Economics without Ecocide
Gandalf Grey
Published on Friday, November 13, 2009 by Montreal Gazette
Economics without Ecocide
The G20 Framework vs. A Whole Earth Perspective
by Peter Brown & Geoffrey Garver
Guiding the global economy now is apparently in the hands of the G20. In
September, at their meeting in Pittsburgh (their third in a year), the G20
leaders adopted what they called a "Framework for Strong, Sustainable and
Balanced Growth."
The framework is cast as "a process for economic co-operation and
coordination to help ensure that post-crisis policies avoid a return to
dangerous imbalances that undermine long-term economic growth."
Unfortunately, with the ecological base of the economy falling apart, the
Pittsburgh framework will be looked back on as part of the fiddling going on
as Rome burned - or, more aptly, as the planet heated up.
Its fundamental flaw? It falls hopelessly short of addressing - or even
recognizing - the real crisis facing the economy: The global ecological
crisis, and the unwillingness of the global community to steer the economy
away from ecological collapse.
This flaw becomes starkly clear when the G20's program for the economy is
examined through the lens of five simple questions: What is the economy for?
How does it work? How big should it be? What is fair? and How should it be
governed?
Fortunately, an alternative is possible that provides better answers to
those questions. It would move the economy toward a mutually enhancing
relationship with a flourishing and prospering Earth - if the political will
is found to seek a new way. We start by looking at the first two questions.
Under the G20 framework, what is the economy for, and how does it work? And
what are some better answers to those questions?
The economy is for enhancing ecological and human integrity.
The G20 framework: A key agreement among the G20 was to continue economic
stimulus efforts until "recovery is secured" and then to responsibly wind
down stimulus programs. But this whole program defines "recovery" in terms
of Gross Domestic Product, with sustained growth in GDP as the overarching
solution to all of the world's economic problems - and, by implication, its
other woes.
A whole Earth perspective: GDP is not a good in itself - we value growth in
GDP because we see it as the means for assuring stability in employment,
security of income, and access to what we need to be healthy and happy. But
the great threat that now hangs over the world is massive ecological
instability in climate, food supply, clean water, biodiversity, ocean health
and much more. Rising numbers of environmental refugees are already tragic
human emblems of the current degrading of the Earth. These instabilities are
the result in large part of the global explosion in economic growth in the
last century.
In short, the G20 has it backward. The overarching goal of the economy
should be to ensure the Earth's ecological integrity and resilience so as to
prevent the collapse of Earth's life support systems. Essential for
achieving this goal will be either a strategy for decoupling growth from
climate change and other ecological degradation (a virtually impossible
prospect given trends) - or de-growth and steady state strategies, such as
those developed by ecological economists like Peter Victor
(http://www.managingwithoutgrowth.com/About_the_Book.html) of York
University and promoted by groups like the Centre for Advancement of a
Steady State Economy, or CASSE (http://www.steadystate.org).
The economy works according to the laws of science.
The G-20 framework: The G20 agreed to review at an international level the
efforts by countries such as the U.S. to increase savings and by others like
China and Japan to increase domestic spending and shift away from
export-driven economies. This includes mechanisms for "mutual assessment" of
each other's performance on these matters, as well as review by the IMF.
A whole Earth perspective: The G20 approach to balance of payments shows no
concern for the health of the biosphere on which the economy, and all of
life, ultimately depends. Seeking more balance is a start, but trade
policies should drive countries away from not hyperactive dependence on an
import-export market that enhances carbon emissions and other ecological
harms. Urgent action is needed to monitor the current behaviour and past
record of nations with respect to their impact on the integrity and
resilience of the Earth's interconnected ecosystems. The monitoring must be
connected to positive and negative incentives or sanctions to move the
world's nations toward responsible stewardship, with an emphasis on over
consumers like Canada and the United States.
The economy must stay within the Earth's ecological limits
The G-20 framework: The G20 agreed on "specific commitments to increase
access to food, fuel and finance among the world's poorest, with a new World
Bank Trust Fund to finance investments in food security, a commitment to
fund programs that expand access to renewable energy and a call to identify
new ideas to strengthen the poor's access to financial system." This is done
in the spirit of "making the policy and institutional changes needed to
accelerate the convergence of living standards and productivity in
developing and emerging economies to the levels of the advanced economies."
A whole Earth perspective: Addressing poverty and working toward the United
Nation's Millennium Development Goals is laudable, but raising developing
world consumption without contracting "the levels of advanced economies" is
a nightmare scenario. It ignores completely the Earth's ecological capacity
and the massive destabilization the of the Earth's life support systems the
economy is already causing. The G20 needs urgently commit resources and
brainpower to a more rigorous evaluation of the Earth's capacity to
withstand climate change and other ecological impacts of the economy, and
then to develop policies that ensure that the global economy respects those
limits.
In the Sept. 24, 2009, issue of Nature, a team of researchers led by Johan
Rockstr�m of the Stockholm Resilience Centre proposed a series of "planetary
boundaries" for ensuring the ecological stability of the planet. This is the
kind of work the G20 should explicitly and urgently support and expedite.
The economy must be fair to people and other living things, now and in the
future
The G20 framework: The G20's disastrous goal of bringing developing world
consumption levels up to developed world levels at least reflects a notion
of fairness. The G20 also agreed to rein in compensation of bankers; yet
took no action on a French proposal for a .005-per-cent tax on the
$800-trillion global foreign currency market, which could yield $33 billion
annually just covering the dollar, yen, euro and pound.
A whole Earth perspective: Fairness is about providing both human and
non-human communities of life, and both present and future generations,
equitable access to the Earth's life support systems. Money gives people
this access, along with the ability to lay down an ecological footprint. The
G20's timid gesture on banker compensation shows starkly the enduring power
of the global financial elite to keep in place the current grossly
inequitable system of access to the fruits of the Earth. The failure to rein
in - or at least tax - rampant speculation in the global currency market,
and to use the proceeds toward the Millennium Development Goals, is likewise
a missed opportunity for fairer sharing.
Keeping in mind the millions of other species with which humans share the
Earth, equitable access means not allowing people individually or
collectively to take too much. The policy of bringing the world's poor to
developed world levels of consumption is a disaster if it does not address
patterns of overconsumption in rich countries. Contraction and convergence,
informed with rigorous information on the Earth's ecological capacity, is
fundamental to a fair approach to the economy.
Governance reform is essential for a human economy that lives within its
means
The G20 framework: The G20 agreed that the G20 forum will now be the main
venue for discussing global economic issues from now on. But the criteria
for admission are based on GDP (the G20 represent 85 per cent of world
output). The G20 also agreed to give greater shares at the IMF and World
Bank to China and other Asian countries - several of which want explosive
growth in GDP at the expense of the environment. They also agreed vaguely
"to phase out fossil fuel subsidies over the medium-term while providing
targeted support to help the poorest."
A whole Earth perspective: Including more countries in the G20 is welcome.
But, just as world leaders should include ecological economists and
scientists among their top economic advisers, the G20 and global financial
institutions would do well to give a strong voice to countries, like Costa
Rica, with relatively low per capita ecological impact along with relatively
high levels of well being. As to fuel subsidies, in a world facing
catastrophic climate change, nothing less than urgent, expedited action to
eliminate fossil fuel subsidies and to support rapid transition to low or
zero carbon alternatives is acceptable.
But the real global governance problem is the lack of strong global
institutions to oversee the security of Earth's life support systems.
Increasingly, global environmental problems require a fully functioning
global system of environmental rulemaking and enforcement, supported with
greatly expanded research into the Earth's ecological capacity and ways for
the human economy to stay within it. Global rules and institutions also must
recognize and respond to local needs and circumstances, and empower rather
than overly constrain local efforts to maintain ecologically enhancing
economies.
The G20 leaders pledged to do their utmost to achieve agreement on climate
change at Copenhagen. A new climate treaty could serve as a starting point
for the structural changes to global governance needed to face up to the
stark reality that for the first time in the millennia of human history, the
human economy is now running down the Earth's ecological capacity faster
than it can regenerate. We will find out in Copenhagen whether the G20 will
provide leadership in that direction. But the Pittsburgh summit was not
promising.
� 2009 Montreal Gazette
Peter G. Brown and Geoffrey Garver are co-authors of Right Relationship:
Building a Whole Earth Economy (Berrett Koehler 2009). Their website is
www.moraleconomy.org.
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