production.

The former Soviet Union was one of two regions in the world to experience a decline in life expectancy of 2.1 years between 1992 and 1999. Besides the decline in conditions in the region, such a drop may also be due to the fact that the data collected during that transition period is likely to be less accurate than more recent data.

Correlations with Human Welfare

The correlations done in the built and social capital sections with Human development (HDI), human welfare (HWI), and happiness and life satisfaction could be expanded to cover all the factors studied, and correlations done with each one. Perhaps all the factors could be combined into a single correlation with human welfare. In order to do this all the factors would have to be converted into dollar terms or an index created so the factors could be added together. It may not be necessary to combine all the indicators together into a single unit. Each type of capital may be complementary to the others. Each may be essential on its own.

Sustainability Correlations with human welfare do not necessarily consider the sustainability question, which relates to the ability to continue current practices indefinitely into the future without harm, and intergenerational equity. How much are we leaving to the next generation? Equity does not necessarily require that we leave them better off than us, but it does require that we leave them the same opportunities we have. Both of these criteria primarily relate to the depletion of non-renewable resources and exhaustion of renewable resources beyond the recovery point.

Depletion of non-renewable resources can be justified if some proceeds are invested in replacements for them, which is described as weak sustainability. There are very few examples of this worldwide. Current economic thinking is based on the premise that all resources have substitutes, and that when a resource becomes scarce the price will rise and a substitute will be found. Perhaps this will come true, although the unique qualities of oil suggest that there are no equivalent substitutes. Some resources have no substitutes such as the atmosphere, ozone layer, or biodiversity.

Exhaustion of non-renewable resources beyond the recovery point applies to endangered species and bio-diversity, use of the earth and atmosphere as a sink for waste, and over-fishing among others. Some of these factors may not be able to recover from overuse. The final report needs a method to measure sustainability of various current practices. Depletion of non-renewable resources without replacement measures, and exhaustion of renewables beyond the recovery threshold could be used as a guide for measuring sustainability.

Work Cited: Report on Natural Capital – Oil

  • Charles A. S. Hall, College of Environmental Science and Forestry, State University of NY, Syracuse, NY
  • The World Petroleum Life-cycle, Richard C. Duncan and Walter Youngquist
  • BP Statistical Review of World Energy, June 2002 Earth Policy Institute
  • The End of Cheap Oil, Colin J. Campbell and Jean H. Laherrere
  • All other sources cited at the end of each capital section.


This is a chapter from Earth, Inc. Shareholder Report (e-book).
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Glossary

Citation

Inc., E. (2007). Earth, Inc. Shareholder Report: The Bottom Line. Retrieved from http://www.eoearth.org/view/article/151840

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