Week No.3: Think up a SES in which you are an active part, and in which private firms play a role

1.Analyze the system using Ostrom’s framework.

For analyzing the Social – Ecological System written by Ostrom, I will use the example of oil converted into petroleum as a resource. I will use the SES framework with a specific position in a specific activity. I take an active part as a user in this system: a consumer of petroleum for my transportation. I will specify the parts of this system and also the second level variables that will lead to interactions and outcomes according to Ostrom’s framework and the symbols she uses to explain about its different parts:

The challenge of SES (Sustainability of Socio-Ecological Systems) is to analyze the relationships among multiple levels of the system, in order to find how sustainable the system is or could be. Extracting oil causes a complex system. The resource system (RS1), sedimentary land in the Amazon Region, is generally located around a high biodiversity environment and close to indigenous communities with ancestral legacy in Ecuador. The resource (RU1) is the barrels of oil extracted from the land. Inside the Governance System (GS1) are the Ecuadorian Government and the Non Governmental organizations like private oil companies such as Chevron or Shell. At the same time and inside the second level variables, there are Non Governmental Organizations, like the ones organized by the indigenous communities where they want to make sure about their property right (GS4) of their land and since they are the most affected by the oil drilling, they are also actors for monitoring and the ones who claim for sanctioning processes (GS8) (when oil companies cause destruction to their environment) not only to the Ecuadorian Government but also to the private oil companies. Finally, the users (U1) are the consumers of the oil transformed in petroleum for transportation (in which I am an active part as a consumer).

The interactions between all these variables, causes a complex dynamic where the goal is to find the productivity of the system (RS5), where oil is abundant (number of barrels of oil) (RU5) and that also has an economic value (RU4) because the economy of Ecuador depends on this activity. According to Ostrom, when “the resource is abundant users do not need to self organize”. Nevertheless, there are some researches that show that oil is not as abundant as before, and that an energetic crisis will come, ¨not when the last drop of oil is extracted but when oil extraction cannot meet demand¨[1] Therefore, the use of oil is passing from being an abundant resource to a scarce resource in the system. Nevertheless, the use of oil keeps growing in Ecuador, for example, the gas stations have reported an increase of 7% in the demand of fuels in the last year[2].

The number of consumers and even the private companies are dependent of oil for several activities (history of use U3) and that is why nowadays, there is a serious concern about this resource and this is why not only consumers but the Government are giving high value to the sustainability of the resource system, looking for other ways of energy for transportation. Many interactions are given through networking activities (I8) and information sharing among the consumers, government and private companies (I2) in order to reduce the amount of oil used in our daily lives.

This is why, the importance of the resource (U8) is taking into account, especially through a part of the users, who are trying to self organize to reduce the use of oil for transportation through several activities. In the most important cities of Ecuador like Quito, Cuenca and Guayaquil, users are getting self organized and starting social movements in which they motivate the population to use their bikes as means of transportation instead of their cars. I have been involved in these movements, also asking to the Municipalities the construction of infrastructure for transportation by bikes.

There are also self organized movements of activists that claim to stop the oil drilling in the Amazon region. Many activists and NGOs defending the right of indigenous people, claim to decentralize the administration of this resource by Governments, because there are proofs that the Governments have not been efficient administering this resource and that is why there are many devastating situations in the Amazon and with the indigenous communities. While I agree with Ostrom when she says that ecological ad social sciences have developed independently and do not combine easily, I know that through Industrial Ecology we can combine them and find out that all these interactions between consumers, private companies, government and NGOs must lead to an outcome where sustainability is the key, not only at the social performance level (O1) but as an ecological performance (O2).

1. Argue how the principle advocated by Friedman might be put to constructive use in the sustainable management of this SES.

In order to put constructive use in the sustainable management of this SES about oil, I would mention a part of Friedman’s theory: “there is one and only one social responsibility of business, to use its resources and engage in activities designed to increase its profits as long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud”.

Taking into account this principle from Friedman, in order to increase the profits of firms that exploit oil in the Amazon region, investors and stakeholders can take the decision to invest their money for developing new technologies of drilling oil that reduces the environmental impact that they create in the Resource System. Through this, private companies will not only benefit because they will reduce the costs of operations with clean technologies but at the same time, the conflicts into the Governance system (between private companies, the government and indigenous communities) will reduce significantly.

Simultaneously, stakeholders and investors can also decide to invest their resources for researching about the generation of cleaner energies with the objective to create new business for more profits. This new business can grow faster due to the fact, that customers (the users) are already self organized and this will be an answer for their claims about cleaner energy. Therefore, these users will be the new customers of the business of cleaner energy. The business can give more profits than expected and in the long run, can switch from extracting oil to generating a new energy for transportation through cleaner energy sources.

This is how, through market mechanisms proclaimed by Friedman, this SES can be more sustainable.

[1] Mac Kay, David. “Sustainable Energy – without the hot air”. Cambridge, 2009

[2] “The sale of heavy trucks grow” http://www.elcomercio.com/actualidad/negocios/venta-de-carros-pesados-crece.html