Social Ecological Economics: The Environmental Crisis and the Need for Degrowth by Clive L. Spash www.clivespash.org Department Sozioökonomie WU Wirtschaftsuniversität Wien UiUnivers ity o fMf Manc hester 25th February 2014 Outline 1) Where does Ecological Economics come from? • Brief History 2) How Does Ecological Economics View the Environmental Crisis? • Mainstream Economists Shutout Reality • The Realist Agenda in Ecological Economics • Fighting for a Radical Alternative Economics 3) The Need for a Different Economic System • Growth for What? • Growth for Whom? • Growth and the Competitive Spirit Part I Where does Ecological Economics come from? Growing Environmental Concern in the Industrially Developed World: 1960s to 1980s • DDT bioaccumulation • Radioactive fallout from nuclear testing • OPEC oil shock price rise • Long range transport of air pollution, acidic deposition •Suppp()gersonic Transport (SST) and climate change • Love canal, chemical waste 1978, 56% birth defects over 5 yrs • Stratospheric ozone depletion • Nuclear reactor accidents and radioactive waste contamination (3 Mile Island, USA; Sellafield, UK; Chernobyl, Russia) The Rise of Environmental Economics The Promise Bohm and Kneese (1971: ix-x) The Economics of the Environment, stated “a profession rethinking, extending, and revising its concepts, and finding new applications for them”. They drew a parallel with “the ferment in the profession when the Keynesian revolution was in progress” andlid claime dhitd history was ithin the ma king Topics Raised • Spaceship Earth (Boulding) • Thermodynamics (Georgescu-Roegen) • The steady state economy (Daly) • Existence values (Krutilla) • Ethics and treatment of future generations (d’Arge, Page) The Fall of Environmental Economics Conforming to Mainstream Formalism Environmental problems as fundamental failures market system (Kapp, 1950) simple externality addressed by property rights (Coase, 1960) Materials balance theory, laws of thermodynamics a general equilibrium framework (Kneese, Ayres and d'Arge, 1970) Pollution all pervasive (Hunt and ddArge'Arge, 1973) an optimal control framework (d'Arge and Kogiku, 1973) Multiple environmental values outside of economics (Krutilla, 1967) cost-bene fit ana lys is an d a we lfare theore tic framewor k (Kneese, 1984). Orthodox Constraints on Innovative Thought • preference utilitarianism •oppgtimal control modelling • discounting • a monistic value system • mathematics as a doctrine of rigour Ecological Economics Early Modern History • K William Kapp (1950) The Social Costs of Private Enterprise • Ciriacy-Wantrup (1952) Resource Conservation • Polanyi (1944) The Great Transformation • Galbraith (1958) The Affluent Society Environmentalism and Economics • Boulding (1966) The economics of the coming Spaceship Earth • Mishan (1969) Growth: The Price We Pay • Georgescu-Roegen (1971) The Entropy Law and the Economic Process • Meadows et al. (1972) The Limits to Growth • Victor (1972) Pollution: Economy and Environment • Schumacher (1973) Small is Beautiful: A Study of Economics as if People Mattered • Hirsch (1977) Social Limits to Growth • Dalyy( (1977) Steady-State Economics • Söderbaum, P., 1975. Tilväxttänkande eller ekologisk grundsyn. Ekonomisk Debatt 2, 113– 120. • Passet, R., 1979. L’e´conomique et le vivant. Payot, Paris. Ecological Economics ElEcology • Ehrlich, P., (1968) The Population Bomb. Sierra Club-Ballantine, New York. • Odum, H.T., (1971) Environment, power, and society. Wiley- Interscience, New York. • Pimentel, D ., et al ., 1973. Food production and the energy crisis. Science 182, 443– 444. • Holling (1973) Resilience and stability of ecological systems. Annual Review of Ecological Systems. • Jansson, A.M. (Ed.), (1984) Integration of economy and ecology. An Outlook for the Eighties. Proceedings from the Wallenberg Symposia. Askf Laboratory, Stockholm. Co-evolutionary development Sustainability Resilience theory Syyystems analysis Complexity Establishing Ecological Economics as a Reputational Organisation Martinez-Alier1987 Journal & ISEE Costanza (ed.) 1991. Ecological Economics. established 1989 Ecological economics: Energy, Environment and The Science and Society Management of Sustainability Social Ecological Economics Spas h, C. L., 1999. The deve lopmen t o f env ironmen ta l thin king in economics. Environmental Values 8, 413-435. Part II How Does Ecological Economics View the Environmental Crisis? The Green Economy Mainstream Economists Shutout Reality Economy as an Isolated System Macroeconomics describes an isolated system, where there are no exchanges of materials or energy with its surroundings ThiiifThis is in fac t a perpetltual mo tion mac hine whic h opera tes w ithou t any degradation or loss in terms of materials or energy Open System Reality Economic systems require physical inputs of materials, minerals , and natural resources and in reality the more an economy grows the more materials are consumed . Open systems exchange materials and energy with their surroundings. Total supply of materials to U.S. manufacturers during the 20th century Thomas D. Kelly (2002) Raw materials and technology fuel U.S. economic growth. Mining Engineering December pp.17-21 Inputs and Outputs: Physical, Biological and Chemical Processes As we know (but mainstream economists neglect from their models) physical inputs are required they create desired outcomes but also undesirable outputs! First Law of Thermodynamics Conservation of energy and mass Energy, like mass, can neither be created nor destroyed Materials mass after consumption equals the mass of resources before extraction/harvesting Economic growth via increased production must: (i) Increase inputs of material and energy into the economy (ii) Increase waste loads into the environment IlitiImplications 1. Interdependence of media: Land, air and water 2. Pollution is an all pppervasive problem We should be concerned for both the quantity and tftilttype of materials we create, use and ditditthi introduce into the environment Modelling Materials Flow Thomas D. Kelly (2002) Raw materials and technology fuel U.S. economic growth. Mining Engineering December pp.17-21 Trying to Close Some of the Loops and Loses Recycling, increased durability and technical efficiency are means of reducing or slowing material flows to the environment Raw materials supplied to USA manufacturers in the 20th Century (excluding stone, sand and gravel) Recycling Recycling Recyclin g, inc r eased dur abili ty an d techni cal effi ci en cy aaere m easoeans of reducing or slowing material flows to the environment BUT have minimal impact in our throwaway fashion conscious consumer society driven by growth. Thomas D. Kelly (2002) Raw materials and technology fuel U.S. economic growth. Mining Engineering December pp.17-21 Not Just a Quantity Issue: Technology & Innovation First and Second Laws of Thermodynamics Conservation of energy. Energy, like mass, can neither be created nor destroyed . Energy is constant between a system and its surroundings Economic growth via increased production and consumption must: (i) Increase inputs of material and energy into the economy (()ii) Increase waste loads into the environment Pollution is an all pervasive problem. EtEntropy is a measure o f the qualit a tive s ta te o f energy. Energy is conserve d within an isolated system, but moves towards minimum usefulness. (Earth is an open system but effectively a closed system only seriously exchanging energy. ) Order in economic/human systems implies disorder elsewhere in the terrestrial system. It also exploits sources of low entropy Three sources of low entropy (i) Terrestrial stocks of concentrated minerals (ii) Solar flow of radiant energy (iii) Gravitational force of moon, planets, sun Energy use (DEC) [GJ/ha] Primary energyuseperunitofland area intheUnited Kingdom, 1830-2000 100 200 300 400 500 0 1830 1845 1860 Krausmann, F., Schandl, H., R.P., Krausmann, Sieferle, Socio-ecological 2008. 1875 1890 1905 1920 1935 regime transitions in Austria and the United Kingdom. Ecolog Kingdom. United the and transitions inAustria regime 1950 1965 1980 1995 Agric. Biomass Wood Coal Petroleum gas Natural Import Hydro/Elec. ical Economics 65, 187-201. ical Economics Carbon dioxide emissions and GDP (per capita) http://nordpil.com/go/portfolio/mapsgraphics/carbon-dioxide-emissions-and-wealth/ The Environmental Crisis 80 percent emissions reductions on 1990 levels needed by 2050 to stabilise atmospheric concentrations and stand a chance of avoiding temperature rises above 2ºC Parry, M., J. Palutikof, C. Hanson and J. Lowe 2008. ‘Squaring up to reality.’ Nature Reports Climate Change 2(June): 68-70 is More than Climate Change Soil erosion Deforestation WtWater sa liilinisati on Insecticides and pesticides Particulates in the air Tropospheric ozone pollution Stratospheric ozone loss Acidic deposition Toxic chemical waste Heavy metals Asbestos Nuclear waste Biodiversity loss Acidification of the oceans Hormone discharges into the water supply and so on ... Economics and Physical Reality What economists regard as externalities are talked of as one-off minor aberrations in an otherwise perfectly functioning market price system. "In reality they are a normal, indeed inevitable, part of these processes. Their economic significance tends to increase as economic development proceeds, and the ability of the natural environment to receive and assimilate them is an important natural resource of rapidly increasing value." (Kneese et al., 1970) Externalities are NOT