The Metro Outlook 2.0 Model

Development of the Model

Development of the Metro Outlook model began with the context for individual decisions, the social system, then added the economic system that provides the resources for spending decisions.

Next, we add the natural system.

The raw materials from which buildings, machinery and roads are made and the land upon which communities and cities are built obviously come from the natural system. The energy to convert the raw materials into finished goods and supply the electricity and fuel needs of the economy also derives from the natural system.

The natural system is the grandfather of the social and economic systems and, in fact, contains them. Its vastness means the diagram above is the most simplified of an already highly abstracted model.

The natural system operates autonomously of human involvement — it needs no input from policy and investment decisions to sustain itself. The system is ultimately powered by the energy of the sun, and it has developed extremely efficient ways of utilizing that raw energy and converting it into forms useful for producing and sustaining life, of which we are a part.

While the natural system can operate autonomously of human policy and spending decisions, it is still affected by them. The same investment decisions that make businesses more productive determine the technology used to extract and use natural resources in the production processes. Consequently, they also determine the level of natural resource depletion and emission of waste products. In large enough quantities, depletion and emissions can damage whole ecosystems, threatening their ability to support the current global diversity of life. 

Because more productive businesses mean, over time, higher incomes for workers, environmental degradation need not occur only on the production side of the equation. Higher incomes lead to higher levels of consumption, which generates its own waste products that are emitted and must be reabsorbed or stored. 

Ultimately, the sustainability of our standard of living depends upon living upon nature’s interest rather than its capital — i.e, consuming no more than can be replaced. As with the distribution of income and profits, how natural costs are distributed depends again on our policy and investment decisions.

As depletion or emission costs to the environment become clear, it is possible for policy decisions to alleviate them. This can be done directly, through explicit policies to conserve, protect and restore natural areas, or indirectly by fully internalizing environmental costs into the prices faced by businesses and consumers as they make their spending decisions.

The finished model>

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