Is a Greener Economy Also More Resilient?
This is the introductory essay for the April 2025 Water Resilence for Economic Resilience newsletter. Please subscribe if these topics interest you!
Despite recent significant global political and economic “distractions” (e.g., tariffs, anyone?), I’ve been impressed with the level of self-organization that has been occurring among macroeconomists around how to make national and global economic policies more embedded within natural systems — a worldview that explicitly includes water resources as part of “nature.”
These developments are very important. I have often heard resource managers and biologists, for instance, talk about ecosystem services and the explicit valuation of landscapes and ecological processes, but until recently I had very rarely heard central bankers bring these concepts up. When I do, they often use the rubric of “greening” economies.
I have nothing but support for these initiatives and hope they can continue. The WR4ER initiative has, I believe, some ideas that can help strengthen and reinforce — if not make more operational — such work through at least three ideas.
First, a greener economy (or set of economic policies) is not necessarily a more resilient economy. Economic systems that are highly dependent on water resources and explicitly value and work to sustain and restore diverse ecosystem resources still need to consider concepts like diversification, redundancy, and flexibility. Ideally, resilience concepts like systems thinking are also important, such as considering how water resources move across (and under and above and through) landscapes in ways that may not reflect traditional basins and watersheds. Greener is better. Greener and more resilient is much, much better!
Second, ecosystems and ecosystem services are not fixed and reliable utilities; they are sensitive, dynamic, and complex, and they will evolve and even transform in ways that may be hard to predict. In application, ecosystem services have often been based on at best simplistic (or sometimes even just dumb) biology and hydrology. If utilities are the domesticated workhorses that deliver clean, reliable water to our economies, then ecosystems are wild horses — mustangs running with strength and agility. They are not saddle-ready and certainly not inclined to be led by a bridle. They will do strange things. We can “break” them by molding wild systems to our needs, but that incurs a different set of costs.
Third and last, freshwater resources and the water cycle more broadly represent a distinct part of the natural landscape. Water resources are integrated and critical to ecosystems and their services but also distinct — they are a mixture of atmospheric, geological, and ecological processes, with a strong dose of human influence at each stage. The Global Commission on the Economics of Water tries to get at this idea. I think tools like the Water Resilience Tracker do too. Reducing a particular aspect of the water cycle to an “ecosystem service” risks treating water’s flow to a kind of “ecological pipe” that may not usefully encompass the fullness of water as a part of a larger system and landscape.
Ecosystem services are a powerful and underused concept, but we might be making our economies and financial systems more vulnerable and less resilient with these ideas if we do not also treat nature with the respect she asks from us. Greener macroeconomic applications also needs more areas of expertise — from climate science and resilience thinking, from biology, and from hydrology.
John H. Matthews
Corvallis, Oregon, USA