Transcript Home Economics

Taking ecological and energy limits
seriously
•
•
•
Extended supply
chains
Weakening of
community bonds
Climate change
imposes limits on
consumption and
transport
 The
irresistible pressure for economic growth
and its connection to money creation
 An economy dependent on energy
 Unbalanced nature of resource ownership
and use
 What green business would look like
‘Growth for the sake of growth is the ideology of the
cancer cell’
Edward Abbey
http://vimeo.com/8947526

Anyone who believes
exponential growth can
go on forever in a finite
world is either a
madman or an economist
 Kenneth Boulding
 Most
money (around 97% is made by private
banks as debt)
 Money made in one period can make a claim
on goods and services in the future
 These goods and services use energy and
resources
 The money supply is hugely increasing
 This is the driving force behind economic
growth
2500
2000
GDP index
1500
Broad money (M4)
index
1000
500
2000
1997
1994
1991
1988
1985
1982
1979
1976
1973
1970
0
100,000
GDP (Billion $)
10,000
1,000
100
10
1
0
0
1
10
100
1000
10000
Energy Supply (Mtoe)
Source: Dan O’Neill, CASSE
13
 If
we were to add together the power of
all the fuel-fed machines that we rely on
to light and heat our homes, transport us,
and otherwise keep us in the style to
which we have become accustomed, and
then compare that total with the amount
of power that can be generated by the
human body, we would find that each
American has the equivalent of over 150
'energy slaves' working for us 24 hours a
day. In energy terms, each middle-class
American is living a lifestyle so lavish as
to make nearly any sultan or potentate in
history swoon with envy.
Heinberg, R. (2005), The Party’s Over: Oil, War and the Fate of Industrial Societies
(Gabriola Island, BC: New Society), pp. 30-1
 Entropy
law: second law of
themodynamics: while
quantity remains the same
(First Law), the quality of
matter/energy deteriorates
gradually over time.
 Inherent tendency towards
chaos or „less orderliness“
 ‘a measure of the amount
of energy no longer capable
of further conversions to
create useful work’
• Entropy as a
„biophysical limit to
growth“
• We use low-entropy
inputs and create
high-entropy wastes
• Only the use of a huge
amount of energy can
offset this process
 Can
you think of economic growth that would
not require more energy?
 Can you find some examples of how the
entropy law is reflected in economic activity?
 What is the difference between a recession
and a no-growth economy
 Is a steady-state economy an appealing
objective, when nature is all about
dynamism and change?
USA
Europe
Asia
Africa
World
Energy
8520
3546
892
580
1640
CO2
20.3
8–12
<1
<1
3.85
430
159
172
47
173
emissions
Daily water
An economy based on
renewable resources
carefully managed for
sustained yield and long-term
productivity of all its
resources can provide useful,
satisfying work and richly
rewarding life-styles for all
its participants. However, it
simply cannot provide
support for enormous
pyramided capital structures
and huge overheads, large
pay differentials, windfall
returns on investments, and
capital gains to investors.
 ‘Henry
Wallich, a former governor of the
Federal Reserve and professor of economics at
Yale, said: “Growth is a substitute for equality
of income. So long as there is growth there is
hope, and that makes large income
differentials tolerable.” But this relation holds
both ways round. It is not simply that growth is
a substitute for equality, it is that greater
equality makes growth much less necessary. It
is a precondition for a steady-state economy.’
(quoted in Wilkinson and Pickett, 2009: 221-2).
 Extraction
of value leads
to more pressure on
resources
 Work directed by profit
rather than need
 Money-work nexus leads
to debt-fuelled growth
By 1995 US-based firms
were spending about $1
billion year on
environmentally related
PR
 Accentuate the positive;
deny and conceal the
negative
 Donate money to
environmental groups
and co-op them
 Invent stakeholder
dialogues to take up
their time
 Production of
‘educational materials’
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In 2001 its revenues were
almost US$135bn. and it
had 90,000 employees in
140 countries.
Last year profits were
annual earnings of
£13.9bn, largest ever
and more than £1.5m an
hour.
Shell gives about
£200,000 to
environmental
organizations every year
and the Shell Foundation
distributes £7.5m to
development projects
around the world.
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
Brent Spar rig disposal
Appalling record in the
Niger delta, including
the murder of Ken SaroWiwa
Lying about its oil
reserves
Founder member of the
Global Climate Coalition
In January 2004 Shell
was forced to admit it
had over-estimated its
reserves by 3.9bn.
barrels, 20 per cent of
the total.

In Ogoniland, 95% of extracted natural gas is flared8
(compared with 0.6% in the United States). It is
estimated that the between the CO2 and methane
released by gas flaring, Nigerian oil fields are
responsible for more global warming effects than the
combined oil fields of the rest of the world
 Prosperity


without Growth:
Alternative hedonsim
Quality not quantity
 ‘The
impact of income inequalities on
sustainable development in London’:
report to the London Sustainable
Development Commission
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
Inequality drives consumerism
Higher income groups produce more CO2
A
bioregional economy would be embedded
within its bioregion and would acknowledge
ecological limits.
 Bioregions as natural social units determined
by ecology rather than economics
 Can be largely self-sufficient in terms of
basic resources such as water, food, products
and services.
 Enshrine the principle of trade subsidiarity
 http://www.bbc.co.uk/programmes/b007tjf8
 ‘The
critical
argument now within
environmental circles
is between those who
operate from a
human-centered
resource management
mentality and those
whose values reflect
and awareness of the
integrity of the whole
of nature.’ (Snyder,
1990: 194).
www.greeneconomist.org
gaianeconomics.blogspot.com
Green Economics: An
Introduction to Theory, Policy
and Practice (Earthscan, 2009)
Environment and Economy
(Routledge, 2011)
 How
do we shift to a new consumption ethic?
 What aspects of your personal lifestyle would
be most difficult to change?
 How much of the solution is structural and
how much is personal?
 Discuss with your group the greenest business
you know well—what makes it a green
business?