Calculating the Value of the Commons

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* Article: Calculating the value of the commons: Generating resilient urban futures. By Doina Petrescu, Constantin Petcou, Katherine Gibson et al.Environmental Policy and Governance, May 2020.

URL = https://onlinelibrary.wiley.com/doi/full/10.1002/eet.1890

Abstract

"In this article, we present a method for valuing the multidimensional aspects of urban commons. This method draws from and contributes to a broader conception of social or community returns on investment, using the case and data of a vibrant project, strategy, and model of ecological resilience, R‐Urban, on the outskirts of Paris. R‐Urban is based on networks of urban commons and collective hubs supporting civic resilience practices. We use data from 2015, the year before one of the hubs was evicted from its site by a municipal administration that could not see the value of an “urban farm” compared to a parking lot. We combine estimates of the direct revenues generated for a host of activities that took place in R‐Urban, including an urban farm, community recycling centre, a greenhouse, community kitchen, compost school, café, a teaching space, and a mini‐market. We then estimate the market value of volunteer labour put into running the sites, in addition to the value of training and education conducted through formal and informal channels, and the new jobs and earnings that were generated due to R‐Urban activity. Finally, we estimate the monetary value of the savings made by an environmentally conscious design that focused on water recycling, soil and biodiversity improvement, and social and health benefits, breaking them down by savings to the organization, participants and households involved in R‐Urban itself, as well as savings to the state and the planet. Although our article is built on specific quantities from a concrete project, the method has wide applicability to urban commons of many types seeking to demonstrate the worth and value of all their many facets and activities."


Excerpts

Methodology for Calculating the Value of an Urban Commons

By Doina Petrescu et al. :

"Community Economy Returns are calculated in four stages: first, in terms of direct financial revenues generated for individuals and for the collective; second, in terms of the estimated value of unpaid labour generated by R‐Urban activities; third, in terms of the estimated value of increased individual capacities that were generated; and fourth, in terms of saved costs to the commons and commoner households, the state, and the planet. Figure 5 shows the (sometimes overlapping) relationship between these methods of calculation and Community Economy Returns. In most of the accompanying tables, returns are grouped into different areas of activity of the project: “Architecture & Construction,” “Gardening & Environmental Care,” “Research, Training & Education,” “Small Business & Jobs Training,” “Care & Governance of the Commons,” and “Human & Social Wellbeing.” These categories all contribute in different ways to the Community Economy Returns shown on the left of Figure 5. Our CEROI calculations are complemented by qualitative data on subjectivity changes with the emerging commoning community." (https://onlinelibrary.wiley.com/doi/full/10.1002/eet.1890)


Full-Cost Accounting

By Doina Petrescu et al. :

"A whole subfield of environmental and ecological economics, for instance, argues for “full cost accounting.” Calculating the full costs of any project involves considering the life cycle of a project and cost effects along the entirety of the supply chain and waste streams (Epstein et al., 2011). Epstein et al. (2011), for example, have produced a full cost accounting of coal mining in Appalachia that includes producing both conservative, average, and high cost estimates for land disturbance, public health problems, climate damage, excess mental retardation for those living near coal production sites, acid precipitation, local water contamination, and so on.

By the same token full benefit accounting would involve estimating the social value produced by any project beyond the creation of paid employment or improvements in individual wellbeing. Determining full benefit requires identifying improvements in household, community and ecological health, social and psychological well‐being, as well as improvements in civic involvement and participatory democracy. A more comprehensive method of full cost–benefit analysis attaches a price to as many of these external and indirect effects as possible, but in so doing, brings into relief a constitutive contradiction: that which is excluded by conventional financial accounting (as indirect or external) is actually internal to the analysis, not external. Discomfort with conventional accounting has led many to seek going beyond GDP, such as the Index of Sustainable Economic Welfare (England, 1998), with Bandura (2008) listing 178 different indices that actually subtract measures that reduce well‐being such as pollution, disaster recovery, etc. And despite this proliferation of academic interest in measuring well‐being more broadly and sustainably, there has been little take‐up of these indices when making municipal or national level fiscal decisions." (https://onlinelibrary.wiley.com/doi/full/10.1002/eet.1890)


Community Economy Return on Investment

Gibson‐Graham et al. :

"A community economy is built upon ethical investments—in surviving well, distributing surplus, responsibly encountering others, consuming sustainably, and sharing our planetary commons, all with a view to the wellbeing of future more‐than‐human generations (Gibson‐Graham, 2006). In Take Back the Economy: An Ethical Guide for Transforming Our Communities, Gibson‐Graham et al. (2013) proposed the Community Economy Return on Investment (CEROI) as a mechanism for tracking and valuing the creation of ethical economies. Community economy “returns” include both social benefits such as increased forms of individual, household and community well‐being, as well as ecological benefits such as a reduced ecological footprint. They also include increased collectively controlled surplus, increased ethical trade, and expanded commons.

The CEROI tool provides a guide for the method we devised for calculating the value of the R‐Urban commons. This tool provides a way of distinguishing how the R‐Urban intervention specifically enabled commoning and the emergence of ethical economic and ecological relations. We use actual and estimated amounts of money, admittedly the dominant metric of value in the capitalist economy (Dyer‐Witheford in Bollier, 2016a, p. 23), to represent the value of urban commoning (Bauwens in Bollier, 2016a, p. 2). Our innovation is to deploy this metric to account for the incredible volume of value that can be returned on an investment in commoning." (https://onlinelibrary.wiley.com/doi/full/10.1002/eet.1890)