Peter G. Brown and Geoffrey Garver wrote an article for the Montreal Gazette, Economics Without Ecocide, this past week, which has gotten some great responses from the community. It’s been reprinted at CommonDreams.org and Share The World’s Resources, among others. We’ve been getting a lot of good mentions around the internet; thanks very much to everyone who’s helping spread the message.
Economics Without Ecocide
By PETER G. BROWN AND GEOFFREY GARVER, Freelance
November 12, 2009
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 Rockström 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.
Peter G. Brown and Geoffrey Garver are co-authors of Right Relationship: Building a Whole Earth Economy (Berrett Koehler 2009)
(www.moraleconomy.org).
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