1. Whats Going On

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1. Whats Going On?

• A view of the context

Based on Welford,R (1997) Hijacking
Environmetalism. Earthscan UK.
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Modernism- philosophical background
17th /18th Century Enlightenment 19th Century
Industrial Revolution

• Humans can understand the world as it really is
  through the use of universally valid rational
  methods.
• Knowledge leads to a rationally grounded future
  of abundance, justice and peace.
• Knowledge produced by rational means is globally
  significant

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Modernism in the Capitalist Economy

• Unbridled development and expansion of
  enterprising industry and commerce will lead to
  growth which will benefit all mankind.

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Environmental Degradation

• Human health
• Global food security (diminishing grain stocks
• Damaged immune systems
• Biodiversity
• Fish stocks in decline
• Climate change
• Water shortage Africa, China, North America
• Social infrastructure
• Environmental unsustainability, rising demand
  shrinking resources spills into social
  instability - Iraq, Somalia, Rwanda

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Is Modernism at Fault?

• Western culture and model of economic development
  permeates the whole world
• Capitalism, secular culture, liberal democracy.
• Domination of industry, free trade, neoclassical
  economics, fixation with growth.
• Belief in the power of science technology.

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CRISIS OF UNSUSTAINABLE EXPANSION?
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Millennium Development Goals

• Eradicate extreme poverty and hunger
• Universal primary education
• Gender equality and empowerment of women
• Reduce child mortality
• Improve maternal health
• Combat HIV/Aids, malaria and other diseases
• Ensure environmental sustainability
• Develop a global partnership for development

http//www.un.org/millenniumgoals/
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Conventional Economics

• Rising prices for diminishing resources will
  produce greater efficiency in their use and the
  development of alternatives
• BUT biophysical indicators of scarcity and
  environmental degradation tell a different story
  (Millenium Ecosystem Report 2005)

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Economics in a Full World

• Economy is a subsystem of the finite biosphere
  that supports it. Unchecked growth (business as
  usual) leads to uneconomic growth.
• At some point we must reach a steady state
  not growth but development.

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Steady State

• Limit use of all resources to rates that result
  in levels of waste that can be absorbed by the
  ecosystem.
• Exploit renewable resources at rates that do not
  exceed the ability of the ecosystem to generate.
• Deplete non-renewable resources at rates that, as
  far as possible, do not exceed the rate of
  development of renewable substitutes
• Constant throughput

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Millennium Ecosystem Assessment

• What are the current condition and trends of
  ecosystems, ecosystem services, and human
  well-being?
• What are plausible future changes in ecosystems
  and their ecosystem services and the consequent
  changes in human well-being?
• What can be done to enhance well-being and
  conserve ecosystems? What are the strengths and
  weaknesses of response options that can be
  considered to realize or avoid specific futures?
• What are the key uncertainties that hinder
  effective decision-making concerning ecosystems?
• What tools and methodologies developed and used
  in the MA can strengthen capacity to assess
  ecosystems, the services they provide, their
  impacts on human well-being, and the strengths
  and weaknesses of response options?

http//www.millenniumassessment.org/en/Products.Sy
nthesis.aspx
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Of the 100 biggest economic institutions in the
world today over half are corporations, the rest
are nation states
Where does the power lie?
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Business Practice

• Profit
• Efficiency
• Cost reduction
• Growth
• Risk

INERTIA resistance to Change
Unavoidable conflict with sustainability?
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Corporations vs Governments
Trans-national corporations roam the world at
will, increasing their profits with little regard
for countries, people or the environment?
National governments and international alliances
attempt to legislate and regulate the activities
of corporations to limit damage
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Capitalism Works No need for Change or
regulation business as usual?

• Wealth Created?
• Expansion throughout world can provide for all,
  based on science and technology which will
  provide technical fixes for environmental
  problems along the way?
• There are no viable alternatives.

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Governments

• The only way to halt degradation is through
  legislation and enforcement.
• But, Privatisation is rampant more power is
  transferred to the private sector.
• Green ideas not deeply embraced

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Ensuring natural resources that support existing
corporations are exploited to the full
guaranteeing profits well into the future
Ensuring just enough stability to prevent
dramatic changes whilst leaving companies free
from regulation and responsibility to maximise
their profits
Maximum profits to shareholders by ensuring
business as usual far into the future Ensure
environmental and social costs are not paid by
the corporations themselves but by end users
through taxation
Ensuring science is used effectively in the
pursuit of profit and in the reduction of public
concern about use of different technologies
Ensuring an illusion of participatory systems.
Building a strong a docile consumer base based on
freedom of choice to consume products which
produce maximum profits
http//www.sustainable-development.gov.uk/what/pri
nciples.htm
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Radical Change in Business Practice and
Government required?

• Could business become something new?
• Can capitalism save the planet?

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Economic growth vs quality of life

• Economic growth does not create happiness
  unhappiness sustains economic growth

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This article by Partha Dasgupta from Scientific
American (September 2005) argues that GDP per
capita should be disposed of altogether in favour
of wealth per capita as a starting point for
assessing well-being, with wealth defined very
broadly to include physical, human, and natural
capital so as to capture factors such as the
depletion of natural resources over time. 
http//economistsview.typepad.com/economistsview/2
005/08/measuring_human.html
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Unsustainable Capitalism?

• Free markets provide the most powerful tool at
  our disposal for fashioning a sustainable
  economy?
• Capitalism as we know it today would appear to
  incompatible with sustainability

Porrit J (2005) Capitalism as if the world
matters . Earthscan, London.
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Defining characteristics of Capitalism

• Markets
• Profits
• Private property
• Free Trade

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Markets

• Must be properly regulated state must be
  strengthened
• Prices must be set in such a way as to reflect
  the true cost of energy and resources

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Profits

• Profitability the key measure of corporate
  success fat cats
• 199-2001 CEOs of 23 US companies under
  investigation took home 1.4billion at a time
  when shares in those companies lost 530billion
• Need to find some way of limiting concentration
  of wealth.

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Private Property

• Is there a fundamental incompatibility with
  sustainability?
• The land belongs to no one absurd for humans to
  assume the have rights (deep ecologists)
• Collective ownership? (socialist greens)
• Market economy founded on private property
  (right-wing)

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Free trade

• Corporations capitalize on cheap labour, cheap
  resources and lower environmental and social
  standards anywhere in the world that they can
  find them.
• Corporations seek to externalise costs on the
  environment, other people, future generations
  etc.
• Incorrect valuation of resources?
• Inadequate regulation?

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Globalisation

• Is globalisation compatible with sustainability?
• Can multinationals be re-engineered for
  sustainability?

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China (and India)

• China 1.3 billion people 100million mc
• By 2050 ChinaIndia pop 3 billion (world 9
  billion)
• 25 years of breakneck growth and resource
  depletion threaten ecological meltdown
• Airwater pollution costs 8 to 12 of GDP(1.4
  trillion)
• China must feed 20 of the worlds population on
  7 of the arable land
• Desertification is a massive problem (Gobi)
• Drought problems

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Chinas resource uses

• By 2020 will be responsible for
• 40 of all coal burned
• 10 of oil
• 13 of electricity
• 20 of CO2 emissions
• Economists get rich quick enough to curb
  pollution and clean up the mess

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Forum for the Future 5 Capitals

• Natural capital resources and sinks
• Human capital knowledge skills
• Social capital structures and institutions
• Manufactured capital tools, machines
• Financial capital represents value of other
  capitals (no intrinsic value)

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Natural Capital

• Any stock or flow of energy and material that
  produces goods and services. It includes
• Resources - renewable and non-renewable materials
• Sinks - that absorb, neutralise or recycle wastes
• Processes - climate regulation
• Natural capital is the basis not only of
  production but of life itself!

http//www.forumforthefuture.org.uk
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Valuing Natural Capital?

• Cost replacing environmental services
• Pollination
• Water supply and regulation
• Assimilation of wastes
• Climate regulation
• Costanza et al(1997) 33 trillion per annum

An Introduction to ecological economics / by
Robert Costanza ... et al.. - Boca Raton, Fla.
St. Lucie Press, 1997. - 1884015727
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Protection for Profit

• New York City 1997 invested 1.5 billion to
  rehabilitate their watershed rather than invest
  in costly energy intensive filtration plants.
• The economy must be compatible with the Earths
  ecosystem

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Human Capital

• consists of people's health, knowledge, skills
  and motivation. All these things are needed for
  productive work. Enhancing human capital through
  education and training is central to a
  flourishing economy.

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Social Capital

• concerns the institutions that help us maintain
  and develop human capital in partnership with
  others e.g. families, communities, businesses,
  trade unions, schools, and voluntary
  organisations.

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• The problem is this a predatory global
  financial system, driven by the single imperative
  of making ever more money for those who already
  have lots of it, is rapidly depleting the real
  capital the human, social, natural and even
  physical capital- upon which our well-being
  depends. Pathology enters the economic system
  when money, once convenient as a means of
  facilitating commerce, comes to define the life
  purpose of individuals and society. Money is not
  wealth. In our confusion we concentrate on the
  money to the neglect of those things that
  actually sustain a good life
• Korten 1997. http//www.yesmagazine.org/article.as
  p?ID885 (accessed 28/09/06)

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Denial

• Values left at home.
• Some argue that If people today are concerned
  about the future they should reflect this in
  their consumer choices not expect governments to
  regulate the markets.

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Security

• Over 1 trillion is annually spent on military
  globally
• The economic, social and environmental cost to
  the worl of this military procurement and
  development is immense. Much of it is borne by
  poorer countries in Africa, the Middle East and
  Latin America where most of the wars are taking
  place and most of the weapons concentrated
• Surprisingly modest investments in health,
  education and environmental protection could
  break the vicious circles destabilising the world
  today
• Programmes to provide clean water and sewage 37
  billion
• Cut world hunger in half 24 billion
• Control malaria 3 billion
• Etc all add up to one third of the money spent
  in Iraq

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Economic progress environmental damage

• GDP does not indicate how to include the
  depletion of non-renewable capital?
• Index of Sustainable Economic Welfare

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• There are many aspects of sustainable development
  that cannot be addressed by companies acting
  individually.
• Many requirements for sustainable development
  depend on changes in market conditions
• Primary responsibility lies with governments

Porritt J (2005) p220
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GDP (Gross Domestic Product) or ISEW (Index of
Sustainable Economic Welfare)?

• Sustain the GDP?
• The sum of natural and man made capital should be
  maintained?
• Natural capital should be maintained
  independently strong sustainability.