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 (footprint.org).  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.