Ecological policy

Global Economic Crisis: Challenges for the Rudd Government
Creating an economy that supports local and global ecological sustainability and justice
Geoff Evans
Faculty of Science and Information Technology,
School of Environmental and Life Sciences,
University of Newcastle.

Paper given at SEARCH Roundtable

Introduction
The convergence of the economic crisis, unprecedented biodiversity collapse and climate change across the planet are manifestations of the non-sustainability of capitalist and industrial societies addicted to growth in a finite planet.

Humanity, and particularly the wealthy populations in the First World/Global North, are living on the Earth’s diminishing natural capital and have so overshot ecological limits such that by 2030 humanity will be consuming the resources of two planet Earths – unless social and economic systems are changed fundamentally.
The linked crises threaten the well-being of the world’s entire human population, as well as the survival of many other species, but it is the poorest and most vulnerable people living in the Third World/Global South that are in most jeopardy.

Yet, the linkage threats to sustainability are also opportunities for radical change towards an ecologically and socially sustainable economies built at local, regional, national and global scales.

The transition to a globally-equitable and ecologically sustainable economy, a Green Economy, is not possible in a neo-liberal market-driven political environment.

It requires social movement mobilization that forces economic policies that put ecological and global justice values at the forefront, and protects natural capital and ecological services (such as clean air, stable climate, fresh water and biodiversity) by internalizing the real environmental and social costs of commodity production and exchange.

The challenge for the Rudd Government to deal with the linked ecological, social and economic crises confronting Australia and the world is to apply new economic thinking that breaks out from growth and consumption addiction, repays ecological debt owed to the people of the Global South, builds new forms of democratic accountability of economic actors to people and the planet.

These are the foundation for an ecological economy and the challenges we face provide an historic opportunity for a ‘just transition’ to just that sort of economy.

While essential it would be naïve to assume there is not enormous entrenched resistance to such a pathway that needs to be overcome by social movement education and mobilizations that builds solidarity across the global North/South divide and across local class, gender and other divides.

Ecological economics is not a recent invention. A large body of transdisciplinary study, has been done since the 1970s by researchers such as Herman Daly, Barry Commoner, and more recently by people such as Robert Costanza, Joan Martinez-Alier, John Gowdy, and, in Australia, by people such as Wendy Proctor (of the CSIRO Sustainable Ecosystems).

From growth addiction to a steady-state economy
Ecological economics is a transdisciplinary field of academic research that recognises that human economies and natural ecosystems are inter-dependent, co-evolving linked entities in which the health of one reflects and determines the health and sustainability of the other. They argue that the only sustainable economy is one that lives within the constraints of a finite planet. Ecological economics applies the principles of recognising that local and global dimensions of environmental change are linked,; that there needs to be inter-generational and intra-generational equity, that economic decisions need to apply the precautionary principle that avoids risks that might cause irreversible harm, and that there should be full valuation and accounting of ecological services.

Ecological economics is informed by the four Laws of Ecology identified by physicist, ecologist, and ecological socialist, Barry Commoner, namely that:

1. Everything is Connected to Everything Else. There is one ecosphere for all living organisms and what affects one, affects all.

2. Everything Must Go Somewhere. There is no “waste” in nature and there is no “away” to which things can be thrown.

3. Nature Knows Best. Humankind has fashioned technology to improve upon nature, but such change in a natural system is likely to be detrimental to that system.

4. There Is No Such Thing as a Free Lunch. Everything comes from something. There no such thing as spontaneous existence (Commoner, 1971: 33).

Herman Daly was a pioneer of ecological economics, and proposed the concept known as a ‘steady-state economy’, which he defined as:
An economy with constant stocks of people and artifacts, maintained at some desired levels by lowest feasible rates of [expenditure of] matter and energy from the stage of production to the stage of consumption (Daly, 1977; 17

A forest is a good metaphor for an ecological economy, as forests grow, mature and renew themselves while overall material and energy throughput remains relatively constant rather than growing.

Ecological economists advocate what is known as strong sustainability, arguing that ecological integrity and ecological services are the foundations of life for humans and other living things and, that rather than being a traded away as ‘capital’, they must be maintained and passed on to future generations of humans and other species as their foundation for sustainability (Daly, 1991; Daly, and Cobb, 1994; Costanza, 1991; Costanza et al, 1997; Wackernagel, and Rees, 1996; Gowdy and McDaniel, 1999

Ecological economists do not argue that nature should remain untouched, or even that non-renewable resources should not be exhausted but rather that:

Non-renewable resources should be depleted at a rate equal to the rate of creation of renewable substitutes.

Projects based on exploitation of non-renewable resources should be paired with projects that develop renewable substitutes. The net rents from the non-renewable extraction should be separated into an income component and a capital liquidation component. The capital component would be invested each year in building up a renewable substitute (Daly and Townsend, 1993: 267).

Thus, Herman Daly defines sustainable development as “development without growth in throughput beyond environmental regenerative and absorptive capacity.” (Daly, 1996:69) where the conditions for sustainability have renewable resources harvested only at the speed at which they regenerate, non-renewable resources consumed or disposed at a rate no faster than the rate at which renewable substitutes are phased into use, and waste production is limited to the assimilative capacity of local ecosystems (1996: 69).

The current ecological, social and economic crises undermine potential for sustainability. As climate change intensifies, hundreds of millions of people may be forced to leave uninhabitable places and become environmental refugees. Australia’s economy is among the largest per capita contributor to CO2 emissions, so the need for adopt ecologically-based economy is very urgent from both a global sustainability and justice perspective.

In fact, the most recent climate change science tells us that the meltiong of polar ice-caps, retreat of glaciers, projected sea-level rise and thawing of arctic tundra is occurring at rates that are more rapid than those projected by the Intergovernmental Panel on Climate Change (IPCC) in its 2007 report, and is likely to unleash feedback processes where average global temperatures might well rise to more than 4ËšC above pre-Industrial temperatures within as soon as fifty years, unless bold action is taken (IPCC, 2007; Hansen , 2007; Rahmstorf et al, 2007; Lenton et al, 2008).

An ecological economy would end addiction to non-sustainable consumption and growth that is a major factor driving climate change. It would apply redistributive policies to tackle poverty, help end conflict, and increase food and water security.

Failing the test of sustainability
The Global Footprint Network (GFN) is a research and policy network established in 2003 to influence decision makers to get economies back into balance with ecosystems. It defines overshoot as occurring when
Humanity’s demand on nature exceeds the biosphere’s supply, or regenerative capacity [bio-capacity]. Such overshoot leads to a depletion of Earth’s life supporting natural capital and a build up of waste. At the global level, ecological deficit and overshoot are the same, since there is no net-import of resources to the planet. Local overshoot occurs when a local ecosystem is exploited more rapidly than it can renew itself (Global Footprint Network, 2009).
The ecological footprint (EF) is “a resource accounting tool that measures how much nature we have, how much we use, and who uses what” (Global Footprint Network, 2009).

According to the Global Ecological Footprint, there is 2.1 global hectares (gha) of productive land per person on Earth, yet humans are on average using 2.7 gha, an overshoot of 30%.
The figure below shows the suicidal trajectory of current development pathways that have clearly been in an unsustainable trajectory of planetary overshoot for at least the last 30 years. The greater the overshoot, the more degraded the planet and its ecosystem services will be for other species and for future generations of humans, and the greater the threat of complete collapse.

Global overshoot means human consumption will soon require two planets (Source:http://www.footprintnetwork.org/en/index.php/GFN/page/world_footprint/)

Equity and ecological debt

There is great inequity in the global ecological footprint among people within and between different countries. The ecological footprint of the average person from the US and the United Arab Emirates is 9.5 gha.

The average Australian and New Zealander requires around 8 gha to maintain their lifestyle. This means that if everyone on the Earth lived our average lifestyle and consumption levels then we would need 4 planets (Ewing et al, 2009).
The average person in the UK, France, Sweden and Japan requires around 5gha, while the average South Korean and German uses 4gha.

Historically, the Global North has benefited economically from the exploitation of the people and ecosystems of the Global South, and continues to do so through over-consumption. This represents an historic and contemporary ecological debt that needs to be repaid.

In contrast to the over-consumption of the Global North, the average footprint of a person living in China requires 2.1gha (the level that, if replicated globally, could sustain the current global population). The average person in India uses less than 1 gha. South Africa also has 2.1 gha, but there is great inequity between the consumption levels of the elite and the average person (WWF Living Planet Report, 2008).
The diagram below gives a visual image of the lack of equitable footprints of different nations, and highlights the gap between the USA, UAE and Australia at the top, China in the middle, and African and Asian countries at the bottom. Humanity needs to return to what is being called ‘one planet living’ (BioRegional and WWF International, 2008), based on equitable consumption levels of people within and between countries.

Global hectares used in consumption by country (Ewing et al, 2009)

Cutting the Carbon Footprint
Ecological footprints (a.k.a. eco-footprints) are calculated by considering a range of data about human production and consumption from different sites of the ecosphere – forests, fisheries, grazing land, cropping land, and the atmosphere.
The graph below shows that the vast majority of the global eco-footprint – and the only element that is actually growing significantly – is the carbon dioxide element (shown in grey), through the ‘carbonisation’ of the economy over the last 150 years, but the last 30 years in particular.

Arguably, this growth is linked to both the growth in consumption ion the Global North, and the growing globalisation of the economy where countries like China (and to a lesser extent Mexico, SE Asia and other Global South countries) have become the factories of the world at the expense of ecological and social sustainability of the Global North and South.
(WWF Living Planet Report 2008)

Clearly then, moving to a zero carbon economy is essential for both global sustainability and global equity.

The diagrams below show two potential trajectories for the future – one that is essentially ‘business-as-usual’ and the other that shows overshoot being arrested and a ‘return to sustainability’.

(WWF Living Planet Report 2008)
Experience in Australia and the US tells us that returning to sustainability means taking on the powerful vested interests of Big Oil and Big Coal, the self-named ’Greenhouse Mafia’, or what Guy Pearse, in his recently-published essay Quarry Vision, calls the ‘Carbon Lobby’ (Pearse, 2009) that have a stranglehold over governments’ climate change, energy and public investment policies.
The burning of coal is the major source of CO2 emissions into the atmosphere from the human economy (IPCC, 2006).

The eminent climate scientist James Hansen, director of NASA’s Goddard Institute for Space Studies in New York, has suggested that coal dependency needs to be addressed with great urgency, describing coal as “the single greatest threat to civilisation and all life on our planet”. He proposes that there needs to be an immediate moratorium on new coal-fired power stations to prevent runaway climate change, and to create a realistic chance to bring carbon dioxide concentrations down to 350parts per million necessary to stabilise the climate and the planet’s ecosystems (Hansen, 2009).

Pearse (2009), and many others, have noted that the carbon capture and storage technologies that the coal industry and the Rudd Government are investing enormous effort into to save Australia’s coal export and carbon-intensive power generation industry, is likely to be too little, too late, with at best, only a few pilot plants operating by 2020, when serious and effective climate action demands a much more urgent timeframe.

Environmental organizations such as Greenpeace have mapped out energy scenarios that show that a transition from coal (and nuclear) to clean energy by 2050 is possible in Australia, the US, China and globally, through investment in currently-proven energy efficiency and existing renewable energy technologies (Teske et al, 2006, 2007, 2008).

This scenario for a shift to a clean energy economy, is in sharp contrast to the hijacking of Rudd Government’s Carbon Pollution Reduction Scheme by the Carbon Lobby, who through a collaboration of industry and some labour unions have put up spurious arguments of employment chaos, capital flight and political bedlam for the Government that has scared them into setting CO2 emission reduction targets that Australia is a again a global ‘climate change laggard’, while granting billions of dollars as corporate welfare to Australia’s biggest carbon polluters to continue ‘business-as-usual’.

The challenge for the Rudd Government is to stand up to the Carbon Lobby and, rather than prop them up with billions of dollars in perverse subsidies (Riedy, 2007), to use these funds to stimulate the economy, particularly the manufacturing sector and regional economies (including in coal-dependent regions like the Hunter and Latrobe Valley and Bowen Basin), by investing in energy efficiency, renewable energy technologies and public transport.

Where do we want to go to – a Just Transition to a Green Economy

There is an urgent need policies that drive reduction of humanity’s (and Australia’s) eco-footprint with raising genuine human development. Economic policies that fail to move these two agendas forward surely fail the ‘test’ of sustainability and global justice.

The Global Footprint Network uses a combination of Ecological Footprint (EF) and the Human Development Index (HDI) to plot transitions towards sustainability at national and global scales.

The HDI is used by the United Nations Development Program (UNDP) as a measure of a country’s average achievements in the areas of health, knowledge, and standard of living. The HDI combines measures of education, health, and Gross Domestic Product (GDP) which measures economic activity. The GDP has problems as a genuine indicator of development, as it goes up irrespective of whether economic activity is beneficial to people and the environment (such as investment in renewable energy, education or health care), or whether economic activity arises from harmful activities (such as arms trade, war, clear-felling forests or devastating river catchments with open-cut mines). However, despite this qualification, the HDI is still a useful indicator of the social dimension of sustainability.

According to the Global Footprint Network, both ecological and social sustainability is possible with an Ecological Footprint of less than 2.1 global hectares per person (resource demands that are globally replicable for all people and still within the Earth’s bio-capacity), and an HDI higher than 0.8 (considered ‘high human development’).

The diagram below, shows the sustainability trajectory of particular countries. The diagram shows the great disparity among countries with respect to both their Ecological Footprint and their level in the Human Development Index, and it also shows that few countries are close to sustainability.

Countries at the top right quadrant of the diagram (including Australia and the US) have high human development but their high ecological footprints indicate a form of violence to the planet through over-consumption. Countries in the bottom left quadrant have low ecological footprints but also low human development index, indicating denial of basic needs and equity as a form of social violence.

The ideal is to have a country located in the bottom right corner, and currently only Cuba and Costa Rica are located in that quadrant.

Justice through equitable sharing the global commons

Ecological economics needs to drive a reduction in ecological footprint and raising of human development.

The Global Commons Institute, a UK-based NGO, proposes a process of moving in this direction (with a particular focus on greenhouse gas emissions, but which could apply to other inequitable global impacts) through a policy process called Contraction and Convergence.
‘Contraction’ here refers to the need to reduce global emissions of greenhouse gases to a level that would result in establishing a scientifically-justifiable tolerable atmospheric concentration – a global ‘budget’ of greenhouse gas emissions. This budget would decline over time until a stable point is reached.

‘Convergence’ allocates shares in that budget to nations on the basis of equity. This means that shares in the atmosphere are equitable among the world’s people and that the current situation where the people of some countries effectively deprive others, because essentially allocations are attained on the basis of wealth, would cease.

After convergence, all countries would contract their greenhouse gas emissions equally until the necessary contraction limit is reached (Broad, 1999.

The diagram below shows historic contributions of countries to global fossil fuel emissions and potential reductions of these emissions through a contraction and convergence process. It is clear that the US and the rest of the OECD countries 9at the bottom of the graph) have made historically the greatest contributions, and must make the largest reductions most rapidly, while India and China have historically made smaller emissions, and would reduce emissions more slowly and perhaps even increase absolute emissions for some decades to boost genuine development before reductions are made.

The contraction and convergence model is supported because it maintains potential for on-going development in low-income countries within an equitable framework. It is consistent with a similar policy proposal for tackling climate change, from the NGO EcoEquity, known as Greenhouse Development Rights which is:
Designed to protect the right to sustainable human development, even as it drives rapid global emissions reductions. It proceeds … by operationalising the official principles of the UN’s Framework Convention on Climate Change, according to which states commit themselves to “protect the climate system … on the basis of equity and in accordance with their common but differentiated responsibilities and respective capabilities” (Baer et al., 2008: 26).

Greenhouse Development Rights requires rich countries to accept large obligations to cut greenhouse gas emissions and commit to making large international financial and technology transfers to poorer countries, while allowing less wealthy countries to adopt nationally appropriate mitigation actions (Baer et al., 2008).

Contraction and convergence and the Greenhouse Development Rights framework are examples of the application ecological economics and the principles of global justice applied both in and to the environment.

A just transition to an ecological economy in a climate change hot-spot
Australia’s coal communities, like the Hunter, Latrobe Valley and Central Queensland, exemplify the challenge the Rudd Government faces in moving Australia towards an ecological economy in which it also supports local economic well-being and global justice, and avoid being stuck in a non-sustainable business-as-usual paradigm.

A just transition to a future beyond coal needs to supported, a transition that protects vulnerable workers and communities during what will need to be a radical economic restructuring process).

The University of Newcastle’s Centre of Full Employment and Employment released a report in 2008 (of which I was a co-author) that identified that a just transition to a clean energy economy was possible in the Hunter region, and in fact, this transition would actually create thousands more jobs than exist currently).

The research identified that if the Hunter was simply self-sufficient energy-wise (including meeting the power demands of two aluminium smelters), then 3,500 extra jobs could be created, while if the region remained an energy exporter to the rest of the country (generating 40% of NSW electricity demand) then 10,500 extra jobs could be created locally in energy efficiency and renewable energy manufacture, installation and maintenance (Bill, Welters et al, 2008).

Thousands of other Green Collar jobs would be created elsewhere as renewable energy infrastructure is built in other localities, as transmission infrastructure is upgraded, and as manufacturing capacity for export of clean energy technologies is developed10,500 extra jobs could be created (Bill, Welters et al, 2008)
Jobs in carbon-intensive industries, such as aluminium smelting and power generation, need to be protected if possible, but any public funds granted to these industries should be conditional on them guaranteeing jobs while implementing plans to wean themselves off coal onto renewable energy over the next decade. if they cannot be carbon-neutral by 2015 (which is when climate scientists are saying CO2 emissions into the atmosphere must peak and then start declining) then the industries need to be phased out as new industries are phased in. This is tough economics, but economic restructuring for a green Economy will inevitably involve change and pain for some people. ).

A just transition process ensures that vulnerable workers and communities are supported during transition. Alternative jobs and regional economies need to be created. But, both the Garnaut and Stern reports showed that inaction and delay is likely to be much more costly for economies, the environment, and for workers and communities).

The Rudd Governments needs to adopt interventionist policies and increase public investment in Green Jobs to support of vulnerable communities and workers. Failure to do this feeds a divisive and false ‘jobs versus the environment’ argument that only serves the interests of corporations hoping to maintain their influence and profits from ‘business-as-usual’ despite the obvious costs to people and the planet).

Just transition policies include:

• A clear decision and early notice to affected communities of any decision to end investment in non-sustainable industries, e.g. a moratorium on investment in new coal-fired power generation;

• Setting clear environmental targets and timelines for transition, e.g. identifying a timeframe for phasing out coal-fired power generation;

• Investment in technological alternatives to the technology being phased out, e.g. investment public transport, energy efficiency, renewable energy;

• Regulation and stimulus to a market that encourages innovation, research and investment, e.g. establishing a gross feed-in tariff for solar, wind and other renewable energy technologies;

• A high degree of political integration among and within different government, industry, union, NGO and community stakeholders, including an active and engaged public involved in planning the transition process;

• Removing perverse subsidies and internalizing the real environmental and social costs of commodities such as coal and aluminium;

• Providing appropriate training, income support, relocation support, and (where appropriate) compensation to affected businesses and contractors;

• Establishing regional and industry development funds to facilitate investment in research, new industries and jobs and technology transfer to targeted sectors and regions, with the location of the CSIRO Energy Research Centre to Newcastle following the closure of the BHP Steelworks as a positive example;

• Guaranteeing social security, including instituting a job guarantee for all workers (Binder, Jänicke and Petschow, 2001; Evans, 2008; Bill, Welters et al, 2008).

A report by the ACTU and the ACF showed that hundreds of thousands of Green Collar jobs could be created in Australia, if appropriate industry development policies are put in place, particularly in renewable energy, energy efficiency, sustainable water systems, biomaterials, Green buildings, waste and recycling (ACF and ACTU, 2008).

Many thousands more could be created if there was greater investment in public transport, sustainable agriculture, public health and education.

A CSIRO report, called Growing the Green Collar Economy, noted that Australia’s national ecological footprint could be reduced over time if economic growth could be decoupled from environmental pressures, for example if growth was in services such as health and education. The report identified that achieving a rapid transition to sustainability would have little or no impact on national employment and that living standards would still increase. The report projected increases in employment of 2.5 to 3.3 million jobs over the next two decades if appropriate policies and incentives were put in place by governments (Hatfield-Dodds, 2008).

Conclusion

A just transition to an ecological economy is possible and is urgently needed, but it requires decoupling social development from economic growth. For the Rudd Government, or any government, to move in this direction it would have to remove the dominance of corporations over the government policies and public investments.

It would only be possible with a strong, active social movement demanding democratic participation and accountability and ecological economic policies that fully internalize social and environmental costs of production and consumption linked to regulatory policies that phase out non-sustainable production and consumption, and investment in Green Jobs and industries of the future.

Perverse subsidies that prop up carbon-intensive and other non-sustainable industries need to be removed.

A just transition to ecologically sustainable and globally-just society will involve building new political alliances across class and other social movement struggles.

A transition to an ecological economy in Australia needs to be linked to transitions at the global level, and that requires support for global justice campaigns that halts exploitation of people and nature across the planet, stops over-consumption of natural resources, repays ecological debt owed to the Global South, and supports human rights and genuine human development for all people.

There needs to be strong targets and strategies for climate change mitigation such as reducing CO2 emissions by 40% by 2020 and by 90% by 2050 on 1990 levels, and there needs to be support for adaptation to the inevitable climate change impacts, particularly protecting the most vulnerable communities. Greenhouse development rights policies that engage countries of the Global North and South to reduce CO2 emissions in a way the equitably recognizes historic contributions and capacity to change need to be linked to the rapid deployment and transfer of currently-available clean energy technology.

The challenge for the Rudd Government is to respond to ‘people power’ rather than ‘corporate power’.

The challenge for progressive social movements is to vigourously push the values, visions, strategies, organizing needed to make a better and sustainable world possible – at local, national and global scales. The collapse in the legitimacy of neo-liberalism and in the capacity capitalist governments to deal with the linked crises of ecological, social and economic collapse that we all face creates an historic opportunity for progressive politics.

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geoffrey.r.evans@newcastle.edu.au