Photo by Brigitte Rieder
Transformational step one
Goal – To transition from a degenerative economy reliant on the fallacious possibility of infinite growth, to a regenerative economy emphasising planetary health and the flourishing of all interconnected systems.
Structure of this post
Given the complex content nature of this post, 1) first, I will define what a regenerative economy is. 2) Next, I dive deeper to identify the content of transformational step one referred to in Part 1 of this series of posts. 3) Given the enormity of the task here, transformational steps 2 and 3 will be covered in subsequent posts.
What is a regenerative economy?
To arrive at a definition of what a regenerative economy is, I combine ideas from several authors: Capra’s systems view of life (2022). Fullerton and ‘the human economy is a living system’ (2025). Gormley’s (2026) appointment of Mother Nature and Future Generations with voting rights to the Executive Board of House of Hackney (2026). Whitmee et al’s (2015) and Pawlyn and Ichioka’s (2021) consideration of planetary health and flourishing.
Definition of a regenerative economy
Erring on the side of simplicity, and largely informed by the above authors, I define a regenerative economy as…
An economy functioning and operating in service to planetary health, the flourishing of all interconnected systems and both current and future generations.
Note: When discussing planetary health, by implication the flourishing of all interconnected systems and, current and future generations is implied. Thus for brevity, I reduce the definition hereafter to’……
A regenerative economy is an economy functioning and operating in service to planetary health.
With this simple but value-laden definition to work with, we can apply a litmus test to any activity that forms a part of the economy, by asking whether the identified activity positively contributes to a regenerative economy. In other words, whether the activity, its process and outcomes are conducted in ‘service to planetary health’. We would also consider the underlying motivating force behind the activity in a functioning economy, and then beyond motivation, extend consideration to include the intentional benefits thereof that support planetary health.
Transformational step one
In order to transform our current degenerative economy to an economy that is regenerative, I offer the following ideas as the basis of an agenda upon which we can build.
First, we need to consider that a functioning economy comprises the contributions made by the following actors: a) governments, organisations (including for-profit and not-for-profit organisations), individuals who contribute to the economy through their individual enterprise endeavours, and b) consumers i.e., society itself whose contribution also occurs as a result of their consumption activities. Clearly, a) and b) participants overlap.
The above actors in a) and b) contribute to the economy via both the application of their skill and competency set, and exchange, which can be both be in a monetised and non-monetised form i.e., as in the case of the N4P sector.
It’s not just about human activity!
It would be erroneous not to acknowledge that in addition to the above, beyond humanity, many other species and life forms contribute vital ecosystem services (e.g., pollination, pest control, carbon sequestration, air purification etc.) to the economy, thereby enabling it to function as a thriving collaborative ecosystem.
For example, in respect to the value associated with crop production, the pollination services performed by honey bees in Australia alone is believed to contribute around AUD$4.6 billion annually (Agrifutures Australia) to the economy. According to the World Health Organisation (2025), more than 75% of global food crops rely on pollinators, contributing AUD$ 332–815 billion annually to global agricultural output (World Health Organisation 2025).
Similarly, according to the Program for the Endorsement of Forest Certification (PEFC), Forests contribute over AUD$1.84 trillion a year to the global economy through the provision of ecosystem services such as carbon sequestration, water purification, urban cooling and flood control (The Morton Arboretum). The economic contribution of forests includes raw materials and industries, as well as tourism and livelihoods with over 33 million people employed in the forestry sector alone (PEFC).
Borrowing the metaphor but not the contentious economic theory of Adam Smith’s (1759) Invisible Hand, it is hard to imagine an economy without the contributions of a variety of other animate and non-animate life forms.
The above examples and many others, support that the interconnected nature of all functioning systems is critical not only for the global economy, but moreover when we look at their identity and the services they provide, for planetary health overall.
Revisiting GDP and consumption
As mentioned in an earlier post, the main employed measure of economic success is Gross Domestic Product (GDP). GDP essentially measures how much consumers, businesses and governments spend on goods and services together with the value of net exports for any given country. In other words, it measures consumption, itself a proxy indicator of finite resource depletion.
Second, given the unsuitable degenerative nature of the above measure in transitioning to a regenerative future, we need to identify an alternative measurement mechanism.
Third, rather than simply cost accounting on the basis of internalised costs only, we need to explore what it means to include the true costs of the consumption process, commencing with extraction and covering the full process to disposal or circularisation (where relevant). For further detail, please visit my earlier posts on this topic.
Goods and services should be valued at their true cost
Thus, rather than simply ignoring externalised costs, and passing these costs on to future generations for them to address, which likely they would struggle even more to achieve, the cost proposition for goods and services should reflect their true cost.
Yes, you read that correctly – to provoke wider conversation on this issue – I am proposing that the cost structure of goods and services be reflective of their true cost.
Now, my ears are burning! I can hear some of you loudly contesting that this suggestion is unrealistic and even unfair! Let’s agree to put the ‘fairness’ argument to one side for now. I’m pretty sure that with a little reflection, you’ll arrive at the point of recognising that any ‘fairness’ counter-argument, would rapidly be addressed by the ethics of environmental and human rights.
The sale is over!
As businesses, organisation employees, volunteers, and citizen consumers, we need to recognise and accept the responsibility of a transition to a true costed economy. Employing an analogy……we have been consuming goods and services over an extended period of time as if they were on sale, and now that sale is long over.
Margins and discounts will change. This alone will likely have significant ramifications both for our individual consumption choices, price differentials, as well as the operating margins of businesses. Of course, there will be many issues to consider here, not least consumer trust. I’ll give this topic dedicated attention in a future post. For more on true costing click here.
Reflection exercise
Let me just pause here for a second to collectively reflect with you. Consider this……….the implications arising as a result of the transformation that I am suggesting, certainly in financial terms, are mostly felt when viewed through a lens that assumes that ‘all else about the economy will remain equal’. But here’s the thing, in an interconnected system like the economy, it wouldn’t be possible for all else to remain equal. A change in one area, will likely be felt in another.
If we shift our consideration of what constitutes value, to include in addition, all other forms of capital beyond financial capital, then perhaps the implications may be more manageable. I’ll discuss this in a little more detail below.
Furthermore, the mechanisms by which a transformed regenerative economy would operate, would also likely function very differently. Indeed, they would have to. It wouldn’t suffice to take our current economic system, tweak it a bit here and there, and expect to see any substantive changes arise in the way the economy functions. Thus, not all else can remain equal.
Fourth therefore, I suggest that we need to revisit all working parts of our economic system to ensure that they too are functioning as befitting a well oiled ecosystem contributing to a regenerative whole, and in accordance with the focal point of our litmus test, planetary health. Where they are not positively serving planetary health, they too need transformative attention.
The entire global financial system (financial architecture) needs reviewing
Fifth, based on the information and arguments presented thus far, in a nutshell, the entire global financial system needs to undergo review and change.
I’m talking here about the need for transformation to occur to every aspect of our financial system. Why to every aspect? Because as I have argued, everything is interconnected in an ecosystem, and therefore, even the financial system functions, or at least should function, as a set of interconnected parts.
Earlier in this post I defined a regenerative economy as….. an economy functioning and operating in service to planetary health.
To summarise thus far, and referencing the above definition, we need to interrogate whether our current economy, and specifically our global financial system and all its constituent parts – referred to elsewhere as global financial architecture (e.g., Beyond Bretton Woods Initiative) – meet the criteria of ‘functioning and operating in service to planetary health?’
I think we can all answer this question upfront without needing to carry out an expansive deep dive. Clearly it isn’t. How can it? Recall my suggestion that the economy is extractive and degenerative!
We need a different holistic metric of value
If we can accept for a moment the suggestion that we measure what we value – given that GDP measures the consumption of goods and services and not the impacts of any aspect of the consumption process – it would appear that we don’t value nature (natural capital), nor for that matter do we value any other type of capital i.e., knowledge capital, institutional capital, social capital, cultural capital and religious capital (Dasgupta 2025), since these are also excluded from the measure of GDP.
By omission therefore, we treat them in the economy as though they are value-less. It’s ironic isn’t it that we consider nature, upon which our lives are totally dependent, to be value-less! Actually, to say that it’s ironic falls way short. Let’s just admit that ‘it’s ‘madness’ is closer to the truth! Consequently………….
This must change!
Sixth, and in response, we need a more holistic measure of the health of the economy and indeed society. We need a measure that considers a wider interpretation of the individual, regional, national and global health and wellbeing of the economy, other than one that is solely reliant on financial capital.
At work in the ruins
We need to extend our consideration to include all forms of capital. In brief, we need to demonstrate that we value life, and the health of our planetary system. But, that’s not to say that we throw the baby out with the bathwater. Not at all! In fact, based on Dougald Hine’s (2023) ‘At work in the ruins’ framework, and thinking about our current global financial ecosystem (financial institutions, financial markets, financial instruments (or assets), and financial services), and, viewing these through a regenerative lens, we need to identify:
- What can be found in the ruins of our current financial ecosystem that is worth keeping?
- What in our current financial ecosystem can we let go of?
- What knowledge and wisdom do we need to cultivate to support the development of a regenerative financial ecosystem?
- What valuable old skills can we rediscover on the journey toward a regenerative financial ecosystem?
In response to the above four questions, and, in the context of our current financial processes and systems, those that sit at the heart of an economy, we need to be guided forward by ascertaining whether these positively contribute to a regenerative economy, which recall, exists in service to planetary health.
Fullerton (2025) argues, that to witness transformation at the necessary scale required, we must first weaken or remove the critical obstacles to change. These critical obstacles to change include among others monetary systems, banking architecture, investment frameworks, the recycling of financial capital at scale, and they necessitate imagining an institution of the commons to complement the public and private sectors (p205).
Beyond Bretton Woods
It would be remiss of me not to highlight in this post the ground-breaking work of the Beyond Bretton Woods: Finance for a Regenerative Future initiative (also cited in Fullerton 2025). Their work proposes ten modifications triggering a fundamental shift in global financial architecture:
- Implement a global price on carbon.
- Incorporate climate in to monetary policy.
- End fossil fuel subsidies immediately.
- Take a nature-centric approach to well-being metrics.
- Regulate the shadow banking sector.
- Rebalance representation in international finance institutions.
- Develop novel institutions for overseeing climate finance.
- Reimagine and redistribute mitigation, adaptation and loss and damage financing.
- Establish a new debt restructuring mechanism.
- Design novel nature-based currencies.
Next move?
Clearly, given the content of this post, to transition from a degenerative to a regenerative economy will not be a simple task. At a global level it will require significant global commitment to negotiate a transitioning strategy, that has as its driving purpose, planetary health. Conversation isn’t only required at the global level either, indeed, bottom-up action is needed. Thankfully there are many positive examples where this is already taking place. We will learn about these together in future posts.
Summary
In this post, having defined what a regenerative economy is, I unpacked some of the core elements. I thereafter suggested that we need to shift to a true cost economy and, that we need to redefine what we value and incorporate different forms of capital in a revised measure of economic health and wellbeing. To close, I explored how we might transform our global financial systems (architecture), drawing on in particular, the work of Fullerton (2025) and the Beyond Bretton Woods Initiative.
Next post
In the next post I will tackle the question of what needs to be done to normalise planetary health considerations in society, and picking up on an earlier post, how we can become co-creators of planetary health. There’s a lot to consider, and so I look forward to you joining me next time. Thank you.
References
- Capra, F. (2022). The systems view of life: A science for sustainable living. Routledge Handbook for Creative Futures, 38-43.
- Fullerton, J. (2025). Regenerative economics: Revolutionary thinking for a world in crisis. New Society Publishers.
- Gormley, F. (2026). In the Company of Nature: Regenerating Business, Community and the Living World. Rizzoli Publications.
- Hine, D. (2023). At work in the ruins: Finding our place in the time of science, climate change, pandemics and all the other emergencies. Chelsea Green Publishing.
- Pawlyn, M., & Ichioka, S. (2021). Flourish. Triarchy Press.
- Smith, A. The theory of moral sentiments. 6th Edition (1790).
- Whitmee, S., Haines, A., Beyrer, C., Boltz, F., Capon, A. G., de Souza Dias, B. F., … & Yach, D. (2015). Safeguarding human health in the Anthropocene epoch: report of The Rockefeller Foundation–Lancet Commission on planetary health. The lancet, 386(10007), 1973-2028.