Ecological Unit

Ecu - Metabolism

Post-capitalism needs an ecological unit of account.

Capitalist Destruction of Nature

"There are many planets, but only one economy" (Die Partei).

With capitalism, an economic system currently prevails in which growth of the overall economy is firmly inscribed into the structure. This inscription occurs on two levels. First, it is already laid out in the Industrial Revolution. Due to increasing efficiency, it becomes possible to use more and more nature with less and less effort. Through competition and private property, this growth leads to competitive pressure on other companies. Growth thereby becomes a compulsion.

This growth imperative leads to widespread destruction of nature, as demonstrated by the exponential rise in CO₂ emissions. A decoupling of growth and environmental destruction has not been proven to date, even with commitments to reduce CO₂ emissions. Furthermore, the profit principle leads to savings in one area (e.g., CO₂ emissions) being offset by shifting to other areas, as shown by lithium mining or nuclear power.

Post-capitalist Blind Spot?

Proposals for alternatives to capitalism have often focused primarily on abolishing and replacing the capitalist principle of inequality and exploitation. The destruction of nature was less frequently in the foreground. (Exceptions: Half-Earth Socialism and Life Cycle Assessment and Cybernetic Economic Planning).

However, actually existing socialism shows that the destruction of nature does not automatically stop with the end of capitalism. In the GDR, even more CO₂ was emitted per person than in the FRG.

On the one hand, this was due to systemic competition. In external relations, a condition similar to the capitalist growth imperative prevailed. Yet, even independent of this competition, the uncritical implementation of the principle of the technical revolution carries a great danger of environmental destruction. Due to the ever-increasing leverage, intervention in nature and its destruction become increasingly easy.

A post-capitalist economy should therefore always explicitly consider its interaction with nature and its protection.

In this text, I make a proposal to this end. I do not outline a comprehensive economic model, but rather draft a module that could then be integrated into existing proposals, such as Parecon.

Non-human beings and future generations, among others, are severely affected by ecological crises. Many animals would go completely extinct, and the majority of sea-level rise affects people who are not even born today.

Taking into account the interests of non-human living beings and future generations through "simple" deliberative processes proves to be not so simple, precisely because they cannot directly express themselves or negotiate. The bird simply cannot speak up for itself.

I therefore find it obvious to fall back on a system here that requires fewer direct negotiation processes. Here, I plead for a central ecological unit of account with a global limit that ensures compliance with these boundaries.

Central Unit of Account in Disrepute

The question of whether there should be a central unit of account is particularly controversial both in the planned economy debate and generally in the search for post-capitalist alternatives. For many authors in the orbit of the Commons Institute, but also in Half-Earth Socialism, a central unit of account is rejected. In my view, too little distinction is made here between current money and the principle of a central unit of account. Our current money is closely linked to the logic of capitalist valorization. It represents precisely this logic as well as strong economic inequality, and it comes with a growth compulsion. However, specifically for ecological crises, a central unit of account holds considerable potential in my eyes—namely, when it refers to the finite resources of the Earth instead of alleged human achievements. Although information is always lost through simplification, information is also gained. Through a central truth function (or reference metric), it becomes significantly easier to argue and enforce that certain boundaries must not be exceeded. Especially regarding the limitlessness of environmental destruction, this seems to me to be the correct choice.

The negotiation on how this unit of measurement is composed would only be conducted once (and adapted later if necessary). This negotiation can and must be conducted in such a way that it is transparent and understandable even to non-experts. The needs of non-human living beings and not-yet-born humans must also be taken into account. With the help of this central ecological unit of account, a metabolic balance is then to be carried out within planetary boundaries.

Planetary Boundaries

The concept of planetary boundaries was developed by an international group of scientists led by J. Rockström and W. Steffen and first published in 2009. It describes environmental limits within which humanity can safely operate in order not to irreversibly disrupt the relatively stable Earth system that we have known since the Holocene, which was crucial for the development of human civilizations.

Nine critical processes that regulate the stability of the Earth system were identified and quantified. Crossing these boundaries increases the risk of sudden or irreversible environmental changes on a continental or global scale.

The nine planetary boundaries comprise:

According to the latest research, 7 out of 9 planetary boundaries have been exceeded (PIK, 2025). These are climate change, the biosphere, freshwater, land use, biogeochemical cycles, the introduction of new substances, and ocean acidification.

The planetary boundaries framework is currently the most comprehensive and most widely scientifically discussed model of its kind.

Ecological Unit of Account

But how can planetary boundaries established for the entire Earth be mapped onto individual production steps or even products? There is already an astonishing amount of knowledge on this question that can be made usable for this process. In Life Cycle Assessment (LCA), the impacts of many products on several of the control variables of planetary boundaries are already being investigated. For this purpose, there are several extensive databases in which the ecological impacts of a large number of production steps or environmental interventions (e.g., raw material extraction) are listed. This information can be used to determine the environmental impacts for all relevant primary production steps. The impacts of later production steps or the impacts of individual products should then be calculated within the production chain itself. Two steps are required for this.

First, a common ecological unit (Ecu) must be generated from the 9 planetary boundaries.

For each planetary boundary, there are one or two control variables that can be used to determine the state of the respective domain or whether a boundary has been crossed. In order to generate the Ecu, a control variable that is directly attributable to human influence must exist for each planetary boundary. This is the case, for example, with CO₂ equivalents. Control variables that can be traced back to human action also exist for most other planetary boundaries.

The number of allowed pollution units per year ($\text{BudgetJ}$) for each planetary boundary is calculated by subtracting the pre-industrial concentration ($\text{VK}$) of the respective control variable from its absolute limit quantity ($\text{Grenze}$) and dividing this value by the average regeneration time (i.e., how long substances remain in the environment or ecosystems take to recover).

$$\text{BudgetJ}{\text{co2}} = \frac{\text{Grenze}{\text{co2}} - \text{VK}{\text{co2}}}{\text{Regeneration}{\text{co2}}}$$

Then we calculate a total capacity utilization ($\text{Gesamtauslastung}$)

$$\text{Gesamtauslastung}t = \frac{\sum \frac{\text{Nutzung}{tx}}{\text{Budget}_{tx}}}{N}$$

with $N = \text{number of boundaries considered}$ and $t$ as a time step (e.g., 1 month); for the quota interpolation, the initial consumption $\text{Nutzung}_{t0}$ is used.

All indicators require an Ecu price ($P(x)$).

The starting prices in Ecu result from the current annual consumption; the Ecu quantity is considered to be $\text{EcumengeJ} / 12$ (if applicable, via $\text{EcumengeZiel} / 12$ in case of initial overload).

$$\text{Ecu}{\text{co2}} = \frac{\frac{\text{EcumengeJ}}{12 \cdot N}}{\text{Nutzung}{t0\text{co2}}}$$

The annual start Ecu quantity ($\text{EcumengeJ}$) is selected to be at least $\text{EcumengeZiel}$; in case of overload at the start, it is scaled with the ratio of the sums.

$$\text{EcumengeJ} = \text{EcumengeZiel} \cdot \max\left(1, \frac{\sum \text{Nutzung}{t0g}}{\sum \text{Budget}{t0g}}\right)$$

The monthly Ecu quantity ($\text{Ecumenge}_T$) decreases during the reduction phase ($\text{Gesamtauslastung} > 1$) in each step (e.g., month) by a politically specified percentage ($\text{Deltagesamt}$, e.g., $1 = 1%$), not below $\text{EcumengeZiel} / 12$.
If the total capacity utilization is $\le 1$, the Ecu quantity is frozen; $\text{Ecumenge}_T$ then remains at the level reached.

To ensure that the individual intermediate prices are also correct, a $\text{QuoteT}_{\text{co2}}$ (and for all further boundaries) is defined for each intermediate step.

f increases in each step of the reduction phase by Deltagesamt (up to at most 1);
if Gesamtauslastung <= 1, f remains frozen.

if f < 1.0:
quote_T[k] = nutzung_t0[k] * (1.0 - f) + budget_T[k] * f
else:
quote_T[k] = budget_T[k]For each planetary boundary, there are one or two control variables that can be used to gauge the state of the relevant system or to determine whether a boundary has been exceeded. In order for the Ecu to be generated, there must be a control variable for each planetary boundary that is directly attributable to human influence. This is the case, for example, with the CO₂ equivalent. For most other planetary boundaries, too, there are control variables that can be attributed to human activity.

The number of permitted pollution units per year (BudgetJ) for each planetary boundary is calculated by subtracting the pre-industrial concentration (VK) of the respective control variable from its absolute limit (Limit) and dividing this value by the average regeneration time (i.e. how long substances remain in the environment or how long it takes for ecosystems to recover).

BudgetJco2 = ( Limiteco2 – VKco2 ) / Regenerationco2

We then calculate a total utilisation (overload)

Total_Exploitation_t = Sum(Usage_tx / Budget_tx) / N

where N = number of limits under consideration and t is a time step (e.g. 1 month)

All indicators require an Ecu price (P(x)).

The initial prices in Ecu are derived from current consumption

ECU_CO₂ = (ECU_volume_t / N) / Usage_t₀CO₂

The initial ECU volume (per year) is set to at least the target ECU volume; if there is overutilisation at the start, it is scaled by the ratio of the sums.

ECU_volume_Y = Target_ECU_volume * max(1, Sum(Usage_t₀g) / Sum(Budget_t₀g))

During the reduction phase (total utilisation > 1), the monthly Ecumenge (Ecumenge_T) decreases in each step (e.g. month) by a politically determined percentage (DeltaTotal, e.g. 1 = 1 per cent), but not below EcumengeTarget/12.

If the total utilisation is ≤ 1, the Ecumenge is frozen; Ecumenge_T then remains at the level reached.

To ensure that the individual interim prices are also correct, a quotaTco2 is set for each intermediate step (and for all further limits).

f increases by Deltagesamt at each step of the reduction phase (up to a maximum of 1);

if the total utilisation is ≤ 1, f remains frozen.

if f < 1.0:

quote_T[k] = nutzung_t0[k] * (1.0 - f) + budget_T[k] * f

else:

quote_T[k] = budget_T [k]

or, as an auxiliary variable for each limit (not yet included in the price formula):

utilisation_tco2 = usage_tco2 / budget_tco2

delta_tco2 = total_delta * utilisation_tco2 / total_utilisation_t

The price must then be set so that the quota_T is matched as closely as possible. To this end, the following is calculated for each step:

Ecuco2 = ( Ecumenge_T / N ) / Quote_tco2

Subsequently, normalisation is carried out at each step, such that the following applies:

Ecumenge_T = P(co2)*Quote_tco2 + P(HANPP)*Quote_tHANPP + …

This ensures that, at every intermediate step, the distribution of Ecumenge across the target quotas is maintained.

The relative overload on a limit is also taken into account during the reduction phase via quota interpolation, so that limits with higher utilisation are steered more strongly towards the budget. As historical consumption figures have already been used as a basis, the deviation per limit will initially remain within acceptable limits.

However, price elasticity is not yet taken into account here. So, if it is easier to replace nitrogen than to do without CO₂, it would be possible for nitrogen emissions to continue falling in the medium term whilst CO₂ remains relatively expensive.

Therefore, if sufficient historical data is available (e.g. from price step 5 onwards)

Raw_Ecuco2 = Elasticity_factor * ( Ecumenge_T / N ) / Quota_tco2

be selected as the raw price. The elasticity factor is initially set to 1 and is adjusted in the event of a deviation between usage and the quota:

Initial_CO₂_elasticity_factor = Sum(Usage_t / Quota_t) / Number_of_periods

if Usage_tCO₂ > Quota_tCO₂:

CO₂_elasticity_factor = CO₂_elasticity_factor * (1 + alpha * (Usage_tco2 / Quota_tco2 - 1))

The elasticity factor may need to be adjusted further if necessary.

Furthermore, a mechanism is required to exclude emission values that are consistently below the target value from the calculation.

Secondly, the individual production steps must be assigned ECU values. To this end, all primary production steps would now be assigned an ECU value based on the data in the LCA databases and depending on their impact on the individual control variables. At each subsequent production step, businesses must now account for the ECU price of intermediate products. Unlike capitalist prices, however, this is a through-put accounting figure. It is not possible to make a profit. So, if a company purchases aluminium and timber and processes these into several tables using a saw and a drill, powered by electricity, the ECU price of the aluminium, the timber, the electricity consumed and the two tools must be allocated to the tables. In doing so, account must be taken of how much waste is produced or how many tables a circular saw can produce before it needs replacing. In the long term, businesses can only produce goods for which there is demand, as, during day-to-day operations, income must equal expenditure.

When investments are made or new products are introduced, ECU loans may be taken out. For research projects, the ECUs come directly from the state. An ECU loan is required to build a factory, the granting of which depends on a realistic ability to repay. Repayment is achieved by passing on ECU costs to the products over a longer period. Loans are only granted if the product appears to be sufficiently ECU-efficient. Some of these loans could be provided by a not-for-profit ECU banking system, supplemented by direct lending similar to crowdfunding.

Distribution issues

The Ecu cycle is completed by distributing all available Ecus amongst all people and states. New Ecus are made available every month. This ‘pollution basic income’ ensures that everyone can share equally in the pollution of the Earth.

States must also set aside Ecus for all their actions that affect planetary boundaries. In some economic models, the Ecu coexists alongside another currency.

Whilst trading in Ecus would not be an intended feature, in my view, it would pose little problem as long as there is little overall inequality in ownership.

Under a socialised banking system, consumers could apply for an Ecu loan if there are valid reasons for doing so. These debts would then be deducted from future Ecu income.

However, it would not be legal to pledge Ecus not yet received to third parties. This would ensure that no economic dependencies arise.

People in greater need – due, for example, to illness or other circumstances – would also be paid a higher Ecu allowance. The desire to own an SUV at some point or a longing to travel would certainly not lead to a loan or to a generally higher allowance. Saving up Ecus, for example to fund a holiday in the Maldives, is, however, possible.

In this respect, the system differs significantly from the ‘ecological footprint’ measures currently used to track consumption. Pollution units permeate the entire production process, starting from consumption, and thus have a direct impact on it. Consequently, the responsibility for adhering to planetary boundaries would no longer be shifted onto private consumption decisions. However, the system would not replace any additional planning that might be required. Whether private passenger transport is to be completely abolished anyway can also be decided from the outset; for all sectors that are fundamentally managed, however, the Ecu enforces production within planetary boundaries whilst simultaneously creating distributive justice amongst people – limited by access to natural resources.

The Ecu metabolic balance as a technology for social transformation

In addition to the use of the ‘ecological economic accounting’ module in post-capitalist economic systems, it could already be implemented to some extent today. In my view, this would be very interesting for two reasons. Firstly, because adaptation to the ecological crisis takes place on a completely different level here. Instead of heating, transport and so on becoming more expensive – thereby pitting environmental protection against social justice – everyone would then receive Ecus. Rather than their circumstances deteriorating, they would be granted additional rights. In my view, this would also be easier to justify politically than price rises. The introduction of the unit of measurement described would also be interesting because there is no dominant counter-narrative to the idea of an equitable distribution. It therefore seems much easier to ensure that everyone receives the same amount in this context than to redistribute money. At the same time, this introduction would likely have consequences for current ownership structures. The introduction of such a pollution unit can therefore also be understood as a technology for social transformation.

The Ecu would, of course, therefore be merely one step towards a more democratic and equitable economy. As long as the existing ownership structures remain in place, it seems likely that trading in the Ecu will also be permitted. Ownership structures would then shift only marginally for the time being. However, as trading in future Ecu entitlements is not legally permissible, there is nevertheless a legal basis for further measures.