*Environmental Impacts*

Environmental impact is defined as increases in use of resources (renewable and non-renewable) and degradation of the environment (land, water, air, and resources). The classic IPAT formula defines environmental impact as arising from the interaction of 3 major factors [3,4]:

$$\mathbf{I} = \mathbf{P} \times \mathbf{A} \times \mathbf{T} \text{ (IPAT)}\tag{1}$$

where I = environmental impact, P = population, A = affluence, and T = technology.

The use of the IPAT formula typically involves examining a specific impact, such as resource use (e.g., oil), from a source, with affluence represented by gross domestic product (GDP):

$$\text{I} = \text{P} \left( \text{preople} \right) \times \text{A} \left( \text{GDP/preople} \right) \times \text{T} \left( \text{billions of barrels/GDP} \right) \tag{2}$$

With resulting impact in terms of billions of barrels used [5].

Alternatively, another specific impact could be the result of human activity, i.e., dumping a waste or by-product into an environmental sink, such as CO2 output to be absorbed by various sinks (ocean, atmosphere, rainforest):

$$\text{I} = \text{P} \left( \text{peeephe} \right) \times \text{A} \left( \text{GDP/peeephe} \right) \times \text{T} \left( 10^b \text{ metric tons CO}\_2 / \text{GDP} \right) \tag{3}$$

With resulting impact in terms of 10<sup>6</sup> metric tons CO2 produced [5].

In both cases, i.e., excessive CO2 output to the atmosphere (sink) or excessive use of resources like oil (source), the human system is generating these problems because of exponential growth in affluence (GDP) and population [1].

These environmental impacts contribute to unsustainability. Sustainability means (1) achieving reasonable rates of usage for renewable resources, such as fisheries or timber, that are less than or equal to their natural regeneration; (2) pollution, garbage, and byproducts of consumption cannot be generated faster than they can decay and be broken-down into harmless components; and (3) in the long-run, we cannot use non-renewables at all [6,7]. Therefore, the IPAT formula serves as a useful framework for understanding sustainability and/or areas where our world is unsustainable.

Unfortunately, as the poor nations of the world struggle with population growth and trying to increase their economic output to help reduce poverty, the rich nations continue to use too many resources in an effort to satisfy competitive consumption and excessive wants [8]. Meanwhile, political systems attempt to satisfy citizens' consumption needs by pushing for more economic growth. It's a political-economic system driven by short-term rewards for politicians, citizens, and corporations [5]. The ability to achieve a global balance in the system does not appear to be easy.

#### **2. The United Nations (UN) and the Sustainable Development Goals**

The essence of sustainability is to "live within our means", and global sustainability refers to living within the limits of a finite planet. The concept of sustainable development first became popularized in the 1987 report of the World Commission on Environment and Development, Our Common Future [9]. The report reinforced the "Limits to Growth" and again brought into public consciousness a crucial concern—that global economic growth must be reconciled with the reality of limited natural resources and the dangers of environmental degradation. The report defined sustainable development as:

#### ... *Development that meets the needs of the present without compromising the ability of future generations to meet their own needs* [9].

Implicit within the 1987 UN statement is the distinction between "the needs of the present" (a short-run focus) and "without compromising the abilities of future generations" (a long-run focus). This is an important distinction because of the fundamental worse-before-better (or better-before-worse) system property that "a policy that seems better in the short run is almost always worse in the long run" [10] (p. 365). Examples of this system property include normal business investments that increase short-run expenses but lead to long-run profit, or conservative quota policy in fisheries that restricts the catch and profit in the short run, allowing the fish stock to build back up and eventually leading to better long-run profit [11]. In essence, good policy aimed at long-run outcomes generally requires some short-run sacrifice.

Since 1987, many corporations, non-governmental organizations (NGOs) and governments have set sustainability goals, but global progress on sustainability has been limited. On 25 September 2015 the United Nations adopted a set of sustainable development goals (see [12]). The sustainable development agenda aims to end poverty, protect the planet, and ensure prosperity for all (equality). Unfortunately, as the world currently operates, these goals are almost certainly conflicting.

### **3. Mental Models**

Inadequate mental models have contributed to the structure of our current system, where governmen<sup>t</sup> has adopted the conflicting goals of: (1) protecting the common good and rights of individuals, and (2) seeking to create employment security and reduced poverty through promoting economic growth [13]. However, as shown in the IPAT formula, increases in GDP through economic growth produce many environmental impacts and depletion of resources, both of which harm future generations. In addition, promotion of economic growth typically comes through policies that reduce corporate taxes and relax governmen<sup>t</sup> regulations, and these policies often have the adverse effect of increasing wealth disparity [14].

Mental models are cognitive representations of external reality. The notion of a mental model was originally postulated by the psychologist Kenneth Craik [15], who proposed that people carry in their minds a small-scale model of how the world works. These models are used to anticipate events, reason, and form explanations [16].

When examining global sustainability and climate change, mental models of economic variables are of particular importance. The number of variables considered and the boundary of the mental models used in the economic domain depend on one's world view. One view provided by many standard economic textbooks shows the circular flow of the economy as a closed system where interactions with the natural world are largely ignored [17]. This naturally leads to a restricted mental model; one that does not consider environmental limits.

This closed world view promotes the following ideas: resource extraction can continue indefinitely, and if any resources do become scarce, then the free market will simply use technology and substitution to allow economic growth to continue [18]. Figure 1 compares and contrasts the traditional economic model, economic imperialism (1A), with the ecological economics or steady-state subsystem (1B). In Figure 1a (economic imperialism), the arrows represent the idea that the economic subsystem can expand until it encompasses the whole ecosystem. In this view, the entire system is conceptualized as the macro-economy, including the ecosystem. Everything in the ecosystem is theoretically considered comparable in terms of its ability to help or hinder people in satisfying their wants [17]. Economic imperialism assumes that everything can be priced, and that subjective, individual preferences are taken as the source of all value. Since subjective wants are thought to be infinite in the aggregate, there is the assumption that the economy will grow infinitely in order to satisfy consumers. Such a view promotes the mental model that only economics and economic variables are important. Anthropocentric orientations are focused on human welfare and view the ecological environment as important, but only to the extent that the environment is directly helpful to human needs [19].

**Figure 1.** Economic Imperialism versus Steady State Mental Models: (**a**) Economic Imperialism Mental Model; (**b**) Steady State Mental Model.

In contrast, the field of ecological economics is based on the steady-state sub-system view of the human economy. Here, the economy is an open system that exchanges energy and matter with the Earth's ecosystem. The size of the human economy does have some optimal level determined by global society and the ecosystem. In the long run, the human economy must be ecologically sustainable by having the ecosystem maintain and replenish the economic subsystem [17]. A mental model based on this viewpoint naturally incorporates a wider boundary where ecosystem health must be considered with the human economy. The eco-centric orientation argues that nature has an intrinsic value, or a value independent of human interests. This viewpoint is consistent with the environmental sustainability requirement that the integrity of ecosystems be maintained. In essence, this is a long-run and holistic viewpoint as compared with the anthropocentric orientation.

The next section introduces systems thinking as an additional framework that can be used to provide insight into our mental models and to provide an enhanced understanding of the socio-economic variables involved with global sustainability.

#### **4. Systems Thinking and Mental Models: Frameworks to Understand Unsustainability**

#### *4.1. Systems Thinking, Interconnection and Focus*

Systems thinking tools help us to see the bigger picture and to enlarge our mental models. Enlarging the boundaries of our mental models is critical since decision-making often involves impacts that alter the decision-making environment and ultimately feedback to influence the current situation [20]. Alternatively, if we were to reduce the boundary of the system, we would not eliminate the interconnections that are found in reality. Not recognizing these interconnections in our mental models is a problem causing us to ignore important feedback. This typically leads to decisions that produce "unintended consequences" [20,21].

A more useful and truer picture of our complex systems will show the feedback structure involved. Although systems may involve many hundreds of variables or components variously interconnected, the long-run dynamic behavior of complex systems is generated by the interaction of just two basic types of feedback loops, either reinforcing feedback that increases or amplifies changes, or balancing feedback loops that counteract or oppose change [20]. Appendix A provides an overview of both reinforcing and balancing feedback loops, along with the corresponding causal loop diagrams and behavior-over-time graphs.

When considering the UN Sustainable Development Goals of (1) ending poverty, (2) protecting the planet, and (3) ensuring prosperity for all, we encounter head-on the divergent mental models and world views. The current conventional wisdom is that we need more economic growth to end poverty, produce a larger economic pie to ensure prosperity for all, and to produce the technology necessary to protect the planet [13,18]. On the other hand, the opposite view was concluded from "Limits to Growth," that in fact, economic growth is the cause of these world problems [1,14]. Recent empirical evidence further supports this view that economic growth is the major underlying problem, that economic growth has not been decoupled from consumption-based emissions, but is instead further contributing to climate change [22].

Additionally, although technology can improve resource efficiency, when viewed in a wider context, efficiency gains are often negated by increases in consumption behavior, known as the rebound effect [23].

While technology is indeed necessary to slow the pace of environmental destruction and climate change, the Limits to Growth World 3 model revealed that no set of purely technical changes in any of the computer runs was sufficient to bring about a desirable future. Restructuring social, economic, and political systems was much more effective [14].

#### *4.2. Interconnection and Focus Based on Economic Imperialism*

It is impossible to uncover the separate mental models of the millions of individual citizen decision-makers. However, we can narrow our focus to the economic imperialism viewpoint and then examine a subset of important economic variables and their interconnections (Figure 2). In this way, we can then make a comparison with the expanded view based on ecological economics and sustainability.

The bold-faced arrows in Figure 2 show a very narrow and focused view of our socio-economic world and one that we believe a citizen majority use to reason and vote for political leaders. We can state this with a rather high rate of confidence as a majority of political debates and campaigning in the US are centered on jobs and the economy. Climate change and sustainability are virtually never mentioned [24].

**Figure 2.** The Prevailing View of Citizens, Jobs and Corporations.

Reading the diagram from the center, as corporations gain size, money and power, this leads to an increase in jobs. The increase in jobs (employment) leads to increases in both consumption and wealth. Increases in consumption and wealth together increase quality of life, as implicitly measured by monetary increases (GDP), ownership increases, and chosen experiences. People then invest money and provide political support for corporations as well. This creates a reinforcing feedback loop that dominates and reinforces our mental models, supporting large companies and the private sector creates growth, jobs, and a higher quality of life for all.

Increases in corporate sector profit will lead to increased tax revenues, loop B4, allowing governmen<sup>t</sup> to build up infrastructure, which again supports the corporate or private sector. Bold-faced arrows indicate loop dominance. Should job creation be weakened, then a decrease in jobs leads to a decrease in political governmen<sup>t</sup> support, which then leads to a decrease in taxes and then to an increase in corporations (size, money, power). B6, job help, is a balancing loop, which can counteract any reductions in the ability to reinforce job growth.

Citizen political support is separated into two categories in the model: political corporate support and political governmen<sup>t</sup> support. Political corporate support represents citizen support for policies that benefit corporations and private sector business. Political governmen<sup>t</sup> support is citizen support for policies that increase taxes and support for governmen<sup>t</sup> services and regulation. If citizens are primarily concerned with jobs, political corporate support should dominate political governmen<sup>t</sup> support and the corporation (size, money, power) variable should increase relative to governmen<sup>t</sup> (size, \$, power).

Reinforcing loops have a tendency to create exponential growth if left unchecked. The bold-faced, dominant loops in the model indicate an increase in support for corporations and the private sector. If taxes are sufficient from corporate profits, then long-run infrastructure support can help to keep the corporation (size, money, power) variable supporting jobs, consumption, and wealth. However, Figure 2 provides a restricted view of socio-economic variables, and one that does not take into account a wider impact on the natural environment or people.

#### *4.3. The Scarcity Mindset, Focus and Tunnel Vision*

In a simple sense, a gap between a desired resource amount and the actual resource level can be considered a problem of scarcity. In this sense, scarcity is a physical constraint. But, scarcity is also a broader concept. A scarcity situation invokes a mental state that captures our attention [25]. When individuals are in a scarcity mindset, they become more attentive, focused, and efficient. In a scarcity situation, whether it is a tight deadline (time scarcity) or a cash shortage, we fall into a scarcity mindset because the situation is important and demands our attention. We realize a short-term benefit from this mental state and perform better on our most pressing concerns. However, a hidden downside to the scarcity mindset is that it also causes us to ignore information outside the tunnel and to neglect other issues [25].

In the case of the prevailing view of citizens (Figure 2), mental models are directed at growing the economy and creating jobs. This is such an important consideration that it captures people's attention and helps to drive the R1, R2, and R3 reinforcing feedback loops and increase corporate influence in the economy. Unfortunately, this is an incomplete, narrow, and short-sighted view.

Figure 3 introduces an expanded view that incorporates impacts on our ecosystem and people, the corporate profit loop. The corporate profit loop shows where our current mental models are dominant (bold-faced loops) and it reveals our shortcomings. In order to transition to a sustainable world, we need to move citizens toward a deeper understanding of how our socio-economic system impacts our wider environment.

**Figure 3.** Jobs, Corporations and Power: The Corporate Profit Loop.

#### **5. Expanding Citizen Mental Models: The Corporate Profit Loop**

Figure 3 shows the corporate profit loop model, which represents a preferred view and mental model in order to produce a more sustainable world. The corporate profit loop model depicts the interplay between governmen<sup>t</sup> (size, money, and power) and corporations (size, money, and power). The causal loop diagram represents most of the important known causal impacts involved in this system, but it is important to stress that although a link may indicate causality, it does not indicate what will necessarily happen in such a complex system (Note: dominant links are again shown boldfaced; and the dotted line from sustainability education shows a preferred leverage point). That is, certain causal links may be strong at one time, but weaker at another. Which causal links become dominant depends on both what has happened in the past (i.e., path dependence) and also on what individuals in the system decide to do in the present. That is, social systems are highly dependent on various decisions of individuals within the system.

The "corporate profit loop" model incorporates sustainability thinking, as the three pillars of sustainability are represented throughout, especially: people (as seen in R8, "people" variable), profit (implicitly represented in loops R1 and R2), and planet (R9 and B10).

Another important aspect of the "corporate profit loop" model is that the left portion of the diagram, reinforcing loops R5, R8, and R9, all follow from the public "government size, power, \$ variable" and all contain delays. For example, governmen<sup>t</sup> investment in infrastructure takes time to actually build up roads, bridges, airports, and investments in education, and R&D take time to produce an educated workforce and new knowledge that can lead to improved technologies. Similarly, governmen<sup>t</sup> can act to protect natural resources, and this can eventually have long-run positive impact on companies (loop R9). For example, fisheries are managed, and stocks remain healthy to produce long-run food supply and jobs. Additionally, non-renewable resources can be used in the short-run to drive economic growth, or they can be conserved (loop R9), for future availability. Government investment is also used to support people directly, through the "Education, Health, Justice-people" variable and R8 People loop. This variable is used to broadly denote the work of governmen<sup>t</sup> to promote the physical (health care) and financial health of citizens (transfer payments). Obviously, not all details of governmen<sup>t</sup> can be shown, but the major benefits are summarized. The costs are shown in the form of taxes and represent the costs to the private sector, loop B4.

Delays in the model are significant because outcomes are not achieved quickly, and instead, causal forces may unfold quietly over time and significantly impact long-run behavior.

Naturally, the model can also operate with the left-hand portion dominating. In this case, taxes can be overwhelming and can stifle corporations. This is a dangerous condition because the free market drives employment, wealth creation, and quality of life (as measured by GDP). In addition, as consumption is reduced and corporations lose profits, tax inflows are reduced, which also weakens governmen<sup>t</sup> and further reduces quality of life. This can behave as a vicious reinforcing feedback loop as lower levels of employment also lead to further citizen dependence on a weakened government.

Reflecting the current citizen mental models, the bold-faced loops in the right section of Figure 3 are shown dominant because of short-termism behavior. Corporations must generate profits and increase shareholder wealth and this puts grea<sup>t</sup> pressure on short-term financial results.
