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Environmental Intangibles

Environmental Intangibles

By Walter A. Pengue

The world economy is proposing a resignification of the importance of the value of various environmental services that were previously not considered. A gross error, both in the calculation and in the form of crematistic validation that has led us to face the worst crisis of civilization since the last ice age.


Nowadays, either because of their relative scarcity, because of their necessary relevance for a certain production or precisely because of the degradation to which we are subjecting various natural resources and environmental services are beginning to have a new meaning. Much has been said and written about the theory of rent for more than a century, and the value that the distance or the quality of a resource had on the price of a certain good.

Currently, thanks to the relative limitation that the world is beginning to face with respect to certain natural resources and environmental services, an environmental neorenta is beginning to be discussed and put in value, a total value not only crematistic from various spheres of knowledge.

In the discussions of social metabolism, so well developed by Victor Manuel Toledo or Marina Fischer-Kowalski, we have seen that we incorporate the flow linked to energy and materials involved in the processes of extraction, transformation, exchange, consumption and final disposal. To this it is important to add the thought that is happening with “the base of those resources”. When we move minerals from one part of the world to the other, we count their weight, the mass we move and such and this we have already started to calculate and evaluate it, but what happens in changes with the base resources that we have incorporated into this transformation or that we need to the same, but they are not "visible" in the production accounts. For example, the nutrients involved in the grains that we export, or the water needed to produce them or to transport the millions of tons of minerals, or consumed in the production of paper or the same computer that you are using right now for the reading by one means or another. Or what of the living space, in terms of land that is used, in one place or another in the world. It is not enough or too valuable to measure only the availability of land on a global scale. If we do not take into account exactly, "the place in the world" where it is located. A land located in the tropics, in the desert, in a valley or in a temperate area of ​​the planet is not the same. Neither is its nutrient content.

Ecological Economics (Pengue 2008) is the discipline that deals with studying these relationships between society and nature, focusing on an ecosystem approach to measuring flows of energy, materials and incommensurable goods under the multi-criteria approach.

This, which is so necessary but has not yet been calculated in the production and transformation accounts, are the "incorporated resources" (which are not perceived in the calculations) in the products consumed. The ecological backpack (Pengue 2009) is precisely part of it, when we talk about backpack of materials and measured in kilograms or tons. Environmental intangibles will be when these resources "have been left behind" and are no longer incorporated into the product (such as water) or if they are part of them (such as nutrients, in the case of grains, meat, wood).

These resources have value. Intrinsic and also economic and for the discussion of developing countries this is relevant. All its agriculture, livestock, forestry, fishing, is based on the "intensive" use of these resources. Developing economies, unlike developed economies, are ecologically intensive using these goods of nature, while developed economies do so but through the intensification of synthetic processes. If they pay when they incorporate a synthetic fertilizer into their crops? Why shouldn't they pay, incorporating it into the prices of the food that we export to them, when the nutrients incorporated and extracted from the soil are directly those that nourish the plants, the animals or trees to be produced?

Thus was born the concept of Intangible Environmental (Pengue 2012). A new element, essential to guarantee the production of the primary products that the global economy demands and for which it still pays nothing.

The green economy should then incorporate for the benefit of developing economies based on agriculture and when these goods respond to export flows, recognize a value in them.

What is an environmental intangible?

The human species uses, like any of the other species on the planet, natural resources for its reproduction and survival. Within the framework of this process, economic systems recognize the "use" of certain resources through their purchase, exchange and transformation.

Thus seeds, minerals, metals, energy, labor or capital are bought for which a certain value or price is paid and recognized. Even today, there are many environmental services that, beyond the appropriate and necessary discussions, are listed on formal markets.

On the other hand, there are other resources and also services that are not included in the profit or loss balances of companies or states. Without them it would be practically impossible to produce. These are the “base” goods or resources for this production or to directly guarantee its productive possibility. The discussion about "land" in terms of its income, either by distance or by quality, is clear and historical.

The Virtual Floor

However, the importance of its sustainability in natural terms has not been clearly established and especially in how, in addition, there is a flow of materials that are not quantifiable in the production calculations. Materials such as the nutrients that come out with crops, grains, meat, wood, biomass in general from certain places and migrate to others in these products are not considered, although they leave an uncalculated liability. Or the use of water, often intensive in places where it is relatively scarce.

This virtual land (Pengue 2009, 2010) or virtual water (Allan 2002, Pengue, 2006) that enters into commercial transactions, is not incorporated with a value in them, as well as the use that is being made, for the satisfaction of the production of primary goods, of living space, scarce in itself. Why is air free, we don't have to take care of it or consider it? This is precisely the intangible, however, that would be happening to you if this vital resource that you enjoy while reading, were restricted or contaminated.

It is widely known that agriculture is a human activity that transforms its environment and that there are also production and management practices that bring it closer to or away from more or less sustainable models.

What has also been much less discussed are the effects that international trade and global demands for primary products exert, as exogenous pressures, on the resource base of those countries that have a significant availability of natural resources such as soil. water or biodiversity.

Intensive agricultural models in many parts of the world have depleted the soil resource and this has been produced by the improper use of management practices, the intensification in the use of polluting inputs and also the extraction without replacement, rotations or restitution of crops that are they bring from the soils the best they have: their nutrients.

With the globalization of agricultural trade, the great regions with still rich soils of the world run a double risk. On the one hand, they are the new focus to identify the possibilities of amplifying the productive frontier and on the other they are the great territories of the planet where it is still possible to produce food without technical restrictions and with more or less, depending on the case, climatic limitations.

The current situation of high cash crops (cashcrops), in international trade, hides behind it a set of environmental impacts (externalities) that must be reviewed but also the need to consider the impacts on the base of natural resources used, including soil, water, and natural and climatic environmental conditions for production, which are often just left aside and not considered in the production or economic accounts.

There is an essential component in this production process, an environmental intangible not considered, which nevertheless is the basis of production itself.

Hence the importance of not only continuing to investigate what happens on the surface (erosion, salinization, degradation) with all the great soils (alfisols, molisols) in the world, and for example the richest in South America such as the Pampeans, but the need to incorporate concepts that load into the analysis of world agricultural trade the environmental shadow cost that extraction without the protection of its natural and sustainable management have these high quality soils.

The soil and its nutrients in particular, should be seen as the Savings Bank and the money in an environmental account. If these "bills" (nutrients) in many cases go away, they will never be recovered, with the consequent environmental, productive and economic degradation for the countries that have allowed it.

The globalization of the world food system is leading to a significant overexploitation of resources and an acceleration of production cycles in unsustainable terms, which generates growing environmental liabilities.

Argentina is an example. The economic cost of what should have been replaced (or paid for by the economic system), in terms of nutrients extracted per harvest in the Pampean Region for the period 1970-1999 reached a value of 13,000 million pesos (dollars in that period). period). The replacement cost of nitrogen, phosphorus and potassium was 6.26, 3.80 and 3.04 billion pesos (Flores and Sarandón, 2002). The average replacement cost would then reach 61, 23 and 49 pesos per hectare for soybeans, wheat and corn respectively. These values ​​represent 21%, 20% and 19% of the average gross margins of the 1990s, for the three crops.

The black box of the nutrients of the Pampean soil, even with mineral fertilization and under the conservationist model of direct sowing, would be showing that if it tends exclusively to agriculturalization in the region or to a Pampeanization (Pengue, 2005) in extra-Pampean soils, the Loss of nutrients would be leading to a depletion of the natural resource and therefore to an environmental liability with important implications in terms of affecting the potential and future demand of the productive base.

Today, the global reality has also left behind this old vision of the provision of food or as high-ranking transnational companies say under the easily marketable slogan of "we are feeding the world." The new paradigm is that of the conversion of countries into large suppliers of biomass.


With any destination that also helps to maintain this machinery of ecological and socially unequal exchange worldwide. Sometimes they will provide food, other energy, other biomaterials, other wood, meat, that is, any product convertible from solar energy into biomass. Because that is what they are turning our countries into, great suppliers of global biomass. This is the scenario of work and discussion for the understanding of the processes and the construction of a biopolitics of the territory, which other countries are already developing and thinking about their new scenarios for the medium term.

This global movement of goods converted into biomass implies, in turn, a growth in the movement of necessary inputs and, on the other hand, an increase in the circulation and use of basic elements not previously considered in the stock accounts, such as water or soil. .

The growth in production levels and the apparent enrichment of certain sectors of the global economy cannot ignore the impacts that the transformation processes of resources have or will have on the even weak sustainability of the entire system.

The loss of nutrients is part of this cost, the loss or improvement of the organic matter contents, the acidity or alkalinity problems, the loss of structure, the infiltration or dragging problems of the water in the soil, the erosion rates and irrigation are also other factors that are not included in costs. Degradation, loss of nutrients, erosion and desertification have a direct environmental consequence, barely perceptible until its materialization in the impossibility of production, which manifests itself in something even more terrible: the increase in poverty, the economic devaluation of resources and the increase of social cost (Morello and Pengue, 2001).

It is interesting to count in physical terms the mobility of the different resources involved in the Pampean soil, not for its inclusion in the cost benefit calculations but for its interpretation in terms of the sustainability analysis, under an umbrella of integrated resource survey. , as relevant data of biophysical indicators of (in) sustainability.

Nutrient extraction can be understood in terms of an approach to the evaluation of approaching or distancing from weak sustainability in the situation of the Pampean soil and as an important element in the definition of sustainable environmental policies towards the sector on which Argentina depends.

Studying these material transports in terms of social metabolism, with their material and energy flows, and in the case of agricultural production of nutrients read as exported virtual soil, is a simple mechanism to understand the operation and evolution of the accounts. environmental conditions of a vital resource, which in light of its current exploitation and management, should be considered exhaustible.

Virtual water

Just as the soil in the previous point, is in many cases a poorly evaluated strategic resource and not included in the companies' income statements, water, when it is abundant or at least, does not appear to be limiting, it is even less considered within these equations. Fresh water is the other strategic resource. Of the total available water on the planet, 97.48% corresponds to salt water and of the percentage of fresh water (2.52%), 1.9% is stored in the polar caps, 0.5% is found in groundwater and only the 0.02% represents fresh surface water.

Of the total amount of fresh water on the planet (approximately 35 million km3), only a part is available, that is, accessible for human activities, since other volumes are used for the functioning of natural ecosystems, as well as stored in different reservoirs.

The man begins to participate with a greater incidence in the hydrological century and the intensification of the productive processes, especially agriculture to satisfy the demand for biomass, is one of the most important axes of these discussions.

According to data from FAO (2010), 70% of fresh water is used worldwide for agriculture, 19% for industrial use and only 11% for domestic consumption. In South America, the figures change a bit, consuming 68% for agricultural use, 13% for industrial consumption and 19% for domestic consumption.

Agriculture is one of the main water-demanding productions (it amounts to around 70% of the world average), irrigation being one of the activities that generates concern regarding the availability and impacts on the demand for drinking water, which may imply the increase of the extractions through this towards the coming decades (Bruinsma, 2003).

Producing food implies consuming water. "All grass is water" said the father of Argentine conservation agriculture, Eng. Molina. To produce one kilogram of grain, one thousand to two thousand kilograms of water are needed, which is equivalent to around 1 to 2 m3 of water. 1 kg of cheese needs around 5,000 to 5,500 kg of water and one of meat requires about 16,000 kg of this vital element.

World agricultural trade can also be thought of as a gigantic transfer of water, in the form of raw materials, from regions where it is found in relatively abundant form and at low cost, to others where it is scarce, expensive and its use competes with other priorities ( Pengue, 2009).

The analysis of the use of water by the agricultural sector cannot but consider the fact that 98% of the cultivated lands in Latin America are cultivated in rainfed areas, but that industrial agriculture for export demands more water every day to sustain its production system and increase its physical productivity (as for example begins to happen in the Argentine Pampean region).

Already many Latin American regions are suffering serious problems. The availability of water in Mexico has been declining as a result of the overexploitation of the water tables and the increasing degradation of the upper parts of the basins, which implies higher costs.

As it is the peasants who have been relegated to the upper parts of the basins, and it is they who have suffered the most from the policies of opening up agricultural trade and containing basic prices, they are less likely to continue their traditional labor management tasks. water and soil (Barkin, 1998).

The case of the use of water in Argentina, especially for the production of export crops and accompanied by a possible drier cycle in the periods to come, requires reflection on the consumptive use of the resource, especially against the new productivist demands both in the Pampean areas and in the extrapampa regions. It is possible that the greatest challenge in the coming years will consist of avoiding that, due to its excellent profitability in environments that are unfavorable for other species, soybeans maintain a predominance that many consider harmful in the long term (Sierra, 2006).

In 1993, researcher John Anthony Allan, from King’s College London, coined the concept "Virtual Water" (Allan 1999), to define the volume of water needed to make a product or to provide a service. Later, in 2002, Arjen Hoekstra coined the term "water footprint" to obtain an indicator that related water to consumption - at all levels - by the population. In this way, the water footprint of a country (or industry, or person) is defined as: "the volume of water necessary for the production of products and services consumed by the inhabitants of that country (or industry, or person). "

To calculate the virtual water of the countries, several factors are taken into account: the total volume of consumption (level of wealth of the country), the patterns of water consumption (a country that consumes a lot of meat will have a larger footprint than a country with a tendency to not eat meat; just as a country that consumes more industrially manufactured products will have a greater water footprint than those that do not).

The climate is also relevant, because in hotter regions (where water evaporates faster) more water is needed for crops. Agricultural practices that save water and are efficient in its use are also considered.

The virtual water value of a food product is the inverse of the water productivity. It could be understood as the amount of water per unit of food that is or could be consumed during its production process, that is, used or contained in the creation of agricultural products.

The virtual water circulation has steadily increased with exports from agricultural countries over the past forty years.

It is estimated that approximately 15% of the water used in the world is destined for export in the form of virtual water. 67% of the virtual water circulation is related to the international trade of crops. In the last five years of the 20th century, wheat and soybeans both accounted for 47% of the total of these outputs.

Neither in the high or low value crops in international trade, nor the final communities that consume them, still recognize this important use of resources in their accounts (Chapagain and Hoekstra, 2003).

It is clear that the virtual water trade generates significant water savings in importing countries and a possible deterioration in exporters, which make intensive use or at the level of overexploitation. For example, transporting a kilo of maize from France (taken as representative of maize-exporting countries for water productivity) to Egypt transforms an amount of water of about 0.6 m3 into 1.12 m3, which represents globally, a water saving of 0.52 m3 per kilo commercialized, a situation that, as can be seen, does not account for the costs or externalities generated by the use of this water in France.

Possibly, the apparent savings in the use of water, hide these costs, which, thanks to the global movement of food, tripled. Virtual water trade increased in absolute value, from 450 km3 in 1961 to 1,340 km3 in 2000, reaching 26 percent of the total water requirement for food production.

The externalities linked to virtual water exports should also consider the problems derived from the increase in the uses of this resource: saline intrusion, salinization, loss of soil structure, nutrient washing, contamination.

In the case of these environmental intangibles, water and virtual land, obviously the issue resides especially in the enormous global transfers, through the use of these resources that are had through the commercial movement.

In the case of nutrients, the extraction and consumption of products at important distances begins to generate alterations in the cycles not only of the macronutrients but and particularly in the situation linked to oligo and micronutrients, both in the base and in the destination, demonstrating a clear environmental unsustainability and an impact on natural cycles.

These intensive commercial activities are part of a set of discussion linked to the placement and generation of environmental liabilities on a global scale. This recognition begins to be demanded.

There is a global consensus to build a new focus of demand for the recognition of these environmental liabilities and uses. There is thus a claim, from the South-North perspective, that can define Ecological Debt (Martínez Alier and Oliveres, 2003), as that which has been accumulated by the North, especially by the most industrialized countries towards the Third World nations. through the plundering of natural resources due to their undervalued sale, environmental pollution, the free use of their genetic resources, the free occupation of their environmental space for the deposit of greenhouse gases or other accumulated waste and eliminated by the industrialized countries.

The export of nutrients such as virtual soil, losses of agricultural biodiversity and use of virtual water are part of this ecological debt (Pengue, 2005).

Dr. Walter A. Pengue

GEPAMA, University of Buenos Aires - Area of ​​Ecology, National University of General Sarmiento

Bibliography:

  • Allan, J .. The dangers of virtual water. UNESCO courier. February, 1999.
  • Chapagain, A.K. and A.Y. Hoekstra. ‘Virtual water trade: A quantification of virtual water flows between nations in relation to international trade of livestock and livestock products’. 2003.
  • Flores, C.C. and Sarandon, S.J .. Economic rationality versus ecological sustainability ?. The example of the hidden cost of soil fertility during the agriculturalization process in the Argentine Pampean Region. Journal of the Faculty of Agronomy, La Plata 105 (1), 2002.
  • Martínez Alier, J. and Oliveres, A. Who owes whom? Ecological Debt and External Debt. Icaria. 2003.
  • Morello, J.H. and Pengue, W.A. The barn of the world is deserted. Le Monde Diplomatique, Buenos Aires, 2001.
  • Pengue, W.A. Industrial Agriculture and Transnationalization in Latin America. United Nations Environment Program, UNEP. Mexico and Buenos Aires. 2005.
  • Pengue, W.A. Virtual Water, Soybean Agribusiness and Future Economic and Environmental Issues. Borders 5: 14-26. Buenos Aires. 2006.
  • Pengue, W.A. Ecological Economics and Development in Latin America. Borders 7: 11-33. 2008
  • Pengue, W.A. Fundamentals of Ecological Economics. Editorial Kaicron. 2009.
  • Pengue, W.A. Virtual Land, Biopolitics of the Territory and International Trade. Borders 9: 12-25. 2010.
  • Pengue, W.A. Environmental Intangibles, Virtual Land and New Forms of Valorization of Nature. Alternatives in Discussion to the Crisis of Civilization in Pensado, M (compiler) Territory and Environment, Methodological Approaches, Editorial Siglo XXI. 2012.


Video: Tangible and Intangible Assets Compared in One Minute (June 2021).