The Emerging Environment-Economy Tradeoff by Doug Cocks




“The inescapable central fact here is that (nearly) all economic growth requires growth in energy use and all energy use produces residues which pollute natural systems”. (Doug Cocks)

“Just as there are a lot more extinct species than living ones, there are a lot more dead civilisations than living ones!” (Doug Cocks)

 

Scenarios for the future

This talk by Doug Cocks reveals five future scenarios that Australia might face in the future regarding the direction of economic policy it will take and the environmental consequences which entails. He presents five possible scenarios:

1. Struggling to Cope.

Quoting Shakespeare’s ‘When troubles come, they are not as single spies but in battalions’, this scenario what happens when a complex society like Australia, one full of long-chain dependencies, is clobbered with five or six major crises in the space of a few years. Under multiple shocks like these, a complex society runs a very high risk of quickly reverting to a much simpler form of organisation. In extreme cases we call this a social collapse. The symptoms of collapse include breakdown in law and order, pervasive fear in everyday life, declining life expectancy, loss of culture, civil and political rights, health and education services and basics like running water and sewerage. In a sentence, quality of life goes through the floor. In conclusion, society collapses quickly because we’re king-hit by a number of sizeable crises squashed into a relatively short time period.

2. Muddling Down.

In this scenario, Doug describes “quality of life declines slowly under ‘do nothing’ governments which act only in response to extreme political pressure or it declines under gridlocked governments which, try as they might, find they can only take actions that do not offend major interest groups. Under this scenario, so much social energy is used up in arguing about who gets what that things just slowly stop working, they clog up; not just services and utilities and markets but framework institutions like parliament and the legal system. In a rapidly changing world like ours, a society that does little to adapt to changed circumstances stands to go into slow decline even if it is not exposed to major shocks. Under this scenario we possibly end up living in hovels and taking our goods to market in horse-drawn carts along disintegrating highways.” In this scenario “we decline slowly, withering on the vine because we are incapable of recognising and decisively countering cumulating threats to our way of life.”

3. Going for Growth.

He describes this scenario: “The basic belief behind this strategy is that we really have only one problem to solve if we want everyone to have high quality of life and, come 2050, be living in a society with good long-term survival prospects. That perceived problem is how to get the economy growing at a steady 3-4% year after year. The rationale behind this scenario is that if you achieve very high income per head—perhaps three times present levels—it will be possible to find the money to protect the environment and to eliminate poverty.”

4. Conservative Development.

The basic perception behind this strategy is that if we want a good life for everybody come 2050 we have three big problems to solve first, none of which can be reliably solved by free markets. These challenges are to get solid economic growth, to manage environmental quality and to achieve social justice. Our only chance of surviving economically in a globalising world is to adopt interventionist industry policies derived from ‘new growth’ thinking; things like research subsidies and advanced education, to boost our knowledge-intensive exports. The conservative development strategy accepts that social welfare programs and active job-creation programs, funded through green taxes, resource taxes and wealth taxes, are needed to protect people from the roller coaster ride of globalisation. And that the main way to protect the environment is strong regulation of entrepreneurial activity—preferably through environmental and social impact assessment, but also through large government programs to directly protect ecosystems from people, weeds and feral animals. This is a ‘tax and spend’ strategy which has faith in the capacity of government to contribute strongly to solving the problems of low economic growth, unacceptable levels of life opportunities and poor environmental quality.

5. Post-Materialism.

On the economic front, the challenge facing a post-materialist society would be to see if it could slow economic growth to a crawl without shutting down the economy or spinning it into recession. Putting a cap, an upper limit, on total energy use and on the use of virgin raw materials would be a fundamental medium-term objective under this strategy. The reasoning here is that energy throughput is strongly correlated with both economic growth and environmental impact. Another objective would be the introduction of a regional land use planning system with real teeth to control all aspects of land and resource use at a region-wide scale, not just on a case by case basis. For tackling the issue of social justice, the main policy would be to narrow the spread of incomes in the community by raising the lowest incomes and lowering the highest incomes.

 

Which scenario should we choose?

From these scenarios, he observed that “the inescapable central fact here is that (nearly) all economic growth requires growth in energy use and all energy use produces residues which pollute natural systems. The simple Malthusian view of pollution is that unless pollution per unit of output can be reduced at a faster rate than total output is increasing, the limited assimilative capacity of natural pollution sinks (airsheds, watersheds) must eventually be over-taxed and air and water quality further reduced. Unfortunately, under a market economy losses in environmental quality arise, largely, as externalities and are unlikely to be ameliorated by market forces alone. That is, markets would seem to have a limited capability for aggregating individual preferences for improved environmental quality into an effective demand.”

In principle, he said, “some possible economic growth is being exchanged for improved environmental quality” and “in a rough-and-ready sort of a way then the Conservative Development strategy and the Going for Growth strategies represent extreme points on a growth-environment tradeoff curve. In principle, we coud follow either strategy or something in between, depending on the relative value assigned to growth and environment .”

However, even with the best of interventionist intentions, he is “doubtful, for several reasons, about our capacity to significntly improve environmental quality in coming decades”:

One reason is the “catch-up” problem. That is, new environmental issues are emerging regularly (eg particulates as air pollutants) and we are responding slowly. And few environmental issues ever get off the agenda once they get on. Meanwhile, old issues continue to grow.

Another is that we just do not really know with any confidence what to do about many environmental problems—dryland salinity and various weeds are good examples.

A third reason is that the resources required to tackle major environmental problems with any hope of success are huge relative to the size of government budgets. He mentioned the size of the re-afforestation task as an example of how a wide range of government-backed environmental programs have been established over the last 20 years can give a misleading impression. Most are just very, very small relative to the size of the problems they address.

His conclusion is “I am forced to conclude that whereever we operate along the tradeoff curve joining the Economic Growth and Conservative Development strategies, environmental quality stands to decline. A new way of thinking about the problem of maintaining environmental quality is needed. Whether the germ of such a paradigm shift lies in the third of my rainbow-chasing strategies, Post-Materialism, I do not have time to explore today.”

(Click here to read the full paper)

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Published::
11.8.07 / 6am
Category:
Appropriate Science and Technology, Change in Change, Ecosocionomics, Global Governance, Life's Necessities, Means, Paths, Ends
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