Center for the Advancement of the Steady State Economy
Regular Contributors:  Herman Daly, Brian Czech, Brent Blackwelder, James Magnus-Johnston, and Eric Zencey. Guest authors by invitation.

Aristotle in Connecticut

by Eric Zencey

Eric_ZenceyAs I tried to comprehend the tragedy in Newtown, Connecticut, my thoughts were with the victims and their families. The horror I feel is nothing compared to what they have been required to experience and absorb. Understanding what happened seems impossible — but attempt to understand it we must, if we are to reduce the occurrence of these devastating shooting tragedies in the future. As I wondered along with the rest of America how this could happen, my thoughts turned to ancient philosophy — specifically, to the teachings of Aristotle and what he said about causation.

Any act that has a cause, he said, actually has four different kinds of causes: material, efficient, final, formal.

The efficient cause of gun violence is a shooter who intends to kill. The material cause of gun violence is the gun. If you want to prevent school shootings, it makes sense to keep shooters and guns from coming together anywhere near a school. Focusing on these easy-to-see causes leads to calls for more thorough background checks before gun ownership, for other forms of gun control, for profiling of potential mass murderers, for pre-emptive arrests, metal detectors, and locked-down schools as prisons for kids — not to keep students in, but to keep violence out. And these are the kinds of solutions that some people are going to say — and are already saying — we need.

But we’re not going to solve the problem of gun violence until we get at the deeper causes that Aristotle called final and formal. The search for final causes leads us to ask questions like, “what was the shooter’s motivation? What could he possibly have hoped to accomplish?” The search for formal causes has us ask “what were the social dynamics, the social context, that shaped this event?”

The United States has the highest level of gun violence among supposedly developed nations in the world, a rate exceeded only by some impoverished countries and some that are host to rival factions that are at war. Mother Jones reports that “Since 1982, there have been at least 62 mass murders carried out with firearms across the country, with the killings unfolding in 30 states from Massachusetts to Hawaii.” (The report counts as mass murder incidents in which a shooter takes the lives of four or more people.) We need to ask why “going postal” and “school shooting” have become such common terms in America. What are the deeper causes that give our culture tragedy after tragedy of this kind?

The answer to that question will no doubt be complex; final and formal causes are many and varied and difficult to sort out. But one avenue of causation might be found in this correlation: besides having the highest rate of gun violence in the developed world, the United States also has the world’s fullest expression of free-market consumerist ideology. Thinking about Aristotle’s categories, I suspect that there may be a connection.

Free-market consumerist ideology, supported by billions of dollars of advertising, has given us a society in which people are too often disconnected individuals who think that their satisfactions and the means of obtaining them are completely their own. We’ve been encouraged to think of ourselves first and foremost as consumers — not as citizens, as neighbors, as family members — and to think that as consumers we deserve to be satisfied. It’s a fairly small step from there to thinking that if we aren’t satisfied then we must have a grievance against someone who’s preventing it. The U.S. has become the richest, most commodious, and most powerful nation the earth has ever seen. In such a bountiful place, it’s all too easy for someone who is unsatisfied with their life to think that the reason must be that someone else has done or is doing something to block the way.

Taking bold action to satisfy personal grievance is perfectly in keeping with our All-American emphasis on individual empowerment and responsibility. Guns symbolize both. Guns are literally empowering: historically, the invention and dissemination of cheap firearms played a significant role in the spread of egalitarian, democratic systems. In Shogunate Japan, rulers declined to adopt the firearms that Westerners offered them in trade precisely because they brought about an unacceptable equality: an untrained musketeer could kill a highly trained Samurai warrior, a result that made no cultural sense whatsoever to the Japanese.

Most Americans accept that with our right to keep and bear arms come certain civic responsibilities, including the responsibility to respect the rights and prerogatives of others. In the traditional version of the American Dream, people are led by their longings and dissatisfactions to work harder to get what they need and want, and that’s good, as long as “working harder” doesn’t also mean “cranking through the planet’s finite resources faster and faster in order to have more and more stuff.” Few Americans stop to reflect that their longings and dissatisfactions have been shaped by a private enterprise system in which corporations profit by creating unhappiness and then by offering us the chance to assuage that unhappiness through consumption — consumption that has to grow to survive, which means it has to use the finite resources of the planet at ever-increasing rates.

Some Americans are perpetually disheartened by the gap between what they’ve been encouraged to want and what they can actually have; they find solace wherever they can. Some get so enraged by that gap that they lose track of the civic responsibility part of the equation. They begin to see other people as impediments that stand in the way of achieving their ambitions — impediments that must be outmaneuvered, defeated, “neutralized” or removed. And if you’ve been raised on a steady diet of first-person-shooter video games and have had your neurological wiring affected by continual doses of violence-as-titillation in movies and sports, you just might fetch up on violent action as a way to deal with your problems.

Still, I think that these causal factors alone are not sufficient. Aristotle, were he alive today, might point to another underlying cause of gun violence in America: cheap gas and the automobile. Far more than other nations, America has been shaped by both. Together they’ve given us an atomized society that contributes to this tendency to solve individual dissatisfactions with outbursts of violence.

When you’re in a car, your fellow citizens aren’t fellow citizens anymore, they’re people who get in your way, annoying you and making it harder to do what you want to do. And when you live in a landscape that’s been shaped by car culture, the networks of family and neighborly connection that grow naturally among people in communities aren’t as strong as they could be; they’re weaker than they are in communities with historical roots that reach deeper than the Age of Oil. (Finland has a per-capita rate of gun ownership about half that of the U.S., but its rate of death by gun violence is far less than half of ours.) Neighborhood networks of trust, mutual aid and common courtesy help restrain individual actors, keeping them more thoroughly embedded in social reality (which includes the basic principles that other people deserve to live and breathe and that schools should be the safest of places).

People living in such neighborhoods are also better positioned to identify community members who are so disturbed that they would perpetrate a tragedy like the one in Newtown. That part of Connecticut retains a sense of village life — Newtown has a vestigial grazing commons, and at the main intersection in one of its village centers, cars make an awkward left turn around an aged flagpole. But like elsewhere in America, it hosts shopping centers and modern suburban sprawl. No place in America can remain aloof from the individualist culture of consumerism, a culture in which true community is increasingly difficult to find. If there’s no true community, there can be no sturdy web of community relations that functions to integrate estranged individuals and either guide them toward positive expression of their urges or toward getting the help they need to deal with their sorrows and grievances.

To prevent future Newtowns and Columbines, I personally think that yes, we’ll need to address the efficient and material causes of gun violence. We’ll need to make it harder for shooters to get hold of assault weapons and make it harder for them to walk unopposed into our civic and public spaces — our schools, our movie theaters and shopping malls. Others will of course disagree, but I think action on these fronts is long overdue.

But we also need to get at the final and formal causes. That means rebuilding the sustainable communities that once held Americans in their supportive embrace, communities that were spun apart by cheap energy and the ease of automotive transport. We can recover them by demanding walkable neighborhoods; by refusing to participate in the infinite-planet economy of Mall and Sprawl America with its big boxes and anonymous spaces; by choosing instead to live, think, breathe, laugh, love, shop, own, create, recreate, educate, and be politically active locally, with people we know and can see face to face. Ultimately it’s impossible to take care of each other, our public spaces, our landscapes and our children on any other scale.

Re-localizing our lives in these ways won’t solve every problem and it’s unlikely to eliminate gun violence completely. There are always going to be people whose mental imbalances make them a challenge to society and sometimes a danger to others. But regrounding our collective lives in post-petroleum, sustainable neighborhoods opens one avenue of positive change, a change we must make if we are to reduce our levels of interpersonal violence to those in other industrialized nations.

This much seems clear: cheap energy and a physical and social world designed for cars and consumers aren’t ecologically sustainable. Neither is the perpetual-growth economy that produced them. We seem to be discovering that they aren’t socially sustainable either.

Regular contributor Eric Zencey is the author, most recently, of The Other Road to Serfdom and the Path to Sustainable Democracy and Greening Vermont: The Search for a Sustainable State.

Elect More Women: Prerequisite for a Sustainable Economy

by Brent Blackwelder

In 1990 there were only two women in the U.S. Senate, but in 2013, twenty women will be serving in the Senate, and another 81 women will take office in the House of Representatives. With this record number of Congressional seats held by women, the U.S. is closing in on the global average (20%) for lawmaking bodies. This is good news because evidence suggests that governmental bodies with more women are more likely to tackle issues of social justice and environmental health (and they’ll be more likely to pass budgets that reflect these concerns).

Especially noteworthy in the U.S. election were the defeats in the Missouri and Indiana Senate races where Todd Akin and Richard Mourdock gained notoriety when they expounded their views on rape. Akin announced that in cases of “legitimate” rape a woman’s body had defenses to avoid pregnancy, and Mourdock asserted that a pregnancy from rape was something that “God willed.”

It’s worth celebrating U.S. electoral gains for women, but there is a long, long way to go. Iceland, for example, has a majority of women filling its university professor positions, and women comprise almost half the members of parliament.

Why is it so important to elect more women to positions of power? And is having 20% of seats enough to make a difference? Researchers Tali Mendelberg and Christopher Karpowitz found that when women make up 20% of a decision-making body that operates by majority rule, the average woman used only 60% of the floor time as the average man. But once women comprise 60 to 80% of such a group, “they spoke as much as men, raised the needs of the vulnerable and argued for redistribution.”

Mendelberg and Karpowitz conclude: “…when there are more women in legislatures, city councils and school boards, they speak more and voice the needs of the poor, the vulnerable, children and families — and men listen. At a time of soaring inequality, electing vastly more women might be the best hope for addressing the needs of the 99 percent.”

Empowerment of women is the centerpiece of the strategy to achieve a sustainable, ecologically sound economy. Here are two of the many reasons for this claim: first is the overarching problem of a growing population. The inexorable momentum of the global population has led to over 7 billion human beings on the earth today and more to come every day.

At dinner tonight on this planet there will be 220,000 mouths to feed that were not present yesterday. Such a figure should cause alarm because the quality of farmland on the planet is being significantly impaired by erosion, by overpumping of ground water, and by the flood/drought cycles being exacerbated by global climate disruption.

Most experts on population growth observe that when women achieve a higher degree of status, respect, and power, they tend to have fewer children. Thus, empowerment of women is a key progressive strategy to stabilize population. In addition, slowing population growth could help reduce future climate-destabilizing emissions.

A second area is government budget priorities. Lawmaking bodies dominated by men spend too much money on war and too little on conservation, protection, and restoration of vital ecosystems. If the majority of members of legislative bodies were women, budget priorities would be influenced by more discussion and debate of sound economic policy.

In contrast to most policy discussions, which spend 90% of the time on the problem and 10% on solutions, I will conclude with two suggestions for continuing the trend of empowering women. First, enact a law that mandates a gender analysis before deploying U.S. foreign assistance in the form of projects, loans, or grants.

It surprises some people to hear that U.S. foreign assistance may be making women worse off. Most aid worldwide is not accompanied by any gender analysis that would answer the basic question: will women be better or worse off as a result of this grant, loan, or matching fund? The nonprofit organization Gender Action offers information and resources for tracking the effects of international financial flows on women.

Second, conduct more robust campaigns to fund family planning services worldwide. Population Action International points out that 215 million women who want to avoid pregnancy lack access to contraception and family planning.

The difference between a world reaching a population of 8 billion people in 2050 as opposed to 9.2 billion is huge. A world of 8 billion would emit roughly two billion fewer tons of carbon – an amount that is equivalent to what would be saved by eliminating all deforestation.

Economics as “Unusual” in Australian Politics

by Robert Lawrence

An important event has been hardly noticed in Australian politics. But it could be the start of a trend to recognize and address causes of social and environmental problems rather than merely to struggle with the symptoms. Until recently economic growth, as measured by gross domestic product (GDP), has been the primary indicator of governmental performance, with alternatives virtually absent from the political discourse. At last one brave member of Parliament is changing that, unafraid to lead the way toward a steady state economy.

To understand the significance of this event, we need to get some perspective on the Australian political situation. There are two rival sides that differ mainly in rhetoric and in their strategies for winning support from voters. More than 90% of elected politicians belong to these two sides.

There are two houses of Parliament. One is the House of Representatives, which does the main business of government. The other is the Senate, which reviews the decisions of the House of Representatives. A group of Senators is elected to represent each of the six Australian states.

Voting is compulsory in Australia for citizens over 18 years of age. There is a preferential voting system in which every candidate must be ranked for a vote to be counted at all. Effectively this has meant that Australians ultimately had to choose between two political parties. In voting for the House of Representatives, votes for independent candidates and minor parties have rarely made an impact. The electoral system is built around the two parties. There is a review of electoral boundaries every seven years. Boundaries of electorates are redrawn so that there is a more even competition between the two major parties. The parties distribute leaflets on how to vote for their candidate, and these suggest an order of preferences for the other candidates.

The situation is different for the Senate, in which each of the six Australian states has its own set of candidates. This setup has given the minor parties and independent senators an opportunity to wrest some power away from the two main parties. This happened during the last national election when the Australian Greens and a small number of independents were able to cast deciding votes. This meant that citizens who voted for a minor party actually had a voice at last. A tax on carbon emissions commenced on July first as a consequence.

Australia has a free press. A common approach in the media has been to strive for a “balanced” view, which has generally been achieved by presenting extreme viewpoints on any given issue to contribute a public “debate.” The effect of this is to polarize the public, rather than to seek well-reasoned, informed decisions.

Another major factor in the political landscape is the opinion poll. Although polls can help politicians be more responsive to the electorate, they can produce undesirable consequences. Politicians become concerned about managing perceptions rather than governing from the best advice of their departments. Another consequence is that both the major political parties tend to become almost indistinguishable. One gives lip service to workers’ rights and the environment, while the other to business. In practice it is impossible to tell which is better in any aspect. Both major parties express disdain for each other and struggle to find ways to differentiate themselves for voters. Often “debate” deteriorates into personal attacks.

But one issue on which both major parties agree, as is the case throughout the western world, is the imperative of economic growth. Rising GDP is the unquestioned prime measure of success.

Conservationists have been dealing with the consequences of the growth-is-good dogma. They have taken the approach of running campaigns on specific, strategic issues that tend to address the symptoms of too much economic growth. One could argue that they have been afraid of being further marginalized as a lunatic fringe with no grasp of reality. At least population growth has recently made it onto the political agenda, but there has been near silence on economic growth.

Christine Milne understands the link between economic growth and environmental deterioration.

Christine Milne has been a Senator for Tasmania since the middle of 2005, and she became the leader of the Australian Green Party in April this year. There are currently nine Australian Greens in a house with 76 members.

Milne delivered a speech in late September in which she made some astute observations. She said that we can build an economic system that serves the needs of people and nature, both for today and for tomorrow. She quoted from a report of the World Economic Forum, “More with Less: Scaling Sustainable Consumption and Resource Efficiency”:

“Current trends clearly show that business as usual no longer works. Unless the present link between growth and the consumption of scarce resources is severed, our resource base, governance and policy structures are unlikely to sustain the standard of living societies have grown accustomed to or indeed aspire to. Action to decouple business and economic growth from resource intensity and environmental impact, has never been more critical to the long term success of business.”

Milne continued by suggesting that we reconsider who belongs to the lunatic fringe in our 21st-century economy:

“Surely it’s time that those who advocate economic growth derived from resource extraction and pollution as the major path be the ones labeled wacky, loopy, irresponsible, divorced from reality or connected to the CIA.”

She went on to question who actually benefits from pandering to mining companies while ordinary people are struggling to make ends meet. Her full speech is worth reading.

Where is this likely to lead? The media and politicians are completely out of their depth in considering an alternative to the perpetual growth paradigm. Such a change even seems to be beyond the scope of thinking of conservationists. Even members of the Australian Greens may have underestimated the significance of this speech. Almost everyone seems content to ignore this speech and go on as they have.

But now that a prominent politician has publicly questioned the dogma of growth, we’ve moved a little closer to a much-needed turning point in Australian politics. Thanks to Christine Milne for saying what needed to be said. How refreshing to see true leadership taking root within the barren fields of the Australian political landscape.

Robert Lawrence runs Heritage Bushcare, a small business that removes weeds to improve the condition of areas of remnant vegetation. He is also secretary of the Nature Conservation Society of South Australia and the Native Orchid Society of South Australia. He is the author of Start with the Leaves: A Simple Guide to Common Orchids and Lilies of the Adelaide Hills.

The Daly-Correa Tax: Background and Explanation

by Herman Daly

Under the heading, “Oil nations asked to consider carbon tax on exports,” John Vidal writes in The Guardian:

The Ecuadorean president, Rafael Correa, proposed a carbon tax at a summit of Arab and South American countries in October in Peru which included the heads of state and energy ministers of nine of Opec’s 12 countries. The Guardian understands the proposal was taken seriously and not dismissed out of hand. The idea was first mooted in 2001 by former World Bank senior economist Herman Daly — leading it to be dubbed the “Daly-Correa tax” — and will be further discussed by Opec countries at the UN climate talks which open on Monday in Doha.

Whether or not it will be discussed at Doha, I think it is worthwhile to explain the idea as it was presented to an OPEC Conference in Vienna in 2001. It elicited little interest on that occasion, but in 2007 was in large part adopted by President Rafael Correa of Ecuador, after being presented to him and his minister of planning, Fander Falconi, by ecological economist Professor Joan Martinez-Alier. Below is the relevant part of my speech at the OPEC conference.*

How might OPEC fit into the emerging vision of sustainable development? Permit me to speculate.

Sources of petroleum throughput derive from private or public (national) property; sinks are in an open access regime and treated as a free good. Therefore, rents are collected on source scarcity, but not on sink scarcity. Different countries or jurisdictions collect scarcity rents in different ways. In the U.S., for example, Alaska has a social collection and sharing of source rents, institutionalized in the Alaska Permanent Fund whose annual earnings are distributed equally to all citizens of Alaska. Other states in the U.S. allow private ownership of sources and private appropriation of source rents.

New institutions are being designed to take the sink function out of the open access regime and recognize its scarcity (Kyoto). Tradable rights to emit carbon dioxide, requiring first the collective fixing of scale and distribution of total emission rights, are actively being discussed. Ownership of the new scarce asset (emission rights) could be distributed in the first instance to the state, which would then redistribute the asset by gift or auctioned lease.

Ideally sink capacity would be defined as a separate asset with its own market. This would require a big change in institutions. Assuming it were done, the source and sink markets for petroleum throughput, though separate, would be highly interdependent. Sink limits would certainly reduce the demand for the source, and vice versa. The distribution of total scarcity rent on the petroleum throughput between source and sink functions would seem to be determined by the relative scarcity of these two functions, even with separate markets. Alternatively, sink scarcity rent could also be captured by a monopoly on the source side, or source scarcity rent could also be captured by a monopoly on the sink side.

To give an analogy, municipal governments, in charging for water, frequently price the source function (water supply) separately from the sink function (sewerage), thus charging different prices for inflow and outflow services related to the same throughput of water. In deciding their water usage, consumers take both prices into account. To them it is as if there were one price for water, the sum of the input and output charges. Likewise the petroleum throughput charge would be the sum of the price of a barrel of crude oil input from the source and the price of carbon dioxide output to the sink from burning a barrel of petroleum. One could consolidate the two charges and levy them at either end, since they are but two ends of the same throughput. This would be a matter of convenience. Since depletion of sources is a much more spatially concentrated activity than pollution of sinks, it would seem that the advantage lies with levying the total source and sink charge at the source end. This is especially so since the sink has traditionally been treated as an open access free good, and changing that requires larger institutional rearrangements than would a sink-based surcharge on the source price. OPEC, given sufficient monopoly power over the source, would be well positioned to function as an efficient collector of sink rents for the world community.

Could it also serve as a global fiduciary for ethically distributing those rents in the interests of sustainable development, especially for the poor? OPEC, assuming it could increase its degree of monopoly of the source, may be in a position to preempt the function of the failing Kyoto accord by incorporating sink rents (and even externalities) into prices at the source end of the petroleum throughput.

Of course OPEC does not have a monopoly on petroleum, much less on fossil fuels. It does not, even indirectly, control non-petroleum sources of carbon dioxide. So it would be easy to overestimate OPEC’s monopoly power, and the scheme suggested here does require an increase in its monopoly power. However, modern mass consumption nations such as the U.S. apparently do not have the discipline to internalize either externalities or scarcity rents into the price of petroleum. Exclusion of developing countries from the Kyoto accord, while understandable on grounds of historical fairness, undermines the prospects for accomplishing the goal of the treaty, namely limitation of global greenhouse gas emissions to a sustainable level. OPEC, assuming it had sufficient monopoly power, might be able to provide this discipline for both North and South.

The South, as well as the North, would have to face the discipline of higher petroleum prices in the name of efficiency, but would, in the name of fairness receive a disproportionate share of the sink rents. There would be a net flow of sink rents from North to South. The size of those rents would depend on OPEC’s degree of monopoly power. The distribution of the rents would be in large part decided by OPEC — a large ethical responsibility which many would be unwilling to cede to OPEC, and which OPEC itself may not want. The obvious alternative to such a global fiduciary authority, however, has already failed. The inability to reach an agreement on international distribution of carbon dioxide emission rights was the rock on which Kyoto foundered. It is hard to see how such an agreement could be reached, either as a first step toward emissions trading, or as a fixed non-tradable allocation.

It is in OPEC’s self-interest to preempt the emergence of a separate market for sink capacity, which could surely lower source demand and prices. While this gives OPEC a motivation, it also calls into question the legitimacy of the motivation as pure monopolistic exploitation. A legitimating compromise, as indicated above, would be for OPEC to behave as a self-interested monopolist on the source side, but as a global fiduciary on the sink side — that is, as an efficient collector and ethical distributor of scarcity rents from pricing the sink function. OPEC countries own petroleum deposits, but not the atmosphere. OPEC has a right to its source rents, but no exclusive right to sink rents. However, it may well have the power to charge and redistribute sink rents as a global fiduciary — exactly what Kyoto wants to do, but lacks the power to do. In addition to effecting this transfer, the expanded role of OPEC as global fiduciary might increase the willingness of other petroleum producers (e.g., Norway) to join OPEC, thus increasing its monopoly power and ability to function as here envisioned. In addition, the fiduciary role might provide ethical reasons for OPEC members to adhere to the cartel, when tempted by short-term profit opportunities to cheat.

Actually the existing OPEC Development Fund is already a step in this direction. Expansion of this fund into a global fiduciary institution for collecting and distributing sink rents, as well as the existing source rent contributions generously made by OPEC countries, is what is envisaged in this suggestion.

Just how total rents are determined and divided between source scarcity and sink scarcity is a technical problem that economists have not tackled because they have not framed the problem this way. Economists have focused on capturing source rents through property rights, and then internalizing the external sink costs of pollution through taxes. Only recently has there emerged a theoretical discussion of property rights in atmospheric sink capacity — whether these should be public or private, the extent to which trade in such rights should be allowed, and so on. As an initial rule of thumb we might assume that, since the sink side is now the more limiting function, it should be accorded half or more of the total throughput scarcity rents. In other words, sink rents should be at least as much as source rents.

Sink rents would go to an expanded OPEC Development Fund dedicated entirely to global sustainable development in poor countries (especially investments in renewable energy and energy efficiency). Source rents would continue to accrue to the country that owns the deposits, and presumably be devoted to national sustainable development. The focus here is on a new public service function for OPEC of efficiently collecting and ethically distributing sink rents in the interest of global sustainable development. Where Kyoto has failed, OPEC might succeed as a stronger power base on which to build the fiduciary role — a power base that sidesteps the inability of nations to agree on the distribution of carbon dioxide emission rights among themselves.

Although any exercise of monopoly power is frequently lamented by economists, the early American economist John Ise had a different view in the case of natural resources: “Preposterous as it may seem at first blush, it is probably true that, even if all the timber in the United States, or all the oil, or gas, or anthracite, were owned by an absolute monopoly, entirely free of public control, prices to consumers would be fixed lower than the long-run interests of the public would justify.” Ise was referring only to the source function. The emerging scarcity of the sinks adds strength to his view. The reasonableness of Ise’s view is enhanced when we remember that for a market to reflect the true price, all interested parties must be allowed to bid. In the case of natural resources the largest interested party, future generations, cannot bid. Neither can our fellow non-human creatures, with whom we also share God’s creation, now and in the future, bid in markets to preserve their habitats. Therefore resource prices are almost certainly going to be too low, and anything that would raise the price, including monopoly, can claim some justification. Nor did Ise believe that the resource monopolist had a right to keep the entire rent, even though the rent should be charged in the interest of the future.

The measurement of the two different rents presents conceptual problems. The source rents are in the nature of user cost — the opportunity cost of non-availability in the future of a non-renewable resource used up today. Assuming that atmospheric absorptive capacity is a renewable resource, the sink rent would be the price of the previously free service when the supply of that service is limited to a sustainable level. If we assume separate markets in both source and sink functions we would theoretically have a market price determined for each function. Since the functions are related as the two ends of the same throughput, the source and sink markets would be quite closely interdependent. The separate markets could be competitive or monopolistic, and differing market power would largely determine the division of total throughput rent between the source and sink functions. For example, if, following a Kyoto agreement, the total supply of sink permits were to be determined by a global monopoly, that monopoly would be in a stronger position to capture total throughput rent on petroleum than would a weak cartel that controls the source. OPEC is surely aware of this.

What might the WTO and the World Bank think of such a suggestion? Since these two institutions are well represented at this conference, this question is more than just rhetorical. So far the WTO and the World Bank have been dedicated to the ideology of globalization — free trade, free capital mobility, and maximum cheapness of resources in the interest of GDP growth for the world as a whole, including mass-consumption societies. In their view maximum competition among oil-exporting countries resulting in a low price for petroleum is the goal. Trickle down from growth for the rich will, it is hoped, someday reach the poor. I suspect the free-trading globalizers consider themselves morally superior to the OPEC monopolists. But which alternative is worse:

  1. Price- and standards-lowering competition in the interest of maximizing mass consumption by oil-importing countries by minimizing the internalization of environmental and social costs with consequent destruction of the atmosphere, and ruination of local self-reliance by a cheap-energy transport subsidy to the forces of global economic integration, or
  2. Monopoly restraints on the global overuse of both a basic resource and a basic life-support service of the environment, with automatic protection of local production and self-reliance provided by higher (full-cost) energy and transport prices, and with sink rents redistributed to the poor?

Monopoly restraint results not only in conservation and reduced pollution, but also in a price incentive to develop new petroleum-saving, and sink-enhancing, technologies, as well as renewable energy substitutes. Unfortunately there would also be an incentive to use non-petroleum fossil fuels such as coal, which would be a very negative effect from the point of view of controlling carbon dioxide. Independent national legislation limiting emissions from coal (and natural gas) may well be a necessary complement.

Ideally most of us would prefer a genuine international agreement to limit fossil fuel throughput, rather than a monopoly-based restriction imposed as a discipline by a minority of countries only on petroleum. But the Western high consumers, especially the U.S. as resoundingly reconfirmed in its recent election, have conclusively demonstrated their inability to accept any restrictions that might reduce their GDP growth rates, even in the likely event that GDP growth has itself become uneconomic. The conceptual clarity and moral resources are simply lacking in the leadership of these countries. Perhaps the leadership reflects the citizenry. But perhaps not. The global corporate “growth forever” ideology is pushed by the corporate-owned media, and rehearsed by corporate-financed candidates in quadrennial television-dominated elections.

A lack of moral clarity and leadership in the mass-consumption societies does not necessarily imply the presence of these virtues in the OPEC countries. Do there exist sufficient clarity, morality, restraint, and leadership in the OPEC countries to undertake this fiduciary function of being an efficient collector and an ethical distributor of sink scarcity rents? As argued above, there is surely an element of self-interest for OPEC, but to gain general support OPEC would have to take on a fiduciary trusteeship role that would go far beyond its interests as a profit-maximizing cartel. But a strong moral position might be just what OPEC needs to gain the legitimacy necessary to increase and solidify its power as a cartel. Could such a plan, put forward by OPEC, provide a stronger power base for the goals that Kyoto tried and failed to institutionalize? Might the WTO and World Bank recognize that sustainable development is a more basic value than free trade, and lend their support? I do not know. Maybe the whole idea is just a utopian speculation. But given the post-Kyoto state of disarray and the paucity of policy suggestions, I do believe that it is worth initiating a discussion of this possibility.

If sustainability is to be more than an empty word we have to evolve mechanisms for constraining throughput flows within environmental source and sink capacities. Petroleum is the logical place to begin. And OPEC is the major institution in a position to influence the global throughput of petroleum.

* “Sustainable Development and OPEC,” Chapter 15 in Herman E. Daly, Ecological Economics and Sustainable Development, Edward Elgar Publishers, Cheltenham, UK, 2007.

Efficiency and Entrepreneurship: Key Ingredients for Infinite Growth

by Milton Mountebank

Editor’s note: In order to present a “fair and balanced” point of view, the Daly News occasionally invites Dr. Mountebank (the award-winning economist and originator of infinite planet theory) to write an editorial.

Limits-to-growth ideology often bullies its way into what would otherwise be an astute dialogue about how to grow the economy. It’s easy to understand why. Some people deny the power of perpetual economic growth because of facts like these:

  • There is a finite pool of raw materials and energy resources on the planet;
  • The atmosphere is filling up with carbon dioxide, disrupting the planet’s climate;
  • Billions of people are struggling to get by on less than $2 per day;
  • Natural habitats and the species that inhabit them are disappearing at increasing rates;
  • The world’s oceans contain four hundred dead zones.
  • Debt loads in nations around the world are spiraling out of control.

The ignorant masses who don’t understand infinite planet theory tend to wallow unnecessarily in the muddy bogs of these facts. Even worse, in the hands of certain wrong-headed scoundrels, these facts can be aligned into an enticing argument against the economic imperative of perpetual growth. The counterintuitive heart of infinite planet theory is that ever-increasing efficiency can turn that which seems finite into a limitless reservoir of consumer products. Efficiency enables us to grow the economy forever, to fulfill any consumptive desire that may occur to us, and to keep the flow of products skyrocketing to infinity and beyond.

To illustrate this magical ability of efficiency, consider a case study from the malodorous field of solid waste disposal. Carl Grifter is a genuine garbage entrepreneur. After the financial meltdown and home foreclosure frenzy of 2008 and 2009, Grifter noticed that his local government couldn’t bring in enough revenue to pay the bills. Some people would view such a situation as cause for alarm, but not Grifter. He says, “While other people were out occupying the public squares and wasting their time on protests, I was busy cornering the garbage market.” In a wave of privatization in which the county sold off its public services to corporations, Grifter got in on the ground floor by purchasing the landfill at what he calls “a deep discount.”

Although it’s worth pausing to applaud such a fine example of entrepreneurship, we need to save the real ovation for Grifter’s efficiency innovations. After acquiring the landfill, he undertook a profitability analysis and classified five key processes that affect landfill operations:

  1. Advertisers induce demand for cheap, plastic products.
  2. Factory workers in China produce the needed supply of doodads and gizmos, pack them onto immense cargo ships, and export them to America.
  3. American consumers transfer cartloads of plastic schlock from the colossal aisles of Walmart, Target, and Costco to the colossal holds of their SUVs and the colossal garages of their colossal homes.
  4. Within one year’s time, consumers discard the remains of their original purchases.
  5. Enormous fleets of garbage trucks gather the plastic refuse and deliver it to the landfill where it will break down over the next several geologic epochs.

It’s tough to be more efficient than this!

Any economist can tell you that efficiency is a measure of how quickly and how cheaply a desired outcome can be achieved. Obviously, the more efficient a business, an industry, or an entire economy is, the better off we all are. Grifter combed through these five processes trying to find room for improving efficiency. He says, “It was real tough going. You can’t get any more efficient than those giant cargo ships. And look at how efficient Americans already are at transporting plastic crap to their homes. I was stumped.”

Grifter could have given up at that point. He concedes that at times, he even started to believe that maybe there were limits to efficiency and growth. But you can’t hold down the spirit of a devout growthist for long. He went back to square one and wrote down a simple equation for his business model:

More refuse = more revenue = more profit.

The desired outcome for a landfill business is to import as much refuse as fast as possible. Once Grifter fully understood this fact, he saw the golden pathway to efficiency: cut out the middleman. He says, “What’s the point of waiting an entire year for consumer products to come through the gates of my landfill? I contacted the factories and shipping guys in China and arranged to have the goods delivered straight from the ships.” Now Grifter’s fleet of garbage trucks meets the cargo ships on the docks and delivers products straight to the landfill. He adds, “It’s pretty much the same process as before, but I expedite things and make a killing!”

It’s a win-win-win situation. The first win: Grifter’s corporation earns higher profits, paving the way for growth and job creation. Projecting corporate growth out five years shows that 78 percent of adults in the county will soon be working at the landfill. The second win: with these products flowing straight to the landfill, advertisers and consumers can focus their attention on other useless and superfluous products — a surefire way to establish new branches on the tree of economic growth.

The third win should appease the environmental doomsayers clamoring about the limits to growth. There’s a clear environmental advantage to Grifter’s improvement. For starters, consider the carbon footprint reductions given the shorter travel distance that products take from factory to landfill. And as Grifter notes, “It’s a lot easier to bury the products in our landfill when they’re still in the packaging — there are less pieces of plastic to fold under the dirt, so we can save a lot of energy.”

“Look here,” he says as he points to a table with two identical boxes on top. “These are brand new Salad Shooters.” A big smile marks Grifter’s face as he takes one of them out of its box, picks up a hammer, and shatters the Salad Shooter into a pile of jagged pieces. “Which one of these do you think is easier to bury?”

Grifter’s corporation is a shining beacon of light for where the economy needs to go. Greater efficiency must be our mantra. Just as more efficient power plants and car engines have solved the so-called “problem” of greenhouse gas emissions, so will greater efficiency in the broader economy overcome any so-called “limits to growth.”

Dr. Mountebank is the John Q. Beelzebub Professor of Economics at Fantasia University.

Where Infinite Growth Meets Biophysical Limit

by Eric Zencey

Eric Zencey is the author of the recently released book The Other Road to Serfdom and the Path to Sustainable Democracy. This essay is adapted from Zencey’s forthcoming history of Vermont’s environmental movement, Greening Vermont: The Search for a Sustainable State, which he co-authored with Elizabeth Courtney.

To achieve a sustainable, steady-state economy, we’re going to have to limit matter-and-energy throughput in the economy to what the planet can sustainably give to us and what it can sustainably absorb from us. Against that physical limit, though, the economy continually exerts pressure: it’s structured for continual expansion of its matter-and-energy throughput, as we are encouraged to want, to seek, to produce and to own more and more and more. What we need are adaptive mechanisms that can reconcile the two.

One such policy adaptation is in place but hasn’t been fully developed or conscientiously applied.

The Clean Water Act (CWA) of 1972 instituted a national cleanup of the nation’s waterways, which had too long been treated as an open-access sink into which anyone could freely dump wastes and pollutants. Under the CWA, wastewater treatment facilities were built or upgraded and point source discharges — those coming from a single facility — were regulated and controlled. Water bodies that were considered dead in 1972 made remarkable recoveries.

Even so, by 2002 the Environmental Protection Agency (EPA) had categorized over 20,000 bodies of water (more than 40% of all those it assessed) as “impaired” — too polluted to be used for their “designated beneficial uses.” Clearly, if water quality was to be fully restored, more needed to be done.

The main problem was and continues to be “non-point” discharges — the diffuse pollution that is carried into waterways by runoff from land. Anything that is put on land can and will find its way into our waterways. The most problematic pollutants vary from basin to basin. Some of the most troublesome: the oil, gasoline, and road salt that find their way into our soils, streets, and parking lots as we use automobiles; untreated animal waste, including the burdens produced in some areas by farm animals and in others by pets; and fertilizers and pesticides, used by suburbanites to feed their lawns and by farmers to increase their yields in order to feed us.

The CWA outlined the manner in which non-point pollution was to be judged and limited: states were to identify impaired bodies of water and then set water quality standards for them. EPA rules written in 1985 and 1992 offered further guidance: states were to identify the pollutants that cause the impairment, and for each of those pollutants they were to identify the Total Maximum Daily Load (TMDL) that the body of water could absorb without being impaired. Their work would be reported to and reviewed by the EPA. How TMDLs would be enforced — how the scarce capacity of waterbodies to absorb effluents would be rationed — was left to state discretion.

Behind the notion of TMDL is sound, steady-state thinking: the capacity of bodies of water to absorb pollutants isn’t infinite, and the limits need to be discovered and respected.

Implementation and enforcement of the new rules wasn’t immediate. Some states, faced with significant expense, declined to comply with the law. Some sued to have the EPA do the job. The scientific work has been slow going. Between 1996 and 2003, a total of 7,327 TMDLs were approved nationwide, representing just 17% of the 42,193 bodies of water listed as impaired.

In Vermont, the issue of TMDLs came to a head in 1999, and experience there may be a guide to promoting the implementation of this finite-planet idea elsewhere. The controversy began with an application from Lowe’s, Inc. to build a store in South Burlington. The company received the necessary stormwater permits from the state in July of 2001, despite the fact that the store and its parking lot would force acres of runoff into Potash Brook, an impaired waterway. The Conservation Law Foundation (CLF) immediately appealed the permit decision. The appeal said that under the CWA, additional pollutants could not be discharged into the brook unless a mitigation and cleanup strategy were in place — a strategy that would require determination of the appropriate TMDLs, which hadn’t been prepared.

There were no TMDLs for Potash Brook for a simple reason: despite its carefully protected (and generally well-deserved) image as an environmentally aware state, Vermont hadn’t calculated any TMDLs at all. Meanwhile, well over 1,000 state-issued stormwater discharge permits had expired and were up for review. The Conservation Law Foundation had brought to light a major problem in the way that Vermont was managing its water resources and had revealed that the state was violating laws established under the Clean Water Act. “Vermont’s Agency of Natural Resources,” said Chris Kilian, the CLF’s Natural Resources Project Director, “can no longer turn a blind eye to our serious water pollution problems. Rubber-stamping permits that will add more pollution is not acceptable.”

CLF appeals of the Lowe’s decision were pending when the two sides announced a settlement in May 2006. Lowe’s agreed to implement higher cleanup standards than the state had required. Measures included stormwater retention ponds and filtration systems for runoff not only for Lowe’s 12-acre site, but the entire commercial plaza of which the new store was a part. Taken together these remedies were designed to eliminate all impact on Potash Brook. As part of the agreement, Lowe’s agreed to monitor stream conditions both upstream and downstream of its discharge, to ensure that the “zero harm” standard would be met.

If the CWA can continue to encode finite-planet assumptions through its call for discovery of TMDLs of pollutants in the country’s bodies of water, and if those limits can be enforced through state action or by citizen lawsuits, one key element of a steady-state economy will be in place.

But it’s not going to be easy to reach that point. TMDLs remain a controversial and difficult topic, as might be expected of a regulatory device that operates at the intersection of human ambition and biophysical limit. And the state-by-state foundation of the law may hamper its effectiveness. For instance, of the fifty water bodies in Vermont that are officially classified as impaired because of acidification, the source of the pollutant — acid raid — is well beyond the power of the state to control. And much non-point-source water pollution in Vermont has its origin in agricultural practices, which Vermont legislators and regulators are loathe to tackle. As the strong base of the state’s economy and as a prime preserver of the working landscape, farming provides all Vermonters with many benefits, and the environmental movement is unanimous in wanting to see a healthy agricultural economy in the state. But farming practices are responsible for 38% of the phosphate pollution that leads to regular algae blooms in Lake Champlain (making it the second largest category, after urbanization at 46%). The blooms can be toxic to wildlife, humans, and domestic pets, and they prevent recreational use of the parts of the lake that are affected. If Vermont is to achieve its water quality goals, it will have to enforce TMDLs for all waters that drain into its lakes, even if those limits require changes in agricultural practice. By 2012, Vermont had established TMDLs for roughly 60% of the waters that had been identified as needing them.

The concept of TMDLs can be extended to other sinks and pollutants. A TMDL could be set for diesel exhaust from trucks, limiting the amount to what a particular airshed can absorb without ill effect. Paired with a similar understanding of the limits of source services — like the maximum sustainable yield figures that can be calculated for forests and fisheries — TMDLs point to one way of achieving a balance between human activity and planetary systems.

The research necessary to determine a TMDL is costly, and comes at a time when public budgets are already being strained (by, among other causes, a declining energy return on investment for oil that means more and more of our economy’s energy is dedicated to getting that energy). If we don’t like the expense of government regulation, if it looks like we can’t afford all that governmental overhead, then we’ve basically got three choices: retreat into an infinite-planet state of denial and let our economy destroy our habitat; require private enterprise to fund the necessary research as part of the cost of doing business on what is undeniably a finite planet; or find ways (like a carbon tax or other uptake and throughput taxes) to meter inputs sufficiently to bring economic activity well within biophysical limit, thereby making the regulatory burden and research expense of TMDL enforcement less needed.

Climate Change Trumps Terrorism as Threat to National Security

by Brent Blackwelder

Climate destabilization eclipses all other security threats to human civilization except for a major nuclear war. But the current global economy gives no signals to investors and consumers about the profound implications of climate destabilization on water cycles, agriculture, and humanity’s ability to grow food for seven billion people.

The latest weather disaster, the monster Hurricane Sandy, demonstrated that changing environmental conditions pose a huge threat to U.S. security and stability. In the aftermath of the storm, thousands of people in New York and New Jersey face grim conditions, with $50 billion in damages, over 20,000 homeless, and some dying of hypothermia.

The American public, however, has been conditioned to think of national security in terms of terrorist threats. The Washington Post’s veteran Pentagon reporter Greg Jaffe makes the case that the world has never been safer, if security is to be measured by acts of human sabotage and terrorism. Jaffe asserts that according to “most relevant statistics, the United States — and the world — have never been safer… global terrorism has barely touched most Americans in the decade since Sept. 11, 2001.”

Jaffe appropriately criticizes presidential candidates and other politicians for exaggerating the national security threat from terrorism because they want to “cast themselves as potential saviors in an increasingly dangerous world.” During this time, he notes, more U.S. citizens have been crushed to death by furniture and televisions falling on them than have been killed in terrorist attacks (Washington Post 11/4/12).

Despite the way politicians are talking about national security, the reality is that over the past twenty years, national security has become more closely tied to environmental factors such as energy, water, food, and climate disruption. President Clinton’s State Department made the formal acknowledgment that deteriorating environmental conditions can cause conflicts and constitute threats to stability.

Hurricane Sandy comes ashore.

Rampaging global weather disasters pose serious challenges to governments around the world. According to Swiss Re, the world’s largest reinsurance company, twenty to forty percent of losses from disasters are uninsured. The company says economic losses from climate-related disasters are substantial and rising. One news release states, “Over the last 40 years global insured losses from climate-related disasters have jumped from an annual USD 5 billion to approximately USD 60 billion.” Another news release says that “without further investments in adaptation, climate risks could cost nations up to 19% of their GDP by 2030, with developing countries the most vulnerable.”

To address the root causes we must move from our current global system of cheater economics and casino economics to a true-cost economy. In a true-cost sustainable economy, the climate-disrupting effects of coal and oil would be factored into their prices, and prices would rise beyond most people’s idea of affordability. Ironically, the current method for calculating national economic well-being (GDP), counts the billions spent on fixing storm damages as a plus.

In the presidential debates Romney and Obama competed to see who could be more supportive of oil and gas and who would accelerate the movement of tar sands oil from Canada the fastest. It was as if they were saying, “Let’s see who can generate the most greenhouse gases the fastest and create even more gigantic storms and weather disruptions.”

The extraction of tar sands oil is devastating the homes of native people in Canada and creating a wasteland scene reminiscent of Dante’s Inferno. Utilization of such a filthy fuel on the scale now being advocated means “game over for the climate,” according to NASA climate scientist James Hansen.

At least the victorious President Obama stressed that he wanted more renewable energy, whereas Romney opposed wind power, belittled concerns about climate destabilization, and joked about rising sea levels. Now is the time to demand that Obama fulfills the clean-energy promise he made in his first term. Along the way, we might even alleviate some threats to national security that are already on our shores.

Who Will Get This Economy Going? No One

by Dave Gardner

“We’ve got to get this economy going again!” Unless your cave lacks wifi, cable or satellite, you’ve heard this once or twice in the last four seconds.

Job creation and economic growth dominate the November election in the U.S. — perhaps more than any election in history. Campaign ads for local, state and national candidates all promise jobs. The presidential election this year has become a referendum on who can breathe new life into our economy.

News Flash: Neither presidential candidate will succeed.

What if our unexamined assumptions about the need and possibility of perpetual economic growth are wrong? What if robust economic growth is our civilization’s way of driving off a cliff? What if the planet is incapable of supporting continued increase in global economic throughput?

We’ll excuse almost anything if it happens in the name of jobs. At last count the U.S. Congress had passed 247 anti-environmental measures in its current term. The Republican Party wants to throw environmental regulations overboard because they throttle back the unfettered growth we must have. Across the aisle, many who normally exhibit a stronger environmental ethic are joining the massacre, so strong is the mandate to grow the economy and create jobs. Few, if any, are apologizing for sacrificing environmental protection on the altar of economic growth.

Our Democratic president, who four years ago promised to stop the rise of the oceans and heal the planet, is now approving drilling in the Arctic, promoting hydraulic fracturing, and bragging about his support for fossil fuel exploration in national debates. Climate change has not even been on the table this election year.

Social critic Noam Chomsky observes: “The two major parties both propose that the colossal machine of everyday life in America can not only run indefinitely, but continue expanding, and include ever more member people who trade ever more schwag. All that is required, they say, is twiddling the settings of the machine, to get it back to running smoothly as it did in the good old days before the mystifying crash of 2008. They disagree slightly on which dials to twiddle.”

Politicians are ignoring the cascade of environmental crises, all tied to the huge scale of the human enterprise (population and economy) on the planet:

  • Climate disruption;
  • Species extinctions;
  • Depletion of soil fertility;
  • Collapsing fisheries;
  • Air and water toxification;
  • Fresh water supply crises;
  • Deforestation and desertification.

No question many people are struggling and feeling true pain from this “great recession.” Everyone needs meaningful work, a roof overhead, and a chicken in the pot. Yet throwing our natural world under the bus in an attempt to restore the robust economic growth we knew during the last century is not an intelligent way to secure these things. We ought not burn down the house to keep warm. We must leave for the next generation a world worth inheriting.

What is the business case for destroying the planet?
–Ray Anderson, founder and chair of Interface, Inc.

It’s time to examine the unexamined assumptions, time to re-evaluate our goals, our metrics, and our definitions of success — including what we mean by “progress” and the “American Dream.” They don’t have to mean more stuff. We’ve reached a point where our quest for MORE is detracting from the quality of our lives. It’s time to acknowledge that quality is more important than quantity.

The definition of the American Dream got hijacked.

In my film, GrowthBusters: Hooked on Growth, Raj Patel, author of Stuffed and Starved, calls our society’s infatuation with economic growth a “fetish.” He has many allies in suggesting that GDP growth is a poor measure of life satisfaction. Former World Bank economist Herman Daly tells us growth has become “uneconomic,” meaning its costs outweigh its benefits.

In an empty world, it was a safe bet that growth was making us richer, but we no longer live in an empty world. We live in a full world.
–Herman Daly, Former World Bank Economist

The evidence is compelling enough to convert smart people who spent much of their professional lives in pursuit of growth. Commentaries are appearing in major financial and global affairs publications questioning the possibility of perpetual growth. Financial gurus — Jeremy Grantham, Paul B. Farrell, Jeff Rubin, and John Fullerton, to name a few — are warning us we are hitting the wall of resource scarcity.

We are experiencing The End of Growth, as energy expert Richard Heinberg describes in his thought-provoking book. It’s a brutal truth we must face. We have hit peak oil, peak food, peak biodiversity and peak water. We had a good run, but the party’s over. The days of 3% annual GDP growth and ever-increasing material wealth are behind us. Stimulus packages, tax cuts, deficit spending, austerity — it doesn’t matter what we try, we cannot repeal the laws of physics.

 Yet the political climate demands that our representatives and candidates avoid telling us the truth. We don’t want to hear the truth. Recent history tells us we can have it all; that is all we’ve known for the past 300 years. Ronald Reagan swept into office telling us we could and would have more.

There are no limits to growth, because there are no limits of human intelligence, imaginations, and wonder.
–Ronald Reagan

Chomsky offers: “Reality knows we have entered a long-term compressive economic contraction; that there is no way we can persist in the current living arrangement; and that the necessary outcome to avoid immense human suffering can be described as the downscaling and re-localizing of everything we do.”

We need a modern-day Martin Luther King, Jr., a true leader with the integrity and courage to tell us the truth, and the charisma to inspire us to follow. We hold these truths to be self-evident:

  • The pie isn’t getting bigger, and over 7 billion of us want a slice.
  • We do not get to be materially richer next year than we are this year.
  • Our children don’t get to have more money and more stuff than we had.
  • That’s okay, because money and stuff are not what really matter in life.

Not one of the candidates on the ballot for U.S. President is telling us this. The most hopeful sign in the political landscape is a write-in campaign for two steady-state economics candidates, Rob Dietz (editor of the Daly News) and Bill Ryerson (CEO of The Population Institute and President of Population Media Center). The centerpiece of their platform is to transition the U.S. to a steady-state economy. Of course, this ticket is a few hundred million dollars shy of being a contender. And it’s a cold political reality that today no candidate can win election on a platform that respects the laws of physics on a finite planet.

Regardless of whom we elect as the next U.S. President, in four years we’ll still be in the great recession. The only difference between the two major candidates is how much damage we’ll have wreaked on the environment in our futile efforts to restore growth, and how much the rich will profit while we waste precious time.

We can live sustainably, practicing the intergenerational golden rule, and — in so doing — live good and happy lives. But this requires us to recognize growth is no longer delivering the goods, and it can’t continue anyway. It requires that we seek not a growing economy, but a healthy economy — one that is not liquidating the planet’s resources. The sooner we do this, the sooner we can enter the next phase of true human progress.

Dave Gardner’s documentary, GrowthBusters: Hooked on Growth, includes interviews with Brian Czech, Herman Daly, and Peter Victor. The film is being rereleased this week in a special edition. The “Final Cut” is a lean 54 minutes and includes new bonus features, some previously unseen. For more information, visit www.growthbusters.org.

Economic Growth: The Missing Link in Environmental Journalism

by Brian Czech

Environmental journalists are like doctors. Doctors run from patient to patient, harried, dealing with symptoms more than causes. They’re too busy dispensing pills to talk about holistic health. It’s an approach that makes money for the health industry but isn’t so great for public health.

Environmental journalists run from issue to issue, harried, dealing with environmental impacts more than causes. They’re too busy dispensing stories to talk about context. It’s an approach that makes money for the media but isn’t so great for environmental protection.

The analogy isn’t perfect. Environmental journalists don’t have an obligation to protect the environment like doctors are obligated to patient health. But journalists are obligated to tell the truth: the truth, the whole truth, and nothing but the truth. Here we’re concerned with the “whole” truth, and it’s worth extending the analogy in this direction.

Let’s say the doctor has an overweight patient. The patient was small as a child and developed an obsession with gaining weight. It’s hard to shift mental gears. Fully mature now, this patient’s top goal is growing even more! This has led to all kinds of problems: bad knees, high blood pressure, and sleep apnea to mention a few.

Now imagine the doctor prescribing more pills for each new ailment, never saying a thing about the patient’s obsession with growth. When will the doctor talk about the big picture? The patient is just not getting it on his own. To him, getting even bigger seems like the solution to all problems, not the cause.

Similarly, we have a society — a readership — that considers economic growth the top priority. This unhealthy obsession has led to all kinds of problems: biodiversity loss, climate change, and ocean acidification to name a few. Yet the reader is just not making the connection. Growing GDP seems like the answer to all problems, not the cause.

A code of ethics prevents journalists from advocating policies. It’s “just the facts ma’am.” But environmental journalists would probably be working for the environment if they weren’t writing about it. That’s my guess after attending three of the last five Society of Environmental Journalists conferences, most recently two weeks ago in Lubbock, Texas.

Yet the journalists have been missing the environmental forest for the trees. Try to remember the last article you read about an environmental problem in which economic growth was even mentioned, much less explored with nuance. Can you?

Journalists covering climate negotiations sometimes identify economic growth as the goal in the way of progress. China and India aren’t about to give up on growth now, and for that matter neither is the United States. Our “way of life is not up for negotiation.” But that’s about it for coverage. There’s little exploration of the nuances: of how in a 90% fossil-fueled economy, economic growth means climate change; of how “green” energy can’t substitute for fossil fueling of the economy; of how a stabilized climate amounts to a steady state economy.

And that’s just the context of one environmental problem: climate change. When, in reading about biodiversity loss, ocean acidification, depletion of aquifers, fisheries decline, etc., do we read about the linkage to economic growth? All environmental problems track with GDP growth, and it’s no coincidence. The relationship between economic growth and environmental impact is causal, just as gaining weight is causal of bad knees. Economic growth is an 800-pound gorilla with two arms: population and per capita consumption. It doesn’t happen without environmental impact.

It’s ironic that environmental journalists don’t tap into the big picture of economic growth. After all, generating a buzz is all about connecting with society’s concerns. It’s about relevance. What is more relevant today than economic growth? What is more covered in the broader media? What gets more attention from politicians?

The environmental journalist’s take on economic growth will sound odd at first. Readers are used to thinking of economic growth as the solution to problems, not the cause. But that’s OK. Readers are like the obese patient intent on gaining weight. When it dawns on them that economic growth is the cause of so many problems, not the solution, their interest will be piqued, and many will develop an appetite for journalism on economic growth and the sustainable alternative, the steady state economy. The whole truth will set them free from the fallacious rhetoric that “there is no conflict between growing the economy and protecting the environment.”

Environmental journalists don’t have an obligation to environmental protection. But they do have a unique opportunity. They have the opportunity to raise awareness of the whole truth, however inconvenient, that environmental protection doesn’t square with economic growth.

The Populations Problem

by Herman Daly

Herman DalyThe population problem should be considered from the point of view of all populations — populations of both humans and their artifacts (cars, houses, livestock, cell phones, etc.) — in short, populations of all “dissipative structures” engendered, bred, or built by humans. In other words, the populations of human bodies and of their extensions. Or in yet other words, the populations of all organs that support human life and the enjoyment thereof, both endosomatic (within the skin) and exosomatic (outside the skin) organs.

All of these organs are capital equipment that support our lives. The endosomatic equipment — heart, lungs, kidneys — support our lives quite directly. The exosomatic organs — farms, factories, electric grids, transportation networks — support our lives indirectly. One should also add “natural capital” (e.g., the hydrologic cycle, carbon cycle, etc.) which is exosomatic capital comprised of structures complementary to endosomatic organs, but not made by humans (forests, rivers, soil, atmosphere).

The reason for pluralizing the “population problem” to the populations of all dissipative structures is two-fold. First, all these populations require a metabolic throughput from low-entropy resources extracted from the environment and eventually returned to the environment as high-entropy wastes, encountering both depletion and pollution limits. In a physical sense the final product of the economic activity of converting nature into ourselves and our stuff, and then using up or wearing out what we have made, is waste. Second, what keeps this from being an idiotic activity, grinding up the world into waste, is the fact that all these populations of dissipative structures have the common purpose of supporting the maintenance and enjoyment of life.

What good are endosomatic organs without the support of exosomatic natural capital?

As A. J. Lotka pointed out, ownership of endosomatic organs is equally distributed, while the exosomatic organs are not. Ownership of the latter may be collective or individual, equally or unequally distributed. Control of these external organs may be democratic or dictatorial. Owning one’s own kidneys is not enough to support one’s life if one does not have access to water from rivers, lakes, or rain, either because of scarcity or monopoly ownership of the complementary exosomatic organ. Likewise our lungs are of little value without the complementary natural capital of green plants and atmospheric stocks of oxygen. Therefore all life-supporting organs, including natural capital, form a unity. They have a common function, regardless of whether they are located within the boundary of human skin or outside that boundary. In addition to being united by common purpose, they are also united by their role as dissipative structures. They are all physical structures whose default tendency is to dissipate or fall apart, in accordance with the entropy law.

Our standard of living is roughly measured by the ratio of outside-skin to inside-skin capital — that is, the ratio of human-made artifacts to human bodies, the ratio of one kind of dissipative structure to another kind. Within-skin capital is made and maintained overwhelmingly from renewable resources, while outside-skin capital relies heavily on nonrenewable resources. The rate of evolutionary change of endosomatic organs is exceedingly slow; the rate of change of exosomatic organs has become very rapid. In fact the evolution of human beings is now overwhelmingly centered on exosomatic organs. This evolution is goal-directed, not random, and its driving purpose has become “economic growth,” and that growth has been achieved largely by the depletion of non renewable resources.

Although human evolution is now decidedly purpose-driven we continue to be enthralled by neo-Darwinist aversion to teleology and devotion to random. Economic growth, by promising “more for everyone eventually,” becomes the de facto purpose, the social glue that keeps things from falling apart. What happens when growth becomes uneconomic, increasing costs faster than benefits? How do we know that this is not already the case? If one asks such questions one is told to talk about something else, like space colonies on Mars, or unlimited energy from cold fusion, or geo-engineering, or the wonders of globalization, and to remember that all these glorious purposes require growth now in order to provide still more growth in the future. Growth is good, end of discussion, now shut up!

Let us reconsider in the light of these facts, the idea of demographic transition. By definition this is the transition from a human population maintained by high birth rates equal to high death rates, to one maintained by low birth rates equal to low death rates, and consequently from a population with low life expectancy to one with high life expectancy. Statistically such transitions have been observed as standard of living (ratio of exosomatic to endosomatic capital) increases. Many studies have attempted to explain this fact, and much hope has been invested in it as an automatic cure for overpopulation. “Development is the best contraceptive” is a related slogan, partly based in fact, and partly in wishful thinking.

There are a couple of thoughts I’d like to add to the discussion of demographic transition. The first and most obvious one is that populations of artifacts can undergo an analogous transition from high rates of production and depreciation to low ones. The lower rates will maintain a constant population of longer-lived, more durable artifacts.

Our economy has a growth-oriented focus on maximizing production flows (birth rates of artifacts) that keeps us in the pre-transition mode, giving rise to growing artifact populations, low product lifetimes, high GDP, and high throughput, with consequent environmental destruction. The transition from a high-maintenance throughput to a low one applies to both human and artifact populations independently. From an environmental perspective, lower throughput is desirable in both cases, at least up to some distant limit.

The second thought I would like to add to the discussion of demographic transition is a question: does the human transition, when induced by rising standard of living, as usually assumed, increase or decrease the total load of all dissipative structures on the environment? Specifically, if Indian fertility is to fall to the Swedish level, must Indian per capita possession of artifacts (standard of living) rise to the Swedish level? If so, would this not likely increase the total load of all dissipative structures on the Indian environment, perhaps beyond capacity to sustain the required throughput?

The point of this speculation is to suggest that “solving” the population problem by relying on the demographic transition to lower birth rates could impose a larger burden on the environment rather than the smaller burden that would be the case with direct reduction in fertility. Of course reduction in fertility by automatic correlation with rising standard of living is politically easy, while direct fertility reduction is politically difficult. But what is politically easy may be environmentally destructive.

To put it another way, consider the I = PAT formula. P, population of human bodies, is one set of dissipative structures. A, affluence, or GDP per capita, reflects another set of dissipative structures — cars, buildings, ships, toasters, iPads, cell phones, etc. (not to mention populations of livestock and agricultural plants). In a finite world some populations grow at the expense of others. Cars and humans are now competing for land, water, and sunlight to grow either food or fuel. More nonhuman dissipative structures will at some point force a reduction in other dissipative structures, namely human bodies. This forced demographic transition is less optimistic than the voluntary one induced by chasing a higher standard of living more effectively with fewer dependents. In an empty world we saw the trade-off between artifacts and people as induced by desire for a higher standard of living. In the full world that trade-off seems forced by competition for limited resources.

The usual counter to such thoughts is that we can improve the efficiency by which throughput maintains dissipative structures — technology, T in the formula, measured as throughput per unit of GDP. For example a car that lasts longer and gets better mileage is still a dissipative structure, but with a more efficient metabolism that allows it to live on a lower rate of throughput.

Likewise, human organisms might be genetically redesigned to require less food, air, and water. Indeed smaller people would be the simplest way of increasing metabolic efficiency (measured as number of people maintained by a given resource throughput). To my knowledge no one has yet suggested breeding smaller people as a way to avoid limiting births, but that probably just reflects my ignorance. We have, however, been busy breeding and genetically engineering larger and faster-growing plants and livestock. So far, the latter dissipative structures have been complementary with populations of human bodies, but in a finite and full world, the relationship will soon become competitive.

Indeed, if we think of population as the cumulative number of people ever to live over time, then many artifact populations are already competitive with the human population. That is, more consumption today of terrestrial low entropy in non-vital uses (Cadillacs, rockets, weapons) means less terrestrial low entropy available for capturing solar energy tomorrow (plows, solar collectors, ecosystem regeneration). The solar energy that will still fall on the earth for millions of years after the material structures needed to capture it are dissipated, will be wasted, just like the solar energy that shines on the moon.

There is a limit to how many dissipative structures the ecosphere can sustain — more endosomatic capital must ultimately displace some exosomatic capital and vice versa. Some of our exosomatic capital is critical — for example, that part which can photosynthesize, the green plants. Our endosomatic capital cannot long endure without the critical exosomatic capital of green plants (along with soil and water, and of course sunlight). In sum, demographers’ interest should extend to the populations of all dissipative structures, their metabolic throughputs, and the relations of complementarity and substitutability among them. Economists should analyze the supply, demand, production, and consumption of all these populations within an ecosphere that is finite, non-growing, entropic, and open only to a fixed flow of solar energy. This reflects a paradigm shift from the empty-world vision to the full-world vision — a world full of human-made dissipative structures that both depend upon and displace natural structures. Growth looks very different depending on from which paradigm it is viewed.

Carrying capacity of the ecosystem depends on how many dissipative structures of all kinds have to be carried. Some will say to others, “You can’t have a glass of wine and piece of meat for dinner because I need the grain required by your fine diet to feed my three hungry children.” The answer will be, “You can’t have three children at the expense of my and my one child’s already modest standard of living.” Both have a good point. That conflict will be difficult to resolve, but we are not yet there.

Rather, now some are saying, “You can’t have three houses and fly all over the world twice a year, because I need the resources to feed my eight children.” And the current reply is, “You can’t have eight children at the expense of my small family’s luxurious standard of living.” In the second case neither side elicits much sympathy, and there is great room for compromise to limit both excessive population and per capita consumption. Better to face limits to both human and artifact populations before the terms of the trade-off get too harsh.