Prosperity without growth

Prosperity without Growth: Economics for a Finite Planet

I paused for a while wondering whether a review of a book on sustainable economics had a place in a website devoted to climate change. But only briefly. One can’t worry about climate change for long without considering the economies which have given rise to it and wondering how they will survive under the low-carbon regime which they must now adopt.  Anyway carbon emissions figure frequently in the course of Tim Jackson’s book Prosperity Without Growth: Economics for a Finite Planet. Published last year it was based on a report he wrote earlier in the year as Economics Commissioner of the Sustainable Development Commission, the UK Government’s independent watchdog. Increasingly climate change has imparted a new urgency to sustainability thinking. It sits as one of many issues, but it underlines the seriousness of the need to come to grips with the finitude of the planet.

The prosperity Jackson writes of is our ability to flourish as human beings. It transcends material concern. It has to do with such matters as physical and mental health, access to education, relationships and sense of community, meaningful employment and the ability to participate in the life of society. He argues that in the developed countries we can (and must) have such prosperity without the economic growth paradigm that currently rules our thinking.

Jackson recognises the difficulties of the situation we have landed ourselves with.  On the one hand growth is unsustainable, at least in its current form. The burgeoning consumption of finite resources and the heavy costs being imposed on the environment are accompanied by profound disparities in social well-being.  But on the other hand “de-growth’ is unstable, at least under present conditions. Declining consumer demand leads to rising unemployment, falling competitiveness and a spiral of recession. It adds up to a dilemma, but one which we must face and think through.

Some economists place hope in our being able to decouple economic growth from growth in physical inputs and environmental impacts.  Capitalism’s propensity for efficiency figures strongly in these scenarios. Jackson doesn’t think either the historical evidence or the basic arithmetic of growth can support the decoupling notion.  The deep emission and resource cuts needed can’t be achieved without confronting the structure of market economics.

He takes a closer look at this structure. The engine of growth is driven by the ability of the profit motive to stimulate newer, better or cheaper products and services through a continual process of innovation and ‘creative destruction’. This is matched by expanding consumer demand for these goods. A complex social logic drives this demand. Consumer goods have come to play a symbolic role in our lives.  Somehow, beyond the simple material needs they meet, they can become vehicles for our dreams and aspirations, however much they fail in delivering. The economic structure thus combines with our nature to “lock us firmly into the iron cage of consumerism”.

What we need, claims Jackson, is a new ecological macro-economics.  It will still include a strong requirement for economic stability, but it will add conditions that provide security for people’s livelihoods, ensure distributional equity, impose sustainable levels of resource throughput and protect natural capital. New variables need to be brought into play to complement and affect those already part of economic thinking. They will reflect the energy and resource dependency of the economy and the limits on carbon. They might also reflect the value of eco-system services or stocks of natural capital. Ecological investment will be important, and will mean revisiting the present concepts of profitability and productivity and harnessing them to longer term social goals. He urges the abandonment of the infatuation with increasing labour productivity in favour of high employment in low-carbon sectors.

We will need to be weaned from our dependence on consumerism, but he provides evidence that a less materialistic society will be a happier one and a more equal society a less anxious one. Greater attention to community and participation in the life of society will reduce the loneliness and unsocial behaviour which has undermined the well-being of the modern economy.

He argues that there is a clear case today for an increased role for government.  We have already seen an acceptance of this in relation to the 2008 financial crisis. The principal role of government is to ensure that long-term public goods are not undermined by short-term private interests and to deliver social and environmental goods. This role has been diminished by the need in the growth economy to support the consumerism which keeps the economy afloat.

Jackson is leery of revolution, but he proposes steps through which to build change. They fall under three main categories. First, changing the limits. Here he writes of caps on resources and emission, considers the contraction and convergence model, discusses emissions trading schemes and ecological taxes and emphasises the need for support for ecological transition in developing countries.

The second category of steps for change is fixing the economic model. The ecological macro-economics discussed above will lower expectations for labour and capital productivity and account for the value of natural capital and ecosystem services. Ecological investment in jobs, assets and infrastructure will include retrofitting buildings, advancing renewable energy technologies, redesigning networks such as the electricity grid, building public transport infrastructure, maintaining and protecting ecosystems, developing public spaces.  There will be increasing financial and fiscal prudence, including regulation of financial markets.  A Tobin tax on international currency transfers may be considered. Banks will be required to hold higher asset reserves. National accounts will be revised to be more robust than the present rough and ready GDP.

The third category is changing the social climate. Working time may be reduced. Systemic inequality will be tackled. Better measurements of prosperity will be found. Social capital will be strengthened. The culture of consumerism will be carefully dismantled.

Utopia? No, he says firmly. A financial and ecological necessity.

In a final chapter he faces the question of whether this spells the end of capitalism. Certainly growth would be slowed – labour-intense activities mean slower productivity growth, and ecological investment means a lower and longer return on capital. There would also be a larger role for the public sector in taking some ownership stake in the longer-term less productive investments. But capitalist economies often have elements of public ownership.  There is a wide spectrum of possibilities in a capitalist system.  There’s no need to polarize the debate.

I thought the book was splendid. Jackson’s writing is lucid and well organised. He has a gift for the telling sentence. (It was not altogether surprising to discover that in addition to his academic life he is a professional playwright for BBC radio.) He is cautious and sensible, not pretending that the transition to low growth is a doddle.  But he holds firmly to the conviction that it can be made and that the society which emerges will be better than the one we currently inhabit.

Feel floes (gone by 2016)

The usual suspects have been making much of the fact that over the last few weeks Arctic sea ice extent (NSIDC daily graph here) has been bumping around the 30 year average for this time of year. John Cook at Skeptical Science posted on the subject last weekend, making the important point that what matters most is not extent or area, but the total volume of ice that’s present — and that’s showing no signs of “recovery”. John’s post is well worth reading, but it set me off on a very interesting trawl through the references he provided — and drew my attention to a most useful graph of ice volume and trend. It also pointed me to research that suggests the Arctic could be effectively ice-free in summer within ten years — possibly as soon as 2013.

Continue reading “Feel floes (gone by 2016)”

There’s nothing quite as sexy as fossil fuels

Slightly off topic, but who can resist two of NZ’s sexiest women having a bit of fun with energy minister Gerry Brownlee, and his plans to mine national parks for more coal? Not me.

Leaked! – NZ talks at Heartland crankfest

BREAKING NEWS: A mole in the Heartland Institute has leaked details of presentations planned for the fourth “International Conference on Climate Change”, to be held in Chicago from May 16 – 18. Over the weekend a file containing a selection of emails between Heartland senior executives and their invited speakers was uploaded to a Russian server, and a link to the file posted in comments at Hot Topic (since removed, to protect the whistleblower). To give you a flavour of the explosive contents, here are extracts in which prominent New Zealand sceptics Bob Carter, Chris de Freitas and Bryan Leyland discuss the talks they plan to give.

Continue reading “Leaked! – NZ talks at Heartland crankfest”

Klein in Bolivia: global democracy is the way forward

Naomi Klein has been to Bolivia. She reports in the Guardian on the World People’s Conference on Climate Change and the Rights of Mother Earthheld this week.

The Copenhagen Accord speaks of keeping global warming to two degrees. In fact to date the emissions reductions pledged under the Accord put the world on the path to three degrees. But two degrees, Morales told the conference, “would mean the melting of the Andean and Himalayan glaciers.”

Klein points out that Bolivia is in the midst of a dramatic political transformation which has nationalised key industries and elevated the voices of indigenous peoples.

“But when it comes to Bolivia’s most pressing, existential crisis – the fact that its glaciers are melting at an alarming rate, threatening the water supply in two major cities – Bolivians are powerless to do anything to change their fate on their own.”

Only deep emission cuts in the industrialised world can avert the catastrophe facing countries like Bolivia and Tuvalu. That’s what the leaders of endangered nations argued for passionately at Copenhagen. “They were politely told the political will in the north just wasn’t there.”

They were also shut out of the closed door negotiations which led to the Accord. And when Bolivia and Ecuador refused to endorse the Accord the US government cut their climate aid by $3 million and $2.5 million respectively. “It’s not a freerider process,” was the explanation of US climate negotiator Jonathan Pershing.  That strikes me as an extremely ironic statement given the disproportionate emissions of the US, a point which Klein makes in this way:

“Anyone wondering why activists from the global south reject the idea of ‘climate aid’ and are instead demanding repayment of ‘climate debts’ has their answer here.”

Klein goes so far as to say that the message in Pershing’s words was that if you are poor you don’t have the right to prioritise your own survival. This is the context for her characterisation of the conference as “a revolt against this experience of helplessness, an attempt to build a base of power behind the right to survive.”

There were four big ideas proposed for the conference by the Bolivian government:

  • “That nature should be granted rights that protect ecosystems from annihilation (a ‘universal declaration of Mother Earth rights’);
  • that those who violate those rights and other international environmental agreements should face legal consequences (a ‘climate justice tribunal’);
  • that poor countries should receive various forms of compensation for a crisis they are facing but had little role in creating (‘climate debt’);
  • and that there should be a mechanism for people around the world to express their views on these topics (‘world people’s referendum on climate change’).”

Seventeen civil society working groups worked for weeks online and for a week together to prepare recommendations. Klein describes the process as “fascinating but far from perfect”, and suggests that its most important contribution may be Bolivia’s enthusiastic commitment to participatory democracy.

She thinks this because of her concern that after the failure of Copenhagen the idea that democracy is at fault “went viral”. The UN process of votes to 192 countries is too cumbersome and solutions are better found in small groups.  She sees James Lovelock’s recent statement as an example: “It may be necessary to put democracy on hold for a while.”

Klein won’t have a bar of this. It is the small groupings which have caused us to lose ground and weakened already inadequate existing agreements. She notes that Bolivia came to Copenhagen with a climate change policy drafted by social movements through a participatory process, resulting, in her view, in the most transformative and radical vision so far.

She sees the people’s conference as Bolivia trying to take what it has done at national level and globalise it, inviting the world to participate in drafting a joint climate agenda ahead of the next UN climate conference in Cancun. She quotes Bolivia’s ambassador to the United Nations, Pablo Solón: “The only thing that can save mankind from a tragedy is the exercise of global democracy.”

Her conclusion:

“If he is right, the Bolivian process might save not just our warming planet, but our failing democracies as well. Not a bad deal at all.”

Whatever one makes of the various avenues being pursued (if that’s not too strong a word) in achieving emission reductions, there is a need for the voices of the most endangered nations to be heard.  It seems likely that they will need to be raised to the level of loud and clear before a great deal of notice is taken of them. Bolivia recognises its vulnerability to glacier melt, and to various other threats which were identified in an Oxfam report last year discussed here on Hot Topic. It would be a failure of a government’s duty to its citizens to remain quiet. Their steps to mobilise global opinion should not be treated with indifference or contempt. And it is to be hoped that the US cutting off of funding will be reversed. It looked suspiciously like punishment, and undeserved at that.