Sunday, July 28, 2013

Does the Solution to Climate Change Rest On Economic Reform?

What follows began as a comment I attempted to leave at A Puff of Absurdity in reponse to a post by Marie Snyder that you really should read.   In it, Marie questions whether, as a civilization, we have become "too stupid to live."

Hi Marie.  I have been wrestling with the question of how we can decarbonize our civilization for quite a while without success.  It's a problem that has a frustrating number of dimensions.  Solving one can create another or worsen others.

I'm beginning to think we need to decouple our political and economic apparatus from neo-classical "political" economics.  Solutions lie in jettisoning growth-based economics and shifting into what is called "steady state" or "full Earth" economics.  I'll try to outline the idea.

Growth-based economics, which has formed the political model of our lifetime and a few generations before us, is a malignancy.  We seem to quest for 3% annual growth in GDP.  But that's 3% compounded annually.  To achieve that target over an average 50-year adult lifetime, you have to grow the economy (per capita mind you) by 4.38 times.  At 100-years, that's 19.22 times.  150 = 84.25X.  200 = 369.36X.  In the span of two centuries we need to expand gross domestic product by 370 times.  You don't want to go beyond 200, trust me.

Neo-classical economics treats the economy as though it exists in isolation.  Natural capital is treated as an externality.  It's not valued.  Steady state economics views the economy as a subset of the environment.  It is something that exists within and, hence, is limited by the size of the environment of our very finite biosphere, Earth.  Believe it or not, this simple and obvious premise, is considered heretical to neo-classical economists and the political apparatus that they guide.  That might strike you as curious yet it goes a long way to understanding why our leadership appears intent on restaging the final scene in Thelma & Louise.

Steady state economics, recognizing that the Earth and its resources are essentially finite, seeks balance.  It advocates a zero-growth economy in which population is balanced, births to deaths, and production is balanced so that what we take and the waste we produce remain safely within the Earth's carrying capacity.

Steady state economics does accommodate some growth but it's qualitative, not quantitative.  The focus is on making things better, doing things better.  That's the sort of growth that best harnesses the human intellect and can, over time, deliver steady improvement in quality of life.

Full Earth economics places actual, fair market value on natural capital.  Natural resources, particularly water, are treated as property belonging to the public to be paid for by whoever uses it.  It also recognizes that pollution from production and consumption are a draw on natural capital, the Earth's ability to absorb these inputs and clean them.  This too then is priced.  Yes these create costs that are passed along to the consumer but not until the source has first paid the public for them.

Can we reorganize ourselves to live without growth?  Of course.  Do we have any choice?  No.  Can it work?  It did for millennia.  The growth-based economy was mainly a creature of the era since the industrial revolution.

Japan is exploring a form of steady state economics.  Krugman and Stiglitz are proponents of what is called "Abenomics."  While Japan's economy has, to growth-based eyes, stagnated for two decades what's remarkable is that employment rates and the standard of living and quality of life of the Japanese people remains very high.

Just the thought of living within our planet's natural means is heretical to our economic and political apparatus.  How bizarre.  Yet that also accounts for this Thelma & Louise moment.

To see how out of balance our captains of industry and lords of our legislatures have positioned us you should visit the Global Footprint Network (  The scientists there tally the Earth's annual production of renewables in terms of biomass.  Then they match that to our consumption of renewables. They allocate biomass to production, consumption and absorption of pollution.  The date on which mankind exhausts a year's worth of renewables is called World Overshoot Day.

When we enter "overshoot" we begin eating our seed corn.  This is not a theoretical concept.  It's quite tangible and, in many cases, measurable.  Some aspects of it are visible to the naked eye from the space station.  It takes all forms from the collapse of global fisheries to deforestation to desertification to the contamination of our atmosphere and so on represented in the chart above as "degraded carrying capacity."

When I began following the footprint network seven or eight years ago, overshoot day fell in late October.  It has advanced by more than a month since then and now falls in mid-September.

There are just three or four countries on Earth calculated to still have a biomass surplus.   Canada, due entirely to our vast area and relatively small population, is one of them.  That, in a world of increasing ecological deficits, is a mixed blessing.

A couple of years ago, before the arrival of the Cameron Tories, the British government issued a study that found the people of Britain consumed the equivalent of their country's entire annual agricultural output by Easter.   The rest of the year represented foodstocks they had to import, to buy abroad, usually from countries already facing food shortages.

The point is, when you reach overshoot, you're shifting, like it or not, from a growth-based world to an allocation-based world.  It's a form of rationing only the rich don't have to participate.  Recognizing this, richer countries have embarked on aggressive land-grabs.  The more affluent Asian and Middle Eastern countries are snapping up the best agricultural lands in southeast Asia, Africa and, recently, even in South America.  A lot of the countries whose land is being pillaged already have difficulties feeding their own people.  That's a candle burning fiercely at both ends (as the graph above plainly reveals).

Getting back to the problem of decarbonizing our civilization it's becoming clear that can only be achieved within a fairly radical overhaul of the global economy and that cannot be achieved without an enormous degree of upheaval, the sort of thing that can only come from below, a mass (and yet somewhat unified) public clamor for change.  It would have to be powerful enough to overcome the incredible inertia in our economic and political apparatus.

Does that sort of global public will exist?  Plainly, no.  We in the affluent nations have been conditioned to instinctively recoil from that sort of change.  Those in the poorer nations have no means of inciting any sort of global reformation.  That suggests the spreading unrest will be unharnessed, diverted into chaos.

I have to say this, Marie, but I think we have become a global civilization of Easter Islanders.  In other circumstances we might have eventually found our way into a steady state balance but I suspect that would require far more time than we have remaining to us.


Purple library guy said...

I agree a steady state economy is needed. But that in itself leaves hanging the most important question:
Politically, or structurally, what could such a steady state economy look like?
I don't think you can do a steady state economy under capitalism. This has been made pretty plain in both theory and practice not just by opponents but proponents as well: Capitalism is an (uneven) growth machine. It's all about creating (or ripping off) more surplus to invest in creating (or ripping off) more surplus.
Your point that the growth economy, particularly as it reaches overshoot, creates benefits for the few at the ongoing and increasing expense of the many, makes it clear that

Anonymous said...

The fastest mitigation to climate change is to severely reduce consumption of animal foods. About 1/2 of human induced warming is attributable to animal agriculture. Methane is 24 times more potent than CO2 and takes only 7 years to cycle out of the atmosphere. CO2 takes around 100 years to come out. Human pursuit of animal protein is the leading cause of methane release and a primary cause of CO2 concentrating in the atmosphere. Check the facts and act!

"A 1% reduction in world-wide meat intake has the same benefit as a three trillion-dollar investment in solar energy." ~ Chris Mentzel, CEO of Clean Energy

"As environmental science has advanced, it has become apparent that the human appetite for animal flesh is a driving force behind virtually every major category of environmental damage now threatening the human future: deforestation, erosion, fresh water scarcity, air and water pollution, climate change, biodiversity loss, social injustice, the destabilization of communities, and the spread of disease." Worldwatch Institute, "Is Meat Sustainable?"

"The livestock sector emerges as one of the top contributors to the most serious environmental problems, at every scale from local to global. The findings of this report suggest that it should be a major policy focus when dealing with problems of land degradation, climate change and air pollution, water shortage and water pollution, and loss of biodiversity. The impact is so significant that it needs to be addressed with urgency." UN Food and Agricultural Organization's report "Livestock's Long Shadow"

“If every American skipped one meal of chicken per week and substituted vegetables and grains... the carbon dioxide savings would be the same as taking more than half a million cars off of U.S. roads.” Environmental Defense Fund

“It’s not a requirement to eat animals, we just choose to do it, so it becomes a moral choice and one that is having a huge impact on the planet, using up resources and destroying the biosphere.” ~ James Cameron, movie director, environmentalist and new vegan

"Nothing will benefit human health and increase the chances for survival of life on earth as much as the evolution to a vegetarian diet." ~ Albert Einstein

Purple library guy said...

Aagh! Didn't mean to do that. Carrying on:

Makes it clear that in order to attain a steady state an economy would have to be ruled by the many, not the few. The many have strong motivation to move to steady state, but the few do not, and depend on systems which structurally must do the opposite.
Since the wealthy few, as long as they exist, always have levers to use to gain more control, a steady state economy would have to eliminate or at a bare minimum drastically reduce and defang the wealthy few.

So. What's required is a non-capitalist, egalitarian economy with control from below. Or, to put it a different way, a steady state economy pretty much has to be some sort of Socialism (of a bottom-up, democratic, participatory variety) or Social Anarchism. Those two differ more in degree than kind anyway.

Anyone with any sense in the modern era must be Green; multiple disasters are staring us in the face. And any Green who has thought it through and takes Green ideas seriously, in my opinion must end up Left.

(In theory a non-fascist dictatorship, that is one so strong as to be able to stand without the support of the capitalist class, could do a steady state economy if the dictator happened to want to. Apparently the Tokugawa shogunate was quite environmentally positive. But that's a very contingent thing and in any case that kind of dictatorship is even harder to achieve in the modern age than socialism. North Korea is the only one I can think of, and their economy is hardly steady state)

Purple library guy said...

“If every American skipped one meal of chicken per week and substituted vegetables and grains... the carbon dioxide savings would be the same as taking more than half a million cars off of U.S. roads.” Environmental Defense Fund

While I do think we should reduce, or even I suppose eliminate meat intake, that quote shows it's hardly a panacea. There are over 250 million cars on US roads. To get the effect of eliminating them all, Americans would have to get rid of 500 meals of chicken a week, a somewhat difficult task. To put it a different way, assuming breakfast lunch and dinner were all carnivorous at the moment, going completely vegetarian would be equivalent to eliminating 1/25th of US cars.

I think there are important reasons other than carbon for reducing livestock cultivation, though.

Anyong said...

Does the Solution to Climate Change Rest On Economic Reform?
Yes it does and it doesn't mean going back to the horse and buggy days either. It takes people standing up for the right thing to do regarding the total environment and the total government, this country as a whole and the world. Being "nice" doesn't get it. However, Canadians are affraid to take a stand in defending our world or for that matter even thinking about the environment and what capitalism is doing to kill civilizations off as I had experienced this morning during a conversation among a group of "educated people". I moved way from the group feeling very angry regarding their indifference toward the rest of the country let alone the world. Having spent many years in South Korea, I know what a population can do when it comes down to a crunch. A fairly long article which I will post the head lines and the site address here, speaks about what people can actually do when they realize certain tack ticks taken by a government is not good for their country, their civilization nor the coming generations. The land grabs are not happening in South Korea but in other countries by the Korean Goverment. Please read it, it is another eye. Global warming is not going to help land grabs if it continues becoming a severe problem, but the article finally describes what people can do. ... South Korea’s global food ambitions: Rural farming and land grabs
Published: 19 Mar 2011

Richard said...

I was going to reply to Marie's article but you have summed it all up pretty nicely here Mound.

The Mound of Sound said...

@PLG - yes, steady state economics incorporates elements of collectivity and recognizes the role of commons in core areas. Those features are inherent whenever you shift from growht-based to allocation-based economics. The growth-based model is just fine with social Darwinism because of the lie that a rising tide floats all boats.

In boom times, when everyone feels at least somewhat prosperous, we're less concerned with inequality. It's when stuff runs out, when we have to shift to an allocation-based economy that our focus turns to egalitarianism. We expect sacrifice to be shared progressively. It's sort of like wartime rationing where everybody gets tickets for a fixed amount of gasoline every month. You can sell your surplus liquor ration but the state forbids you to assign your future ration or quota.

I think there is room for a mode of capitalism within a steady state economy. It is simply a more narrowly regulated capitalism focused on qualitative growth aligned with the common purposes of the public. That's pretty much a 180 from today's corporatism.

Are we, as a national society and as a global civilization, capable of overcoming the enormous inertia of our political and economic institutions that would be required to achieve this change. I suppose there could be some massive triggering event that creates a sea change in global public opinion but I'm very pessimistic about the chances. I'd love nothing more than to be proved wrong on that.

@ Anon. The meat reduction point is arguable given the new and rapidly expanding demand for meat products in the developing economies. That genie is long out of the bottle.

@ Anyong. In southeast Asia I think the land grabs are primarily in Cambodia, Laos and northern Thailand.

Purple library guy said...

MoS, near as I can figure out steady state economics is not an economic system in itself, and certainly not a political one. It's a set of policies and objectives. In a very rough sense, it could be created in almost any economic/social system. The question is, over the medium term, how are the incentives and power aligned?

In theory, if everyone got het up enough, it would actually be possible to institute policies in a modern representative democracy with capitalist-but-mixed economy that would give you a steady state economy--for a little while. It's just that everyone with levers of power would hate it and they'd still have those levers. We'd see sustained propaganda efforts like those against unions and social programs and corporate taxation. We'd see bribery, regulatory capture, on and on. It would erode quickly.

And that's the problem with your idea that a "more narrowly regulated capitalism" would be OK. Capitalism is about private individuals owning production, and seeking to maximize surpluses. Those private individuals are not going to co-operate with a system which wants to tell them their surpluses are going to have to be drastically curtailed. They are not going to want to stop profiting from externalities. Cheating, bending the system, or changing it to be less regulated, will always be in their interests. Regulation can contain them for a time perhaps, but as long as they have the power and money coming from their economic role they will have ways to acquire political power with it. No steady state can be stable if it has a significant role for capitalists. I'm not even sure it could work with markets, at least as we currently think of them.

The same is true, I think, of Soviet-style "Communism"--it might not be compatible with steady state either. The rule by a small elite with a focus on production was certainly terrible for the environment in the USSR.

The Mound of Sound said...

I don't know that even neo-classic economics is truly an economic system, PLG. They all have political, social and economic components. Steady state economics has all those facets but it also reinstates the environment to a full role. It's that inclusion of the environmental dimension that serves to fill in the gaps and inconsistencies that neo-classic economics depends on.

It's an interesting subject to explore but it's also as grueling as getting through an undergrad stats course. Former World Bank economist Herman Daly's "Beyond Growth" is a grind.

It is considered a transdisciplinary field of research and is sometimes called ecological economics.

I agree that even tightly regulated capitalism would have flaws and potential problems but I really don't see any alternative. That said I'm not terribly optimistic that we have the will to transition to a radically different economics on a global scale within the time remaining for it to achieve any good.

I think we're not far from the point where it'll be every country for itself with widespread chaos.

xraymike79 said...

I think purple library guy has it mostly right on this subject.

have you all read these 2 papers:

Marie Snyder said...

Tim Jackson does a good job of explaining it all in a very accessible way in Prosperity Without Growth. I agree with zero-growth systems entirely - get rid of externalities and exploitation. It's bizarre how long we've run a growth system on a finite planet. And it's not entirely divorced from Adam Smith's version of capitalism. Our version has allowed greed to take over until most people are no long experiencing the freedom the system is supposed to be all about!

But I'm still baffled as to how we even begin to get there. I think the first step is greater corporate regulations (a huge leap), followed by personal restrictions, all the while shifting subsidies to renewables. But who's going to implement that?? If I were queen of the world, I'd do it. I think. But maybe even I would be corrupted by the short-sighted prospect of massive wealth with no possibility of punishment.

There are precious few people in my "real life" that think about any of this. How do we get the Twilight-readers and soccer-moms and sports-stats-quoters to be concerned enough to protest against the type of life they're accustomed to? In South Korea, as Richard says, there were mass protests, but only because it got really bad for many people. I fear it won't get bad enough here until it's too late to act. So, then it's in the hands of the political system which would be loath to dismantle itself - unless we get someone with great foresight and no aspirations for financial gain in power. But that's a long shot.

kootcoot said...

This is an important idea and post, that unfortunately no one in a position to promote change will read or to which anyone will pay any attention.

It is so obvious that the very things required for our deeply flawed economic (capitalism - free markets, etc.) are the same things that threaten our very existence. Over consumption of disposable goods and over population and constant growth are indeed impossible in a finite environment with a finite amount of resources and indeed real estate on land, water and atmosphere for the waste created by this wasteful lifestyle.

All the tactics needed to save our civilization, like population reduction and husbanding of resources are liabilities to our free booting economic and social Darwinism.

The Mound of Sound said...

"Corporations can’t make the socially and ecologically rational decisions that need to be made
to save the humans because they represent only private particular interests, not the social and universal interests of humanity, the environment, and future generations. But society can afford to close down coal, retrench oil production and socialize those losses. Society can
ration oil, like we did during World War II, and society can redeploy labor and resources to
construct the things we do need to save the humans, like renewable energy, public transit,energy efficient housing for all, and many othersocial needs that are cu
rrently unmet by the market system. In the final analysis, the only way to align production with society’s interestsand the needs of the environment is to do so directly. The huge global problems we facerequire the visible hand of direct economic planning to re-organize the world economy to meet the needs of humans and the environment, to enforce limits on consumption and pollution, to fairly ration and distribute the goods and services we produce for the benefit of each and every person on the planet, to conserve resources so that future generations of humans and other life forms can also live their lives to the full."

This is Smith's basis for arguing that we need to abolish capitalist private property in the means of production and assume that function socially, much along the lines suggested by PLG above.

Yet I think modern civilization, steeped in its "haves" and "have nots" culture and organized into nations resistant to these very concepts makes these sort of reforms unrealistic absent some global equivalent of the 9/11 attacks used by the neo-cons to seize America's political helm.

I just don't think we're built to do this. We would have to be almost enslaved, our lives micro-ordered, to make this magnitude of change a reality. And in the sort of world envisioned there might be even less reason for the rulers (and there will be, there always are) to be benevolent instead of tyrannical.

Thanks for the links, Mike.

xraymike79 said...

Mound of Sound,
You have officially joined the ranks of the "Doomers".
Welcome to the club.

Anonymous said...

Yes..South Korea's land grabs are in the countries you mentioned...they are still land grabs. Anyong

Bill Protection Insurance said...

Environmental problems can also cause economic decline. It should be addressed accordingly.