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Free Markets and Free Trade, Ecology and Economics

Wednesday, May 13th, 2015

(This article was first published as a Google knol and then transferred to I re-publish it here as a basis for discussion. © Klaus Rohde).


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  1. Marco Parigi

    December 2, 2008

    One implicit assumption of your knol here is that Ricardo’s principle is not legitimate for cases where the axioms are not reflected in reality. My view regarding these kind of principles is that what is important is that the dynamics predicted by the principle are reflected in reality, and that the mathematics behind the model based on these axioms is tenable and usable at the same time. The test to determine when to stop using Ricardo’s principle is when alternative models show better predictive value. Predictions of Malthusian catastrophes seem to be very unreliable at the least.From what I can tell, countries often behave as if those 7 assumptions were true, even if most of them are false.I am not really clear on the dependence of concepts on whether a system is in or not in equilibrium. When is an economy thought of as being in equilibrium? Are there tests independent of the economic models used?

    • Klaus Rohde

      December 2, 2008

      Concerning your question:”When is an economy thought of as being in equilibrium?”Below are some definitions for economic, genetic and ecological equilibrium. Economists would have to answer the question concerning relevant tests, but it seems to me that only an actual evaluation of data a posteriori could show whether equilibrium has existed or not.From Wikipedia (“In economics, economic equilibrium is simply a state of the world where economic forces are balanced and in the absence of external influences the (equilibrium) values of economic variables will not change. Market equilibrium, for example, refers to a condition where a market price is established through competition such that the amount of goods or services sought by buyers is equal to the amount of goods or services produced by sellers. This price is often called the equilibrium price or market clearing price and will tend not to change unless demand or supply change.”“A genetic equilibrium occurs when an allele within a gene pool is not changing in frequency (i.e. evolving). For this to be the case, evolutionary forces acting upon the allele must be equal and opposite. The only basic requirement is that the population be large enough that the effects of genetic drift are minimised. One example is Hardy-Weinberg equilibrium.” There is nothing in Wikipedia on ecological equilibrium, which I would define as follows: An equilibrium point in an ecological system is the population (or community) density to which the population (or community), which has temporarily deviated from it, will always return. Or: an ecological system is an equilibrium system when its density fluctuates around a midpoint. – One might be inclined to add that fluctuations around the midpoint should not be excessively large, although this introduces a subjective aspect to the definition: what is excessive?As pointed out above for economic equilibrium, it seems to me that only an evaluation of data a posteriori can distinguish equilibrium from nonequilibrium ecological systems. One might then make projections for the future development of the system on the basis of whether conditions are likely to change.

    • Klaus Rohde

      December 2, 2008

      Concerning the first part of your comment:”The test to determine when to stop using Ricardo’s principle is when alternative models show better predictive value.”I commented on this already in my knol: it is not so much another model that is needed, but”a careful analysis of local conditions permitting a decision on the benefits of free trade may often be useful, in particular when a powerful nation deals with a small developing one.”

  2. Ryan Faulk

    January 23, 2010

    Horrible — 1. “Since this knol was published, Paul Krugman was awarded the Nobel Prize for Economics for work which clearly implies that Ricardo’s principle does not realistically describe what is actually happening.”- And Obama won a Nobel Peace prize, and Hayek also won a Nobel in economics. Do you even know who decides who wins a nobel prize in economics?2. You are treating freedom as some prescriptive model. It is not, it is what happens when you don’t threaten with imprisonment. These are not dueling prescriptions, but the violent imposition of rules vs. resistance to them.There is “free market dogma” in the same way there is “no murder dogma” and “anti violent theft dogma”. I’m also dogmatic in there not being a god.3. Your characterization of competition is hideously ham-fisted. Firms make deals with each other in supply lines, as do animals in nature. You clearly have not explored arguments for freedom in good faith.4. States control the money supply. See fiat currency and central banks, and in the US see the federal reserve system. The financial market is perhaps the most state-controlled market there is, and thus is chaotic because the false certainty of a state decree leads to chaos.5. Hysterical citizens voting for war is only an issue if there is a state. That’s a failure of your ideology, not freedom.6. The Oil lobby is powerful and does things to prevent alternative energy from coming on line. The state enables cartelization by creating a “web of difficulty” that large firms can bypass, or only apply to new firms entering an industry, or are fixed costs (like a license) which disproportionately hurt small firms. Again, this is a problem of the state.

    • Klaus Rohde

      January 22, 2010

      Thanks for the comment, it is always good to hear somebody who does not agree with you.1. I commented on earlier Nobel prizes in economics and Obama’s peace prize in my blog .Comments welcome;2. When I say free market dogma I mean (and I believe this is perfectly clear) that free markets are often but not always useful; an examination of local conditions may be important;3. Yes, to a degree, but unfortunately weaker economies are often forced into deals unfavourable to them because they have no other choice; and it is not always companies but governments which determine the rules;4. May be but perhaps not controlled enough;5. ????;6. Yes, indeed, this may well be the case, but wrong rules imposed by a state do not mean there should be no rules.

    • Peter Baskerville

      January 23, 2010

      Anonymous, now that you have taken the trouble to register, why not write a Knol that best outlines your view of the topic that Klaus has developed here. It would be great to read your views in an article rather than just responses to this one.

  3. Michael Pathak

    February 7, 2010

    Industrial Symbiosis as a way of meeting Ecological Economics needs — Industrial Symbiosis is a means of achieving continued growth in the economy whilst minimizing the impact on the environment. It is claimed that an industrial ecosystem in industrial symbiosis may behave similar to the natural ecosystem where everything gets recycled. Technological tools such as open source virtual globes like Google Earth can be used to determine that locations for optimizing symbiosis. A good resource is the following.W. Doyle and J. M. Pearce, “Utilization of Virtual Globes for OpenSource Industrial Symbiosis”, Open Environmental Sciences, 3, 88-96.The link to the article is here

  4. Seema Singh

    September 30, 2011

    nifty tips — Markets dramatically change they their flow and no one exactly produce or expect 100% from their profits . Choosing the right indicator or analyzing software blended with human aspect gives better results.regards:-

The Chief Business Adviser to the Prime Minister on Climate Change, and Continuing Rise in Global Carbon Dioxide Levels

Saturday, May 9th, 2015

According to the Sydney Morning Herald 9.5.2015, ”

“Climate change is a hoax led by the United Nations so that it can end democracy and impose authoritarian rule, according to Prime Minister Tony Abbott’s chief business adviser.

Maurice Newman, the chairman of the Prime Minister’s business advisory council, has written in The Australian that scientific modelling showing the link between humans and climate change is wrong and the real agenda is a world takeover for the UN.

This is not about facts or logic. It’s about a new world order under the control of the UN “

Full article here:

Perhaps Maurice Newman can explain the following:

The Global Monitoring Division of NOAA/Earth System Research Laboratory has published data which show that for the first time since measurements began, the global monthly mean carbon dioxide level has exceeded 400 parts per million in March 2015, a rise of more than 120 parts per million during the industrial age.





(Graph from Ed Dlugokencky and Pieter Tans, NOAA/ESRL (

For methods, interpretation and links to other relevant sites see:




An Ethical Basis for Nature Conservation: Arthur Schopenhauer

Wednesday, May 6th, 2015

In the last chapter of  the book edited by me “The Balance of Nature and Human Impact, Cambridge University Press 2013″, we, i.e.  Klaus Rohde, Hugh Ford, Nigel R.Andrew and Harold Heatwole”  deal with “How to Conserve Biodiversity in a Nonequilibrium World”. The first section of the chapter discusses economic, esthetic and ethical arguments for conserving biodiversity. We conclude that in the modern world people are most impressed by economic arguments, whereas the ethics of the problem is very rarely considered. Are there ethical reasons for conserving biodiversity? We point out that there indeed are, convincingly demonstrated by the German philosopher Arthur Schopenhauer. His philosophy is particularly suitable, because it appeals not only to philosophically educated Westerners, but also to all those who have a Buddhist or Hinduistic background, i.e. a very large proportion of mankind. Schopenhauer was the first Western philosopher who taught that ethical (moral) behaviour must be based on compassion with humans and animals. 

I have given a concise outline of Schopenhauer’s philosophy of ethics and justice earlier:

Here I mention a few important points in excerpts taken from my earlier essay:

Schopenhauer’s ethics and theory of justice follow from his epistemology, according to which the world as it appears to us, as we perceive it, is to a large degree shaped by our mental apparatus. Following Immanuel Kant, he assumes that time, space and causality are not characteristics of the thing-in-itself (“Ding an sich”) but categories of our mind. All distinctions between individuals disappear once these categories are taken away. In other words, all beings are in essence One.

Schopenhauer’s ethics has had a deep influence on many philosophers and writers after him. Albert Einstein, for example, mentions Schopenhauer as an important influence on his views. Schopenhauer was the first who arrived at conclusions similar to those in Eastern philosophy, in particular Hinduism and Buddhism. And he was the first in Western philosophy who based ethics on compassion with man and animals.

………  Schopenhauer develops a theory of ownership, of natural justice and law in general. Injustice is the original and positive, justice the derived and negative concept. “The only purpose of law is determent from encroaching on others’ rights”. Schopenhauer considers Kant’s thesis that humans should always be considered to be the end (“Zweck”) and never as means, as vague and problematic, because “a murderer sentenced to death must with full justification be used as means”, as a determent and for the re-establishment of public security. However, this applies only to justice in time (“zeitliche Gerechtigkeit”), eternal justice which applies to the entire world (that is, lies in its essence) and does not depend on human constructions (“Einrichtungen”), cannot be retaliatory, because it lies not in time unlike justice in time which is based on retaliation. “Punishment must here (in eternal justice) be connected with the crime in such a way that both are one.” If one wants to know what humans as a whole and in general are worth from a moral perspective, one only has to look at their fate as a whole and in general. This is indigence (“Mangel”), misery, agony and death. Eternal justice at work…..”. However, the “crude individual” has a different view, since he knows only the temporally and spatially separate appearances: he sees tormentors and murderers on the one side and sufferers and victims on the other, who are really only One. Nevertheless, in the depth of his consciousness he sometimes has the “somewhat dark hunch” that “all this is not entirely foreign to him”. Horror (“Grausen”) is founded on this sometimes appearing hunch. All evil in the world derives from the Will which is the real essence of each single person. Hence (Schopenhauer quotes Calderon’s “Life as Dream”, in which the Christian dogma of original sin is expressed: “Since the greatest guilt of man is that he was born”). – Esoterically depicted in the Vedas and especially in the Upanishads, the myth of transmigration expresses the cognition of eternal justice in an easily understandable form for the people. You must not kill an animal, because at a time in eternity you will be born as such an animal and suffer the same death”. This is the meaning of “tat twam asi” (This is you), which is the foundation of Hindu teaching. – In the same sense Christian ethics forbids retaliation of evil with evil and submits to eternal justice (“Revenge is mine, I shall retaliate, says the Lord”).

Our discussion to this point permits a description of the ethical significance of action. According to Schopenhauer, genuine virtue can come only from the insight which recognizes in a foreign being the same being as one’s own. “In principle (“an sich”) all deeds…. are just empty images, and only the attitude (ethos, “Gesinnung”) that leads to them, lends them moral significance.” The principle of justice (based on the negation of evil) commands that one must not hurt others.” Genuine goodness goes much further and leads to love of mankind  (“Menschenliebe”): one distinguishes much less than usually between oneself and others, one sacrifices one’s property and even oneself to one’s neighbour (“Nächster”) and one does not torture an animal. Love is based on the recognition of foreign suffering and pure love is therefore by its nature compassion. All this is in direct contradiction to Kant’s view that any truly good and virtuous deed is based on abstract reflection, on the concept of duty and the categorical imperative.

In Schopenhauer’s time (the first half of the 19th century), destruction of the environment had not become the important issue it is today. Hence, he does not deal with conserving the environment as such. However, his conclusion that moral behaviour of humans must be based on compassion with fellow humans and animals should be interpreted as meaning that animals must be protected and therefore also their habitats and the environment in general. In other words, we must not preserve organisms and the environment as a whole because they are of economic benefit to us, we must conserve them because we have an ethical responsibility towards nature, i.e., not only to the next generations of humans, but also to other living beings.






Third book review of Klaus Rohde ed., The Balance of Nature and Human Impact, Cambridge University Press 2013.

Thursday, April 23rd, 2015

The third review of the book edited by me has just been published in Biological Conservation 182, 281-283 (February 2015)
Reviewer is Brian Drayton, TERC Cambridge, MA, USA, who gave me permission to use excerpts from his review.

For earlier reviews see here:

This latest review covers two books:

Green Equilibrium: The Vital Balance of Humans and Nature, Christopher Wills. Oxford University Press (2013). xxviii+280 pp.,
and The Balance of Nature and Human Impact, Klaus Rohde (Ed.) Cambridge University Press (2013). xvi+413 pp.

Excerpts dealing with the book edited by me follow:

“These two books make good companions, and it is instructive to read them side by side. In doing so, the reader can reflect upon a central challenge to conservation science, and to the societies within which it carries out its business.”


“Klaus Rohde’s fascinating edited volume The Balance of Nature and Human Impact offers a snapshot of current research, exploring
evidence for or against equilibrium processes from an array of systems, interspersed with reviews of literature on selected topics. A brief gallop through the table of contents can only suggest its wealth of provocative entries.
Part I: ‘‘Nonequilibrium and equilibrium in populations and metapopulations’’ examines reef fishes ……..
ectoparasites on terrestrial hosts …….. and marine parasites. Part II: “Nonequilibrium and equilibrium in communities’’ examines plankton communities ……, community stability in relation to fire ……., marine and freshwater ectoparasite communities ….. and small mammal ectoparasites …. , and bird populations and communities. Part III addresses ‘‘Nonequilibrium and equilibrium on geographical scales’’ in the context of island flora and fauna …… and arctic vascular plant diversity and spatial variation ……… Part IV: ‘‘Latitudinal gradients’’ focuses on diversity gradients… the literature providing evidence for and against equilibrium and nonequilibrium explanations,” and ‘‘effective evolutionary time.’’
Part V: ‘‘Effects due to invasive species, habitat loss and climate change’’ is by far the largest section. …….. the section marks a transition, as all the rest of the book looks at ‘‘biocomplex’’ (coupled humannonhuman)systems—where the nonhuman component may include insects … coral reefs ….. , emerging infectious diseases ……., human impacts on biodiversity …… , amphibians …….. , and reptiles ……. Part VI: ‘‘Autecological studies’’ comprises two articles: ‘‘Autecology and the balance of nature—ecological laws and human-induced invasions’’ …… and ‘‘The intricacy of structural and ecological adaptations: micromorphology and ecology of some Aspidogastrea’’.
Part VII: ‘‘An overall view’’ sets much of the foregoing into a larger theoretical and practical context, coming back to the
challenges faced by conservation biology in a world in at least one kind of chronic disequilibrium: anthropogenic climate change. Rohde discusses interspecific competition as a regulator of communities, and the status of evolutionarily stable strategies. Finally, Rohde and co-authors discuss ‘‘How to conserve biodiversity in a nonequilibrium world.’’ Here we come to the crux of the matter. As Wallington et al. (2005) argue, much conservation strategy betrays an underlying ‘‘balance’’ orientation, which often takes the form of creating reserves and assuming that they will ‘‘do the job’’……….; or of reintroducing species or otherwise restoring a system, and then assuming that short-term success will last (also not a safe assumption……………. Rohde et al. argue cogently that in the world we now inhabit, equilibrium assumptions will result in deep design weaknesses in many conservation strategies, and the kind of reflective research represented by this volume as a whole must result in substantial innovation.”


“Both books under review make the case ……. that the unexamined assumption of ‘‘balance’’ has contributed to many of our current ecological crises, and inhibits proper responses to them. In some cases, a naive reading of ‘‘balance’’ contributes to the assumption that in time, any disturbance caused by human activities will be remedied by Nature as it comes back into balance. In other cases, the ‘‘balance of nature’’ is reified without sufficient understanding of ecological systems and their dynamics, so that intended remedies result in further, different disturbance or even system transformation. Our challenge …….. is to convey a much richer, but perhaps just as satisfying, understanding of the way things work, and the implications of that understanding for what conservation must become. As Donald Worster (1994) wrote in his seminal treatment: ‘‘It is a pattern of behavior based on the idea that preserving a diversity of change ought to stand high in our system of values, that promoting the coexistence of many beings and many kinds of change is a rational thing to do. . . .Such a strategy of trying to conserve a diversity of changes may seem paradoxical, but it is founded on a crucial and reasonable insight. We may have to live with change, may even be the products of change, but we do not always know—indeed, we cannot always know—which changes are vital and which are deadly.’’

Don’t support science but obscurantism!

Saturday, April 18th, 2015

If you don’t know the meaning of obscurantism, here it is (from the source of all wisdom, Wikipedia): “Obscurantism (/ɵbˈskjʊərəntɪsm/) is the practice of deliberately preventing the facts or the full details of some matter from becoming known.”

This is what the Australian government is doing, in this case represented by the Minister of Education Christopher Pyne. See here:

It cut many millions of Dollars in funding from the budget of CSIRO, the foremost research organisation in Australia which has done much work on the science of climate change, and many other science projects, but is quite happy to invest four million in a centre to be located at the Business School of the University of Western Australia and devoted to misleading the public (officially “The new centre will focus on applying an economic lens to proposals to achieve good for Australia, the region and the world,” said a statement from UWA).

An extract from the article:
“The government would cover roughly a third of the cost for an Australian iteration of Dr Lomborg’s Copenhagen Consensus Centre at the University of Western Australia (UWA), confirmed Mr Pyne’s office following an investigation by The Guardian Australia.

The news comes on the heels of the Danish economist’s move to the UWA’s school of business and his appointed as Prime Minister Tony Abbott’s advisors on foreign aid.

Labor and environmental activists heavily criticised the appointment, questioning why someone who played down the effects of global warming should be advising on policy concerning developing countries in the Pacific that were exceptionally vulnerable to climate change.”

Dr.Lomborg is not an environmental, but a political scientist and is highly sceptical of the importance of climate change. He has lectured on statistics and the new centre at UWA is in the business and not the science school. He does not deny that climate change is real and human-induced, but thinks it is “not the end of the world”. Climate scientists do not claim that climate change is necessarily “the end of the world”, but Dr.Lomborg’s views differ sharply from those of the vast majority of climate scientists who take the risks much more seriously and want to do something about it. The establishment of the Consensus Centre and the appointment of Dr.Lomborg can only mean that the Liberal-National Government will continue its politics based on the denial of the seriousness of the threat posed by climate change, and shown by the reduction in the clean energy target, the abolishment of the carbon tax, etc.

More about the Copenhagen Consensus Center, the Danish equivalent of the Australan version and run by Dr.Lomborg, and the donors supporting it here:

Australia’s climate change policy all talk and no action

Sunday, April 12th, 2015

See here:

“The government is refusing to accept a political compromise on the renewable energy target (backed by Labor, the renewables industry and big business) because it thinks the industry won’t be able to reach the target, but the only reason industry wouldn’t reach the target is the absence of a political compromise.”

The government will set a post-2020 emissions reduction target without a policy to get there.

“The government is not including climate change in long-term planning exercises that really should be planning for climate change.”

And not to forget: even the term “climate change” appears to be taboo in government papers. It has been replaced by a term which puts much less urgency on the problem: “climate variability”. All in line with the views of Tony Abbott and some of his ministers, who do not take climate change seriously (in Abbott’s word: “crap”).

Put a Prize on Carbon Now!

Tuesday, April 7th, 2015

Have a look at the article linked below.


“An international team of scientists has tried a new approach to addressing the complex argument about the costs of climate change – and, once again, the prediction is that the costs of inaction will be so much greater than paying the bills now.

The researchers − from the UK, Switzerland and the US − conclude that policy-makers must apply the brakes and put a high price on carbon emissions “before it is too late”.”

The Destruction of Nature

Tuesday, April 7th, 2015

A friend sent me this very useful link:

Overpopulation, overconsumption in pictures

This is where our present economic system has led us and which has to be stopped!

Plastic pollution affects corals

Saturday, March 21st, 2015

Many studies have shown that enormous quantities of plastic get into the oceans. However, we know little about the effects of plastic on the marine environment. Now, a study by Hall, Berry and Rintoul, published in Marine Biology, has shown that corals, which feed on plankton (beside synthesizing organic matter using symbiotic zooxanthellae) ingest (but do not digest) microparticles of plastic, possibly with severe adverse consequences. For details see here:

Full reference here:

Microplastic ingestion by scleractinian corals by N.M. Hall, K.L.E. Berry, L. Rintoul, M.O. Hoogenboom, Marine Biology. DOI 10.1007/s00227-015-2619-7

Amazon rainforest: declining ability to absorb carbon

Thursday, March 19th, 2015

An article just published in Nature 519, 344-348 (19 March 2015), doi:10.1038/nature14283, shows that the Amazon rainforest’s ability to act as a carbon sink, i.e. to absorb carbon dioxide from the atmosphere, declined over the last decade.

“Atmospheric carbon dioxide records indicate that the land surface has acted as a strong global carbon sink over recent decades, with a substantial fraction of this sink probably located in the tropics, particularly in the Amazon. Nevertheless, it is unclear how the terrestrial carbon sink will evolve as climate and atmospheric composition continue to change. Here we analyse the historical evolution of the biomass dynamics of the Amazon rainforest over three decades using a distributed network of 321 plots. While this analysis confirms that Amazon forests have acted as a long-term net biomass sink, we find a long-term decreasing trend of carbon accumulation. Rates of net increase in above-ground biomass declined by one-third during the past decade compared to the 1990s. This is a consequence of growth rate increases levelling off recently, while biomass mortality persistently increased throughout, leading to a shortening of carbon residence times. Potential drivers for the mortality increase include greater climate variability, and feedbacks of faster growth on mortality, resulting in shortened tree longevity. The observed decline of the Amazon sink diverges markedly from the recent increase in terrestrial carbon uptake at the global scale, and is contrary to expectations based on models.”

In addition, of course, the area covered by rainforest in the Amazon has decreased markedly due to largely illegal logging, reducing even more the forest’s ability to mitigate the effects from ever increasing carbon emissions due to human activities.