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FET Discussion Papers-Roundtable Pre-Release 040609 FUTURE ECONOMIC THOUGHT DISCUSSION PAPERS Contributing Authors: Dr Richard Denniss Richard Sanders FUTURE ECONOMIC THOUGHT F O R E W O R D ACF is seeking to engage an influential audience at this critical time to discuss the idea of transforming the economy to one that focuses on ecological sustainability, human and environmental wellbeing and resilience. Our aim is to advance thinking on: • the steps that are needed to map out pathways for transforming our economy to one that is environmentally sustainable and maximises well being; • the most promising ideas for transforming how government and private decision- making is undertaken, with attention both to formal public policy processes and informal or political cultural influences. ACF has commissioned discussion papers by Dr Richard Denniss, Executive Director the Australia Institute, and Richard Sanders, ecological economist and environmental scientist to facilitate this discussion. They outline leading thinking from around the globe on economic transformation, provide a theoretical underpinning of the unsustainability of current economic policy and identify key public policy areas where change is crucial for transformation. The discussion papers are intended to inform both ACF’s internal work program and through a later public release, inform a broader public discourse on these crucial issues. Please find enclosed the two discussion papers. These are not yet for public release, and may still be further edited. The objective of the roundtable on the 10 th June in Sydney is to discuss the key promising ideas for economic transformation, informed by these discussion papers as thought starters, and set in place a pathway for enacting this well needed transformation. ACF intends to create an ongoing dialogue and actions to progress this transformation of our economy. DISCUSSION PAPER Commissioned by the Australian Conservation Foundation | May 2009 | Page i FUTURE ECONOMIC THOUGHT TABLE OF CONTENTS Dr Richard Denniss INTRODUCTION..................................................................................................................................................... 1 EXPONENTIAL GROWTH – THE LOGIC OF THE CANCER CELL....................................................................... 1 THE (SUB)PRIMACY OF GROWTH....................................................................................................................... 6 IS ANYBODY OPPOSED TO SUSTAINABILITY? .................................................................................................. 6 HOW TO MEASURE UNSUSTAINABILITY ............................................................................................................ 8 HOW TO USE MEASURES OF UNSUSTAINABILITY TO WIN THE PUBLIC AND POLITICAL DEBATE ...........14 WHERE TO FROM HERE?....................................................................................................................................18 REFERENCES.......................................................................................................................................................19 Richard Sanders INTRODUCTION....................................................................................................................................................20 PART 1: UNDERSTANDING THE PROBLEM .......................................................................................................22 WORLDVIEWS - HOW SOCIETIES PERCEIVE AND THEREFORE ACT IN THE WORLD.................................22 THE COMPETING WORLDVIEWS........................................................................................................................23 A SYSTEMS APPROACH TO UNDERSTANDING SUSTAINABILITY ..................................................................24 HUMANS AS A STRAND IN THE WEB OF LIFE AND EVOLUTIONARY JOURNEY ...........................................26 SUSTAINABLE DEVELOPMENT - THE CONVENTIONAL POLICY RESPONSE ................................................28 SUSTAINABILITY DEBATE AS A CLASH OF WORLDVIEWS..............................................................................29 WEAK VS STRONG SUSTAINABILITY .................................................................................................................30 DO THE OLD STORIES STILL MAKE SENSE? ....................................................................................................31 PART 2: POLICIES FOR A TRANSITION TO SUSTAINABILITY ..........................................................................38 FINANCIAL REDESIGN .........................................................................................................................................38 SURVIVAL ECONOMICS.......................................................................................................................................40 ECOLOGICAL ECONOMIC APPROACH TO RESOURCE ALLOCATION............................................................40 PROGRESS INDICATORS ....................................................................................................................................48 THE CENTRAL ROLE OF GOVERNANCE ...........................................................................................................49 LEGAL REFORMS .................................................................................................................................................49 REDESIGNING THE WAY WE LIVE......................................................................................................................50 PART 3: SOCIALLY ENABLING THE NEEDED TECHNICAL SOLUTION............................................................50 PATHWAY TO A CIVILISATION WORTHY OF OUR HUMANITY.........................................................................50 REFERENCES.......................................................................................................................................................53 DISCUSSION PAPER Commissioned by the Australian Conservation Foundation | May 2009 | Page ii FUTURE ECONOMIC THOUGHT The Unsustainable Argument: Redefining the pursuit of environmental and social goals In Australia Dr Richard Denniss DISCUSSION PAPER 1: RICHARD DENNISS INTRODUCTION The goal of sustainability has been a dangerous and destructive distraction for both citizens and policy makers concerned with the development of a society that protects our natural environment and promotes the wellbeing of our citizens. This paper argues that the goal of sustainability needs to be abandoned in all but its broadest metaphorical sense. That is, while the concept of leaving the same environmental and social assets for the next generation that we inherited ourselves is an essential element of a just society that, it is time that the rhetorical and policy framework that has built up around the term sustainability was cast aside. The pursuit of a ‘sustainability agenda’ was well intentioned and had the potential to unite environmentalists, governments and businesses in the pursuit of significantly improved environmental outcomes, but it has achieved little and is increasingly acting to conceal rather than reveal the fundamental policy and behavioural problems that are damaging both the environment and society. Rather than fight to reclaim the meaning of the term sustainable from those who wish to use it to describe their uranium mines, their coal fired power stations and their aluminium smelters this paper argues that the pursuit of sustainability should instead be replaced with a fight against unsustainability. In a perfect world, with perfect foresight and perfect information the pursuit of sustainability and the fight against unsustainability would be opposite sides of the same coin. However, in a rapidly changing world, when we have imperfect knowledge about our ecosystems, and no idea what problems and opportunities we will face in 20 years time, the two goals become fundamentally different. Rather than seeking to define with precision exactly the kind of ‘sustainable’ transport, housing, manufacturing, consumption and agriculture systems we want in 50 years time, significant improvements in both environmental sustainability and personal wellbeing could instead be achieved via a focus on preventing the growth of unsustainable practices. The avoidance of unsustainable activities, rather than the pursuit of sustainable activities, can be pursued at the macro level as well as at the sectoral level. The same argument can be applied at a much broader level. Rather than trying to define what national wellbeing or sustainability is, or what rate of GDP growth is consistent with sustainability, significant gains can instead be achieved by simply accepting that a possible consequence of preventing some developments from proceeding is a slight reduction in the rate of GDP growth. Put another way, reducing GDP growth should not be an objective in itself, but the argument that the destruction of an ecosystem could help create jobs should be seen from the same point of view that abolishing occupational safety standards might help create jobs – i.e., irrelevant. EXPONENTIAL GROWTH – THE LOGIC OF THE CANCER CELL The pursuit of economic growth has, over the past 60 years, become a useful proxy for the pursuit of the national interest. Whereas political debate once raged about the kind of society that was desired, the distribution of income between workers and capitalists and the DISCUSSION PAPER Commissioned by the Australian Conservation
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