3.1.5 Ecologically embedded markets

The Amazon Rainforest, spanning multiple countries in northern South America, covers about 6.7 million square kilometres—twice the size of India. Known as the "lungs of the Earth," it plays a key role in the oxygen, carbon, and water biogeochemical cycles (Section 1.2.5). Evaporation from the forest affects global climate patterns. The Amazon is also home to around 10% of the world’s plant and animal species, many of which are endemic, found nowhere else.

However, business activities significantly harm the Amazon Rainforest. Agricultural, mining and logging companies clear vast areas of the forest to use its resources to make products to sell to consumers/households. This deforestation destroys habitats, displacing countless species. Fewer trees means that less carbon dioxide (CO2) is absorbed from the atmosphere, increasing greenhouse gases and global warming. Deforestation also disrupts the Amazon’s water cycles, affecting global weather patterns. 

The destruction of rainforests like the Amazon also impacts indigenous communities. According to WWF, over 47 million people live in the Amazon basin, including 2.2 million from indigenous communities, relying on the Amazon for their survival and livelihoods.

The destruction of the Amazon and other rainforests in Africa and Asia for short-term business profit is not just a local issue, it has far-reaching effects on the planet's climate, water cycle, and biodiversity. These ecosystems are essential for all life on Earth, driving climate and weather patterns around the world.

Recognising our dependence on ecosystems for energy and materials can lead to more regenerative economic practices, helping to ensure that we meet real human needs within the means of the planet.

The economy is all the human-made systems we use to transfer and transform energy and matter to meet human needs (and wants). Markets are part of a larger provisioning system that converts biophysical inputs into (hopefully) good social outcomes as seen in Figure 9 and discussed in Section 1.3.5.

Businesses in markets need energy

Energy is essential for all life on Earth (Figure 10). Businesses use energy to power machines that produce the goods and services we rely on each day. Certain types of businesses use significantly more energy than others because of what and how they produce:

• manufacturing sector: requires vast amounts of energy to transform raw materials into finished products like cement, chemicals and steel (Figure 11);

• transportation sector: businesses like airlines, shipping companies, and logistics firms that rely on (mainly) fossil fuels to move goods and people around the world (Figure 12);

• information technology sector: information technology (IT) consumes vast amounts of energy, though it is less visible than in manufacturing and transportation. The cloud, online shops and games, cryptocurrencies and video streaming services store and process enormous amounts of digital information. They need continuous power for computers, networks and cooling systems (Figure 13). In particular, artificial intelligence (AI) uses huge amounts of energy. Many people are worried about how AI development will impact our ability to meet other energy needs or  to lower carbon dioxide (CO2) emissions. 

Businesses in markets need matter

Matter, anything that has mass and occupies space, is another component for business activity in markets. Businesses use raw materials like minerals, water, and biomass (Figure 16). These materials are extracted, transformed, and used to produce products to meet human needs and wants. 

Understanding the deep connection between market activities and ecological systems is crucial for designing regenerative economic systems. By recognising how our production and consumption activities impact Earth’s systems, we can make better choices about what and how much energy and materials we need to survive and thrive, and advocate for businesses and state policies to create and maintain the conditions for life.

Concept: Systems

Skills: Thinking skills (transfer, critical thinking)

Time: Varies, depending on option

Type: Individual, pairs, group?

Option 1 - Annotating diagrams

Time: 30-40 minutes

In this section you learned about the impacts of business activities on ecosystems. These systems are discussed in greater detail in Section 1.2.5 and Section 1.2.6, but even with just this section, you should be able to identify some impacts on two biogeochemical cycles: the water cycle (Figure 19) and the carbon cycle (Figure 20) - click on the arrow below to reveal them.

• Sketch one (or both) cycles on a piece of paper (boxes for stocks, arrows for flows) and then annotate further with how business activity disrupts these systems. You may want to use a pencil so that you can edit your diagrams as you go. OR

• Copy and paste the relevant illustration(s) into a digital document and annotate it from there.

You may want to work alone to test your understanding, or work with a partner to support each other’s understanding.

Option 2: Discussion

Time: 20 minutes

When discussing the impact of business activities on ecosystems, business owners might argue that they are just responding to consumer/household demand and that the burden is on consumers/households to change their behaviour if we want to lessen the impact on ecosystems.

• Considering what you have learned in this subtopic, and others you may have studied, what do you think of this argument? 

• How do both businesses and consumers bear responsibility to reduce the environmental impact of producing goods and services?

• Take some time to consider your ideas, and then discuss these questions with a partner, small group or as a whole class.

Option 3: Reflection on use of AI

Time: 30 minutes

Many individuals and businesses are using artificial intelligence tools to support them with their work, maybe also you? If you are using these tools:

• Make a list of what you are using AI tools to do

• For each use, assign a number to it on a scale of 1-5, where 1 = very beneficial to human/ecological wellbeing and 5 = not at all beneficial to human/ecological wellbeing

• Consider the results and compare with one or more other students if you can.

• Given the high levels of energy needed to run these tools, to what extent are your AI activities a good use of resources? Write or audio record a reflection, or discuss with others in your class.

Note: this activity can be expanded into a larger project to research and raise awareness of the use of AI in the school community, potentially sparking a discussion on appropriate use of the tools that go beyond the usual discussions about academic honesty.

Option 4. Exploring global deforestation with an interactive map

Time: 20-25 minutes

This section started by looking at the impact of business activities on the Amazon Rainforest. The Amazon is not the only forest experiencing deforestation. There are other large rainforests in Africa and Asia that are under threat, as well as temperate forests and boreal forests.

The website Global Forest Watch has a beautiful, rich and saddening interactive global map where you can see areas of the world that are losing and gaining forest.

• Where in the world are we losing forests?

• Where in the world are we gaining forests?

• What is the situation where you live?

Ideas for longer activities and projects are listed in Subtopic 3.5 Taking action

• Water Footprint Calculator - Educational resources on water use which includes information about embedded water to show how much water is used to make the goods and services we buy. Footprint calculators help people see the impact of their choices. Note: resource use in our economy involves both producers and consumers. When producers make unnecessary goods and use advertising to encourage people to buy things they don’t need, consumer-focused footprint calculators can distract from the real issue. Difficulty level: easy 

• Marcel Gomes, 2024 Goldman Environmental Prize, Brazil - A 5 minute video about Marcel Gomes, who led an international campaign linking beef from JBS, the world’s largest meatpacking company, to illegal deforestation in Brazil’s threatened ecosystems. Using evidence from his investigation, Marcel and his partners pressured global retailers to stop selling illegally sourced meat. In December 2021, six major European supermarket chains in Belgium, France, the Netherlands, and the UK indefinitely halted the sale of JBS meat products. Difficulty level: easy

• AI's Energy Demands Are Out of Control. Welcome to the Internet's Hyper-Consumption Era - Wired Magazine article about the increase in energy and water demand from use of artificial intelligence. Difficulty level: medium

• Per- and Polyfluoroalkyl Substances (PFASs) - United Nations Environment Programme website on PFAS substances and their ecological impacts. Difficulty level: high (mainly because of technical terminology for chemicals)

• Earth for All - A book that explores a number of scenarios for our collective future on the planet. The book uses research from new computer models about the impact of different actions and policies on human and ecological wellbeing. The scientist-authors present five big impact changes we can make to meet the needs all within planetary limits in a single generation. Difficulty level: medium

• Planetary Boundaries - [ECO]NOMICS Part 3 - In this video, from the Institute for New Economic Thinking Lectures on [ECO]nomics, Professor Juliet Schor explains planetary boundaries and why we need to live within them. She counters arguments often put forward by mainstream economics that there is a tradeoff between protecting the environment and our ability to consume goods and services. Difficulty level: medium

Daly, H., Farley, J. (2011). Ecological Economics (2nd ed.). Washington, D.C.: Island Press.

EcoRise. (2022, July 6). Home. Water Footprint Calculator. https://watercalculator.org/ 

Met Office (n.d.). Carbon cycle. https://www.metoffice.gov.uk/weather/climate/climate-explained/carbon-cycle

NASA (n.d.). Classroom Activity: Modelling the Water BudgetJet Propulsion Laboratory, California Institute of Technology. https://www.jpl.nasa.gov/edu/teach/activity/modeling-the-water-budget/.

Raworth, K. (2017). Doughnut economics: seven ways to think like a 21st century economist. London: Penguin Random House

Richardson, K. et al. (2023). Earth beyond six of nine planetary boundaries. Science Advances, 9(37). DOI:10.1126/sciadv.adh2458

WWF. (n.d.). The 2022 Living Planet Report. https://livingplanet.panda.org/en-US/#:~:text=The%20Living%20Planet%20Report%202022,are%20to%20reverse%20nature%20loss

WWF. (n.d.). Here are our top facts about the Amazon. https://www.wwf.org.uk/learn/fascinating-facts/amazon#:~:text=1.,the%20side%20of%20the%20UK!

Link to Quizlet interactive flashcards and terminology games for Section 3.1.5 Ecologically embedded markets

biogeochemical cycle: Earth system cycles that move essential elements like water, carbon and nitrogen between living and nonliving parts of ecosystems

evaporation: the transformation of a substance like water from a liquid into a gas

climate: the weather conditions that are normal for an area over a long period

species: a group of organisms with similar characteristics, where the individuals are capable of interbreeding

endemic: an organism that is native and restricted to a certain place

consumer: someone who buys and uses resources and products ot meet needs

household: a system where people living together care for each other and do domestic work, often termed the 'core economy'

deforestation: removing a wide area of trees, often for farming, mining, or urbanisation

habitat: the natural home or environment of an animal, plant, or other organism

carbon dioxide (CO2): gas produced by burning carbon or organic compounds and through respiration, naturally present in the atmosphere and absorbed by plants in photosynthesis

greenhouse gas: gases in Earth's atmosphere trap the Sun's heat, warming the planet

global warming: the rise in the average temperature of Earth's air and oceans (due to human activities)

water cycle: the stocks and flows of all water on Earth

indigenous community: the original settlers of an area (pre-invasion/colonialism) who have retained their culture apart from colonisers

profit: total revenue minus total cost

biodiversity: the variety of living organisms on Earth

ecosystem: the interaction of groups of organisms with each other and their physical environment

energy: the ability to do work or cause change

regenerate: the process of restoring and revitalising something

economy: all the human-made systems that transfer and transform energy and matter to meet human needs and wants

transfer: to move something from one place to another

transform: a change in the state, energy or chemical nature of something

matter: anything that takes up space and has mass

market: a system where people buy and sell goods and services for a price.

provisioning system: systems that manage the levels of energy and matter used to meet specific human needs

biophysical input: Earth's biogeochemical cycles and natural resources

raw material: a basic material that is used to produce goods

fossil fuel: a non renewable energy source including coal, oil, and natural gas, formed over millions of years in the Earth's crust from decomposed plants and animals

artificial intelligence (AI): computer systems able to perform tasks normally requiring human intelligence

carbon dioxide (CO2): gas produced by burning carbon or organic compounds and through respiration, naturally present in the atmosphere and absorbed by plants in photosynthesis

renewable energy: energy from sources that are continuously available or regenerate quickly

nonrenewable energy: energy from sources that cannot be regenerated in a human timescale, such as coal, natural gas and oil

Jevons paradox: a situation where efficiency gains in an input are counteracted by increased consumption and production, resulting in even greater use of the input

biomass: organic matter

embedded water: the water hidden in goods, services and processes

ecosystem: the interaction of groups of organisms with each other and their physical environment

sustainable: meeting human needs within planetary limits

planetary boundaries: the limits of Earth systems to absorb the impact of human activity and continue to function

climate change: a change in the temperature and precipitation patterns in an area, in recent times due to human economic activities

carbon cycle: the movement of carbon between Earth's atmosphere, hydrosphere, biosphere, and lithosphere

methane: a colourless, odourless flammable gas; natural gas

forever chemical: a toxic substance that persists and accumulates in the environment

UV radiation: invisible rays that are part of the energy that comes from the sun; can damage living organisms

aerosol propellant: a compressed gas that dispenses the contents of a container when the pressure is released

Montreal Protocol: an international agreement that protects the ozone layer by reducing ozone-depleting substances

aerosol: small solid particles or liquid droplets suspended in air

ocean acidification: a reduction in the pH of the ocean over time, caused primarily by absorption of carbon dioxide

carbon dioxide (CO2): gas produced by burning carbon or organic compounds and through respiration, naturally present in the atmosphere and absorbed by plants in photosynthesis

carbonic acid: an acid formed when carbon dioxide dissolves in water

exoskeleton: a rigid external covering for the body in some animals

habitat: the natural home or environment of an animal, plant, or other organism

fertiliser: a chemical or natural substance added to soil or land to increase its fertility

nitrogen: an element that occurs as a gas which makes up 78 percent of the atmosphere and that forms a part of all living tissues

phosphorus: an important element for living organisms as a component of adenosine triphosphate (ATP) which is the primary energy source for organisms' cells

algal bloom: a rapid increase in the population of algae in freshwater or marine water systems

dead zone: a reduced level of oxygen in the water

surface water: water that collects on the surface of the ground, like lakes and rivers

groundwater: water that collects underground in soil or in rock crevices and pores

stock: an accumulation of something, such as energy, matter, information, or money

flow: movement of something such as energy, matter, information or money between stocks

water cycle: the stocks and flows of all water on Earth

wetland: a distinct ecosystem flooded or saturated by water, either permanently or seasonally

extraction: taking something away from somewhere else, especially using effort or force

built environment: human-made structures or conditions in an area

pollution: the presence of a substance that has harmful effects on the environment

overconsumption: buying and using more products and resources than you need