This is a crucial question, and one I have been struggling to understand for that last several months. Undoubtedly it is a question we will be force to face in the coming years. Politicians, conventional economist, techno-optimist (those who believe technology will solve everything) argue that if we grow right, growth can be sustainable. “Our Common Future” which launched the term ‘sustainable development’, called for changing the quality of growth, which is no doubt important but does imply that growth can be sustainable. Obama (who would never lie to me) has inspired and pleased millions of American’s with his green energy plan that will solve the financial crisis (read: get the economy growing again), end the U.S.’s dependence on foreign oil and lead to environmental sustainability. Currently, sustainable growth proponents are winning the debate, but I question if it is by sound argument or just a louder voice.
I am going to walk through the conventional economic and techno-optimist arguments and highlight potential flaws. I will then present an alternative position. I want to stress that this alternative position is not a fringe idea, there is a robust body of research supporting it, but because questioning growth is such a pariah it does not get much mainstream attention.
Conventional (neoclassical) economics: is built on the assumption that the workings of the economy are fundamentally captured by the circular flow of exchange value -- Firms produce goods, which are bought and consumed by households, which in turn supply labour by which the firms use to produce the goods, and so on. The circular flow grows by increasing the inputs of labour (more workers), capital (more machines, bigger factories, etc.), and land (more natural resources). The system is self-contained, and therefore there is no reason it can’t grow forever. In conventional economic thinking the environment is obsolete because resources are assumed to be infinitely substitutable for one another. If we run out of something, or it becomes scarce and therefore prohibitively expensive, we can always find something else that is more abundant and cheaper.
Problems with this logic: the central assumption is flawed because the economy is not a self-contained system, it is a subsystem of the environment. And, the flow is not circular, but linear -- natural resources are converted into goods, which are bought and consumed, and expelled back into nature as waste. Economic production converts nature capital (trees, water, fossil fuels, minerals, etc.) into manufactured capital (houses, cars, clothes, computers, etc.). The economy can, therefore, only grow at the expense of nature. We know the ecosphere is finite because there is a fixed amount of matter on earth, and so it follows that the economy too, must also be finite because as a subsystem it cannot outgrow its host.
Techno-optimist: Proponents of this persuasion, who often play Robin to conventional economics, argue that limits are obsolete. The infinite bounds of human ingenuity can overcome any limit nature tries to impose on us. In our society it is technological ingenuity that gets most of the attention, our propensity for technological fixes allows serious people to have serious conversations about solving climate change by building a giant reflector in outer space. It is easy to understand why technological ingenuity is so popular, it can ‘solve’ an immediate problem, while allowing us to continue course without questioning or changing our lifestyles. It creates new industry and solves the problem, a win-win.
Problems with this logic: Granted the techno-optimist have millennia of support for their position, ever since humans climbed down form the trees we have been overcoming nature’s limits – we tamed fire, developed agriculture, invented electricity, and went to moon, but all that success does not guarantee our ability to overcome the next limit. Nor does it recognize that there are many problems, of our own making, that we have yet to solve. And, many of our ‘solutions’ abate the immediate problem by creating a new one, or deferring the old one to other countries or future generations.
This is not say that technology has no place, indeed it will, and needs to, have a massive role in the future. Efficiencies can be made in every sector of the economy. I am big supporter closed-loop production, 100% recycling, biomicry, life cycle analysis, and renewable energies. But if, and that’s a big if, all those things were put in place (which will take decades, at least), then what? We would still have growth. Every scrap of steel we use might be recycled, forever, but the amount of steel needed each year would still be growing, which would mean more extraction. Likewise, renewable energy could power the economy, but our energy demands would still be growing, which would mean more windmills, more solar panels, more land, more steel, and more Silicone. The technological fixes don’t solve the underlying problem they just delay the day reckoning.
The alternative view is one supported by ecological economist, physicist and ecologist. It is built on the principles of finitude, thermodynamics and ecological interdependence, I’ll briefly explain how these interact: as a subsystem, the growth of the economy is limited by 1) the size of the ecosystem, and 2) its dependence on the ecosystem as a source of low entropy inputs (trees, coal, etc.) and as a sink for high entropy waste (heat, pollution, landfill mass). For example, we take coal and trees and turn them into carbon dioxide, heat, and landfill mass -- they pause for only a fraction of the time in the ‘chair’ phase. We tend to think turning a tree into a chair adds value, but from a thermodynamic viewpoint we are really consuming value. Economic growth is achieved through depletion and pollution and it entropic costs interfere with and unravel the planet’s complex, interconnected ecological life support services -- this cannot ever be sustainable.
Put another way, sustainable growth is an oxymoron. For the economy to grow it must incorporate an ever-greater proportion of nature, but it will eventually hit that 100% ceiling -- in reality, the ecospheres interconnectivity means that Mother Nature will get rid of us long before we reach that point. This does not mean that the economy cannot develop, but that is different from growth. The ecosphere develops, it does not grow. However, to arrive at this, and begin designing how the economy might develop sustainably requires that we stop believing we can grow our way out of every problem we face.
Subscribe to:
Post Comments (Atom)
Hey Blake,
ReplyDeleteCool blog!
I heard a quote that you might be interested in....not sure who said it but here goes:
"Unlimited growth is the ideology of a cancer cell"
Best wishes with your work,
DP
Hey Blake,
ReplyDeleteGreat start to the blog! I look forward to following it.
The NYT article below may be of interest given that it assumes that growth and wealth eventually lead to greater environmental protection. However, the writer fails to be account for time (i.e. climate change's rapid approach) and finite global biocapacity, not to mention the policies and programs in place that have led to reductions in emissions in places such as France.
Cheers,
SBG
The New York Times | April 21, 2009
Use Energy, Get Rich and Save the Planet
By JOHN TIERNEY
When the first Earth Day took place in 1970, American environmentalists had good reason to feel guilty. The nation’s affluence and advanced technology seemed so obviously bad for the planet that they were featured in a famous equation developed by the ecologist Paul Ehrlich and the physicist John P. Holdren, who is now President Obama’s science adviser.
Their equation was I=PAT, which means that environmental impact is equal to population multiplied by affluence multiplied by technology. Protecting the planet seemed to require fewer people, less wealth and simpler technology — the same sort of social transformation and energy revolution that will be advocated at many Earth Day rallies on Wednesday.
But among researchers who analyze environmental data, a lot has changed since the 1970s. With the benefit of their hindsight and improved equations, I’ll make a couple of predictions:
1. There will be no green revolution in energy or anything else. No leader or law or treaty will radically change the energy sources for people and industries in the United States or other countries. No recession or depression will make a lasting change in consumers’ passions to use energy, make money and buy new technology — and that, believe it or not, is good news, because...
2. The richer everyone gets, the greener the planet will be in the long run.
I realize this second prediction seems hard to believe when you consider the carbon being dumped into the atmosphere today by Americans, and the projections for increasing emissions from India and China as they get richer.
Those projections make it easy to assume that affluence and technology inflict more harm on the environment. But while pollution can increase when a country starts industrializing, as people get wealthier they can afford cleaner water and air. They start using sources of energy that are less carbon-intensive — and not just because they’re worried about global warming. The process of “decarbonization” started long before Al Gore was born.
The old wealth-is-bad IPAT theory may have made intuitive sense, but it didn’t jibe with the data that has been analyzed since that first Earth Day. By the 1990s, researchers realized that graphs of environmental impact didn’t produce a simple upward-sloping line as countries got richer. The line more often rose, flattened out and then reversed so that it sloped downward, forming the shape of a dome or an inverted U — what’s called a Kuznets curve. (See nytimes.com/tierneylab for an example.)
In dozens of studies, researchers identified Kuznets curves for a variety of environmental problems. There are exceptions to the trend, especially in countries with inept governments and poor systems of property rights, but in general, richer is eventually greener. As incomes go up, people often focus first on cleaning up their drinking water, and then later on air pollutants like sulfur dioxide.
As their wealth grows, people consume more energy, but they move to more efficient and cleaner sources — from wood to coal and oil, and then to natural gas and nuclear power, progressively emitting less carbon per unit of energy. This global decarbonization trend has been proceeding at a remarkably steady rate since 1850, according to Jesse Ausubel of Rockefeller University and Paul Waggoner of the Connecticut Agricultural Experiment Station.
“Once you have lots of high-rises filled with computers operating all the time, the energy delivered has to be very clean and compact,” said Mr. Ausubel, the director of the Program for the Human Environment at Rockefeller. “The long-term trend is toward natural gas and nuclear power, or conceivably solar power. If the energy system is left to its own devices, most of the carbon will be out of it by 2060 or 2070.”
But what about all the carbon dioxide being spewed out today by Americans commuting to McMansions? Well, it’s true that American suburbanites do emit more greenhouse gases than most other people in the world (although New Yorkers aren’t much different from other affluent urbanites).
But the United States and other Western countries seem to be near the top of a Kuznets curve for carbon emissions and ready to start the happy downward slope. The amount of carbon emitted by the average American has remained fairly flat for the past couple of decades, and per capita carbon emissions have started declining in some countries, like France. Some researchers estimate that the turning point might come when a country’s per capita income reaches $30,000, but it can vary widely, depending on what fuels are available. Meanwhile, more carbon is being taken out of the atmosphere by the expanding forests in America and other affluent countries. Deforestation follows a Kuznets curve, too. In poor countries, forests are cleared to provide fuel and farmland, but as people gain wealth and better agricultural technology, the farm fields start reverting to forestland.
Of course, even if rich countries’ greenhouse impact declines, there will still be an increase in carbon emissions from China, India and other countries ascending the Kuznets curve. While that prospect has environmentalists lobbying for global restrictions on greenhouse gases, some economists fear that a global treaty could ultimately hurt the atmosphere by slowing economic growth, thereby lengthening the time it takes for poor countries to reach the turning point on the curve.
But then, is there much reason to think that countries at different stages of the Kuznets curve could even agree to enforce tough restrictions? The Kyoto treaty didn’t transform Europe’s industries or consumers. While some American environmentalists hope that the combination of the economic crisis and a new president can start an era of energy austerity and green power, Mr. Ausubel says they’re hoping against history.
Over the past century, he says, nothing has drastically altered the long-term trends in the way Americans produce or use energy — not the Great Depression, not the world wars, not the energy crisis of the 1970s or the grand programs to produce alternative energy.
“Energy systems evolve with a particular logic, gradually, and they don’t suddenly morph into something different,” Mr. Ausubel says. That doesn’t make for a rousing speech on Earth Day. But in the long run, a Kuznets curve is more reliable than a revolution.