climate change
25 Feb 2008
Why Downsizing Won't Work
The climate isn't changing because we're too rich but because we're not rich enough, argues Akshay Shanker
Like many people, Brett Robertson believes that economic development is the culprit behind environmental degradation and climate change. It's an accepted part of contemporary environmental debate: we need to downsize before the "affluenza" virus cripples both our lifestyle and the ecosystem.But the view that modern capitalist society is too affluent is incorrect - and dangerous. Modern capitalism is poor. The key to a more sustainable future lies in more growth and more affluence, not de-development.
A quick look at Maslow's 'hierarchy of needs' shows that people first satisfy their basic material needs for food, shelter, physical security and health, after which they satiate so called "higher needs" - including creative freedom, justice, opportunities for political expression and even environmental goods such as clean air, clean drinking water and certainty of their own and their children's economic future.
What Maslow's hierarchy shows us is that consumers do not view goods that satisfy higher needs, and goods that satisfy more basic needs, as substitutes for one another. In other words, if people value environmental goods they would not sacrifice these goods for the opportunity to consume a greater number of lower order consumables, such as plasma TVs. We can see this historically, where progress on conservation has been borne out of relative affluence, prosperity and greater satisfaction of basic needs.
Early 19th century London, with a GDP per capita of less than one tenth of the present day United Kingdom, was characterised by the unbearable stench of human effluent and rampant air pollution from the smut and stink of coal firing. Even Sydney Harbour was dirtier at that time than it is now. In North America, that era saw the unapologetic destruction of natural resources and forests with an attitude of environmental "conquest".
At that time, although capitalism was in its infancy, production methods were highly inefficient compared to today, and human understanding of our relationship with the ecosystem was archaic.
The latter part of 19th century saw a new level of environmental awareness in the West, arising from growing prosperity and a concern for the preservation of resources. The rise of conservation movements was in part spurred by a burgeoning middle class who had the time, political will and resources to satiate their higher needs with environmental goods. It was during this time that the first national parks were established, the Sierra Club - the forerunner for the Wilderness Society - was founded, and that the State began to play an important regulatory role in managing natural resources.
The conservation movements of the 1890s did not survive the turn of the century. Instead they developed in a wave-like manner, peaking at the end of the great economic expansions of the 1920s, 1950s and, arguably, today. These movements were not underwritten by a desire to slow down economic growth or downsize, but rather to ensure its survival and to improve our standard of living.
Nobel Prize-winning economist, Amartya Sen convincingly argues that economic growth has at its primary end the very higher needs mentioned above, namely: political freedom, social opportunities and transparency in public life. Sen's analysis can be expanded to incorporate environmental sustainability. If consumers value environmental goods then this demands a radical alteration to the way we perceive ideas of material wealth and growth.
As Australia's income grows, the methodology of calculating GDP needs to be revised to incorporate the higher goods that are now demanded by consumers. Current methods of calculating income only explain standards of living up to a certain level, after which they become redundant. If air pollution decreases our standard of living, pollution should be deducted from GDP estimates. Likewise, if reduced risk of catastrophic natural disasters creates a more favourable business outlook, then efforts to decrease the likelihood of adverse climate change should add to GDP. Such a revaluation of income measurements would mean that a transition to a sustainable future would present us with more opportunities for growth, rather than be a threat to our standard of living.
Policy that does not emphasise the growth opportunities of a more sustainable future, concentrating only on emission reduction, is dangerous. The term "emission targets" sends a pessimistic and alarmist message that bad times are coming. The public may react unfavourably to the realisation that more and greater costs will fall on them as a result of treaties which promise emissions cuts.
Growth-based climate politics should focus on informing the public of the benefits of a sustainable future. This would allow more risk taking by consumers and business, leading to the creation of new growth sectors. Government policy should set the right incentives and regulations for business to meet the growing demand for environmental goods. This means greater investment in new energy sources, sustainable technology and the skills and expertise required to undertake the massive urban planning of sustainable cities. New industries will thrive on these initiatives, creating more job opportunities and increasing our standard of living and wealth.
Growth-based solutions to climate change also present an opportunity to bridge the North-South divide in global multilateral discussions. Large developing economies such as China and India stand to win from tackling climate change early and investing now in renewable energy and sustainable industries. For Australia, these nations represent a market for technology and consulting on infrastructure development - not just the coal, uranium and iron ore of our old economy.
Economic growth is the key to a more sustainable future. Perhaps future economic historians will look on this era as a time of relative poverty - not affluence - from the point of view of their new economies.
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"If consumers value environmental goods then this demands a radical alteration to the way we perceive ideas of material wealth and growth."
Its growth Jim, but not as we know it.
Of course technology and human initative will be needed now and in the future to fix up that which technology and human initiative damaged in the past. I don’t really see the point of the article at all. Just seems to say capitalism will save us all and we can ignore the massive waste of our unnecessary consumer society because the invisible hand will wave its magic wand and the problem will disappear faster than a stock market bubble.
Unfortunately you neglect to address how to tackle the unsustainable artefacts of "growth-based" anything.
While I tend to agree that affluence could create the awareness and general social conditions that gave impetus to combat climate change, I don’t think it makes sense to extrapolate this and say greater affluence could somehow magically solved environmental problems.
Is economic babble ever going to get beyond classical to relativity?
This ‘economic growth’ term, which seems to be used interchangeably with ‘development’ neatly ignores the reality that wealth is a measure of other people’s poverty.
No surprise that we also find human beings wholy defined as ‘consumers’.
Does anyone else find econobabble as mad and maddening as marketing - the creation of irrational decisions by uninformed consumers?
Like what GraemeF said.
Can anyone spell ‘paradigm shift’? We are not spending our way out of this one.
Firstly, where is the empirical evidence to support Maslow’s hypothesis (speculation)?
Secondly, "economic growth" - that is, the endless counting of things and insisting that more and bigger is, indeed, better - is exactly the problem. It is the sort of confusion that insists individual "wealth" - that we as individuals acquire more and more of all things - equates to general well being - a communal state where each individual has adequate shelter, adequate food, a reasonable freedom from gratuitous violence (institutional or otherwise), adequate leisure (which, in some, leads to the opportunity for invention), the highest attainable levels of public health and access to alleviation of injury and illness and the opportunity, as far as possible, for every individual to improve their own state above the communal norm (if they so wish).
The first - wealth - leads inevitably to bizarre behaviours like collecting 500 cars or thinking that casinos are the height of sophistication.
The second - well being - we have never come near to achieving, not for lack of ability but purely because those who make our communities (those who wish to be wealthier) simply lack the will.
What a lot of twaddle. Science tells us what we are all doing to the world. We cab ignpre the scientific evodence like Howard did and go to hell on our own hancart or ewe can take immediatea and urgen actions to halt our contribution to the rising CO2 levels. get with it or face the consequences. All this philosophical nonsense will not have any effect except to delay action until it is too late.
Yep, this is silly. Like we really need 4 bathrooms per house to be able to avoid catastrophic global warming. Yeah right.
This is a typical anthropogenic view. Civilization has developed by irreversibly using up much of the available limited natural capital. It has already used a high proportion of the exhaustible natural resources, like oil. It has already diminished the availability of fertile soil, potable groundwater, the biodiversity provided by old-growth forests and the stocks available from ocean fisheries. It has already generated vast amounts of material wastes polluting land, sea and air. These include the emissions that are causing climate change. Civilization has achieved much by unsustainably drawing down on all this exhaustible natural capital. Human cleverness together with technology has enable this ravaging of the life support system by using ineffective temporary means. But it has not enabled any replacement for the natural goods and services that provide the foundations of society. The build up of civilization has so depleted natural capital that society will find it difficult to operate and maintain the existing infrastructure.
This article makes sense to me, or at least more sense than most of the comments so far have made. In my reading, the article is suggesting is the insertion of environmental issues into economic measurements that otherwise ignore them - this seems eminently sensible. Secondly, the article proposes that it is only once people reach a certain level of affluence that they are able or willing to address environmental issues that do not directly affect them in day to day life - this is also pretty straightforward, I think you’d be hard pressed to find many people in third world countries who give two hoots about global warming - they are occupied with more basic needs - shelter etc - hence Maslow’s hierarchy.
The comments show exactly the problem that needs to be addressed - there is the impression that economic growth/wealth is incompatible with environmentalism - this seems nonsensical - and other than spraying the usual ideological dogma, none of the previous posts have given any reason why this should be true.
To adress the posters -
"Unfortunately you neglect to address how to tackle the unsustainable artefacts of "growth-based" anything."
This answer to this is contained in the article’s noting of increased incentive for companies and individuals to innovate - new techonology such as recycling plants, more efficient waste processing technology, and goods that are less wasteful in their production are themselves the product of this innovation.
Moggill and Grantnw miss the point entirely - Moggil with a non-sequitur, and Grantnw by missing the point of the article - it’s not suggesting that individuals with 4 bathrooms will fight environmental problems - it’s that the inclusion of environmental factors into economic indices will spur environmentally aware policies and products.
denisaf has gone with a wonderfully simplistic primitavist view - technology bad! Thankyou for such an great constructive insight.
I think this article doesn’t deserve the twaddle that has passed for commentary so far, and at the very least should merit some more serious consideration than "hurr economic growth and capitalism = environmental doom". It is this sort of attitude that prevents environmental issues from being usefully explored by society as a whole - nobody wants to give up what they have, and any approach which advocates that uncompromisingly is a futile and pointless one.
Thanks for this article Akshay. Actually, this is exactly the kind of response I was hoping to provoke - not so that I can attack it, but because this kind of thinking is deeply embedded in mainstream economics and needs to be brought out into the open and examined.
I want to respond to the main point of this article:
Yes, our knowledge of environmental problems has grown with our affluence - but so has the scale of the problems. During the 20th century, our global economy grew to such a scale that we are now having a massive and irreversible influence on our environment. We could hardly avoid being more environmentally aware when the problem is staring us square in the face.
Most mature economies show modest improvements in their carbon intensity - the amount of carbon emitted per unit of GDP - as they grow richer*. But it’s not fast enough, and emissions are still growing, despite our constant innovations.
If we put those points aside, and assume that any economy is able to magically become environmentally sustainable once it becomes rich, then we have a serious problem. If we have to wait until the average Chinese citizen achieves the same standard of living as the average Australian before they start to limit their emissions growth, then we are leaving it far, far too late. If China had the same per capita emissions as Australia, global emissions would be roughly 75% higher, based on EIA figures from 2005. If India did as well, global emissions would be two and a half times what they are now. Waiting for affluence to spread through the world is not an adequate response. We have to act now - mitigation first, growth later; not the other way around.
Given that growth is such a big part of the problem, I just cannot see how it can be a big part of the solution. Like it or not, economic activity and energy consumption are heavily linked, and similarly, energy consumption and carbon emissions are heavily linked. It will take nothing short of a revolution to break those two connections. Not more of the same.
Akshay does make some good points - most notably regarding how we should be measuring GDP differently. This idea has been hanging around the fringes of economic discourse for decades and it desperately needs to be dragged into the mainstream. And I heartily agree with this statement:
But is it enough?
*(with the worrying exception of China, which after having improved their carbon intensity between 1980 and 2000, has since shown a steady increase, according to EIA statistics)
I actually agree with the premise of the article - i.e. we need to change our measure of growth, and change the framing of the debate from "do with less" to "grow sustainably" - and with many of the comments.
I’ve posted my own thoughts on my blog.
I agree with Akshay
cleaN and abundant energy is the only solution. Otherwise we parcel up the environment and deal with it like it is property to be bought and sold (carbon trading perhaps?). Then it becomes a matter of the rich and powerful doing as they please and the poor suffering. I mean who will tell me here in Australia not to turn on my AC, the police? or will i be priced me out of the market? Then what? Look in naples right now at the mess because no-one is collecting the garbage. Modern society exists because of cheap energy. Take that away and we return to what, the 19th century?
Rich western countries should advance the cause of the rest of the world, take the lead, just as they did at the turn of industrialisation, and promote the development of clean renewable energy. God we have gotten so fat at the expense of the south, and maybe this is our last chance before the bubble bursts and it finally dawns on our leadership that we in the west have very few productive resources. Imagine if a country like Australia developed say solar thermal to a point where it was as efficient as coal, then turned the coal taps off and said we have this alternative technology here that you might just want to buy. But that would be a pipe dream because that would take some sort of central planning initiative, you know like how a war economy might be run (if markets are such efficient allocators of resources why in times of war does the state not just leave it to the market to decide?). In reality this is a war, and future generations will rightly hold us accountable for not fighting this with the respect that they deserve. Instead we hold out the notion that some flawed economic principle based on self interest will promote the greater good. Our governments ascribe to this view in a way that reflects not only their impotence, but also the extent to which the democratic process is corrupted to reflect the views and interests of those who sit in the castle on the hill. And one can blame capitalism, but to overcome the philosophical impediments that underpin capitalism, and importantly, fashion the ‘common sense’ of the majority of the population, a space needs to exist within society where people can reflect on their situation and respond to it. But this has all been said before in previous posts
Hmm, you might be right, but only because the shift into really sustainable environmental management, needs to be lead by those whom have the wealth so as not to fear the consequences. Its a bit rich to expect those who are already living hand to mouth to turn the world economy around, surely.
The whole solution is within knowledge that if capitalism ever worked to strip the world of her natural resources, then it works to repay that debt also, but because the essential lie of capitalism is just that sort of a trick. Eventually, if we profit from what teaches us how and why to take better care of that environment, and teaches us what that care feels like, (because it sure feeeels way better than any other way of life, to know that your own living is not harming the envirnoment), then the economy will down size naturally without anybody needing to be scared of that process. When the richest of folk are on television talking about their gardens with the passion of Peter Cundel, we’ll know its all going to work out alright in the long run.
I have a conclusion
About money’s delusion
In which
I have realised its
Abuse is
Through you who
Fail to realise your own
False advantage grown
Was always penned in
By the owners of monetary capital
Enabling those they groom well
To imagine that if
This place here is new to you
Then those whom oppress you
Are those old to it
This place on Earth
And might include who loved it first
While if you are
Among those longest here
That your oppressor
Must be thus
Those most newly arrived to our shore
But hereby do I declare
Of my heart’s nature forever belonged here
Have I
Become by skin colour
Culture and religious basis
As much like those from many other places
Therefore and thereby
Their money world I defy
So blame me well if you like
For I am white
A descendant of invaders
And religious conspiracies
Yet never not been
Also indigenous
And loving the land in this
For racism’s ground
Was never Australian bound
And the Earth to recover
Will need what we together will discover
(that’s my latest poem, already copyright to my company a.c.n. 123212671 pty ltd, in an earlier edition - this less than 5% altered)
Word Sword Sworn
At Hath
That Hat
Inshallah no poetry farce
By Solomon’s Seal will my past
No word not true can last
Another like the Other:
The accumulation of capital
Is dependently fixed upon
Communication prevention
Between indigenous and refugee stations
While to reconcile national salvation
Each place depends upon
Use of money belong
To love of Earth strong
Let these words sing money’s song
For tired I am of
Awakening in Dreams of
The purses which
Build only delusion
While I have seen
Reality blessed
And my message of this
By heart’s nature
A shape shifter
Might my changes make
None other but the disenfranchised
Rich
For into the shape of a coin
Have my heart and spirit toiled
Gears well oiled
Learned by bacterial foils
To shift
If only I can avoid
Money’s lazing drift
Of working to earn what
We had no real need of but
When the work the Earth needs of us
Was being ignored
So for money that implores
Us to work for no more
Than to save her the Earth
Know we can buy of
No more than to sustain of
The conscience within which
To reforest the planet
Start immediate
Feed all its people
Educate the masses of its
Forgone conclusions
That this poem is
Not written to get rich
For by money yet
Will love be well
When truth proves this I tell
Word Sword Sworn
At Hath
That Hat
Inshallah no poetry farce
By Solomon’s Seal will my past
No word not true can last