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Better, Different, Less – Green Economy Revisited

Post Growth Economy or Resource Efficiency Revolution – How Should We Face the Limits of Our Planet?” This question I asked in a blog post half a year ago. On the green growth vs. post-growth front, an interesting publication caught my attention recently. Barbara Unmüßig and Thomas Fatheuer from the “Heinrich Böll Stiftung”, a foundation associated with Germany’s Green Party, and Wolfgang Sachs, member of the club of Rome and former Wuppertal Institut researcher, published a “Critique of the Green Economy” in April with a translation to English that followed in June. In it, they discussed the two most famous green economy approaches, the one from UNEP and the one from OECD, and also critically reviewed the so-called “bio-economy”, an idea that is spreading in Germany and the US.

Looking at their social science backgrounds, it’s no wonder the authors take a harshly critical approach toward economic ideas, old as well as new: Unmüßig studied political science; Fatheuer social science and classical philology; Sachs theology, sociology and history. Fatheuer and Sachs both attained PhDs. Their analysis, however, is well-grounded. Anyway, who says only economists can develop ideas for our common future? I’ve allowed myself to cite the most relevant parts below. But before jumping into the Critique, I would like to briefly consult an economist. And of course, only the godfather of contemporary post growth economic thought, Herman Daly, will do.

As early as back in 1996, he wrote the definitive book, “Beyond Growth”. On page 220, Daly defines:

To capture the cluster of values expressed by “sustainability/sufficiency/equity/efficiency” in one sentence, I suggest the following: We should strive for sufficient per capita wealth – efficiently maintained and allocated, and equitably distributed – for the maximum number of people that can be sustained over time under these conditions.

Why do I mention this? Because social equity is the authors’ vital focus in “Critique of the Green Economy”. And sufficiency is the point where green growth and post growth concepts differ the most. Supporters of the post growth standpoint argue that we have to limit consumption and find ways to be happy with less, whereas followers of the green growth approach believe that consumption should only shift to sustainable products and a lower material intensity. To illustrate the post-growth idea, let me give you an example of sufficiency. Instead of using an electric car (which the green growth advocates would favor), we give up our own car and either use public transport or, even better, question the need for moving at all. Instead, we more often stay at home (or in the park around the corner) to play with the kids or care for the elderly.

The 3 Most Important Green Growth Approaches

Daly’s sufficient per capita wealth is the number one controversial subject of our times – assuming, of course, we are interested in current affairs and have already heard of the idea of questioning economic growth. It is also the question the Critique‘s authors ask. That is, how much money is needed for a person to be happy? How much health? How much environment? How much education and social connection? Wealth, say post-growth supporters as well as happiness researchers, depends on a variety of factors, money being just one of them. But before we get into this, let’s see how Unmüßig, Fatheuer and Sachs describe the three most important approaches to green growth; the following paragraphs are a pretty comprehensive summary. By the way, the 52-page publication can be downloaded here and the cited passages can be found on page 23.

[The great variety of terms in circulation often cause confusion over concepts]. The United Nations Environment Programme, UNEP, speaks of the “green economy,” while the OECD and the World Bank refer sometimes to sustainable growth and at other times to green growth. There is also talk of “greening the economy.” […] Considerable technological hopes are also being pinned on the bio-economy, which many believe will promote the transition from an oil-based economy to a bio-based one. Bio-economy strategies are currently being driven forward by the German government and the Obama administration in the USA.

Green Economy According to UNEP

UNEP defines the green economy as one that results in improved human wellbeing and social equity, while significantly reducing environmental risks and ecological scarcities and facilitating sustainable resource management.

Because I haven’t covered UNEP’s green growth approach in any article before, let me cite more of the Unmüßig, Fatheuer and Sachs report. Pardon the excessive length, but it is one of the most comprehensive summaries available and also very well-written. You find it on pages 23 ff.

UNEP has positioned itself as the leading player in elaborating the idea of the green economy – its report “Towards a Green Economy” runs to over 600 pages. […] The report notes that all global problems have a common basis, namely the mis-allocation of capital: during the past two decades, it says, most capital has been poured into property, fossil fuels and financial market products including derivatives. By comparison, relatively little has been invested in renewable energy, energy efficiency, public transport, sustainable agriculture and conservation of ecosystems, biodiversity and water resources. UNEP therefore advocates targeted investment in ten key economic sectors (including energy, agriculture, urban development, water, forestry, fisheries and ecosystem services), with a view to enabling a rapid and effective transition to greener and more poverty-focused development, and underpins its arguments with an impressive array of facts and econometric calculations. It proposes spending two percent of current global GDP (equivalent to approximately USD1.3 billion) annually to finance these investments. UNEP believes that this investment would be sufficient to provide an effective stimulus for a lower-carbon, more resource-efficient global economy.

This descriptive tone, however, soon changes to a more critical one. Not, indeed, surprising, when the word “Critique” is in the publication’s title. What, then, do the authors criticize? Mainly two things. First, a lack of precision in describing concrete proposals for political action. Second, the lack of social sensitivity in environmental economics.

[T]he UNEP report has little to say on how trade regulations would need to be designed in order to decarbonize the global economy and make it more resource-efficient. The report goes furthest with its proposals on organic agriculture and sustainable urban development. One of the most important and far-reaching demands made by UNEP is its call for the abolition of environmentally and socially harmful subsidies in the agricultural and transport sectors and for coal and oil. […] (p. 24)
UNEP also wants to assign an economic market value to ecosystem services and invest in them in the long term: “A green economy values and invests in natural capital.” […] Advocates of the monetization of nature rarely spare a thought for the social context within which “ecosystem services” are provided; indeed, such terms all but obscure the social context. After all, it is not industrious nature itself that is to receive payment for ecosystem services, but its owner. But many of the last intact ecosystems are located in areas occupied by indigenous peoples and local communities. Their traditional ownership rights are jeopardized by new market- based instruments. The most vigorous critics of the UNEP concept point out that natural resources are being commodified in order to make them more attractive to the private sector, thus making them vulnerable to commercial exploitation. Capitalizing on “ecosystem services” has come under fierce attack as a new stage in the privatization and commercialization of the natural environment. Instead of joining forces with local inhabitants to protect natural resources from commercial exploitation, so the accusation goes, business is turning nature into a commodity and not infrequently driving out the local population. […] Assigning a monetary value to ecosystem services or to the environmental costs of climate change (e.g. by way of CO2 emissions trading) or biodiversity loss opens the floodgates to the financialization of natural capital. “Climate and environment policy are being made compatible with financial speculation,” according to the analysis of Elmar Altvater (2012). Since we are dealing with an all-out wave of financialization, we need a comprehensive and nuanced debate on the “economics of ecosystems and biodiversity” that is being aggressively promoted by UNEP. (25 f.)

The New Mainstream Paradigm: OECD’s Green Growth

The OECD’s favorite term when talking about sustainable development is Green Growth. For the details of this approach, see my article from April, The OECD Turns Green – Why Saving the Planet Pays Off, where I shared the Critique‘s authors’ summary as a comment.

Between Consistency and National Competitiveness: Bio-Economy

Just like the UNEP approach, the Bio-Economy is another concept that has not yet been dealt with on knowtheflow. It is not really clear what its supporters have in mind. Perhaps making the economy consistent to natural flows, or maybe gaining a competitive edge for national economies just before the oil runs out. Either way, it is worth mentioning:

Bio-economy is a relatively new concept that is cropping up with increasing frequency and often in the context of the green economy. The bio-economy focuses similarly on technological innovation to enhance efficiency and the use of natural resources for food, energy, pharmaceuticals and the chemicals industry. The German government’s “National Research Strategy BioEconomy 2030” is “striving towards a natural cycle oriented, bio-based economy that is in accordance with technology and ecology” and as a knowledge-based bio-economy uses biological processes – from the level of genes to the entire ecosystem. […] The objective is to shift from an oil-based to a bio-based economy. At the same time the international competitiveness of Germany’s chemical and pharmaceutical industry, biotechnology companies, and small and medium-sized seed companies and plant breeders operating transnationally will be maintained and enhanced. […] In Washington, too, the White House has released a “National Bioeconomy Blueprint” (April 2012). It follows on from the 2009 report by the US National Research Council, A New Biology for the 21st Century, and highlights the potential of technological innovation for health and food in the future, emphasizing the importance of research to free the USA from its dependency on oil and enable production of new, non-oil-based goods. (page 27 f.)

Governance Missing

And now comes the interesting part. What’s wrong with the green economy? Why do the authors think only a post-growth approach can resolve scarce resources issues? To start with, they voice a general criticism of the institutional approach both UNEP and OECD favor. No wonder, since Green parties have always been a center for the NGO sphere and for those attracted by bottom-up decision making. And it’s where Unmüßig, a promoter of grassroots citizen engagement, worked for decades.

None of the green economy strategy papers – from OECD to UNEP – tackles the issues of power and distribution of resources. They are simply omitted. Clearly, as far as these organizations are concerned, all new initiatives and programs take place in an arena where power and interests do not exist. Both organizations – UNEP more explicitly so than the OECD – support the role of the state as a framework-setting institution whose task it is to remove environmentally harmful subsidies, formulate legislative standards, implement sustainable industrial policy and above all promote research. Drastic command-and-control measures to limit energy and resource consumption (“caps,” large-scale nature conservation measures, bans on resource extraction in sensitive ecosystems such as the Arctic or the deep ocean) are no longer seriously considered as policy options. Setting limits scarcely features as a priority, let alone a requirement, in the minds of the protagonists of the green economy. […] (p. 30)
Democratic control and social participation as the basis for economic action are blind spots. None of the current documents – from UNEP to the OECD – covers these adequately or even in outline. […] (p. 33)
Over the last 200 years the economy has freed itself from its natural and social bounds; now it must impose political bounds on itself for the sake of both nature and society. (p. 36)

The Limits of Consistency Strategies

Consistency, one of three essential sustainability strategies, means that human activity coheres to natural flows. Biodegradable packaging is one example, wind energy another. Composting instead of depositing waste would be third one. Sounds good, so what’s the problem? Well, the problem is that as long as we don’t limit our needs, which have constantly risen in the fossil-powered age, there is no way we can make all of them consistent to nature!

While still including an efficiency strategy, more sophisticated concepts of a green economy place considerable importance on a strategy of consistency, in other words on ensuring that industry is compatible with the natural environment. How can we exploit nature without destroying it? […] The downside is that the consistency strategy very quickly comes up against constraints if applied on a large scale. Even renewable energy and resources, after all, are not limitless; most notably, there is very little scope for expanding the total land available for bio-energy and biomass production without putting food production and nature conservation at risk. […] Neither efficiency nor consistency strategies will be able to achieve their objectives unless accompanied by the principle of sufficiency – prosperity with moderation instead of unbridled excess. This, however, is conspicuously absent from all of the green economy concepts. (p. 31 f.)

Sufficiency – The Secret to a Post-Growth Era

[M]ore efficient use of resources must go hand in hand with more moderate goals; unless there is a revolution in terms of sufficiency, the efficiency revolution lacks direction. (p. 31)

Moderate goals! This is sufficiency. Apart from efficiency and consistency, sufficiency is the third essential strategy on the road to holistic sustainability. Limiting our consumption, limiting the allocation of money and goods, that’s the idea of post growth. Even as generally un-sexy as this already sounds, critics of it find yet more fault because of the question of responsibility for entering the post growth era. Who should start to be satisfied with possessing less? And who decides what is enough? But living with less is what the Critique‘s authors call moderation.

No matter what angle one considers it from, a green economy must find an alternative to the lack of moderation that has accompanied industrialization. The fossil economy has grown out of all proportion to nature and is bringing the biosphere to its knees. And it is not just the physical size of the fossil economy that needs to be addressed; the scale of the social impacts of the economic system must also be reviewed. Just as a new balance between the economy and the natural world is needed, so must a new equilibrium between the economy and the social order be found. It is hard to see how an economy could contain its resource flow within physical limits without placing social limits on the expansion of the economic system. It is impossible to abandon the world of fossil fuels and leave the mental world untouched. Technology must have a counterpart in the social culture, and vice versa. In short: without a moderate economy there can be no green economy. […] (35)
The economics of the last two centuries have been driven by an imperative of constant increase; now we must turn our minds to economic disarmament and rediscover an economy of moderation. In environmental terms this means that, in order for the economic system to be transformed, sufficiency (wealth in moderation) must take its place alongside efficiency (the smart use of resources) and consistency (compatibility between industry and nature). “Better,” “different” and “less” are the triumvirate of sustainability. […] That a high standard of living does not necessarily result in a high quality of life – indeed, that an excessive standard of living can reduce quality of life – is one of the lessons that affluent societies are now having to learn. (36)

Here is the first argument pro post-growth. A decrease in excessive consumption, as in a lower standard of living, automatically increases quality of life on a higher level. If people sell their cars, they not only have to breath in less exhaust fumes, but also save working time to afford it!

The green economy as we understand it must foster not only technical innovation but also the art of restraint. Too many goods, too much speed, excessive distances, an overdose of stress at work and too many areas of life, such as school and culture, where the maxims of competitiveness and efficiency hold sway – moderation is alien to today’s economy. That is why for us the art of restraint is part of the vision of a viable economy. There is no evading the question of “How much is enough?” […] (35 f.)

And here is the second argument pro post-growth. The commons. Even though I reflected on the possible misuse of the commons just a week ago (see Green Ocean Hunters? The Environmental Effects of Fishing and Aquaculture), there are many hopes related to them. Disconnecting quality of life from money, valuing all forms of wealth instead of just the financial form, that is the spirit of a post-growth era. Being really rich without having an excessive amount of money, now that sounds promising, doesn’t it?

Hardly anyone mentions the commons – as though nothing of significance exists outside the market and the state. These two concepts are like two communicating tubes: a lot of market on one side and not much state on the other; not much market on one side and a lot of state on the other. Yet historians and anthropologists have long been at pains to point out that exchanging goods via the market or via the state are only two ways in which goods can be distributed – there is a third way: exchange in the community. The first way is governed by the principle of competition and the second by the principle of planning, while in the third the emphasis is on mutuality. […] (p. 38)
Above all, though, it has become possible to imagine a form of wealth with less money. Because in the social commons services are not provided for monetary reasons, but out of a sense of community spirit, interest or solidarity, needs can be met with a lesser investment of money. (p. 40)

Further Reading

Article image edited by Moritz Buehner, previously used in the corresponding knowtheflow-article from March.

moritzbuehner

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