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The Degrowth of Consumption As an Economic Strategy: Is Sustainable Development a Fading Adage?

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The Degrowth of Consumption As an Economic Strategy: Is Sustainable Development a Fading Adage? IUL School of Social Sciences Department of Political Economy The Degrowth of Consumption as an Economic Strategy: Is Sustainable Development a fading adage? Dissertation submitted as partial requirement for the conferral of Master in Development Studies by João Carlos Correia Palminhas Supervisor: Catarina Roseta Palma, Associate Professor, ISCTE –University Institute of Lisbon October 2015 IUL School of Social Sciences Department of Political Economy The Degrowth of Consumption as an Economic Strategy: Is Sustainable Development a fading adage? Dissertation submitted as partial requirement for the conferral of Master in Development Studies by João Carlos Correia Palminhas Supervisor: Catarina Roseta Palma, Associate Professor, ISCTE –University Institute of Lisbon October 2015 I THE DEGROWTH OF CONSUMPTION AS AN ECONOMIC STRATEGY This dissertation could not have been completed without the great support of my family and friends. I wish to offer them my most heartfelt thanks! Also to my university supervisor, she was helpful in helping me crank out this paper. Indeed, it was a long and laborious journey but done with honest work. I apologize in advance for any faults, surely due to my inexperience. “Nowadays people know the price of everything and the value of nothing”. Oscar Wilde II THE DEGROWTH OF CONSUMPTION AS AN ECONOMIC STRATEGY RESUMO O moderno conceito de ‘”desenvolvimento sustentável” emergiu com o relatório Bruntland em 1987, e baseou-se num reconhecimento crescente quanto à existência de graves problemas ambientais. Decisores em todo o mundo começaram a aceitar as interconexões entre o ambiente, a economia e o bem-estar social. Contudo, cerca de 30 anos depois, o mundo já está a ultrapassar a capacidade do planeta Terra e a sua resiliência. As políticas vigentes para um desenvolvimento sustentável parecem ter sido insuficientes para cessar este caminho insustentável. Alguns têm questionado certos mitos de desenvolvimento e alertado para os perigos do atual paradigma económico dominante, nomeadamente o fracasso, a iniquidade e insustentabilidade dos modelos de desenvolvimento económico contemporâneos. A promessa era de reconciliar o crescimento económico com o ambiente, mais isso não respondeu ao princípio económico fundamental que reside no facto de um crescimento perpétuo ser impossível devido à existência de limites biofísicos. Dado o seu peso, os padrões de consumo estão no centro do problema. Depois de analisar o atual paradigma económico e de providenciar percepções sobre o bem- estabelecido conceito de desenvolvimento sustentável, bem como das suas derivações, consumo e produção sustentáveis, a presente dissertação irá focar-se no decrescimento sustentável do consumo como estratégica económica. O movimento Degrowth está a emergir como uma alternativa, rejeitando o fetiche por crescimento económico e defendendo uma governação do desenvolvimento de acordo com os princípios da ‘sustentabilidade forte’. Dilema do Crescimento, Padrões de Consumo, Decrescimento, Economia Ecológica, Pós-desenvolvimento: Palavras-chave O44; Q56: Classificações do JEL III THE DEGROWTH OF CONSUMPTION AS AN ECONOMIC STRATEGY ABSTRACT The modern concept of ‘sustainable development’ emerged from the 1987 Bruntland Report, and was based on a growing recognition of serious environmental problems. Decision-makers worldwide began to accept the interconnections between the environment, the economy, and social well-being. However, about 30 years later the world is already overshooting the earth’s capacity and resilience. Mainstream policies of sustainable development seem to have done little to stop the unsustainable path. Some have questioned a few development myths and have highlighted the dangers of the current global economic paradigm, namely the failure, inequity, and unsustainability of contemporary economic development models. The promise was to reconcile economic growth with the environment, but this did not answer the core economic principle of an impossible everlasting growth due to biophysical limits. Given their weight, consumption patterns are in the centre of the problem. After analysing the current economic paradigm and providing insights regarding the well-established sustainable development concept as well as its offshoot, sustainable consumption and production, this dissertation focuses on the sustainable degrowth of consumption as an economic strategy. The degrowth movement emerges as an alternative, rejecting the growth fetish and advocating a strong sustainable consumption governance. Growth dilemma, Consumption patterns, Degrowth, Ecological Economics, Post-development: Key words O44; Q56: JEL Classifications IV THE DEGROWTH OF CONSUMPTION AS AN ECONOMIC STRATEGY LIST OF CONTENTS INTRODUCTION ............................................................................................................................ 1 CHAPTER I. FOUNDATIONS OF CURRENT ECONOMIC MODELS ....................................................... 5 SECTION I.1. NEOCLASSIC MODEL AND THE ECONOMIC PROCESS 5 I.1.1. Dissecting the Model – a historical perspective 5 I.1.2. Main Elements of the NNS 6 I.1.3. Limitations and Key Criticisms 7 SECTION I.2. ECONOMIC GROWTH 9 I.2.1. Introduction 9 I.2.2. Modelling the Economy 10 I.2.3. Forecasting and Measuring the Economy 14 I.2.4. Economic Policy 16 I.2.5. The Growth Dilemma 18 CHAPTER II. DELEVERAGING CONSUMPTION ............................................................................... 21 SECTION II.1. DEVELOPMENT AND UNSUSTAINABLE PATHS 21 II.1.1. Sustainable Development: an Holistic and Systemic View 21 II.1.2. The Role of Consumption in the Growth Paradigm 22 II.1.3. Unsustainable Paths and Limits to Growth 27 SECTION II.2. SUSTAINABLE CONSUMPTION AND PRODUCTION 30 II.2.1. Concepts of Sustainability 30 II.2.2. Sustainability Measures, Policy and Decoupling 32 II.2.3. Scale, Composition and Technique Effects 40 II.2.4. Strong Sustainable Consumption Governance 44 CHAPTER III. SUSTAINABLE DEGROWTH ...................................................................................... 49 SECTION III.1. AN EMPIRICAL APPROACH TO DEGROWTH 49 III.1.1. The Origins of the Movement 49 III.1.2. The Degrowth Approach 50 III.1.3. Associating sSC Governance and Degrowth 55 SECTION III.2. THE ECONOMICS OF DEGROWTH 56 III.2.1. Historical Alternative Paradigms 56 III.2.2. Sustainable Degrowth - an emergent paradigm 62 III.2.3. Post-Development Criticism 67 CONCLUSIONS ............................................................................................................................ 73 SOURCES .................................................................................................................................... 77 REFERENCES ............................................................................................................................... 79 ANNEXES ................................................................................................................................... 87 ANNEX A - FROM THE KEYNESIAN REVOLUTION TO THE NEW NEOCLASSICAL SYNTHESIS 87 ANNEX B – MEASURES OF WELL-BEING, ECONOMIC WELFARE, AND SUSTAINABILITY: A BRIEF COMPARISON 88 ANNEX C – CHANGES IN THE COMPOSITION OF GLOBAL MATERIAL EXTRACTION 89 ANNEX D – GLOBAL ENERGY-RELATED CO2 EMISSIONS BY SECTOR AND REGION 90 ANNEX E - ECONOMY–ENVIRONMENT INTERDEPENDENCE SCHEME 91 ANNEX F - TOOLS, METHODS, AND INDICES FOR SUSTAINABLE DEVELOPMENT DECISION-MAKING 92 ANNEX G - SCP DOMAINS, PROPOSED INICATORS, AND RELATED TARGETS UNDER THE SDGS 96 ANNEX H - GLOBAL INTERRELATION BETWEEN RESOURCE USE AND INCOME 97 V THE DEGROWTH OF CONSUMPTION AS AN ECONOMIC STRATEGY LIST OF TABLES Table A.1 – Beyond GDP - Measures of well-Being ............................................................................. 88 Table A.2 – Beyond GDP - Measures of economic welfare .................................................................. 88 Table A.3 – Beyond GDP - Measures of sustainability ......................................................................... 88 Table A.4 - Changes in the composition of global material extraction .................................................. 89 Table A.5 - Tools, Methods, and indices for sustainable development decision-making. .................... 95 Table A.6 - SCP domains, proposed indicators, and related targets under the SDGs ......................... 96 LIST OF FIGURES Figure II.1 – Key elements of sustainability ........................................................................................... 21 Figure II.3 - Ecological Economics - economy as a subset of the larger ecological environment. ....... 27 Figure II.4 - The pressure-state-response (PSR) framework ................................................................ 33 Figure II.5 - The DPSIR framework ....................................................................................................... 34 Figure II.6 - The Cycle of Sustainable Consumption and Production (SCP) ........................................ 36 Figure II.7 - Timeline of Events of Sustainable Consumption and Production ...................................... 36 Figure II.8 - SDGs – Areas of critical importance to humanity and planet ............................................ 37 Figure II.9 - Kondratiev Cycles - relationship between innovation and economic growth ..................... 40 Figure III.10 - Degrowth related Themes and Concepts ....................................................................... 53 Figure III.11 - Domains of ecological
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