Transcript Sustainability development and ecological economics

Ecological Footprint:
first step towards a new paradigm
for sustainable prosperity
ETUI Conference
Presentation by Willy De Backer
Brussels, 29 June 2009
Contents
1.
2.
3.
4.
5.
Background
The unsustainability trends
Beyond GDP: ecological footprint
From new indicators to new economy
Conclusions
My background
• 25 years of experience in EU policies
• Politics – journalism – energy and environment policies
expert
• A short-term pessimist, a mid-term realist and a longterm optimist
•European Director of Global Footprint Network
The Hydra of Unsustainable Growth
Food
crisis
Energy
Descent
Climate
Crisis
Population
Explosion
Water
Scarcity
Biodiversity
Economic
Shocks
Governance
Failure
4
Population explosion
5
Climate crisis
• The REAL inconvenient truths:
– Despite Kyoto and the resource-intensive climate
diplomacy circus, CO2 emissions have accelerated from 1.3
per cent per year in the 1990s to 3.3% per year from 2000
to 2006.
– The conservative estimates of the IPCC have been proven
seriously wrong by new scientific work. Tipping points are
approaching much faster.
– The EU’s 2 degrees target of warming is very unlikely to be
achieved (IEA 2008).
6
Energy descent
• The age of cheap energy abundance is over
– Geophysical peaks – date unimportant
– Nationalisation of energy producers (Aramco, Petrobras,
Gazprom)
– EROEI: it takes energy to harvest energy sources which are
increasingly difficult to find (+ lower quality)
• Peak oil, peak gas and maybe even peak coal are around the
corner
• To prevent a real energy crunch in 2012, we need a fast
energy transformation but investments are postponed
• Energy transformation takes normally many decades (Smil) –
“rate-of-conversion” problem
7
Food crisis
• Between 2005 and summer 2008, international prices of
wheat and maize tripled, price of rice grew fivefold (FAO).
• In same timespan the number of undernourished people
increased from 848 to 923 million, largely because of the
food-price crisis. Now over one billion
• Reason: rise of prices for raw materials and policies for
biofuels.
• Although recession has brought down prices, international
agencies predict new price hikes when economic recovery
• Peak oil will lead to price and production pressure on
fertilisers and pesticides
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Water scarcity
• No global water scarcity as such but increasing number of
regions face water shortages.
• By 2025, 1 800 million people will be living in countries or
regions with absolute water scarcity, and two-thirds of the
world population could be under stress conditions (UN data)
• Increasing conflicts over fresh water (Middle East)
• Climate impacts – tipping points (Himalaya – Ganga basin)
9
Biodiversity
• Biologists warn that we are living in the age of the Seventh
Extinction (6th killed the dinosaurs). Between 17000 to 100000
species are becoming extinct every year.
• Biodiversity is essential for our global eco-systems (if the bees
would disappear, our food systems would collapse)
• EU-commissioned study: “The economics of ecosystems and
biodiversity” (2009) – Deutsche Bank economist Pavan
Sukhdev.
– Economic loss of deforestation and degradation is between 2 and 5
trillion dollar EACH year
– Comparison: current bank crisis 1.5-3 trillion dollar.
10
EconoShocks
• Is the current economic depression the beginning of a series
of continuous economic shocks, each more serious than the
other? (between deflation and inflation)
• Current economic depression is too much seen as result of
greed or bad bankers, whereas real underlying reason might
be more systemic and related to spiraling commodity prices.
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Causes of the financial collapse in 2008
• Subprime crisis, credit default swaps, greed?
• No, systemic crisis caused in first place by rising commodity prices
• There is a direct and underestimated link between current economic
crisis and sustainability crisis
12
Governance failure
• We are tackling global 21st century problems with 20th century
governance structures
• UN system is weak and needs serious reform
• Return of nationalistic tendencies and protectionism
• These and rising energy prices will stall globalisation
• Geo-political power shifts (China, re-emergence of Russia)
• Are our current democratic structures able to cope with the
effects of the challenges? (long decision procedures, rise of
populist parties, new extremism, new social conflicts etc.).
Tom Friedman: “If only we could be China for one day”
• Tendencies to go back to old failed recipes (Keynesianism,
hard regulation) instead of thinking “out-of-the-box”.
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To summarise: Ecological limits to growth
RESOURCE
RESOURCE
SCARCITY
SCARCITY
Various commodities:
commodities: peaks
peaks
Various
of extraction
extraction reached
reached or
or
of
about to
to be
be reached
reached
about
LIMITED
LIMITED
BIOCAPACITY
BIOCAPACITY
==supply
supplyof
ofbiologically
biologically
productive
productivearea
area&&related
related
ecosystem
ecosystemservices
services
Demand
Demandincreases
increases&&per
per
capita
capitaavailability
availabilitydeclines
declines
Future decrease
decrease of
of extraction
extraction
Future
constricted availability
availability
&& constricted
Overshoot
Overshoot&&environmental
environmental
degradation
degradation
Peak oil
oil is
is approaching,
approaching,
Peak
about half
half the
the world’s
world’s reserves
reserves
about
have already
already been
been used
used
have
Scarce
Scarcebiocapacity
biocapacitythe
thelimit
limit
to
tofuture
futureeconomic
economic
development
development
Source: SERI Austria 2009
What do these trends mean for business and unions?
•
•
•
•
•
•
Harder and more expensive access to raw materials
More pressure for hard environmental legislation
Competitive pressures
More unemployment and pressure on wages
Pressure on the middle classes
Changing consumer market: quality versus quantity; durability
of products instead of throwaway culture;
• Globalisation will stall - the world will get smaller – more
regional and local focus – manufacturing will come back to
Europe – agricultural sector of the economy will grow again.
15
What is needed? A Copernican Revolution
• The Industrial Age view
• The Sustainability Age view
Environment
Economy
Society
Economy
Society
Environment
Source: Peter Senge: The Necessary Revolution, 2008, p.102:
“businesses need to wake up to the simple fact that ‘the economy is the
wholly owned subsidiary of nature, not the other way around’”
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New indicators for this Copernican Revolution
• GDP and most alternatives are expressed in monetary values;
• When the planet’s limits, its budget, becomes the defining
factor for future prosperity, it is necessary to focus on
measuring how big is this budget and how much we have
used or are using up every year;
• The ecological footprint does exactly that;
• Ecological Footprint is currently the only accountancy tool
which measures the new ecological limits to growth in an
easily understandable way.
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What is Ecological Footprint?
• An accounting system which measures the ecoservices,
energy and materials the planet provides (the “offer”) and
compares it with humanity’s consumption (the “demand”) of
this natural capital for the production and use of our food,
fibres, timber, transport, etc. and for the handling of the
waste produced in the process.
• It is measured in terms of surface of the planet needed in
order to provide these resources and expressed in “global
hectares”;
• End result: “If everyone on the planet lived like an American,
we would need five planets” – we are living above our means.
Footprint Analysis world from 1960 to 2005
• In 2005, our demand of resources was 30% higher than the offer (the
Planet’s biocapacity (2.7 global hectares per person versus 2.1 gh
available).
Overshoot
Nature cannot be bailed out
• In 2050, we will need 2.5 planets.
Strengths and weaknesses of the ecological footprint
• Easy to understand metaphor to explain that our economy has
an ecological basis;
• The only real indicator of pressure on the Planet’s “carrying
capacity” – useful alarm bell
• Ecological footprint is only 13 years old and is still under
development – its development is being led by a small nonprofit based in the US (Global Footprint Network) and its
partners – standards need to be developed and maintained
• EF leaves out a lot of dimensions of ecological sustainability
(water consumption, soil erosion, toxicity, other greenhouse
gases than CO2, does not take into account depletion of fossil
fuels and minerals)
“Beyond GDP”: the right debate?
• Danger 1: debate about new indicators will overshadow the
more fundamental debate about a new resource-constrained
economy;
• Danger 2: discuss until our statistical experts have found the
right new indicator
• “if you jump out of an airplane you need a crude parachute
more than an accurate altimeter. And if you also take an
altimeter with you, at least don’t become so bemused in
tracking your descent that you forget to pull the ripcord on
your parachute. We should be thinking in terms of a
parachute, however crude” (Herman Daly)
The real debate: “Prosperity without growth”
• What we need is a debate on creating “prosperity without
growth”
• UK’s Sustainable Development Commission (2009) is a good
start.
What to do as trade unions?
• Unions and social-democratic parties have been too much lured by the
free-market ideology of the consumer society – turning citizens into
consumers and giving them more “stuff” is not progressive;
• Raising the boat for everyone (the neo-liberal religion) is an illusion which
will turn into a nightmare when the boats will start going down;
• Respecting ecological limits to growth, redefining and redistribution of
wealth inside and between our societies should be the name of the game
• Political and economic objectives should move from labour productivity to
resource productivity;
• The left needs a new visionary project based on the one-planet economy
idea. It will have to become radical again.
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Conclusions
• The world of business and work is facing new huge challenges. We have
started the transition from the Industrial Age of Abundancy to the new
Sustainability Age of Limits, where we need to bring our economies back
to its one-planet limits and therefore redefine growth, competitiveness
and governance.
• Businesses that can adapt their business models, products and services to
the one-planet economy challenges will have a strong competitive
advantage and will be the winners of the 21st century.
• Unions should help drive businesses and citizens into that direction. It will
need a lot of innovation and courage to leave behind the old dogmas and
recipees.
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Thanks for your attention
Questions?
[email protected]