9. Build a One-Planet Economy


Business as unusual

The twentieth century was dominated by debates about ‘development’, how to promote Western models of economic growth, urbanization and industrialization globally. Environmentalist critique of development in the last 30 years argued that this conventional development model was unsustainable.

The success of development on the standard ‘fossil fuel automobile-based throwaway consumer economy’ model in China and India demonstrates its limitations very clearly. China's success, for example, is bringing massive increases in consumption (grain, meat, steel, oil, timber).102 China's revolutionary economic growth highlights the need for systemic change in the way development is understood and brought about globally: in the west as much as elsewhere. Business as usual is no longer an option.

There is an urgent need to move beyond the old-fashioned idea of development as a single task of investment to achieve ‘take-off’, in the conventional developmentalist model of the second half of the twentieth century. According to this standard model, the process of development involves a translation to a Western-style modernity, industrial, urban, democratic and capitalist. In Walt Rostow's classic book Stages of Economic Growth: A Non-Communist Manifesto, development was a linear path of change from traditional society, through take-off, maturity and the age of high mass consumption.103

‘there is an urgent need to move beyond the old-fashioned idea of development’

The present global dilemma offers huge risks, but also outstanding opportunities. The need to create a ‘sustainable post fossil-fuel society and economy’104 has never been more widely recognised, although the challenges on the road to achieving it remain breathtaking. There are critical technological dimensions to this contraction and convergence, discussed in the next section. More fundamental than these, however, is the need to re-conceive growth.

Re-conceiving growth: contraction and convergence

The dominant development model, based on the unlimited meeting of consumer wants leads inexorably to over-consumption.105 Yet the continued physical expansion in the global reach of commodity supply systems means that consumers in developed countries continue to perceive resource flows as bountiful, and develop no sense of limits to consumption. Whether as consumers or citizens, people in industrialized economies show no awareness that production systems are ecologically flawed or constrained.

This model is disseminated internationally by global media and advertising as unproblematic, uniformly good and desirable. Belief in the opportunity to consume without limits in an ecologically limited world is a powerful driving force increasing global risk.

It is assumed that growth will take care of all distributional issues. Growth is indeed the main reason for economists to discount the future. Growth (because of technical change and today's investments), will mean a declining marginal satisfaction from consumption. Whatever the power of the car as symbol of success, it is likely that the third and fourth cars in the family's garage will be not so exciting as the first Fiat in post-war Italy or the first Geely King Kong in Shanghai.106 Since growth is expected, there is then an excuse to discount the present value of future incremental consumption.

In order to achieve fair shares of the global resources available, theories of growth need to be transformed to theories of contraction and convergence, to balance the increases in energy and material use that are needed to raise living conditions among the poor against contractions among the wealthy and super-rich. There is a growing interest in ideas of ‘degrowth’ (décroissance). Degrowth is a term created by radical critics of growth theory intended to make space for alternative projects as part of post-development politics. Degrowth is (like sustainability) an ethical concept of how the world needs to change. Proponents of contraction want ‘to create integrated, self-sufficient and materially responsible societies in both the North and the South’.107

Re-conceiving growth builds on longstanding arguments about the need for, and feasibility of, ‘zero-growth’, notably perhaps Herman Daly's work on ‘steady-state economics’.108 Back in 1977, Daly's ‘impossibility theorem’ pointed out that a high mass-consumption economy in the US style was impossible (at least for anything other than a short period) in a world of four billion people. Since then, lock-in to progressivist growth economics has if anything deepened, and so too have the risks that sustainability thinking seeks to address.109

The idea of a contraction-based society poses a challenge: to find alternative models for the creation of human welfare from industry, technology and nature. Poor countries need to be able to industrialize and grow to meet the welfare needs of their people, but they need a way of doing this that avoids the world-busting models of past industrialization. Rich countries need to see ways forward that maintain quality of life, while shedding the habits and structures that damage the biosphere and corner an unfair share of the resources that are needed by the world's poor.

Understanding wealth

Under the conventional development model, the ‘good life’ is defined in narrow economistic terms, in terms of access to goods and services. This formulation is inadequate. Just as Amartya Sen's concept of ‘development as freedom’ (the expansion of the real freedoms that people enjoy) transforms understanding of attempts to achieve development, so too there is a need to concentrate not on the means to achieve sustainability, but on ends.110

‘measurements of consumption and profits were regarded as poor indicators of happiness’

Thus an IUCN e-forum on sustainability in 2006 (The Future of Sustainability: Have Your Say!) considered the question of ‘the good life’ (Box 9.1). Similarly, a conference convened by the Yale School of Forestry and Environmental Studies in 2007 explored the values and worldviews underlying current relationships with the natural world, and the links between environmental crises, consumption patterns, and quality of life. It investigated what makes people happy and measurements of success, and explored the possibility of a cultural ‘tipping point’ for sustainability.111

Box 9.1 Redefining the ‘good life’

An IUCN e-discussion Forum about sustainability in 2006 explored definitions of the ‘good life’.112 A crisis of values was a reason for the social and environmental challenges facing, in particular, industrial western society at the beginning of the twenty-first century. There were calls for a deep transformation of worldviews and for an evolution of consciousness for sustainability – one that would make room for cultural and spiritual values in decision making and for new definitions of the good life.

Simplistic connections between material wealth and wellbeing were challenged, as problems of ‘affluenza’, unsustainable consumption and the psychological effects of living divorced from nature were highlighted. People claimed that western society seems to have lost touch with its ‘wisdom traditions’ that taught that moderation in all things produces the greatest advances for human beings.

Conservation and environmental organizations were urged to tackle the ‘demand’ side of unsustainable consumption as well as measuring its ‘impact’ in order to promote environmentally friendly behaviour, and to encourage new understandings of the ‘good life’ beyond dreams for an ‘American lifestyle’. However, the difficulties in competing with corporations who spend billions on advertising and appealing to status identity were recognised, particularly in emerging economies.

Measurements of consumption and profits were regarded as poor indicators of happiness and fulfilment, and there are calls for the promotion of new metrics that take into account social and environmental values beyond profit, such as the Happy Planet Index, or the Bhutanese indicators of Gross National Happiness.

Source: Jeanrenaud, S. (2007).113

Sustainability needs to be made the basis of a new understanding of human aspiration and achievement. The relevant metric of sustainability is ‘the production of human wellbeing (not necessarily material goods) per unit of extraction from or imposition upon nature’.114 Dollar metrics of development are inadequate measures of quality or richness of life. The twentieth century fixation with GDP as a measure of human development is flawed. The conclusion from the ‘Beyond GDP’ conference held in the European Parliament in 2007 was that ‘GDP is unfit to reflect many of today's challenges, such as climate change, public health, education and the environment’. We need to aim to go ‘beyond GDP’ and add environmental and social criteria to the existing set of metrics.115

‘society must urgently replace its defective economic compass’

A new economics of nature

A critical requirement for a one-planet economy is that economic calculations of all kinds take proper economic account of biodiversity and ecosystem services. The Millennium Ecosystem Assessment in 2005 was a major step forwards in this regard, but it lacked the hard numbers of the influential Stern review on the economics of climate change to the UK Treasury.116 A recently launched project, catalysed by the G8+5 group in 2007, entitled ‘The Economics of Ecosystems and Biodiversity’ (TEEB) is setting out to redress the balance (Box 9.2). The study will evaluate the costs of loss of biodiversity and associated decline in ecosystem services, and compare with the costs of effective conservation and sustainable use, and make this knowledge available to policy makers.117

The study claims that the failure to recognise the economic value of wild nature has contributed to the continuing decline of biodiversity and degradation of ecosystems. It considers the many reasons why society finds it challenging to conserve biodiversity. These include ‘market failure’ resulting from lack of markets for biodiversity and ecosystem services, lack of information about many services such as pollination or scenic beauty, lack of facts and tools, lack of secure property rights, harmful taxes and perverse incentives which encourage damaging behaviour or penalise sound practices.

The analytical framework reflects critically on the ethical and equity issues embedded in tools such as discounting and integrates these concerns into its methodology. It also takes account of new insights in ecology, particularly the complexities of the non-linearity and resilience of ecosystems (Box 9.2). Preliminary analyses of the costs of the loss of biodiversity and ecosystem services from forests suggest we are losing services with a value equivalent to around US$28 billion each year.118

Box 9.2 The economics of ecosystems and biodiversity

Vision

Society must urgently replace its defective economic compass so that it does not jeopardise human wellbeing and planetary health through the under-valuation and consequent loss of ecosystems and biodiversity

Objectives

  1. Disclose the global economic values of biodiversity and ecosystem services: the study will recommend analytical economic frameworks and preferred valuation methodologies with which to value ecosystems and biodiversity; and evaluate the ethical choices implicit in our approach.

  2. Support the achievement of the MDGs: the study will consider vulnerability of societies, especially the poor, to ecosystem and biodiversity loss; and provide stakeholder compensation mechanisms to promote biodiversity conservation.

  3. Enable governments to integrate valuations of ecosystems and biodiversity into national accounts, policy frameworks, and local decision making, and also provide valuation guidance towards redefining corporate performance and standardizing individual footprints: the study will evaluate the explicit policy choices available; improve the extension and effectiveness of qualitative, voluntary disclosure schemes.

Source: Sukhdev, P. (2008).119

New markets

The market is a human institution of unique power and efficiency. It is capable of driving massive changes in environment and human opportunity on a scale and at a speed that dwarfs the regulatory powers of citizen, state or global organization. Human aspirations, and subsistence, are inextricably linked to the performance of that economy. The twentieth century was the first where the state of the environment became an issue for legislators. Environmentalists have long argued for tighter regulation of markets, but have only recently shown much sophistication in imagining how to engage the power of markets to secure environmental services and biological diversity. This will be vital if we are to map a transition pathway to an equitable low-carbon economy that works for both industrialized and non-industrialized economies, for rich and poor countries, and for rich and poor within those countries.

‘we need to redesign and engineer the global economy so that people can get more yet consume less’

The market is central to the way the world works, but sustainability needs to be understood as a fundamental cultural idea: we need to plant a culture of sustainability. The planetary future depends on what kind of culture of consumerism we build. We need to redesign and engineer the global economy so that people can get more yet consume less. One aspect of this is an economy of services rather than objects, that generates value without generating waste or unnecessary physical or energetic throughput.

It must not be forgotten that there will be profits to be made in decarbonization. The vision of the ‘environmental economy’ is conventionally presented as empowering to the alert entrepreneur. Arnold Schwarzenegger, Governor of California, said recently ‘Do not believe doom and gloom and disaster are the only outcomes. Humanity is smart and nature amazingly regenerative. I believe we can renew the climate on this planet’.120 Venture capital flows into clean technology in California doubled in 2007 to US$1.8 billion.121 In 2006, US$52 billion was invested in renewable energy sources worldwide.122

New market opportunities also, of course, bring new risks. Thus it is vital that new markets in decarbonization do in fact reduce human climate change in the long term. Carbon trading, or carbon capitalism, has been created by the Kyoto Protocol, and is growing rapidly, worth US$30 billion in 2006.123 While it may be ‘the only game in town’, many worries remain.124 Without full carbon accounting, which measures all exchange of greenhouse gases into and out of the atmosphere, there is a danger that carbon markets may simply move emissions around. Thus, for example, companies in industrialized countries might benefit from carbon credits for burning biofuels even if the crops they are made from are grown on former peat swamps or tropical forests.125

Sustainability metrics

We need to devise metrics to make the economy ‘tell the ecological truth’,126 especially about the externalities of industrial, economic and social processes. For this, we need new metrics, arising from a new consensus about aims and means, and new debates about human goals.

The concept of ‘ecological footprint’, first conceived by William Rees and Mathis Wackernagel in 1990,127 is now widely used as a sustainability metric. The footprint concept is a measurement tool to make the reality of planetary limits relevant to decision makers.128 The Global Footprint Network aims to make the metric as prominent as GDP: it holds a database of National Footprint Accounts on 150 countries since 1961.129 The ecological footprint represents the area of biologically productive land and water a population (an individual, city, country, or all of humanity) requires to provide the resources it consumes and to absorb its waste, using prevailing technology. Due to world trade, individual footprints have global impacts.130

Ecological footprints are usually measured in global hectares per person (gha). The Global Footprint Network calculates that there are only 1.8gha of biologically productive land per person available on the planet. Yet the average person's ecological footprint is 2.2 global hectares. Humanity's footprint exceeded the earth's capacity in about 1986. In 2007 humanity consumed more than 30% of the earth's capacity. Yet many high-income countries exceed this global average by as much as 500% (Figure 9.1).

Figure 9.1 Global Footprint: combining overshoot with Human Development Index

Source: Hails et al (see note 19)

The ecological footprint concept helps integrate social justice issues into questions of sustainability by linking individual or group demands to ecological capacity.

For example, the average footprint per person in Europe is calculated to be more than twice Earth's available biocapacity per person, and about eight times that of low-income countries such as Mozambique or Pakistan. In 2003 Europe's biocapacity was 1.06 billion gha, or 2.2gha per person. Europe's footprint was 2.26 billion gha, or 4.7gha per person. In other words, if all the world's citizens lived as Europeans, we would need more than two planets to provide the necessary resources, absorb our waste and leave some for wild species.

According to the Global Footprint Network, sustainable development can be assessed using the Human Development Index (HDI) as an indicator of socio-economic development, and the Ecological Footprint as a measure of human demand on the biosphere. The United Nations considers an HDI of over 0.8 to be ‘high human development.’ An Ecological Footprint less than 1.8 global hectares per person makes a country's resource demands globally replicable. Despite growing adoption of sustainable development as an explicit policy goal, most countries do not meet both minimum requirements (see figure 9.1).

One Planet Living

A major application of the Global Footprint Network's ecological footprinting approach is WWF and BioRegional's work on One Planet Living.131 This uses ecological footprinting as its key indicator of sustainability. WWF and its partners apply both ecological footprinting and the ten principles outlined in Box 9.2, in projects which demonstrate ‘One Planet Living’ in action.

Box 9.2 One Planet Living

The One Planet Living (OPL) vision is a world in which people everywhere can lead happy, healthy lives within their fair share of the earth's resources and leave space for nature

Global challenge One Planet Living principle One Planet Living goal One Planet Living strategy
Climate change due to human-induced build up of carbon dioxide (CO2) in the atmosphere Zero carbon Achieve net CO2 emissions of zero from OPL developments Implement energy efficiency in buildings and infrastructure; supply energy from on-site renewable sources, topped up by new off-site renewable supply where necessary.
Waste from discarded products and packaging create a huge disposal challenge while squandering valuable resources Zero waste Eliminate waste flows to landfill and for incineration Reduce waste generation through improved design; encourage re-use, recycling and composting; generate energy from waste cleanly; eliminate the concept of waste as part of a resource-efficient society.
Travel by car and airplane can cause climate change, air and noise pollution, and congestion Sustainable transport Local and sustainable materials Reduce reliance on private vehicles and achieve major reductions of CO2 emissions from transport. Provide transport systems and infrastructure that reduce dependence on fossil fuel use, e.g., by cars and airplanes. Offset carbon emissions from air travel and perhaps car travel. Provide transport systems and infrastructure that reduce dependence on fossil fuel use, e.g., by cars and airplanes. Offset carbon emissions from air travel and perhaps car travel.
Destructive patterns of resource exploitation and use of non-local materials in construction and manufacture increase environmental harm and reduce gains to the local economy Local and sustainable materials Transform materials supply to the point where it has a net positive impact on the environment and local economy Where possible, use local, reclaimed, renewable and recycled materials in construction and products, which minimizes transport emissions, spurs investment in local natural resource stocks and boosts the local economy.
Industrial agriculture produces food of uncertain quality and harms local ecosystems, while consumption of non-local food imposes high transport impacts Local and sustainable food Transform food supply to the point where it has a net positive impact on the environment, local economy and people's wellbeing Support local and low-impact food production that provides healthy, quality food while boosting the local economy in an environmentally beneficial manner; showcase examples of low-impact packaging, processing and disposal; highlight benefits of a low-impact diet.
Local supplies of fresh water are often insufficient to meet human needs due to pollution, disruption of hydrological cycles and depletion of existing stocks Sustainable water Achieve a positive impact on local water resources and supply Implement water use efficiency measures, re-use and recycling; minimize water extraction and pollution; foster sustainable water and sewage management in the landscape; restore natural water cycles.
Loss of biodiversity and habitats due to development in natural areas and overexploitation of natural resources Natural habitats and wildlife Regenerate degraded environments and halt biodiversity loss Protect or regenerate existing natural environments and the habitats they provide to fauna and flora; create new habitats.
Local cultural heritage is being lost throughout the world due to globalization, resulting in a loss of local identity and wisdom Culture and heritage Protect and build on local cultural heritage and diversity Celebrate and revive cultural heritage and the sense of local and regional identity; choose structures and systems that build on this heritage; foster a new culture of sustainability
Some in the industrialized world live in relative poverty, while many in the developing world cannot meet their basic needs from what they produce or sell Equity and fair trade Ensure that the OPL community's impact on other communities is positive Promote equity and fair trading relationships to ensure the OPL community has a beneficial impact on other communities both locally and globally, notably disadvantaged communities.
Rising wealth and greater health and happiness increasingly diverge, raising questions about the true basis of wellbeing and contentment Health and happiness Increase health and quality of life of OPL community members and others Promote healthy lifestyles and physical, mental and spiritual wellbeing through well designed structures and community engagement measures, as well as by delivering on social and environmental targets.

Source: http://www.panda.org/about_wwf/what_we_do/policy/one_planet_living/index.cfm

Technology and efficiency

Currently, there is little visible trend towards a “dematerialization” of the economy in absolute terms. On the contrary, the material intensity (tons/GDP) in some large economies is still increasing. Nonetheless, at the level of the individual firm or enterprise, it is accepted that there are competitive gains to be made by improving resource use and energy efficiency (and hence reduced costs), particularly in the face of tightening regulatory frameworks and rapid technological change. Such commercial ‘win-win’ scenarios give courage to those who would see a transition to sustainability led by radical improvements in technical efficiency.

Contraction and convergence need to be achieved in ways that are technologically clever, not by ‘turning the clock back’ to some pre-industrial state of endless human want, but moving to choose between technologies and forms of organization that allow two critical transitions:

Technology is critical to the transition from the old economy (fossil fuel, automobile throw-away) to the new economy (reuse, recycle, new energy).132 Technological advance is at the core of the movement for radical improvements in resource productivity, notably the ‘Factor 10 Club’ founded in France in 1994 by Friedrich Schmidt-Bleek, whose goal is to dematerialize the economies of the industrialized countries tenfold on average within 30 to 50 years (Hawken et al., 1999).133

Technologies exist that can enable a start to decarbonization. The question is, how do we create the leverage that will drive a process of change to adopt and mainstream them? The challenge is to put together chains of debate and action to link citizen, government and business; consumer, regulator and producer. It is important to find new and innovative ways to finance the transition to the low-carbon economy and to maintain the essential metabolism of the world economy. Private-state partnerships and novel forms of social ownership of production are likely to be important. Carbon taxation has a major role to play, both nationally and potentially internationally, so that the costs of production come to reflect the carbon density of manufacture, transport and sale.

The area of ‘sustainable design’ is attracting huge attention. Concepts such as ‘Natural Step’, ‘Biomimicry’, ‘Natural Capitalism’, ‘Cradle to Cradle’ design and ‘Industrial Ecology’ draw on insights from nature to accelerate progress towards a low-carbon economy.134 Thus Janine Benyus argues that evolution can be seen as 3.8 billion years of research and development that has ‘solved’ the problem of how to live sustainably on the planet.135 Nature can therefore provide clues to help address today's human sustainability problems. Unlike the ‘take, make and waste’ models of our current industrial systems, nature manufactures biodegradable products, on site, using only small quantities of chemicals at ambient temperatures, which are extraordinary energy-efficient.

The ‘Cradle to Cradle’ concept (C2C) is based on the premise that ‘waste = food’, and that unlike the current ‘cradle to grave’ way of making things, systems could be designed in which waste products became resources for future generation of products and living organisms, thus eliminating toxic materials and waste products.136 So rather than consuming less, or less badly, it would be possible to rethink the way things are made and create products, buildings and cities that enhance the life process itself. C2C principles are being applied to projects with financial and environmental success worldwide.137

New technologies may be the key to substantial improvements in material and energy intensity. They may also pose risks to health, welfare and environment. New institutions may be needed to manage these transitions.

The velocity of global change in 2008 gives a singular urgency to the need for a rapid transition to sustainability. So much is obvious. Yet we need to avoid short-term knee-jerk reactions to crises. Urgency itself brings a risk of short-termism. Solutions to problems can create problems of their own. Many development projects do that, trading hopes for economic growth against real environmental and social costs. So too do many new technologies, their Promethean promise marred by unforeseen side-effects. There are many examples of knee-jerk policy responses to problems such as climate change: expanded nuclear power programmes, biofuels, wide spectrum Genetic Modification (GM), nanotechnologies, the deployment of reflective devices in space, or seeding the ocean to enhance carbon storage. There are reasoned cases to be made for many of these, but panic makes for poor policy. Many seeming solutions treat symptoms not diseases. Many bring environmental problems in their wake. There are no ‘magic bullets’ to slay the villain of unsustainability.

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