. RACHEL'S ENVIRONMENT & HEALTH WEEKLY #624 . . ---November 12, 1998--- . . HEADLINES: . . SUSTAINABLE DEVELOPMENT, PART 1 . . ========== . . Environmental Research Foundation . . P.O. Box 5036, Annapolis, MD 21403 . . Fax (410) 263-8944; Internet: erf@rachel.org . SUSTAINABLE DEVELOPMENT--PART 1 The phrase "sustainable development" was coined by the World Commission on Environment and Development (the "Bruntland Commission") in 1987. The Commission defined "sustainable development" as material improvement to meet the needs of the present generation without compromising the ability of future generations to meet their own needs.[1] This definition emphasizes an important aspect of our ethical relationship to the unborn, yet it remains too vague to be truly useful as a guide for human activity because we cannot agree on the meaning of "needs." We can't really know what the "needs" of future generations will be, and we can't even agree on what we ourselves "need" vs. what we merely want. Fortunately, more useful definitions of "sustainable development" are coming into focus. By "more useful" I mean definitions that will allow us to reach agreement, thus giving us a common basis for action. In his book BEYOND GROWTH,[2] economist Herman Daly defines "sustainable development" as "development without growth --without growth in throughput beyond environmental regenerative and absorptive capacity."[2,pg.69] This is an important definition, worth examining. First, let's look at "throughput." Throughput is the flow of materials and energy through the human economy. It includes everything we make and do. When we speak of "growth" we are talking about growth in throughput --people making (and throwing away) more stuff and using more energy to do it. The totality of the human economy is throughput. It is calculated as the total number of people multiplied by their consumption. The "regenerative and absorptive capacity of the environment" refers to the ability of the environment to provide (a) materials for our use, and (b) places where we can throw our wastes. This gets a little more complicated. It refers to two things --(1) the ability of the environment to provide us with the high-quality raw materials we need to make things, and (2) the ability of the environment to break down our wastes and turn them back into raw materials, an essential service. Let's take waste first. When we throw things away, nature begins to take them apart and recycle them. For example, when we throw away wood, natural agents (called "decomposers"), such as termites, begin to eat our wood waste and break it down into raw materials --carbon, hydrogen, oxygen, nitrogen, sulfur, and so forth. Creatures such as earth worms use the termites' wastes as raw materials for soil, which provides nutrients for new trees to grow. This is called the "detritus food chain" and it is essential to life on earth, though largely invisible from a human perspective. The detritus food chain is made up of insects, bacteria, funguses, and other creatures that most of us know little about. But without their workings, the world would become overloaded with wastes and biological processes would become clogged and stop working.[3] If you've ever visited a modern hog farm, you have an idea of what it means to exceed the capacity of the local environment to absorb waste. It is unpleasant and hazardous. A second major benefit that nature provides for us is high-quality raw materials that we can use. Herman Daly calls these "natural capital," of which there are two kinds. The first kind of natural capital takes the form of a stock, a fixed quantity, such as oil or coal or rich deposits of copper. We can use these stocks of natural capital at any rate we choose, but when they are used up (dispersed into the environment as wastes), they will no longer be available for our use, or for the use of future generations. (The second law of thermodynamics guarantees that we can never take highly-dispersed atoms of, say, copper and gather them back into a highly-concentrated copper deposit. The energy requirements of such an operation are simply too great. If the second law didn't hold true, as Herman Daly says, we could make windmills out of beach sand and use them to power machines to extract gold from seawater. Unfortunately, the second law DOES hold true, and once we disperse highly-concentrated ores, we cannot afford to reconcentrate them.) The second kind of natural capital takes the form of a flow. In general these flows are continuous (though human bungling can interrupt some of them). Examples include sunlight, the capacity of green plants to create carbohydrates by photosynthesis, rainfall, and the production of fish in the oceans. These forms of natural capital are endlessly renewable but can only be used at a certain rate --the rate at which nature provides them. Example: So long as we cut trees at a certain rate, and no faster, then nature will produce new trees fast enough to maintain a constant supply of cuttable trees. If we cut trees faster than that, nature will not be able to keep up with us and then people in the future will have fewer trees to meet their needs. The capacity of the Earth to support life will have been diminished. This is an example of exceeding the capacity of the ecosystem to regenerate itself. Growth, then, means quantitative increase in physical size. Development, on the other hand, means qualitative change, realization of potentialities, transition to a fuller or better state. On a planet such as Earth, which is finite and not growing, there can be no such thing as "sustainable growth" because growth will inevitably hit physical limits. Because of physical limits, growth of throughput is simply not sustainable indefinitely. But development CAN continue endlessly as we seek to improve the quality of life for humans and for the other creatures with which we share the planet. To repeat, then, sustainable development means development without growth in throughpout that exceeds the regenerative and absorptive capacity of the environment. Sustainable development and the standard ideology of growth stand in contrast to each other and, in fact, are incompatible with each other. Thus to be sustainable, the human economy (our throughput) must not exceed a certain size in relation to the global ecosystem because it will start to diminish the capacity of the planet to support humans (and other creatures). If the human economy grows too large, it begins to interfere with the natural services that support all life --services such as photosynthesis, pollination, purification of air and water, maintenance of climate, filtering of excessive ultraviolet radiation, recycling of wastes, and so forth. Growth beyond that point will produce negative consequences that exceed the benefits of increased throughput. There is considerable evidence that the throughput of some parts of the human economy has already exceeded the regenerative and absorptive capacity of the environment. The problem of climate change and global warming is an example; it provides evidence that we have exceeded the capacity of the atmosphere to absorb our carbon dioxide, methane, and nitrogen oxide wastes. Many of the fresh water fish of the world now contain dangerously elevated levels of toxic mercury because we humans have doubled the amount of mercury normally present in the atmosphere --evidence that we have exceeded earth's capacity to absorb our mercury wastes.[4] Depletion of the ozone layer is evidence that we have exceeded the atmosphere's capacity to absorb our chlorinated fluorocarbon (CFC) wastes. This list can readily be extended. There is also considerable evidence that we have already diminished several important stocks and flows of natural capital. The U.S. economy, for example, is now dependent upon oil imported from the Middle East because we have depleted our own stocks of oil. Most of the world's seventeen marine fisheries are badly depleted --a flow of natural capital that we have overharvested, in some cases nearly to the point of extinction. (See REHW #587.) This list, too, can readily be extended. One particular limit seems worth noting at this point. In 1986, a group of biologists at Stanford University analyzed the total amount of photosynthetic activity on all the available land on Earth, and asked what proportion of it have humans now appropriated for their own use (mainly through agriculture)?[5] The answer is 40%. This leaves 60% for the use of non-humans. But the human population is presently doubling every 35 or 40 years. After one more doubling, humans will be using 80% of all the products of sunlight, and shortly after that, 100%. Don't get me wrong --humans are important. But I don't know very many people who think it would be smart to deny every wild creature access to the basic food and habitat resources of the planet just to keep the human economy expanding. Even if we thought we had the right to use 100% of the green products of sunlight for our own purposes, the human population would have to stop growing at that point because there wouldn't be any more sunlight to appropriate. That time is less than one human lifetime (70 years) away. Thus we soon will reach --or more likely have already reached --the point at which growth of the human economy does more harm than good. What is needed under these circumstances is to stabilize total consumption, total throughput. There are two basic rationales for doing this, one based in science and one in religion. Herman Daly offers both. We have heard the scientific argument, above, which says that the capacity of the Earth to support life is being --or soon will be --diminished by growth of throughput and that sooner or later we can only hurt ourselves and our children if we persistt on this path of unsustainability. The religious argument goes like this: "I believe that God the Creator exists now, as well as in the past and future, and is the source of our obligation to Creation, including other creatures, and especially including members of our own species who are suffering. Our ability and inclination to enrich the present at the expense of the future, and of other species, is as real and as sinful as our tendency to further enrich the wealthy at the expense of the poor. To hand back to God the gift of Creation in a degraded state capable of supporting less life, less abundantly, and for a shorter future, is surely a sin. If it is a sin to kill and to steal, then surely it is a sin to destroy carrying capacity --the capacity of the earth to support life now and in the future. Sometimes we find ourselves in an impasse in which sins are unavoidable. We may sometimes have to sacrifice future life in order to preserve present life --but to sacrifice future life to protect present luxury and extravagance is a very different matter."[2,pgs.222-223.] --Peter Montague (National Writers Union, UAW Local 1981/AFL-CIO) =============== [1] Gro Harlem Brundtland and others, OUR COMMON FUTURE (New York: Oxford University Press, 1987). [2] Herman E. Daly, BEYOND GROWTH (Boston: Beacon Press, 1996). [3] See any ecology textbook; for example, G. Tyler Miller, Jr., LIVING IN THE ENVIRONMENT Ninth Edition (Belmont, California: Wadsworth Publishing, 1996), chapter 5, "Ecosystems and How They Work." [4] F. Slemr and E. Langer, "Increase in global atmospheric concentrations of mercury inferred from measurements over the Atlantic Ocean," NATURE Vol. 355 (January 30, 1992), pgs. 434-437. [5] Peter M. Vitousek and others, "Human Appropriation of the Products of Photosynthesis," BIOSCIENCE Vol. 34, No. 6 (1986), pgs. 368-373. . RACHEL'S ENVIRONMENT & HEALTH WEEKLY #625 . . ---November 19, 1998--- . . HEADLINES: . . SUSTAINABLE DEVELOPMENT, PART 2 . . ========== . . Environmental Research Foundation . . P.O. Box 5036, Annapolis, MD 21403 . . Fax (410) 263-8944; Internet: erf@rachel.org . SUSTAINABLE DEVELOPMENT, PART 2 In his excellent short book, BEYOND GROWTH,[1] economist Herman Daly says that every economy faces 3 problems: allocation, distribution, and scale.[2] What do these terms mean? Allocation refers to the apportioning of resources among different products --in other words, deciding whether we should produce more corn, more cars, more bicycles, more jelly beans, or more hospitals. Because resources are limited, we can't have everything, so we must allocate our resources in some way to provide the goods that people want and can afford to pay for. The way we do this is "the market" which sets relative prices for goods.[3] Prices act as signals that cause people to put more (or fewer) resources into creating particular products that other people are willing and able to buy. The second problem faced by every economy is distribution --apportioning goods (and the resources they embody) among different people, not among different products. Nearly everyone agrees that goods should be distributed in a way that is fair (though we may disagree on the precise meaning of "fair"). If you don't believe this statement is true, think of an extreme case. If one person received 99% of all the benefits provided by the U.S. economy, and all other citizens had to divvy up the remaining 1%, almost everyone would agree that this was an "unfair" or unsatisfactory distribution of benefits. The vast majority of people would say, "There is something wrong with this picture." This extreme example is intended to show that nearly everyone agrees that there are "fair" and "unfair" distributions of goods. What is a "fair" distribution --and how we should achieve it --are the main questions that give rise to "politics." Unfortunately the market cannot solve the problem of fair distribution. Left alone, a market economy tends to create inequalities that grow larger as time passes. Both the economic successes and failures of individuals tend to be cumulative --the successful tend to succeed again and again while the unsuccessful tend to remain unsuccessful. Marriages tend to result in further concentration of wealth. Furthermore, as Daly says, dishonesty and exploitation are not necessary to explain inequality but they certainly contribute to it.[4] None of these statements is absolute --you can point to many individual exceptions to each of them --but the tendencies that they describe are well-recognized. No, the market cannot solve the problem of unfair distribution. This problem must be solved by people deciding what is fair, then making public policies intended to achieve a fair distribution. After those decisions have been made, then the market can allocate resources efficiently[3] within the politically-established framework of fairness. The third economic problem is the problem of scale --how large can an economy become before it begins to harm the ecosystem that undergirds and sustains it? Here again, the market does not --cannot --provide any answer. The market offers no mechanism for deciding what is a desirable scale or for achieving that scale. You can have an efficient allocation of resources[3] and a just distribution of benefits, yet still have an economy that grows too large and consequently damages the ecosystem. (Each of the three problems --allocation, distribution, and scale --is separate and each must be solved separately.) The ecosystem provides us with two major services --it provides resources that we can use (such as air, trees, copper deposits) and it provides a place to discard our wastes. Within limits, the ecosystem can regenerate certain resources (air and trees, for example), and it can absorb a certain amount of wastes, recycling them via the services of the detritus food chain. (See REHW #624.) Unfortunately, it is quite possible for the economy to grow so large that it exceeds the capacity of the ecosystem to regenerate itself and/or to absorb our wastes. At that point, the economy has grown unsustainably large and further growth will diminish the carrying capacity of the planet --the capacity to support life, including human life. As we saw last week (REHW #624), there is abundant evidence that the human economy, worldwide, has already grown so large that it has exceeded some of the ecosystem's capacity to regenerate itself, and has already grown so large that it has exceeded part of the ecosystem's capacity to absorb our wastes. These problems first appear on a local scale (the U.S. has nearly exhausted its reserves of tin, nickel, chromium, petroleum, and many other mineral resources,[5] and many U.S. cities are presently unable to provide their inhabitants with healthful air because of waste gases from automobiles). Eventually economic growth reaches a point at which local problems become global. For example, in recent years we discovered that we had inadvertently damaged the Earth's stratospheric ozone layer with our CFC wastes, and that most of the world's marine fisheries have been severely degraded by overfishing. We are now making similar unhappy discoveries at a steady (or perhaps accelerating) pace. Economists, and business and political leaders, acknowledge only two of the three economic problems outlined above --the problems of allocation and distribution. The problem of scale --caused by growing quantities of materials and energy flowing through the economy (see REHW #624) --the problem of scale has still not been acknowledged by most economists, business people, or politicians. To them, continued growth can only be good. The vast majority of them deny that the scale of the economy must be kept comfortably within the regenerative and absorptive limits of the ecosystem (if they have thought about it at all). There is a deep and abiding reason for their denial. For the past 400 years, growth has been the central organizing principle of all European societies, and especially of American society. Economic growth has substituted for politics, deflecting attention away from the contentious problem of fair distribution: even a small slice of the pie will grow larger each year if the total pie keeps growing larger. Thus growth has allowed us to avoid confronting difficult ethical questions about the fair distribution of income and wealth.[6] So long as the pie kept growing we could accommodate the rising demands of slaves, farmers, immigrants, industrial workers, women, and so forth. As William Ophuls has said, "We have justified large differences in income and wealth on the grounds that they promote growth and that all would receive future advantage from current inequality as the benefits of development 'trickled down' to the poor. (On a more personal level," Ophuls says, "economic growth also ratifies the ethics of individual self-seeking: you can get on without concern for the fate of others, for they are presumably getting on too, even if not so well as you.) But if growth in production is no longer of overriding importance the rationale for differential rewards gets thinner, and with a cessation of growth it virtually disappears.... Since people's demands for economic betterment are not likely to disappear, once the pie stops growing fast enough to accommodate their demands, they will begin making demands for redistribution," Ophuls says.[6] The end of growth will change American (and European) politics fundamentally, forcing us to confront basic ethical questions of economic fairness. For this reason, the environmental dangers of growth are ignored by those who think they have the most to lose --our business and political leaders (and their academic support staff, the mainstream economists). Now stay with me as we probe a little deeper into growth. This may seem obscure, but it is important. Growth --the central organizing principle of our society (we could also call it the main ideology of our society) has been grounded in an ethical principle developed by the English philosopher Jeremy Bentham and elaborated by John Stuart Mill in the 1830s. Bentham argued that the goal of public action was "the greatest good for the greatest number" --a goal that most people would probably embrace today without thinking about it very carefully. Now that the end of growth is in sight (because we have begun to hit nature's limits), we can no longer pretend that we can achieve the greatest good for the greatest number.[7] Confronting the limits of the planetary ecosystem, we are forced to ask, how much good can we achieve for how many people for how long? As Daly says, we can have "the greatest good for a sufficient number" or we can have "sufficient good for the greatest number" but the "greatest good for the greatest number" we cannot have.[8] Daly favors seeking "sufficient good for the greatest number" --meaning the greatest number of humans that can be supported year after year into the indefinite future. If your goal is to maximize human welfare, this is the formula that does it. If we live sustainably, without exceeding the planet's capacity for regeneration and the absorption of waste, billions or trillions of humans will ultimately be able to enjoy the good life on planet Earth, world without end. The alternative (which is the path we are presently on) is to load up the planet with 12 to 20 billion people in the next century until the ecosystem collapses, thus diminishing the carrying capacity of the planet and greatly reducing the total number of humans who can ever enjoy a good life on Earth. If you want to maximize human enjoyment of the good life, the choice is clear. An essential step toward sustainable development --offering the greatest number of people a sufficiency of resources for the good life --will be policies explicitly aimed at reducing huge economic inequalities. Growth will no longer substitute for ethical public policies. One of the main features of the modern world that creates and sustains inequality is the high human birth rate. An abundance of people provides a pool of cheap labor to do the world's work. A high birth rate creates steady pressure driving wages down. In ancient Rome the word "proletariat" meant "those with many children" and the main role of the proletariat in Roman society was to procreate to serve the patricians. Failure to help people control their own numbers --then as now --is a implicit cheap labor policy. A high birth rate tends to maintain inequality, and a reduced birth rate has the opposite effect, tending to equalize incomes and wealth. Small wonder, then, that so many of the world's people are denied the knowledge and the means for voluntarily eliminating unwanted fertility. In too many societies (including our own) the knowledge and means for voluntarily controlling fertility are as inequitably distributed as income and wealth. The wealthy have little difficulty controlling their numbers; the technologies are readily available to them. The poor find it not so easy. There is a reason for this. More next week. --Peter Montague (National Writers Union, UAW Local 1981/AFL-CIO) =============== [1] Herman Daly, BEYOND GROWTH (Boston: Beacon Press, 1996). ISBN 0-8070-4708-2. Hereafter cited as Daly. [2] Daly, pg. 159 [3] Relative prices measure marginal opportunity costs; see Daly pg. 222. Efficient allocation is an allocation that corresponds to effective demand, i.e., the relative preferences of citizens as weighted by their relative incomes. An inefficient allocation is one that uses resources to produce items that people will not or cannot buy, and it fails to produce items that people want, can afford to buy, and would buy if they could find them. See Daly pgs. 159-160. [4] Daly, pg. 207. [5] U.S. Bureau of Mines, MINERAL FACTS AND PROBLEMS [Bureau of Mines Bulletin 675] (Washington, D.C.: U.S. Government Printing Office, 1985). [6] William Ophuls, ECOLOGY AND THE POLITICS OF SCARCITY (San Francisco: W.H. Freeman, 1977), chapter 6. [7] As a matter of logic and mathematics, we never could achieve the greatest good for the greatest number because it is impossible to maximize two variables in a function. [8] Daly, pg. 220. . RACHEL'S ENVIRONMENT & HEALTH WEEKLY #626 . . ---November 26, 1998--- . . HEADLINES: . . SUSTAINABLE DEVELOPMENT, PART 3 . . ========== . . Environmental Research Foundation . . P.O. Box 5036, Annapolis, MD 21403 . . Fax (410) 263-8944; Internet: erf@rachel.org . SUSTAINABLE DEVELOPMENT, PART 3 When Adam Smith published THE WEALTH OF NATIONS in 1776, the world was essentially empty from a human perspective, with fewer than one billion human inhabitants.[1] At that time, the planet had abundant "natural capital" of all kinds --for example, highly-concentrated metallic ores, oceans full of fish, continents covered with trees to absorb carbon dioxide from the atmosphere, and mysterious substances like petroleum oozing out of the ground spontaneously. The world of 1776 was short of HUMAN capital --techniques for extracting minerals from the deep earth, ships to catch fish efficiently, and machines to turn trees into lumber, for example. Now, says economist Herman Daly, the situation is reversed.[2] Increasingly, natural capital is scarce and human capital is abundant. ** Today there is no shortage of huge ships to sweep nets through the oceans to harvest fish --but the fish themselves are disappearing. ** Chemical factories are abundant, producing a cornucopia of useful chlorinated chemicals, but there is a shortage of natural mechanisms to detoxify and recycle such chemicals. As a result, the entire planet is experiencing a buildup of chlorinated toxicants and scientists are discovering new harmful effects in wildlife and humans each year. ** Only recently, scientists concluded that the ecosystem's capacity to remove carbon dioxide from the atmosphere has been exceeded because of human activity. As a result, they believe, CO2 is building up in the air, pushing up the temperature of the planet. We are waiting now to learn the real consequences, but more droughts, floods, and major storms must be expected, we are told. In sum, natural capital --both sources and sinks --are becoming scarce on a global scale for the first time ever. The Earth is no longer empty. It is full, or nearly so. Mainstream economists do not worry about shortages of natural capital because neoclassical economic theory assumes that human capital can substitute for natural capital. To a certain limited extent, this is true. When copper becomes too expensive for making telephone wires, we substitute glass in the form of fiber optic cables (which we make by manipulating sand with large quantities of energy and accumulated know-how). However, Daly argues, traditional economists have ignored the extent to which the usefulness of human capital depends upon the availability of natural capital. Daly asks, quite sensibly, what good is a sawmill without a forest, a fishing boat without fish and an oil refinery without oil? In truth, says Daly, natural and human capital complement each other --we need them both to sustain our economy and the natural systems that support us and the other creatures. This may seem obvious to most people, but to many traditional economists it still seems like heresy. As we have seen (REHW #624), there are two kinds of natural capital --those that renew themselves (e.g., fish, trees) and those that don't, at least not on a human time scale (e.g., copper deposits and petroleum). How do you "improve" natural capital? Renewable natural capital can be replenished by not using it and by waiting patiently. Fish stocks will replenish themselves if we refrain from overfishing. The same is true of forests. In this new economic perspective, frugality, efficiency, and patience once again become prime virtues. As Daly says, for ecological economists, laissez faire takes on new, deeper meaning. Somewhere in between natural capital and human capital is "cultivated capital" --fish ponds, tree farms, and herds of cattle, for example. Recent attempts to cultivate natural capital may provide some limited benefits. Tree plantations provide one of the services of a real forest --trees to cut --but they do not replace forest habitat or biodiversity. Fish farms do produce fish but they also require high-protein fish food, antibiotics to fend against disease, and some means of handling concentrated wastes. Clearly, cultivated capital has severe limitations, and it relies on natural capital for its limited successes. The ultimate experiment in cultivated natural capital --or ecosystem management, as many modern engineers and scientists like to call it --took place between 1991 and 1993 in the desert 25 miles north of Tucson, Arizona. Here, a group of scientists built a complex ecosystem covering 3.15 acres under an airtight glass cover and 8 of them tried to live in it for two years. The materially-closed system --nothing was supposed to go in or out during the two years --was intended to replicate a tiny Earth, complete with ocean, desert, grasslands, and woodlands. The experiment was called Biosphere 2 (the Earth is biosphere 1), and it was a stunning failure. From the beginning the Biospherians encountered "numerous unexpected problems and surprises."[3] Fifty tons of oxygen disappeared mysteriously from the closed system, reducing oxygen levels to those typically encountered at an altitude of 17,500 feet --barely sufficient to maintain human consciousness. Carbon dioxide skyrocketed to levels that threatened to poison the humans as well. Levels of nitrous oxide --laughing gas --rose high enough to interfere with vitamin B12 synthesis, threatening the humans with brain damage. Finally, oxygen had to be pumped in from the outside to keep the Biospherians from suffocating. Tropical birds disappeared after the first freeze. A native species of Arizona ant somehow found its way into the enclosure and soon killed off all other soft-bodied insects. As the ants proliferated, creatures as large as snakes had to hide from them or be eaten alive. All seven species of frogs went extinct. All together, 19 of 25 vertebrate species went extinct. Before the two years was up, all pollinators went extinct, so none of the plants could reproduce themselves. Despite unlimited energy and technology available from the outside to keep the system functioning, it was a colossal $200 million failure. The scientists concluded, "No one yet knows how to engineer systems that provide humans with the life-supporting services that natural ecosystems produce for free. Dismembering major biomes [ecosystems] into small pieces, a consequence of widespread human activities, must be regarded with caution.... the initial work in Biosphere 2 has already provided insights for ecologists--and perhaps an important lesson for humanity."[3] Thus we know that cultivated natural capital has an exceedingly limited capacity to provide the benefits that nature's own natural capital provides. We would be fools to count on replacing nature's bounty with something of our own invention. The Earth is our only home and we must protect it. Non-renewable capital cannot be "improved" --it can only be preserved. Thus to the extent feasible, our economy should shift over to renewable resources, to be used at a rate set by nature's rate of renewal. Non-renewable resources should be left alone, or they should be liquidated thoughtfully to provide future humans with a stream of income. For example, arguably, dwindling petroleum supplies should be invested in "solar breeder" facilities --factories that make photovoltaic solar cells. The product of such a factory could be used to power the construction and operation of more factories to manufacture more photovoltaic cells, to make more factories to make more photovoltaics, and so on, providing the next generation with a legacy that allows them to tap into the endless flow of the sun's energy. What public policies might help us make the shift to using renewable resources at sustainable rates? 1) Stop counting the consumption of natural capital as income. (See REHW #516.) Depletion should never be treated as income. It would be like burning the furniture to heat the house, congratulating ourselves on the resulting warmth. It will be short-lived. As preposterous as it may sound, most nations, including the U.S., presently treat depletion of their natural capital as if it were income, so far as national accounts are concerned --a major accounting error. Depletion is a cost, not a benefit. (The same is true of pollution --in calculating Gross Domestic Product [GDP] we count pollution, pollution illnesses, and anti-pollution expenditures as benefits, not costs. This is clearly wrong and wrongheaded but the nation's economists still endorse such a system --a sad commentary on the state of economic "science" today.) 2) Tax labor and income less, and tax throughput more. We will always need governments to ** protect the weak from the strong and tyrannical; ** provide a safety net for those plagued by bad luck; ** protect the commons (such as the atmosphere) from thoughtless or predatory individuals and businesses; ** level the playing field for individuals and businesses (making sure, to the extent possible, that people start life with equal opportunity, and that the competitive envi-ronment for businesses is preserved against monopolies and oligopolies). The present tax structure encourages businesses to substitute capital and throughput (energy and materials) for workers. Throughput depletes resources and creates pollution, so our tax structure discourages what we want (jobs and income) and encourages what we don't want (depletion and pollution). This is backwards. After we shift over to "green taxes" --which encourage jobs and income and discourage depletion and pollution --we will still need an income tax but not primarily to provide revenue for government. We will need an income tax chiefly to reduce inequalities in income and wealth because huge inequalities undermine the main goals of a democracy: equal opportunity, a real voice in the decisions that affect your life, and a sense of shared ownership (a "stake") in the community. 3) Move away from the ideology of global economic integration by free trade, free capital mobility, and export-led growth. Instead, move toward a more nationalist orientation that seeks to develop domestic production for internal markets as the first option, embracing international trade only in those instances where it is clearly more efficient. Herman Daly emphasizes this point again and again: free trade as conceived by the current generation of political and economic leaders will be disastrous because it is destroying the power of national governments to control the destiny of their people. "To globalize the economy by erasure of national economic boundaries through free trade, free capital mobility, and free, or at least uncontrolled, migration is to wound fatally the major unit of community capable of carrying out any policies for the common good," Daly writes.[4] --Peter Montague (National Writers Union, UAW Local 1981/AFL-CIO) =============== [1] Herman E. Daly, BEYOND GROWTH (Boston: Beacon Press, 1996). ISBN 0-8070-4708-2. [2] Joel E. Cohen, HOW MANY PEOPLE CAN THE EARTH SUPPORT? (New York: W.W. Norton, 1995), pg. 76. ISBN 0-393-31495-2. [3] Joel E. Cohen and David Tilman, "Biosphere 2 and Biodiversity: The Lessons So Far," SCIENCE Vol. 274 (November 15, 1996), pgs. 1150-1151. And see William J. Broad, "Paradise Lost; Biosphere Retooled as Atmospheric Nightmare," NEW YORK TIMES November 19, 1996, pg. C1. See also Peter Warshall, "Lessons >From Biosphere 2: Ecodesign, Surprises, and the Humility of Gaian Thought," WHOLE EARTH REVIEW (Spring 1996), pgs. 22-27. [4] Daly, cited above in note 1, pg. 93. . . . RACHEL'S ENVIRONMENT & HEALTH WEEKLY #627 . . ---December 3, 1998--- . . HEADLINES: . . SUSTAINABLE DEVELOPMENT, PART 4 . . ========== . . Environmental Research Foundation . . P.O. Box 5036, Annapolis, MD 21403 . . Fax (410) 263-8944; Internet: erf@rachel.org . SUSTAINABLE DEVELOPMENT, PART 4 Sustainable development means achieving human well being without exceeding the Earth's twin capacities for regeneration (trees and water, for example) and for waste absorption (carbon dioxide, for example). As we have seen in recent weeks (REHW #624, #625, and #626), there is growing evidence that humans have already exceeded both of these capacities and that further growth in throughput (making more stuff using more energy) will only make things worse. Of course, increasing efficiency (making more useful things with fewer materials and less energy) can buy us a short reprieve. But it appears that we are approaching (or have already exceeded) the Earth's limits for handling many kinds of wastes. Sooner rather than later total throughput (measured as the total number of humans multiplied by their furnishings and the energy they require) must soon decline or we face a harsh future with (for example) more big, costly storms and more poisoned wildlife and people. Recall that hurricane Mitch just killed over 10,000 people and devastated several national economies. To bring human economic activity into line with Earth's limits, we will need to understand the forces that are pushing us in wrong directions. Chief among these is the drive toward "free trade," according to economist Herman Daly.[1,2] If there is one thing that most economists, politicians, and business leaders agree on, it is the desirability of free trade. Daly, on the other hand, says free trade undermines environmental standards, drives down wages, weakens our capacity to do better, and undermines our sense of community. Free trade is the absence of barriers to international trade. There are three common barriers: tariffs, quotas, and restrictions on the flow of capital. A tariff is a tax on goods coming into a country --for example, a tax on Egyptian cotton imported into the U.S. A quota is a limit on imports --for example, the U.S. might accept only a certain number of Japanese automobiles. A third limit on free trade might restrict the amounts of foreign capital that could flow into a country. For example, in response to its recent (and ongoing) financial crisis, Malaysia is now severely restricting the amount of foreign capital that it will accept. Almost all traditional (neoclassical) economists favor free trade. Among economists, free trade has taken on the character of a religious faith, its power to do good unquestioned. Among traditional economists, Herman Daly is viewed as a heretic. He believes free trade is bad for everyone (except transnational corporations) for the following reasons: ** Free trade tends to lower environmental and social standards internationally. Take the example of two nations: One nation internalizes environmental and social insurance costs to a high degree (enforcing strict environmental laws; providing benefits such as health care and social security). The second nation refuses to internalize these costs --providing no social security, and throwing toxic waste into its rivers. Products from the second country will sell for less and will tend to drive competitors in the first country out of business. Thus there is a clear conflict between a national policy of internalizing environmental and social insurance costs and a policy of free trade. The country that exploits its environment and its citizens is rewarded. The country that protects its environment and its citizens is penalized. Of course if we had a world government to enforce environmental rules and minimum standards for human well being, this problem would disappear. But no such government is in sight. Furthermore, the world's economists cannot even agree on how to measure the costs of environmental degradation; the vast majority of economists continue to account for depletion of natural resources as if it were income --a preposterous and wrongheaded accounting practice that is nearly universal. (Any business that treated depletion of its assets as income would be bankrupt in short order.) One solution would be a tariff on goods imported from countries that refuse to internalize environmental and social insurance costs. Such a tariff would aim not to protect an inefficient domestic industry but to protect an efficient national policy of setting prices to reflect the full costs of maintaining community. ** Wage levels are set mainly by population size and growth rates. Countries with large populations, rapidly growing, tend toward low wages. This is especially true because the laboring class tends to have a much higher birth rate than the owning class, often twice as high. Labor is the main cost in most consumer goods. Therefore, cheap labor means low prices, creating an advantage in trade. Capital therefore tends to move to low-wage countries. Herman Daly believes that the effect of unrestricted capital mobility is the same as the effect of unrestricted labor mobility. If the U.S. had unrestricted borders, we would enjoy endless cheap labor, but wages would plummet. Unrestricted capital flow will have the same effect, Daly says. "United States capital will benefit from cheap labor abroad followed by cheap labor at home, at least until checked by a crisis of insufficient demand due to a lack of worker purchasing power resulting from low wages," Daly wrote in 1996. Daly's words have a special resonance today when Asian economies have been devastated by overcapacity for cars, chemicals, and electronics. As Louis Uchitelle of the NEW YORK TIMES wrote recently, "In an open-border global economy nearly every car manufacturer, for example, is trying to have a presence in every market. But when all the factories crank out more cars than people can buy, down come car prices. Down go the profits of car companies. Out go the workers. And down go the number of people who can afford to buy cars. Economies can spiral downward toward recession, or worse.... The global economy appears, in effect, to be capable of self-destruction."[3] The problem of uniformly low wages could be solved by maintaining low population growth everywhere, plus a fair distribution of benefits, plus policies to internalize the costs of environmental protection and social insurance. But even if all this were achieved, Daly says, free trade would still be harmful: ** Free trade and free capital mobility separate the ownership and control of businesses, and force labor to become mobile --both of which undermine human community. "Community economic life can be disrupted not only by your fellow citizen who, though living in another part of your country, might at least share some tenuous bonds of community with you, but by someone on the other side of the world with whom you have no community of language, history, culture, law. These foreigners may be wonderful people --that is not the point. The point is that they are very removed from the life of the community that is affected significantly by their decisions. Your life and your community can be disrupted by decisions and events over which you have no control, no vote, no voice."[4] ** Daly believes that free trade and free capital mobility have created economic instability by permitting huge imbalances in international payments and capital transfers resulting in debts that are unrepayable or excessively burdensome. Efforts to pay back loans while still meeting domestic needs have fostered government deficits and high inflation rates, furthering instability. Inflation then takes an additional toll: currency devaluations, foreign exchange speculation, repudiation of debts, and bank failures. Thailand, South Korea, Malaysia, Indonesia, the Philippines. Who is next? ** Free trade appears to loosen the constraints of the ecosystem, but this is a false picture. We must all live within the absorptive and regenerative capacities of the ecosystem. Trade allows us to import environmental services (including waste absorption) from elsewhere. Within limits, this makes sense. New York City cannot grow its own food and must import it from elsewhere. But, Daly says, free trade leads to a situation in which every nation is trying to live beyond its own absorptive and regenerative capacities by importing these capacities from elsewhere. It requires 12.6 acres of land per person (5.1 hectares) to create the flows of materials and energy needed to maintain an American lifestyle, and Europeans require nearly as much. But if you divide all the good land on Earth by the present human population, you find there are only 3.7 acres (1.5 hectares) available per person. This tells us that everyone on Earth will never be able to enjoy the hedonistic lifestyle to which we are accustomed.[5] Secondly, if you divide all the good land in the U.S. by the current U.S. population, you find that we have only 6.9 acres (2.8 hectares) per person. This means each of us is "borrowing" 12.6-6.9=5.7 acres (2.3 hectares) of someone else's land to maintain our lifestyle.[5] (Is this one reason why we spend $250 billion each year --5 times as much as any other country --maintaining our armed forces?) Thus we in the overdeveloped north face a number of uncomfortable moral realities: with at least a billion people not getting sufficient food calories each day to maintain subsistence, they require economic growth --not merely development --to meet their needs. Yet growth is already stressing the planet's capacity to regenerate itself and absorb our wastes. It appears that the overdeveloped north will have to stop growing (and perhaps shrink) before the south can take its rightful place at the world's table. Daly acknowledges that the roots of this problem are much deeper than free trade ideology. But, he says, "The point is that free trade makes it very hard to deal with these root causes at a national level, which is the only level at which effective social controls over the economy exist.... [T]he unit of community is the nation --the unit in which there are institutions and traditions of collective action, responsibility, and mutual help, the unit in which government tries to carry out policies for the good of its citizens...." Daly favors not free trade but regional trade among national communities that share similar community standards regarding wages, welfare, population control, environmental protection, and conservation. "True efficiency lies in the protection of these hard-won community standards from the degenerative competition of individualistic free trade, which comes to rest only at the lowest common denominator," he writes.[2,pg.235] Today a growing movement of workers, environmentalists, consumers, farmers, and social activists worldwide is urging an alternative to the destructive practices called "free trade." Instead of free trade, they are promoting fair trade. Fair trade is a concept developed in the U.S. (and elsewhere) in the 1940s. Fair trade is international trade based on bedrock principles: workers are paid a fair wage--whenever possible not a minimum wage but a family-sustaining livable wage; the business unit is the cooperative or producer association; raw materials are locally derived and managed in a sustainable fashion; fair trade organizations respect the cultural identity of their trading partners; and they insist on public accountability for their business operations.[6] Different. Very different. --Peter Montague (National Writers Union, UAW Local 1981/AFL-CIO) =============== [1] Herman E. Daly, BEYOND GROWTH (Boston: Beacon Press, 1996). ISBN 0-8070-4708-2. [2] Herman E. Daly and John B. Cobb, Jr., FOR THE COMMON GOOD [Second Edition] (Boston: Beacon Press, 1994). ISBN 0-8070-4705-8. [3] Louis Uchitelle, "Global Good Times, Meet the Global Glut," NEW YORK TIMES November 16, 1997, Section 4, pg. 3. And see William Greider, "When Optimism Meets Overcapacity," NEW YORK TIMES October 1, 1997, pg. A27. And see William Greider, ONE WORLD, READY OR NOT: THE MANIC LOGIC OF GLOBAL CAPITALISM (New York: Touchstone Books, 1998). ISBN 0684835541. [4] Daly, BEYOND GROWTH, cited above in note 1, pg. 163. [5] Mathis Wackernagel and William Rees, OUR ECOLOGICAL FOOTPRINT; REDUCING HUMAN IMPACT ON THE EARTH (Gabriola Island, British Columbia, Canada: New Society Publishers, 1996). $14.95 plus $3.00 shipping from: New Society Publishers, P.O. Box 189, Gabriola Island, B.C., Canada V0R 1X0; telephone (604) 247-9737. [6] Learn about fair trade on the world wide web: http://www.fairtradefederation.com/ab_princ.html and http://www.ifat.org/fair_trade_def.html. . RACHEL'S ENVIRONMENT & HEALTH WEEKLY #628 . . ---December 10, 1998--- . . HEADLINES: . . SUSTAINABLE DEVELOPMENT, PART 5: EMISSIONS TRADING . . ========== . . Environmental Research Foundation . . P.O. Box 5036, Annapolis, MD 21403 . . Fax (410) 263-8944; Internet: erf@rachel.org . SUSTAINABLE DEVELOPMENT, PART 5: EMISSIONS TRADING As we saw in Rachel's #625, there are 3 problems facing every economy: resource allocation, fair distribution, and tolerable size. Resource allocation means deciding what the economy should make -- more automobiles, more nursing homes, or more chocolate truffles, for example. We can't make everything we might want, so we must make choices. In the U.S. and other "market economies," allocation is handled mainly by "the market," meaning the system of prices. Prices send signals to manufacturers to make more of this and less of that, according to what people want and can afford to pay for. Fair distribution means just what the words say --distributing the benefits of the economy with fairness and justice. The market has no inherent ability to do this. Left alone, the market will tend to make the rich richer and the poor poorer until a small number of people ends up owning just about everything. To achieve a fair distribution, people must make political decisions about what's fair, and about how to achieve their goal of fairness. One formula for fairness, endorsed by economist Herman Daly, says that high-income people should only make about 10 times as much as low-income people.[1] There are precedents for such a limit in American society. Approximately 10-to-1 is the range of pay in federal civil service jobs, and in our military. A general makes about 10 times as much as a private. A 10-to-one ratio allows hard-working, ambitious people to earn 10 times as much as people who prefer to take it easy and enjoy life. (And fixing the relationship between the bottom and the top would give the high-income people an incentive to favor raising the incomes of the low-income people because it would be the only way the high-income folks could increase their own income without violating the 10-to-1 rule.) The way to achieve a fair distribution (once you've decided what's fair) is conceptually simple: transfer payments. Tax the haves and transfer the money into the hands of the have-nots. Transfer payments can take various forms --you could simply write checks to the have-nots, or you could provide jobs that pay wages, for example. The third problem --how large should the total human economy be --has never been considered a problem until very recently (although British economist John Stuart Mill did write about it in 1857). Until very recently, the world looked as if it could support an endless expansion of the human economy. But in recent decades, signs of serious trouble have emerged. In particular, it has become apparent that the world is running out of (or, more accurately, already has run out of) the capacity to absorb industrial wastes safely. The buildup of carbon dioxide and chlorofluorocarbons (CFCs) in the atmosphere, and mercury in fish, are three examples of this problem. It is now apparent that there is some optimum size for the human economy --a size that will provide a sufficient quantity of goods (sufficient to allow "the good life"[2]) for the greatest number of people, world without end. If the economy grows beyond that optimum size, it will begin to produce bads (such as toxic fish) faster than it produces goods, and we (and future humans) will be deprived of some of the benefits we enjoy today. There is a good chance that the total human economy has already exceeded the optimum size and that further growth in throughput will do more harm than good. ("Throughput" means materials and energy flowing through the economy --people making more stuff and using energy to do it.) The size of the economy has never been considered a problem for two main reasons: 1) until recently, the world has always seemed nearly empty from a human viewpoint; and 2) even when the size of the economy began to cause obvious problems, people did their best to ignore the signs, to avoid facing uncomfortable choices. An end to growth is literally unthinkable for most people --especially for Americans --because growth has always been our main method for achieving a fair distribution. We have always been able to argue that poor people would be better off next year because their slim piece of the pie would grow a bit larger as the total pie expanded. Thus we have advocated more growth instead of confronting the question of a fair distribution of benefits. In other words, throughout our history we have substituted growth for politics. Once growth is removed as our all-purpose problem-solver, we will have to face squarely the problem of fair distribution. This is very likely to cause serious disagreements and perhaps even strife. It could get ugly. As we (in the industrialized world) think about ways to make the transition from our present economy to a steady-state economy in which throughput is no longer growing, a necessary step is to become more efficient. Efficiency is politically acceptable to nearly everyone. Efficiency means cutting waste, learning to do more with less. Who could be against that? For a time, improved efficiency can give us the same benefits that we used to get from real growth. So how do we cut waste for the least cost? Most economists favor a system called "tradeable pollution permits" also known as "emissions trading." As we will see, many (but not all) environmentalists oppose tradeable pollution permits. Most economists, including Herman Daly, favor them.[3] However, Daly favors them for reasons that are different from the reasons given by most economists. Tradeable pollution permits are a simple idea. First you decide how much total waste (pollution) to allow in an area. Second you create "rights to pollute" which, taken together, add up to the desired total pollution, and you establish initial ownership of those rights. The third step is where the market comes in. Some people (or corporations) can reduce pollution more cheaply than others. Those for whom reduction is cheap will proceed, thus freeing up some number of unused "rights to pollute." Those rights can then be purchased by firms for whom genuine reduction would be expensive. This scheme promises to provide society with the desired level of total waste (pollution) at the least cost. So far so good. Herman Daly likes this plan for one main reason: the process of issuing tradeable pollution requires society to confront each of the three economic problems separately: sensible allocation, fair distribution, tolerable size. The problem of tolerable size must be confronted first: how much total pollution is tolerable? The market has nothing to say about this question. It is a political question. How many sick people is acceptable? How much crop damage caused by air pollution is OK? How many mercury-poisoned fish will we tolerate? Once that question is settled, then we move to the matter of fair distribution. How should initial ownership of "rights to pollute" be distributed? What is fair? Here again, the market provides no help. This is strictly a political question that citizens must decide among themselves, based on ethics. Should polluters automatically receive the right to pollute at their current level? This rewards polluters by freely giving them a public good (the capacity of the ecosystem to absorb wastes). Furthermore, it provides the biggest rewards to the biggest polluters. This hardly seems fair. (This is the system that Congress, with help from the Environmental Defense Fund [a mainstream environmental organization], wrote into the Clean Air Act, and this is the system that the U.S. government favors in negotiations over the Kyoto agreement on global warming.) Another way to distribute pollution rights would be to declare them, collectively, a public good and auction them off to the highest bidder. This has the disadvantage of favoring the wealthy (many of whom made their fortunes by polluting). This doesn't seem completely fair either. A third way to distribute pollution rights initially would be to give a small pollution right to each citizen in the affected area. Citizens could then dispose of their personal right any way they wanted --they could sell it to a polluter who could use it, or they could retire their right and thus provide a little cleanup. After the political problems have been solved (establishing the total pollution desired, and making a fair distribution of initial pollution rights), then the market can handle the problem of allocating pollution in the most economically efficient manner (as firms and individuals buy and sell each other's rights according to their circumstances). At least that's the theory. On paper it looks good and Herman Daly is right: tradeable pollution permits expose three separate economic questions to public scrutiny, in the process revealing that the market has a relatively minor role to play in the overall scheme. The political questions are much larger and more difficult than the question of buying and selling pollution rights, and the market has nothing to do with them. In actual practice, however, tradeable pollution permits have proven to be a very unfair way to allocate pollution,[4] and there is evidence that they do not always reduce pollution. In some instances, they may actually increase it.[5] Here are some obvious problems with pollution trading schemes in actual practice: ** Emissions trading moves pollution from one location to another. In practice, this often means dumping more pollution on the poor and on people of color. ** Setting the total desired amount of pollution assumes that risk assessors can determine how much pollution is "safe" for humans and for the ecosystem. Risk assessors have a notoriously poor track record of making such estimates. ** Pollution trading requires careful monitoring and accounting of who is emitting what. Governments, including the U.S. federal government, typically rely on self-reporting by the polluters themselves, who have a large monetary incentive to issue false reports.[4] Internationally, there are no government agencies capable of accurately monitoring thousands or millions of polluters. Monitoring by citizens would appear to be the only practical solution to this problem, but no examples of such a system exist on a large scale. ** Emissions trading will complicate a permit enforcement system that already does not work. Until government can show that it can monitor and enforce limits, emissions trading should not be implemented. ** An emissions trading system has no inherent, built-in incentives to reduce pollution. Unless the system requires an annual decrease in the total pollution allowed, emissions trading will simply lock in today's pollution levels. Polluters need a constant incentive to reduce their discharges toward zero, but emissions trading inherently offers no such incentives. ** In accord with the principle that the polluter should pay, polluters should be required to absorb the costs of the entire pollution control system. Present systems give away the store to the polluters.[6] --Peter Montague (National Writers Union, UAW Local 1981/AFL-CIO) =============== [1] Herman E. Daly, BEYOND GROWTH (Boston: Beacon Press, 1996). ISBN 0-8070-4708-2. See pages 202-203. [2] Daly (cited above in note 1) never precisely defines the "good life" but on pg. 14 he says, "...most would agree with [British economist Thomas] Malthus that it should be such as to permit one to have a glass of wine and a piece of meat with one's dinner. Even if one is a teetotaler or a vegetarian that level of affluence is desirable, and would serve by itself to rule out populations at or above today's level. What really must be stabilized is total consumption, which of course is population times per capita consumption. Both of the latter factors must be reduced." [3] Daly, cited above in note 1, chapter 2. [4] Michael Belliveau, "Smoke and Mirrors: Will Global Pollution Trading Save the Climate or Promote Injustice and Fraud?" available at www.corpwatch.org/trac/feature/climate/pollution/belliveau.html. And see Michael Belliveau, "Trading Places --Lethal Lessons from Los Angeles," and "Beltway Bandits --Pollution Trading as National Policy," at www.corpwatch.org/trac/feature/climate/pollution/box.html. Michael Belliveau directs Just Economics for Environmental Health, P.O. Box 806, Montara, California 84037; telephone (650) 728-5728. [5] Arjun Makhijani, "A Gamble on Global Warming," WASHINGTON POST November 3, 1998, pg. A17. Arjun Makjijani is president of the Institute for Energy and Environmental Research, Suite 204, 6935 Laurel Avenue, Takoma Park, MD 20912; telephone (301) 270-5500. Dr. Makhijani describes a situation in India in which a pollution permit program might increase, not decrease, pollution. [6] Our thanks to David Zwick, the director of Clean Water Action, for sharing an insightful internal memo titled "Pollution Trading" that he co-authored with Paul Schwartz, in October, 1998. . RACHEL'S ENVIRONMENT & HEALTH WEEKLY #629 . . ---December 17, 1998--- . . HEADLINES: . . WHEN GROWTH STOPS -- SUSTAINABLE DEVELOPMENT, PT. 6 . . ========== . . Environmental Research Foundation . . P.O. Box 5036, Annapolis, MD 21403 . . Fax (410) 263-8944; E-mail: erf@rachel.org . . ========== . . Back issues available by E-mail; to get instructions, send . . E-mail to INFO@rachel.clark.net with the single word HELP . . in the message; back issues also available from . . http://www.rachel.org . To start your free subscriprion, . . send E-mail to listserv@rachel.org with the words . . SUBSCRIBE RACHEL-WEEKLY YOUR NAME in the message. . ================================================================= WHEN GROWTH STOPS -- SUSTAINABLE DEVELOPMENT, PT. 6 Here we wrap up our discussion of sustainable development, based on the excellent book BEYOND GROWTH by Herman Daly.[1] Sustainable development means, first, setting physical limits on the "throughput" of the human economy. Throughput means all the materials and energy flowing through the economy -- all the things we make and use, and all the energy required to do so. Another phrase for "throughput" is "total consumption," which is total human population multiplied by per-capita consumption. The total throughput of the human economy must be kept small enough to avoid exceeding two physical limits of the ecosystem: its capacity to regenerate itself, and its capacity to absorb our wastes. Each year now, scientists report new evidence that the human economy has exceeded both of these ecosystem limits. For example, nature creates (regenerates) new topsoil each year, but in much of the world (particularly in the U.S.) humans are destroying topsoil faster than nature can create it.[2] Loss of topsoil reduces our future farming capacity in a fundamental way. Topsoil destroyed today is topsoil taken from our children and grandchildren. Pesticides provide an example of humans producing wastes faster than nature can absorb them. If nature could absorb pesticide residues as fast as humans created them, then there would be no buildup of toxic residues. But there has been a measurable buildup of pesticides at the north and south poles, at the bottom of the deepest oceans, in the drinking water of much of the midwestern U.S., and in the breast milk of women worldwide. We have clearly exceeded nature's capacity to absorb pesticide wastes, thus denying our children their rightful share of nature's detoxification capacity. In sum, there really are "limits to growth" and we have already exceeded some of those limits. This means that, at some point, continued economic growth (growth of throughout) will create bads faster than it creates goods (an economist would say "marginal costs will exceed marginal benefits"). Daly (pg. 40) argues, for example, that the U.S. chemical industry may have already passed the point at which its toxic discharges are costing society more than the benefits provided by its products. If this were the case, then society would receive net benefits by shrinking the chemical industry instead of promoting its growth. Unfortunately, we have no way of measuring whether our economy has passed the point at which costs have begun to exceed benefits because, in our national accounting system (in which we measure "gross domestic product"), we count all production of goods and services as "goods." In tallying up gross domestic product (GDP) we never subtract any bads. Chemicals are counted as goods and the products they allow us to make are counted as goods. This makes sense. But when our chemical factories produce chemical waste dumps that must be cleaned up at huge public expense, those costs are counted as "goods" too, instead of being subtracted as bads. If a few hundred or a few thousand children get cancer from exposure to chemical wastes, their hospitalization, their radiation treatments, their chemotherapy, and their funeral expenses are all counted as "goods" in our total GDP. If their parents sue, all the resulting court expenses are counted as goods, not bads. In sum, the nation's brightest economists maintain our national accounting system with a calculator that has a plus key but no minus key.[3] Therefore we have no way of knowing whether the costs of economic growth have exceeded the benefits. The nation's economists (and politicians and business leaders) simply assume that if GDP is rising, our standard of living is rising too. But, as the song goes, it ain't necessarily so. (For substantial evidence on this point, see REHW #516.) Historically, growth is an aberration; a steady state economy is the norm. Only during the past 500 years has growth begun to seem like the normal condition for human economies. The physical limits to growth (which we are now perceiving because we have exceeded some of them) require us to return to the steady state sooner or later. If we do so by choice, we may be able to guide the process and achieve a steady-state economy with a reasonable approximation of the "good life" for most people, world without end.[4] On the other hand, if we continue to blindly accept the ideology that growth is good, then natural limits will reduce our numbers with an ecological meat axe and the suffering will be immense. Why do we have so much trouble imagining a no-growth economy? Daly believes there is one central reason: because a steady-state economy, one that is no longer physically growing, will force us to confront the problem of inequality, which is another name for the problem of poverty. So long as the total economic pie is growing we can say, "The poor will be lifted out of poverty by growth, so we need not take any special steps to alleviate their condition -- in fact we hardly need to think about them at all because the market will take care of them." In a steady-state economy, we will have to decide what is a fair distribution of the benefits of the economy because, in the steady state, as the rich get richer the poor must get poorer. In this situation, the only way to make sure that a fair share is available for everyone (whatever society decides "a fair share" means) is to set a limit on how much the powerful and the predatory can take for themselves. Daly says simply, "In a steady state, if the rich get richer the poor must get poorer, not only relatively but absolutely. If the total [throughput of the economy] is limited there must be a maximum limit on individual income." Daly believes this is the key reason why we refuse to confront limits to growth: we cling to the path of unsustainable growth so that we will not have to think about limiting inequality. (pg. 215) Daly argues that establishing the principle of limited inequality is a necessary (but not sufficient) condition for achieving a modern steady state. He argues that the precise range of inequality that we allow is not as important as establishing the principle that inequality should be limited. If inequality is to be limited, this implies that there will be a maximum allowable income and a minimum income. (These standards would have to be developed within each society because needs are culturally determined.) Daly argues (pg. 210) that the minimum income "would be some culturally defined amount sufficient for food, clothing, shelter, and basic health and education." The maximum income might be four times as great as the minimum (which is what Plato advocated), or it could be 10 or 20 times as great. The exact number isn't terribly important. The point is that there must be a limit on inequality -- the precise limit can be worked out in practice. (The overarching goal would be to provide sufficient incentive so that all necessary jobs are filled voluntarily by qualified people.) Daly argues that limiting inequality (in a steady-state economy) is a way to achieve 3 things: 1) It is a way to keep the rich from leaning too heavily on the poor; 2) It is a way to keep the present generation from leaning too heavily on future generations; 3) It is a way to prevent humans from "leaning too heavily on other creatures whose habitats must disappear as we convert more and more of the finite ecosystem into a source for raw materials, a sink for waste, or living space for humans and warehouses for our artifacts." In addition to the matter of fairness (the meaning of which each society or culture must decide for itself), in a steady-state economy we would need to limit inequality for another reason as well: to limit total human consumption, which is total population multiplied by per-capita consumption. It is total human consumption that stresses the ecosystem. Because total consumption has two parts (human numbers and per-capita consumption), to limit total consumption, we would need to limit inequality AND limit total human numbers. In a steady-state economy (one whose total size is established by the Earth's limits), the more people there are, the lower their average standard of living must be. Controlling growth requires us to limit both human consumption AND human population. Both limits are ESSENTIAL if we aim to control the total size (throughput) of the global economy. In recent decades we have invented several technological fixes aimed at circumventing the natural limits of ecosystems, so that growth can continue. The "green revolution" tried to speed up the growth rates of the edible portions of wheat and rice plants[5] -- but these changes were achieved at the expense of stability, resilience and resistance to disease. The latest technical fix is genetically engineered crops. The hidden costs of this latest agricultural gimmick have yet to be measured, but we can be sure that they will become apparent as time passes. Daly says, "It is for now certainly better for us to slow down our own biological growth rate than to attempt to speed up the growth rates of all the species we depend upon." (pg. 85) It seems logical that we in the northern hemisphere must confront (and achieve) the limits to growth first because it is our past growth that is stressing the world's ecosystem, squeezing out the opportunity for others to claim their rightful share of the Creator's bounty. Now we must relinquish some of what we have so that others may thrive. But, in fairness, everyone has an obligation to control their numbers as their consumption rises. Individual countries will find it more difficult to limit their consumption as the "free trade" ideology is imposed on them by powerful traders like the U.S. "Free trade" hides the ecological costs of consumption. If Americans are doing the consuming but the related ecological limits are being exceeded in Mexico or in Indonesia, Americans can feel no incentive to reduce their consumption. Free trade even makes it difficult to keep relevant accounts because benefits are being enjoyed in one locale while costs are being created in another, thousands of miles apart. There is considerable evidence that free trade doctrines are increasing inequalities within and between countries. As Herman Daly says (pg. 156), free trade will bring with it "a further writing off of the laboring class in this country, an increasing disdain toward uneducated and rural people by the corporate and university elite, and an increasing devotion by the former to the one thing about themselves that at least vaguely concerns the latter -- their growing arsenal of guns." Within countries, great inequality creates civil conflict. Between countries, in a full world, high rates of consumption create international conflict. To the extent that free trade makes nations less able to control their rates of consumption, to that degree it will promote war within and between countries. To promote peace, nations need to become more self-sufficient and to consume less. We have said before and we say again: We know of only one organization committed to tackling every part of the "sustainable development" problem: Sustainable America. We urge all our readers to join and support Sustainable America. This is important. Please do it. Telephone (212) 269-9550; fax (212) 269-9557; or www.sanetwork.org. Happy new year! ========== [1] Herman E. Daly, BEYOND GROWTH (Boston: Beacon Press, 1996). ISBN 0-8070-4708-2. [2] Gary Hardner, SHRINKING FIELDS: CROPLAND LOSS IN A WORLD OF EIGHT BILLION (Washington, D.C.: Worldwatch Institute, 1996). ISBN 1-878071-33-5. Worldwatch can be reached at 1776 Massachusetts Avenue, Washington, D.C. 20036-1904. Telephone: (202) 452-1992; fax: (202) 296-7365. [3] Lincoln Anderson, "Gross Domestic Product," in David R. Henderson, editor, THE FORTUNE ENCYCLOPEDIA OF ECONOMICS (New York: Warner Books, 1993), pgs. 203-207. ISBN 0-446-51637-6. [4] Daly (cited above in note 1) never precisely defines the "good life" but on pg. 14 he says, "...most would agree with [British economist Thomas] Malthus that it should be such as to permit one to have a glass of wine and a piece of meat with one's dinner. Even if one is a teetotaler or a vegetarian that level of affluence is desirable, and would serve by itself to rule out populations at or above today's level." [5] Vandana Shiva, STAYING ALIVE; WOMEN, ECOLOGY, AND DEVELOPMENT (London, England, and Atlantic Highlands, New Jersey, USA: Zed Books, 1989). ISBN 0-86232-823-3.