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A Rational Look at the "Settled Science"

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As I've said before, an ecosystem can function just fine without a human economy but it doesn't work the other way around.

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Coincidentally enough, I heard this last week:

How Do You Put a Price Tag On Nature?

Back in 1997, a team of scientists slapped a giant price tag on the earth. They calculated the dollar value of every ecosystem on the planet, and tallied it all up: 142.7 trillion dollars.

http://www.radiolab.org/story/what-dollar-value-nature/

That seems real low. The total (annual) GDP of human civilization is ~$72 trillion, all of which (for now) is supported by Earth. $143 trillion is only ~2 years of that GDP. Long term systems are normally valued at much more than just 2 years worth of their production. For example, the US economy is worth ~$124 trillion, about 7 years of GDP. The P/E of the S&P500 index is similarly 7, meaning that the value of the world's top 500 companies is equal to roughly 7 years of their earnings. If you take 7 as the recurring theme here, that means Earth should be worth about $500 trillion (7x72 trillion). More precisely, that should be the value of the sum total of human civilization.

But realistically, Earth has to sustain human civilization until a significant portion of our resources and production are no longer bound to Earth. If one assumes this will take another (for example) 100 years, during which GDP should continue to grow in inflation-adjusted terms at, say, 3% per year, then we have still to use Earth to provide for about 600 times our current GDP over that timeframe, which works out to about $43 quadrillion ($43,000 trillion) [we're likely not that far away from the time when economists and politicians will start talking about quadrillions of dollars].

Edited by Bonam

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...meaning that the value of the world's top 500 companies is equal to roughly 7 years of their earnings. If you take 7 as the recurring theme here, that means Earth should be worth about $500 trillion (7x72 trillion). More precisely, that should be the value of the sum total of human civilization.

But realistically, Earth has to sustain human civilization until a significant portion of our resources and production are no longer bound to Earth. If one assumes this will take another (for example) 100 years, during which GDP should continue to grow in inflation-adjusted terms at, say, 3% per year, then we have still to use Earth to provide for about 600 times our current GDP over that timeframe, which works out to about $43 quadrillion ($43,000 trillion) [we're likely not that far away from the time when economists and politicians will start talking about quadrillions of dollars].

It's amazing that you are able to come up with that ! I'm not sure if the value they give is an annual production number, though, or an overall asset value. I urge you to listen to that piece and I especially urge you to send your response to the folks who came up with that number !

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