Green Growth or No Growth?

Many readers have taken the position that we need to put a brake on growth in order to cut greenhouse gas emissions and reduce consumption of other resources.

In a Real News Network interview, Robert Pollin goes through the math of carbon output and shows why a no growth approach is inadequate. A separate issue that often goes by the wayside is that conservation efforts, contrary to conventional wisdom, can increase profits. For instance, BP in 1997 decided to lower its carbon emissions below the 1990 level by 2010. It achieved the goal in 3 years rather than 13 at a cost of $20 million. Oh, and it happened to save $650 million. With that sort of calculus, you’d think that every big corporation would be on the emissions-reduction bandwagon. One of the major impediments is the reflex to reject government “interference” even when it is to the business’ benefit.

Now having said that, humans are wiping out so many species as to increase ecological risk. We need to start eating much further down the food chain and getting much more serious about containing, and better yet reducing, population sizes (note that the argument that a slowly growing or declining population is based on the notion that the dependency ratio will rise. Labor force participation is a function of employment conditions and social norms, and the concern is also based on the social welfare costs of the young and old. We instead have a big issue of underutilized resources, in terms of un and under employment, and a tremendous amount of revenues going to the military-industrial complex, and its young cousin, the fear-industrial complex. We can afford more butter if we cut down on the guns).

This is the fifth segment in an eight-part series. You can view the latest segment, number seven and find links to the earlier ones, here.

PAUL JAY, SENIOR EDITOR, TRNN: Welcome back to Reality Asserts Itself on The Real News Network. I’m Paul Jay.

We’re continuing our series of interviews about the green economy, how to get to one. And one of the ideas connected with the green economy is green growth. Well, not everybody agrees you can have growth and be green. And here’s one of those people. Professor Tim Jackson, the author of Prosperity without Growth, quoted in The Guardian newspaper, said,

“The ‘G’ word [growth] is a signifier for not changing the system. It is synonymous with western consumerism which we are locked into. Green growth is the emperor’s new clothes, it is an empty concept. There is nothing there apart from aspiration and some of the modelling is vaguely supportive of getting a growth based economy more efficient in resource terms but there is no single piece of modelling anywhere really that shows you can have sustained growth, even in the richest economies, and get the poorest up to the level of the west and meet you [sic] CO2 targets.”

Now joining us is someone who has done the modeling and disagrees with all this. And we’re continuing our series with Bob Pollin.

Thanks for joining us.

PROF. ROBERT POLLIN, PERI CODIRECTOR: Thank you, Paul.

JAY: So, one more time, Bob is the distinguished professor of economics at the Political Economy Research Institute at the University of Massachusetts Amherst and recently did some studies. Global Green Growth he did with the United Nations. And he has in fact what he thinks has modeled exactly that, green growth that actually meets CO2 emission targets.

So thanks for joining us again.

POLLIN: Thank you.

JAY: So what do you make of that quote? You can’t have growth, meet those targets, be green, and deal with poorer countries getting up to a Western standard of living. Like, you can’t accomplish all of that growth.

POLLIN: I think it’s wrong. I think that, as we’ve discussed in our previous sessions on this, the key is transforming the energy system so it’s based on renewable energy and high efficiency. If you do that, poor countries–India, for example, Indonesia–my models show that they can grow as long as you’re substituting, you’re not using fossil fuels, you’re using green energy as opposed fossil fuel energy.

Now, if we want to talk about things that are vague and poorly thought out, I think the notion of an economy contracting in order to achieve emission reduction really takes the prize. And let me just mention a few reasons why.

As we’ve discussed in previous sessions, the globe, the world today, emissions are at 40 billion tons of CO2, and we need to get to 20 billion tons in 20 years. Now, let’s say we say, okay, the solution is to stop growing and actually even to shrink. So let’s say we shrink by 5 percent, which would be double the global GDP contraction that we experienced in the Great Recession, a 5 percent contraction. It would be a massive depression. Now, maybe it’s worth it ’cause there’s no other way to fight climate change. But what would that achieve? It would get us from 40 billion tons of emissions to 38 billion tons of emissions–no solution at all. If we are not going to invest in renewables and energy efficiency to a massive extent, there’s no way we’re going to get to 20.

JAY: But wouldn’t most of the people making this argument before investment in renewables and alternative energy–I don’t think I’ve ever heard this argument from someone who’s against that–they just think you have to do that and not try to have any GDP growth. And I assume they–I have to say, Bob has agreed to debate Tim Jackson, who I quoted off the top, or any of the other kind of leading proponents of this slow to no growth. And I am not the best proponent of this argument, but I would assume their argument is, yes, invest in renewables and alternative energy, but in terms of you don’t need more growth to have more equalized well-being of people, what you need is more equal distribution of existing wealth, that so much wealth is concentrated in one end, so it’s more an issue of massive taxation, changing who owns stuff, redistributing income, both within countries and globally, and green, but you don’t have to keep growing the economies.

POLLIN: Okay. Now, if we say that climate change really is a dire situation and that we have to make massive reductions in emissions within 20 years, within ten years, and within 50 to 60 years, we’re going to have to eliminate burning oil, coal, and natural gas altogether. That is a huge political project.

Now, the proponents of no growth are saying, and on top of that, we’re going to stop GDP from growing. Now, they’d never say how you actually get the GDP to stop growing. And if we’re going to redistribute income, we’re going to stop GDP from growing and we’re going to take significant shares of GDP from rich people in rich countries and redistribute that to poor people in poor countries. All of this is happening while we’re also shutting down the fossil fuel industry, all of this within the next ten to 20 years. It’s completely unrealistic.

I mean, the project that I have, green growth, global green growth, the studies that I’ve done, are premised on the idea that we want job opportunities to expand, not contract. We want progressive environmentalists to be pro-employment opportunities. And my models show that if you invest in the green economy, even while the fossil fuel economy is contracting, there are going to be net gains in jobs, millions. And that is a positive. And that’s something I think we can honestly sell to people in rich countries and poor countries, to working-class people, that supporting a green economy overall will promote job opportunities. There is no way you can tell me a realistic story through which a contraction of GDP in any country is going to lead to an expansion of job opportunities.

JAY: Well, there’s a scenario. Whether it’s politically possible is a separate question. But if wages went up significantly and there was that–essentially, some of that income that’s at the top one percentile, although in truth it’s more at the top 20 percentile, gets distributed throughout the economy, there’ll be a lot more demand, and a lot more demand would mean more jobs.

POLLIN: And more growth.

JAY: More growth because you’re going to create more products for these people.

POLLIN: Yeah. If we’re going to be–those things are all positive. But on top of that, if we’re going to say, oh, by the way, we stop growth, now–and how do we even stop growth?

JAY: Yeah, ’cause more demand’s–unless you’re–you can’t have more demand with the same amount of products [crosstalk]

POLLIN: Yeah. So what we’re talking about: talking about things that are vaguely constructive. We don’t really even know what it means to stop growth. What I’m talking about: I am stopping, I’m saying something very specific. The fossil fuel industry has to contract by 40 percent. Coal has to contract by 60 percent. And the green economy–solar, wind, geothermal, hydro, small-scale hydro, clean bioenergy–they’re going to have to grow. That is something very specific. That’s going to grow big-time. Fossil fuels are going to contract big time.

The rest of GDP, we can’t handle all those things at the same time. And if we’re going to succeed in controlling emissions, we have to limit ourselves to a set of goals that are actually achievable and well defined. They’re talking about the equivalent of imposing something like a Great Recession in order to benefit the environment.

JAY: Well, they’re talking about–I mean, again, I don’t know the argument very well. Bob is going to debate one of the leading proponents of this when we can arrange it. But I assume their argument is–and from what I’ve seen–is there will be some kind of minimum wage at much higher than it is. So, through taxation you create a floor within which people can’t go below, which doesn’t have–in other words, you wouldn’t have the same consequences of a Great Recession.

POLLIN: Why wouldn’t you?

JAY: Well, in theory you’d have a social safety net and, well, you would redistribute the income that exists. But I agree with you. Once you do that, there’s more demand for products.

POLLIN: And therefore the economy grows,–

JAY: Right.

POLLIN: –the nonfossil fuel part of the economy grows.

I mean, take the case of Indonesia. Indonesia expects to grow, wants to grow 5, 6 percent a year, like China. That’s where they want to go. Am I to tell them they can’t do it? I mean, if we’re talking about fairness issues, in the U.S., where we’re emitting ten times more per person than Indonesia, we’re going to tell them they can’t grow. Well, the proponents of no growth, they say, well, Indonesia can grow; we just can’t grow. Now, how do you stop that? I mean, the global economy is integrated. So now we’re going to also break down the degree of integration of the global economy and were going to cut emissions by 50, 60, 70 percent in a matter of ten years. It’s utterly impossible.

JAY: And these countries depend on the northern countries as markets.

POLLIN: Of course they do.

JAY: So if you’re [getting (?)] big slowdowns there, you’re going to–

POLLIN: Yeah, imports and exports.

JAY: Right.

Okay. In the next segment of our interview, we’re going to talk about the politics of this, particularly in the United States. Where are we at with trying to get to dealing with the challenge of carbon emissions and green economy? So please join us on Reality Asserts Itself on The Real News Network.

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35 comments

  1. c1ue

    If you refer to the fossil fuel era (either post 1880 for coal or post 1940s for oil), the numbers of species wiped out by greenhouses gases is…zero.
    What species are being wiped out – although the actual trend is massive decline in numbers rather than extinction – are caused primarily because of land use changes such as deforestation. “Going Green” isn’t going to affect this dynamic – and in fact may accelerate it because of biofuel subsidies as well as outright kills such as birds/bats by wind turbines.
    As for eating down the chain – absolutely agree that some nations (cough America) eat too much meat. However, it isn’t eating meat itself which is necessarily destructive; historically it is not prime farmland that is used to grow meat, it is rangeland. The issue is the amount – a sin which most of the world is not guilty of.
    Lastly energy: this is the substance which lies underneath most “no growth” calculations. Why is it acceptable to doom most of the 3rd world to not even having electricity for household labor savings and light for extending potential productive hours? Why is it acceptable to have millions of smoke inhalation related deaths due to wood burning, again in the 3rd world, rather than cooking with natural gas or electricity?
    I have no issue with alternative energy per se – what I take issue with is the desire to replace fossil fuels now via subsidies of immature or even completely unsuitable technology (cough corn ethanol). Many of the eco-NGOs and the alternative energy companies display the exact dynamic criticized in the MIC.

    1. Yves Smith Post author

      I suggest you read what I wrote with greater care. I did not and never have said that species loss was due to greenhouse gases. The paragraph in question clearly signals a break in the thought pattern by staring out with, “Now having said that.”

      Straw manning the host gets you troll points.

    2. rusti

      Why is it acceptable to doom most of the 3rd world to not even having electricity for household labor savings and light for extending potential productive hours? Why is it acceptable to have millions of smoke inhalation related deaths due to wood burning, again in the 3rd world, rather than cooking with natural gas or electricity?

      Ah, the “Carbon Humanitarianism” argument from a few days ago makes an early appearance! I’m sure you and oil executives lose a lot of sleep about impoverished peoples not having adequate access to natural gas. Gotta make sure everyone has the right cooking tools in place for the window of time before those large swaths of the earth become uninhabitable.

      I have no issue with alternative energy per se – what I take issue with is the desire to replace fossil fuels now via subsidies of immature or even completely unsuitable technology (cough corn ethanol).

      Best to go with the tried, tested and perfectly safe solution of burning fossil fuels. Much greater moral hazard in giving government handouts for “alternative energy” than any of the relatively trivial geopolitical considerations associated with oil exploration, extraction and consumption.

  2. rusti

    This discussion reminds me of last month’s post about economists and the widespread refusal to dip their toes in anything resembling the real world. You don’t need to do any modeling. There are plenty of obvious examples that could appease economists and their “green growth” deities, it’s just a matter of human labor and resource reallocation.

    Right now there are millions of people working dead-end, unfulfilling McJobs and millions more sitting at home who can’t even get that. You could put every single person in the U.S. to work revamping their communities for electrified transit, researching and building advanced battery chemistries, biofuel jet propellants, optimizing structures and cities for energy efficiency, and a million other things that are critically important if we have any hope of weaning ourselves off fossil fuels. Put the unemployed and foolishly employed to work and eliminate the jobs running financial casinos, building idiotic super-yachts, or weapons for fighting imperial wars. Absolutely astonishing progress could have been made on any of these projects with the money that was pissed away on the Joint Strike Figher program alone.

    But this requires a reallocation of resources and political power, which serves neither today’s political class nor those that they serve. And the issue that Banger highlighted yesterday about artificially cheap fossil fuels helps facilitate this ridiculous dynamic of economists as modern-day shamans.

  3. Sam Kanu

    I think their debate fell flat for me because it was bouncing around on the wrong premises.

    What is “growth”? Growth in economic activity is not in an of itself bad. But, given where we are today it is 100% undesirable if it involves continued indulging in externalities, over-consumption of non-renewable resources and destruction of our natural habitat as a species i.e. the ecosystem of this planet. This just has to stop. Its really that simple.

    As for jobs and incomes of the people, the truth is that human development and inequality are actually a problem that needs to be tacked separately from issues of growth. We have more than enough food on this planet to feed us all but we waste it. We have more thane enough water, more than enough natural resources to support decent lives. The caveat to all this is…..IF we use it more sensibly and with general HUMAN development as the overriding objective, as opposed to greed and accumulation of financial value by a small handful of individuals.

    One example, “job creation” is posed as an issue? Why? At this point in time we have for example executive compensation reaching something like 300x the compensation of a basic worker. Cutting out nonsense like that sure sounds like a lot of “jobs” and “income” and improved overall well being created right there. You cut the compensation of ONE CEO in half and you’ve created 150 jobs. Anyone seriously want to tell me that companies would not being able to find great managers for half the the ludicrous amounts they pay. And this is a conservative cut, as we probably should be looking at max 20-to-1 ratio.

  4. Paul P

    It will take energy to transition to a solar economy. So, energy is directed to conservation, energy efficiency, and green alternatives. Does this mean General Motors and all the other car companies can keep bringing out a new line of cars each year? That Ikea can continue to manufacture cheap furniture and cut down another forest to build more cheap furniture when it breaks? That Exxon, et. al. will continue to do business until alternatives put them out of business.?

    It seems to me that there is not enough time to become carbon free under ‘free’ market capitalism. Capitalism has institutional deficit, ie, no mechanisms to solve the problem–or it would have done so by now. Our definitions of property will, of necessity, be challenged. And, when property is challenged, death squads are brought out to answer the challenge.

    So, I hope Robert Pollin’s models work and Yves is right about green growth. Cop 21 will be an indicator of whether the homo sapien is up to solving the epochal task facing its species. My bet is that Cop 21 will be a failure.

    Some people have said that intelligence is a negative characteristic for species survival. It appears we are out to prove them right. Nature’s experiment with intelligence, as Ronald Wright has described it, is not working out.

    1. rusti

      It will take energy to transition to a solar economy.

      I realize this is tangential to your point, but it’s certainly not a foregone conclusion that solar should be the single driving force of a new energy generation system despite all the infighting for subsidies and venture capital within the renewable energy industry.

      Solar has had huge efficiency improvements in the past few years, but the general lesson to be imparted is that diversification of generation sources along with interconnectedness across geological landscapes are the best way to mitigate the intermittent nature of renewable generation. This can be improved further by “demand response” and storage, and a non fossil-fuel based grid on the order of magnitude of what we have now would require a combination of all of these things and still likely be finicky compared to the relative ease of burning up thousands of years of accumulated organic matter each day..

    2. susan the other

      If capitalism had a mechanism for correcting its imbalances it would have employed it by now. Yes. But we don’t have to use capitalism at all. We do need to be extremely efficient. And organized.

    3. NoFreeWill

      That’s why both the Green Growth and anti-growth arguments are a joke. Neither seem to understand that they cannot be achieved under capitalism, but if we’re going to have a revolution (we’re not) you had best aim for the more radical of the two: anti-growth.

  5. Tyler

    Yves, thank you so much for this post.

    Dr. Guy McPherson believes humanity’s fate is sealed. He predicts human extinction by 2035.

    Episode one of his YouTube show can be viewed here.

  6. Jef

    I don’t think holding up BP as an example is a good idea. I have not been able to get very deep into their claims as they only release mostly spin but any corporation that large can show a half billion or so of savings with simple book keeping magic.

    Conservation as Global Corporations apply it over the last 20 years (when collapse first started) is simply the “race to the bottom”, cutting jobs, outsourcing, offshoring, engaging in financial activities as a growing percentage of operations.

    Conservation as with austerity is something that only happens from the bottom up.

    The World can not and will not transition to a World where there is less of everything and everything cost more, at least not in a good way.

    1. Yves Smith Post author

      There are lots of analogies to the BP case, of companies fighting pro-environment measures and finding when forced to implement them, that they saved money. One is McDonalds in the UK, which after a protracted court battle, had to give up styrofoam clamshells. McD insisted that nothing was as good as styrofoam. Lo and behold, the paper-based substitute they adopted was as good performance-wise and cheaper.

      Intuitively, conserving energy use, which will reduce carbon output, should also save money. But corporate managers hate being told what to do and being made to change behavior.

  7. gaw

    The knee-jerk reality challenged dipshitism of the greentarded is on full display in this discussion. Like the good Professor, who I would bet has never been near the private sector, safe in his ivory tower.

    How exactly are we going to get all nations to agree on this? Are our noble Saudi friends going to stop pumping oil for the sake of the environment? Iraq? Libya? Russia? Iran? Qatar? Kuwait? Crickets….. I know, why don’t we just stop producing oil and gas here, we can just buy it from our Saudi friends, where air pollution standards are minimal, and run a massive trade deficit to do it, so they can give the money to terrorists.

    Nope, we here in the West have to don the hair shirt, while overseas they do diddly squat. I have been in the “solar industry”, and it’s not really an industry, it’s companies who only exist because of massive Government (taxpayer) subsidies. Take away the subsidies, and the “industry” evaporates overnight. See Germany. I had to leave solar and get a real job to pay the bills, sadly.

    The idea that India will go all-renewable is laughable. They don’t have clean water to drink, but they’ll put solar panels everywhere, to connect to their non-existent grid. OK then. Hey, I know, you can just dismiss anyone who disagrees with you as a straw man/troll. Whatever. Let me state I am NOT in the awl/gas business, nor do I own any shares in any companies who are, nor do I really care if they exist or not. I do like having an economy where people can have a job.

    If you are detecting my cynical contempt for all pie-in-the-sky greentards, you are very observant. I was a young dewy eyed dreamer once too. Reality is harsh and the world does not operate according to what the greens may want. Where I live, most of our power comes from nuclear, yet another industry that must be shut down now, according to environmentalists. See Germany, again, where shutting down nuclear has driven electricity rates way up, causing industries to want to move out. But who needs a job, you can pay your bills with good green intentions, I’m sure. And just dismiss perfectly valid points as trolling, and carry on.

    The relentless lefttardedness of this site is just the opposite side of the coin to the righttarded ones. Both are wrong. The real world goes it’s own way regardless.

    1. NoFreeWill

      The great difficulty of preventing global ecological catastrophe (and possible human extinction) doesn’t mean that it isn’t worth striving for. Much of the environmental left remains deluded about the potential of alternative energy to replace oil to maintain our glorious industrial civilization (which cannot be saved) and the potential for green capitalism (obviously impossible) as well as the required methods to get from here to there (violent revolution). Accomplishing all of that seems very unlikely, but the alternative is to sit back and watch until drought kills every last one of us.

    2. Chauncey Gardiner

      gaw,
      Your choice of language in the first sentence of your comment is unfortunate. It caused me to initially dismiss your comment out of hand, although job loss may be a basis for your anger.

      I gather that you are arguing that solar energy is not economically competitive with energy from fossil fuels and nuclear plants? If that is your argument, I invite you to consider indirect long-term social and environmental costs in your calculations.

      I understand that you also believe that fossil fuels will continue to be produced and used for energy regardless of climate concerns by sovereign nations for both economic and political reasons, and and that is simply bottom line realpolitik, I have no basis to disagree with your view, although based on what occurred at Kyoto and subsequently, I do think many foreign political leaders might be more receptive to policies designed to reduce greenhouse gas emissions than some suppose.

      I will add that I would appreciate your relating your personal experience about specifically why energy produced using German-manufactured solar equipment is not competitive with other sources. Thank you, gaw.

    3. Yves Smith Post author

      You seem to be missing the key point of his remarks, that simply going to no-growth is not going to even remotely cut it in term of what we need to do to reduce greenhouse gas emissions. That is a very important take-away, regardless of what you think about his proposals.

    4. jrs

      The real world (what a dumb phrase, there is but one world) goes it’s own way regardless of whether there is human life or any life on it period as well.

  8. WorldisMorphing

    Yves, you once asked in a post the following question: “Why are progressives lame ?”

    Many months later, I came up with an answer…which I’ve written in the comment section of a ghost posting of this exact same Real News video [Also posted by TRNN- Jan 11th].

    https://www.youtube.com/watch?v=AIE9klWvA4g

    My comment is still right up there if you still seek a possible answer (or a clue leading to it).
    You probably won’t like it, but believe or not, I wrote it in good faith…

  9. Chauncey Gardiner

    Why did Paul Jay switch the conversation from a discussion of how to address and politically market development of renewable and alternative energy sources in order to reduce greenhouse gas emissions and climate change to a conversation about wealth inequality? I consider these to be largely separate issues. One of the key selling features of renewable energy, according to Pollin, is vastly increased job opportunities, and I would have liked to have heard more about this and Pollin’s modeling.

    Did Paul Jay do so because he himself believes that no economic growth is at least a partial solution to the greenhouse gas emissions problem, and that wealth redistribution is in turn a key feature to selling a no growth message?

    If so, Paul indirectly acknowledged that increasing total demand through wealth redistribution from wage increases or other policy measures that address income inequality and social equity issues may actually contribute to increased greenhouse gas emissions and other environmental pressures by increasing demand for consumer products and durables like single family housing and automobiles.

    Just sayin’. If Tim Jackson’s (and Paul Jay’s?) view is correct, maybe there is an argument for keeping all that “wealth” locked up in the markets and financial system after all.

    Thank you for this post, and especially for your “guns-fear & butter” observations in the intro. Much to consider here and the hour is late. Think I’ll watch the other segments in this series to see if there are answers to my questions.

  10. Paul Niemi

    In hindsight, the sum of the tons of liquidity poured into oil and gas production in the last decade, and the extra cost consumers paid for the speculation in oil and gas fostered by easy money in the form of higher prices, if it had all been spent for home insulation and other green technologies, we would be far ahead, with good economic growth and sound finances all around.

  11. WorldisMorphing

    There is no such thing as “Green Growth”. Pollin is absolutely unqualified in this area. This is not an economics matter, it’s a physics and engineering issue.
    This is why progressives are lame, they can’t handle the truth any more than conservatives or centrists can…
    You asked the question many months ago Yves — there’s my answer.

    Economists are scientifically illiterate.
    Energy is the quantification of the change of state of a system. By definition, being “clean\green” is leaving things as they were. Energy does the exact opposite, as it is supposed to. Current “clean\green” energy are such because they are insignificant. The day they’ll stop being insignificant, they’ll stop being “clean\green”. It’s physics. It’s the law — not a bullshit polical-econ one — but a real inescapable one….

    The cleanest greenest growth in GDP you’ll ever have is of the bullshit asset price inflation kind, but I would’nt count on that sort of gimmick to maintain the peace…

  12. Paul Lafargue

    Real News has done a major disservice to its viewers and I hope Robert Polin does “debate” a proponent of post-Growth and not pretend that he has something to offer as a program by attacking a straw man of his making.
    Tim Jackson’s position (he’s British, btw), regarding growth, is simply that a Green New Deal will not, as many social democrats in Europe have tried to maintain, address unemployment, CO2 emissions and raise living standards world-wide. His target is the illusions of growth NOT alternative energy. Polin in relation to Jackson’s is besides the point, or in other words, simply talking past it. For Jackson’s perspective on a meaningful prosperity see this TED lecture. Jackson still he presumes that what sustains hope is rationality. On the contrary, I think it is subverting power.

  13. Steven J. Willett

    The green growth-no growth contrast in a false dichotomy. Prof. George Mobus has already shown in a series of computer models that the world does not have sufficient time to build out an alternative energy system before we pass 400+ ppm greenhouse gases and a temperature rise by century end of 4C-6C. Some of the more negative climatologist scientists believe we may actually start to hit 4C-6C in the 2030s with BAU. There isn’t the slightest evidence that fossil fuels will be left in the earth. We’re hellbent to extract them all in the shortest possible time.

    What we need is a Steady State Economy.

    In the following short article, Herman E. Daly (University of Maryland, School of Public Policy) summarizes his book “Steady-State Economics” in a lucid, witty and highly suggestive article (watch the wrap):

    http://ebookbrowse.com/herman-daly-thinkpiece-pdf-d300370466

    Since it’s only ten pages long, you might find it worth reading. “The remaining natural world,” he notes, “no longer is able to provide the sources and sinks for the metabolic throughput necessary to sustain the existing oversized economy–much less a growing one.” The neoclassical emphasis on continuing aggregate quantitative growth in production and consumption has already exhausted more than one planet earth of resources. If we continue the growth model, we will destroy the biosphere and the biosphere will reciprocate by pruning us. The steady-state economic model must replace the aggregate quantitative GDP model and the transition to it must begin pretty quickly if we are to manage the four other big global crises (population, warming, alternative energy and food).

    Here is his definition of an SSE:

    “Following [John Stuart] Mill we might define a SSE as an economy with constant
    population and constant stock of capital, maintained by a low rate of
    throughput that is within the regenerative and assimilative capacities of
    the ecosystem. This means low birth equal to low death rates, and low
    production equal to low depreciation rates. Low throughput means high
    life expectancy for people and high durability for goods. Alternatively, and
    more operationally, we might define the SSE in terms of a constant flow
    of throughput at a sustainable (low) level, with population and capital
    stock free to adjust to whatever size can be maintained by the constant
    throughput beginning with depletion and ending with pollution.”

    An SSE would require quite strong central state control, a point that is implicit in his proposal but not explicitly addressed. To stop aggregate quantitative growth we will need among others

    1. to tax resources at the depletion end so the cost rises through the production cycle and forces efficiencies,

    2. to reduce poverty by limiting the range of permissible inequality through a minimum income *and* a maximum income along with redistribution,

    3. to severely restrict free trade and halt the global migration of capital (which was the key goal of Brettton Woods by the way),

    4. to maintain a steady-state population that requires births plus in-migrants to equal deaths plus out-migrants (“It is hard to say which is more politically incorrect, birth limits or immigration limits? Many prefer denial of arithmetic to facing either one.”),

    5. to increase usable lifetimes on all durable goods by emphasizing production as a cost of maintenance,

    6. to free intellectual knowledge from the straight jacket of patents,

    7. to slow automation and off-shoring of jobs while encouraging wider participation in the ownership of businesses,

    8. to shift taxes away from value added income earned through labor and capital and onto “that to which value is added,” the throughput flow, preferably at the depletion end,

    9. to require 100% banking reserves, that is, an end to fractional reserve banking and high leverages,

    10. and to replace GDP with the maximum amount that a community can consume in a year and still be able to produce and consume the same amount next year with full subtraction of capital, man-made or natural, from income in calculating the maximum.

    And these are only some of the changes that would be necessary to create an SSE. Naturally, life in an SSE would be radically different if radically better for the ecosystem, but it would also in my view be radically better for the spirit. An economy of infinite consumption stimulating infinite growth on a finite planet is not only physically impossible, it’s soul corroding. Either we end it or it will end us in a matter of decades. Remember: nature bats last.

    The problem, as usual, is politics. Any feasible SSE will require highly centralized state control and regulation. Free marketers and libertarians would view such centralized governmental management as something like communism, and they’d be right in a way. All attempts by the new field of environmental economics to craft a steady-state economy will have to face the political issue. The whole mechanism of neoliberal economics based on growth must be reformed within a time frame of about 40 years. Beyond 2050 the cumulative crises of population growth, global warming, fossil fuel depletion, water depletion and food production will put governments in pure selfprotection mode, and it will be every country for itself. Continuous war is the likelihood.

    I am highly skeptical that a large nation state can be turned into an SSE short of a complete economic collapse. A rational transition may only be possible in relatively small, highly-integrated and culturally homogenous states like Sweden, Finland or Japan (where I live). It certainly is impossible in the current US, though it might well work on a regional basis if say the Pacific Northwest (including Idaho, the old Oregon Territory) could separate from the country.

    It is clearly more difficult to establish a SSE than a no growth GDP.

    I apologize for the double post. I’m a newbie here and this is my first.

    1. MyLessThanPrimeBeef

      I think, in order to arrive at a SSE, without drastic depopulation, in a workable time frame, we will have to undergo negative GDP growth, for a while.

      We talking about something other than just green growth or no-growth.

    2. Yves Smith Post author

      Um, he’s wrong on his point 9. We aren’t in a fractional reserve banking system. Anyone can create credit. A bar tab is credit, for instance.

      1. Vatch

        Correct me if I’m wrong, but doesn’t the money supply increase whenever a bank makes a loan? There’s no increase in the money supply when someone runs a tab at the bar.

    3. Vatch

      I especially like these items:

      2. to reduce poverty by limiting the range of permissible inequality through a minimum income *and* a maximum income along with redistribution,

      4. to maintain a steady-state population that requires births plus in-migrants to equal deaths plus out-migrants (“It is hard to say which is more politically incorrect, birth limits or immigration limits? Many prefer denial of arithmetic to facing either one.”),

      However, our current population is much too high, so we really need some population reduction before the steady state kicks in. As a precaution against troll-like behavior, the usual disclaimer applies: this must not be accomplished by increasing the death rate, but rather by decreasing the birth rate.

      1. Sam Kanu

        “…4. to maintain a steady-state population that requires births plus in-migrants to equal deaths plus out-migrants (“It is hard to say which is more politically incorrect, birth limits or immigration limits? Many prefer denial of arithmetic to facing either one.”)…”

        This sounds like a hate agenda aiming to dress up for respectability.

        We are talking about global problems here. Kindly explain what on earth migration limitation has to do with this. Migration to or from where? Mars? Jupiter?

        At the end of the day we have a single planet and a single set of resources to draw on, regardless of what random maps were drawn on a piece of paper in medieval ages, that we now interpret as “nations”. We are humans. Global warming, pollution, etc are all threats to the single ecosystem (read: planet) that we in habit. Worrying about where exactly we are is pointless, except in relation to putting people closer to where it is most efficient to use basic resources such as water and energy. Ethnicity or passports should be irrelevant there.

        People have any human solutions to offer? Great. But all this sidetracking about migration is pointless and has no place here.

        1. Vatch

          Of course migration is irrelevant for the planet as a whole. But it is important for regions and localities. There’s nothing hateful about recognizing the ecological carrying capacity of a particular location. If the people in one region have achieved stability with a total fertility rate of 2.1 or less, why should they be subject to continued population increases by more in-migration than they can sustain?

  14. Globus Pallidus XI

    Green technology = magic pixie dust.

    Sure in the lab isolated processes can be made more efficient. But everything at once? In the real world? In just a few decades, starting with the technical and capital resources that we have right now? No. It’s a fairy tale.

    The issue is population growth. Remember, too-rapid population growth is not caused by poverty. It is poverty that is caused by too-rapid population growth. What causes too-rapid population growth is, if you dig far enough, government policies aimed at maximizing population growth in order to drive wages down and profits up.

    We have all seen Syria fall apart into chaos. A few articles talked about the lack of food starting the collapse of Syrian society. But the real issue was that the Ba’athist government instituted a population explosion, giving medal to women with large families, and making the sale and purchase of contraceptives illegal. Sure with better tech Syria could probably support more than 22 million people – but that would take a lot of time and investment, and will not happen fast enough when you go from 12 million people in 1990 to 22 million in 2010…

    And even now, in Turkey and Iran and Russian, new population explosions are being deliberately ignited. They will add to the demographic momentum of all those past pro-overpopulation cheap-labor policies…

    But we can’t talk about that, because the rich love their low labor costs (‘labor market reforms’, ‘affordable labor costs’, etc.) so anyone talking about this is slimed as a racist. I suggest that we need to move beyond this subservience to corporate-approved dogma. With a modest population we can have plenty for all without needing magic technology right now. With a massive and constantly growing population it’s just not going to work, and we can flap our gums about green this and eco that but it won’t be enough in time, and people will everywhere be crushed into subsistence (they can’t do worse, now can they?).

    We can start by talking truthfully about this, and stop the self-censorship.

    1. charles 2

      Your point is perfectly valid as far as the economic motivation of the rich for over-population, but it does not go far enough. It is not just about having low labor cost. It is also about justifying extensive growth through the addition of more households. The rich don’t want to have to work to develop new economic models to cater for the evolving needs of a stable population, it is so much simpler to build more houses, more plants and more roads to serve the increasing population.
      Another important point to note is that most overpopulation is not linked to economic incentives, but to cultural ones, the most important of course being religion. What is in common in Turkey, Iran, Russia ( and you could have added Pakistan, Saudi Arabia, Nigeria, Egypt or Indonesia, but also the Philippines) ? Religions who worship fertility as “a gift from god” and dismiss the value of individual lives. Islam is the main culprit here but Christianity has its pockets of crazy population growth too.
      When aversion to growth will take hold in the political realm, it will correlate with a backlash against fertility obsessed monotheist religions, a fight where “Charlie” was way in advance of his time by the way.

  15. Sam Kanu

    “..What is in common in Turkey, Iran, Russia ( and you could have added Pakistan, Saudi Arabia, Nigeria, Egypt or Indonesia, but also the Philippines) ? Religions who worship fertility as “a gift from god” and dismiss the value of individual lives…..”
    – This attempt to smear islam sneakily is a reach. Russia for example is in basically an orthodox christian or even in practice an atheistic nation. Nigeria is arguably not even half muslim if you go into their local politics of census rigging for political purposes.

    More importantly, what those countries really have in common is not religion – it is a highly corrupt ruling elite that rules nations with significant populations or streams of income. You have basically mentioned every large country that is on Transparency International’s list of corruption medal winners, so to speak.

    It speaks volumes that people can be so obsessed by religion as to miss on the beyond obvious and far more pertinent commonality of bad governance.

    “…Islam is the main culprit here but Christianity has its pockets of crazy population growth too…”
    – Sorry but this again betrays a lack of global insight. The vast majority of the most devout christians in the world are actually in Africa and South America. They are not an aberration or a “pocket” – they are the main face of christianity today. They are the ones having children, the live in the nations that generally have low resource consumption per capita, low human quality of life index ratings. All of this is why “green growth” is a myth – we are clearly looking at a major change in which the west is going to have to start cutting back in order for the rest of the planet to live decently. Either that or we end up with more of the instability we are already experiencing.

    A lot has to change for us and really the mindset and global perspective is the first thing.

  16. gaw

    Chauncey Gardiner – I could not reply above for some reason, probably my script blockers.

    I know my tone is insulting, but I am fed up to here with greentards telling me how I have to do what THEY say because, well, it’s “Good”, or something. It’s just a religion that brooks no dissent, like political correctness. I have been reading this site for many years, but I rarely comment because I find the leftist slant on everything depressing, as it just seems to be the opposite side to the right-tarded Faux News style media. I guess I am in the angry common sense middle, with few companions. I’m not upset about solar, I went to school for it, worked in it, and eventually came to realize that as an “industry”, it is a sham. I made far more money not working in solar. In the future, maybe, solar will be competitive on it’s own merits without massive subsidies, but it is not there yet, or even close. And when it is I have no doubt cheap solar panels from China will be the leading sellers, as they are now.

    I read this site because it is against the Banksters, and I support that. But when you load it down with nonsensical leftist dreaming about how “progressives” wish the world to be on every issue, you dilute the message and lose focus IMHO. And relying on academics and Professors to tell you what is or is not is idiotic – like Krugman, as a prime example. An “economist” who could not buy a reality clue if they were free. Most tenured ivory tower dwellers I have met are so far detached from reality on the ground that they can’t really credibly put forward any workable solutions, but somebody has to fly to all those conferences and make all those important sounding speeches. Try running an actual business and meeting payroll on Friday, where results matter, and bullshit just does not fly, then get back to me.

    Yves – first of all, thanks for the website, regardless of my critical tone, it is well worth reading. I noted his point, but I doubt it matters in the context of international reality. If we here in the West went to 0 emissions by tomorrow, will those nations I listed do the same? Even if they could afford to (solar/wind/tidal etc are not cheap enough yet per kwh to pay for themselves, yet, without subsidies that would come from somebody), would they make the hard political decision to throw millions out of work now in return for less carbon years down the road? Could they do so, without causing economic collapse and likely revolutions and insurgencies and thus ensure a quick end to their political leadership classes? Would China and India stop burning coal by the shipload, and what could they replace that with? Greentards say no nuclear, no fossil fuels, no coal…that equates to me to no economy either, given the current costly state of “aternative” sources. I fear the result will be just more jobs go to China, while economies in the West tank under the weight of stifling regulation. I really don’t see the Saudis or any other major producers stopping pumping oil in support of the green cause, do you?

    1. different clue

      I can think of one political economic context in which unilateral de-carbonizing action within the US could make a world-affecting difference. And that context would be . . . . the total abrogation of every Free Trade Treaty or Agreement and the withdrawal from every Free Trade organization and association ( like WTO), followed by the restoration of Belligerent Protectionism.

      We would then be free to erect a Carbon Tariff Wall to go along with other necessary Tariff Walls to save our economy and society. Under Belligerent Protectionism, we would be free to ban the import of anything from abroad whose production involved the release of more carbon that the production of that thing had involved within the United States.

      But as long as we have Free Trade, your prediction is correct and accurate. Any counter-carbon action taken here will merely send yet more thingmaking/ thingdoing to the carbon skydumping havens of the world.
      (The lastest laugh of all will be on India and China in the longest run. They don’t have the surplus water and land to throw half of it away on Global Heating and Global Desertification . . . . to be brought on by their own carbon skydumping behavior as much as by anyone elses’.)

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