An Intro to Ecological Economics:
As I enter into this “holiday season,” it takes a concerted effort to stave off my tendency toward cynicism. At no other time of the year do Americans illustrate their unsustainable habit of conspicuous consumption so blatantly. Headlines about mayhem and violence at Black Friday sales from coast to coast confirmed my annual commitment to participate in Buy Nothing Day (celebrating its 20th anniversary), followed by Small Business Saturday (in its 2nd year) instead. Small Business Saturday is about Main Street, not Wall Street, focusing holiday shopping at small businesses in an effort to support the local economy and providing a great opportunity to check out “mom & pop” shops where you can find unique, personalized, and locally-made gifts from Hawai`i. Both of these events provide the perfect opportunity to examine our hyper consumerism, and the economic models that fuel it. To many around the world, in an “Occupy” mode, these models are fueling our eco, social, political, and economic decline.
Mainstream economics promotes economic growth, the democratization of affluence, and ever-increasing consumption as the formula for individual and social happiness. A thoughtful and well-informed minority emphatically disagrees. Few have contributed more to this dissent than Herman E. Daly, widely regarded as the founding father of “ecological economics.” Integrating theology, ethics, science, and economics, Daly’s ecological economics offers a holistic vision too seldom seen, and one of the most important and promising intellectual developments of our time. Daly maintains that the economy is a subset of an ecosystem which is finite, non-growing, and materially closed (i.e., no matter enters or leaves it) and that it uses the environment as a source for material inputs and as a sink for wastes. He argues that the economy has become so large relative to the ecosystem that human activity is undermining the ecosystem’s ability to support human life. Resource finitude and the entropy law make perpetual economic growth impossible. Accordingly, we must abandon growth (quantitative enlargement) in favor of development (qualitative improvement), and of a “steady-state economy” which can be sustained long-term (though not forever), in which population and capital stocks are constant, and throughput (the flow of low-entropy matter and energy which is taken from the environment and transformed into high-entropy wastes) is minimized.
(“The idea that low-entropy matter-energy is the ultimate natural resource requires some explanation. This can be provided easily by a short exposition of the laws of thermodynamics in terms of an apt image borrowed from Georgescu-Roegen. Consider an hour glass. It is a closed system in that no sand enters the glass and none leaves. The amount of sand in the glass is constant—no sand is created or destroyed within the hour glass. This is the analog of the first law of thermodynamics: there is no creation or destruction of matter-energy. Although the quantity of sand in the hour glass is constant, its qualitative distribution is constantly changing: the bottom chamber is filling up and the top chamber becoming empty. This is the analog of the second law, that entropy (bottom-chamber sand) always increases. Sand in the top chamber (low entropy) is capable of doing work by falling, like water at the top of a waterfall. Sand in the bottom chamber (high entropy) has spent its capacity to do work. The hour glass cannot be turned upside down: waste energy cannot be recycled, except by spending more energy to power the recycle than would be reclaimed in the amount recycled. As explained above, we have two sources of the ultimate natural resource, the solar and the terrestrial, and our dependence has shifted from the former toward the latter.” —Daly and Cobb, FOR THE COMMON GOOD)
In a recent edition of The Daly News, from the Center for the Advancement of the Steady State Economy (http://steadystate.org/wealth-illth-and-net-welfare/), Daly discusses how in the empty world of the past the economy was so small relative to the containing natural world that our production did not incur any significant opportunity cost of displaced nature. We now live in a full world, full of us and our stuff, and such costs must be counted and netted out against the benefits of growth. Otherwise we might end up with extra “bads” outweighing extra goods, and increases in “illth” greater than the increases in wealth. What used to be economic growth could become uneconomic growth — that is, growth in production for which marginal costs are greater than marginal benefits, growth that in reality makes us poorer, not richer. No one is against being richer. The question is, does growth any longer really make us richer, or has it started to make us poorer? Wellbeing should be counted in net terms — that is to say we should consider not only the accumulated stock of wealth but also that of “illth;” and not only the annual flow of goods but also that of “bads.”
This brings to mind The Story of Stuff (see attached video).
One reason that growth may be uneconomic is that we discover that its neglected costs growing at a rapid rate; while simultaneously realizing that the “benefits” of growth aren’t often felt by the majority of us (the “99%”). This has been emphasized in the studies of self-evaluated happiness, which show that beyond a threshold annual income of some $20,000-25,000, further growth does not increase happiness. Happiness, beyond this threshold, is overwhelmingly a function of the quality of our relationships in community by which our very identity is constituted, rather than the quantity of goods consumed. A relative increase in one’s income still yields extra individual happiness, but aggregate growth is powerless to increase everyone’s relative income. Growth in pursuit of relative income is like an arms race in which one party’s advance cancels that of the other. It is like everyone standing and craning his neck in a football stadium while having no better view than if everyone had remained comfortably seated. (Wealth, Illth, and Net Welfare, Posted: 13 Nov 2011 by Herman Daly.) From the Center for the Advancement of the Steady State Economy (CASSE), David Orr says, “Growth for the sake of yet more growth is a bankrupt and eventually lethal idea. CASSE is the David fighting the Goliath of endless expansion, and we know how that one turned out.”
To better understand the concepts of ecological economics and sustainable development, and in addition to reading any of Herman Daly’s works, I highly recommend Limits to Growth (LTG): The 30 Year Global Update [Chelsea Green Publishing, ISBN 1-931498-58-X]. In LTG, the now, preeminent environmental scientists Donnella Meadows, Jorgen Randers, and Dennis Meadows, along-side systems analysts, offer a realistic view of the natural resources available for the world’s population. Using extensive computer models based on population, food production, pollution and other data, the authors demonstrate why the world is in a potentially dangerous “overshoot” situation. Simply put, overshoot means people have been steadily using up more of the Earth’s resources without replenishing its supplies. The consequences, according to the authors, may be catastrophic. They examine the progress made both in their understanding of the mechanisms underlying the impact of humanity on the world ecology and of steps taken toward remediating the accelerating approach to the train-wreck that is mankind’s ill-managed and uncontrolled ‘footprint’ on this planet’s environment where humanity has overshot the limits of what is physically and biologically sustainable. Over the past three decades, population growth and climate change have forged on with a striking semblance to the scenarios laid out by the World3 computer model in the original LTG. While Meadows, Randers, and Meadows do not make a practice of predicting future environmental degradation, they offer an analysis of present and future trends in resource use, and assess a variety of possible outcomes. These outcomes show that overshoot WILL lead to the collapse of the planetary environment’s ability to support not only our species but much of the rest of the biosphere if we do not act rapidly and effectively to reduce our footprint. These conclusions provide reasons for both optimism and alarm: optimism because humanity has demonstrated its capacity to act appropriately in one specific instance (the response to ozone depletion); and alarm because thirty years have been largely wasted since the consequences of our failing to act were detailed. They contend that there is still time but the need to act quickly and effectively is urgent. The authors demonstrate that the most critical areas needing immediate attention are: population; wasteful, inefficient growth; and pollution. They show how attention to all three simultaneously can result in returning the human footprint on the environment to manageable, sustainable size, while sharply reducing the disparity between human well-being and fostering a generous quality-of-life worldwide. Absent this, the prospects are grim indeed. LTG sounds a much-needed warning that is hard to refute, but also offers options open to humanity that the authors believe have the best chance of avoiding social, economic and probably political collapse in the next century or so. We have a choice: the human experiment, possibly even the biological experiment, that is life on this planet can yet succeed and persist in a sustainable way. But to do so will require our species as a whole to consciously and deliberately take immediate, remediating steps, now, seriously and adequately to address the issues we have so far failed to do so effectively. It IS up to us.
As we approached the 40 year anniversary since the first edition of LTG was published, and enter a season celebrated with often unbridled shopping, it may be the perfect time for us to make our own personal commitments and choices to “be the change we wish to see in the world.” Kanu Hawai`i and the Kokua Hawai`i Foundation both offer resources to simplify and eco-fy over the next month. Visit Kokua’s Simplify the Holidays homepage (http://kokuahawaiifoundation.org/community/) to see their 12 Days of a Green Holiday and to make a commitment to start a new tradition today. For the month of December, Kanu Hawai’i will run a Waste Challenge. This month-long campaign will focus on awareness and action through mini-challenges: Week 1 (Nov. 27-Dec. 3): The State of Rubbish in Hawai’i – learn how much waste we produce and where it goes; Week 2 (Dec 4-10): The Dirt on Recycling – learn how/what to recycle, and why recycling should be a last resort when it comes to plastic; Week 3 (Dec 11-17): Green Gold – learn how to turn green waste into a valuable local resource; Week 4 (Dec 18-26): “One Week – One Bag” Waste Challenge – take the challenge to limit your household waste to a single bag for the entire week (you determine the size of the bag, based on a significant reduction to your usual household waste). Take the Challenge today! (http://www.kanuhawaii.org/challenge/details/?id=17)
Look for more information about ecological economic theories in coming articles.
Dedicated to my Ecological Economics Professor, Regina Ostergaard-Klem! Xoxo