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Monday, May 4, 2009

Bill Rees on "Uneconomic Growth"

How to Boil a Frog is proud to welcome guest blogger Bill Rees, co-creator of the Ecological Footprint, to the lily pad. We supply the flies, he supplies the wise! In the following post, Bill discusses the recent calls for a steady state or even negative growth economy, vs. the conventional wisdom that growth is the universal solution to our problems.

We have to be clear on what we mean by growth and shrinkage. When I refer to growth and the need for retraction, I am referring to energy and material throughput (resource consumption and pollution production). This is what must decrease if we are to achieve sustainability. For example, we need a 95% decline in fossil carbon use by 2050.

Theoretically, of course, one could have continuous income growth even as total throughput declines. This is the dream of those who claim the economy is 'decoupling from the environment' or 'dematerializing' (or in a more restricted case, 'decarbonizing').

The problem is that there are very few data to support the notion that dematerialization is actually taking place. There is some separation of GDP growth from consumption/pollution in rich countries but much of this disappears when trade-corrected to account for the embodied energy/matter in trade goods and the off-shore migration of energy intensive industries.

Thus, until there is real decoupling, the best way to reduce throughput is through a planned equitable descent.

Even in a planned decline, it is possible to have growth industries and sectors--e.g., as we phase out cars, the construction of rapid-transit vehicles takes off; as we dump carbon-energy technologies, we create a future for renewable alternatives. In short, forward-looking entrepreneurs and investors might still buy into this. (Most resistance to change comes from those with the greatest stake in the status quo).

As ecological economist Herman Daly emphasizes, we should distinguish between development and growth. Development is getting better; growth is simply getting bigger.

If something sucks, there is no point in growing it.

On the other hand, moving forward by shrinking equitably, creating a secure (but smaller) economy for all and a stable ecosphere is clearly development, but it is development without material growth.

Corollary: It is arguable that, globally, throughput growth is actually creating more unaccounted costs than benefits, in which case we are in a period of uneconomic growth. In other words, today's form of growth is counterproductive--it is actually disdevelopment that destroys the ecosphere while increasing inequity.

The problem is that 'we' (the already rich) pretend not to notice because we receive most of the benefits and the poor are suffering the costs. The rich also make the decisions, so uneconomic growth remains the flavour of the era.

There are two approaches to addressing the potential catastrophe on the horizon. Approach 1 anticipates the problem and gets a head start on remediation and adaptation. Approach 2 is more reactive to catastrophe as it unfolds. The assumption of Approach 2 is that we can bring more people on side to cope with change as it occurs. This is post hoc remediation and adaptation.

I am less comfortable with Approach 2 because it invites uncertainty and tipping points, pushing systems to the point of no return while society is unprepared. In other words, I'm not convinced that approach 2 would allow for the accumulation of resilence in the socio-political system.

It makes more sense to me to be proactive.

Bill

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