Prof. Tim Jackson’s Report “Prosperity without Growth” – a review and critique

1. Prof. Tim Jackson’s Report “Prosperity without Growth” – a review and critique By Trevor Berrill Sustainable Energy Systems Consultant and Environmental Educator

2. Population • Exploded hyperbolically 1800s • Currently 7 Billion • 5 Bill. Added in last 70 yrs • Still adding 70mill./yr • Projected 9 -10 Bill. by 2060 • Most Growth in Very Poor Countries • Ratio Poor to Rich people Now 4:1 In few decades > 7:1 (Source: Nielsen, p.238) ? ? ?

3. No. of Earths to sustain 7 Bill. At Australian Affluence Level

4. Prof. Tim Jackson’s Findings “Prosperity without Growth” Report

5. 1. Building Sustainable Macro-Econ. • Developing Macro-econ. Capability – tools, variables, interactions, investment required etc Eg. Canadian Low Grow Model, IPCC, Stern Report • Investing in green jobs and business, public assets and infrastructures Eg. Deutsche Bank Green Investment • Increasing financial and fiscal prudence • Improving macro-econ. accounting Eg. GDP vs ISEW

6. 2. Protecting Social Capabilities • Sharing work & improving work/life balance Eg. various EU country work policies • Tackling systemic inequality Eg. restrict CEO bonuses • Measuring prosperity Eg. Dutch capabilities index • Strengthening human & social capital Eg. Permaculture or Transition Towns movements • Reversing culture of consumerism Eg. Scandinavian advertising policies

7. 3. Respecting Ecological Limits • Imposing clearly defined resource/emission caps Eg. Stockholm Resilience Centre “Planetary Boundaries Study” • Fiscal reform for sustainability Eg. Green taxes that shift tax burden to pollution, not income • Promoting sustainable technology transfer to poorer nations & ecosystem protection Eg. Clean Development Mechanism

8. Issue’s and Criticisms

9. Characteristics of Modern Economies • Efficient ??? - Maybe if measured by monetary flows • Not if measured by energy and material flows • Still treat ecosystem as external to economy • Don’t account for many forms of social capital • Source: Foran, Millenium Report

10. Cheap Energy = In-Efficiency!! • Material Flows (North America) - 1% ends up in products & is still in use 6 months after sale. • Energy Efficiency - only a few percent for most efficient countries. (Source: Hawken et al, 1999:81)

11. Least Efficient Transport Mode 99.4% Fossil Fuel WASTED 0.6% Shifts Driver 12% Moves Car

12. Equitable? • Ratio of Wealth - Haves VS Have-nots increasing • 1 bill. on < $1 per day, 2 bill. on < $2/day • 20% Global Pop. Earn 2% of income • OECD inequality increased in past 20yrs • Ratio of CEO income to Workers income > 262:1 • Wealth - Trickly up / not down • (Source: Jackson; Nielsen; Mishel)

13. CEO to Aver. Worker Pay

14. Rich Poor

15. Perfect Markets? • Advertising manipulation of young children • Subsidies to Big Polluters - $10 Bill./yr to “fossil fool’s” industry in Australia • “Ideal”/ “Equitable” Information Flows

16. Bulletin, 28 Sep 2003 Real Cost of Middle East Oil to USA > $450 per barrel Iraq war in 1990 Source: RMI Newsletter(1990), Vol. VI, No. III

17. Sustainability Principles • Polluter Pays > Ignored • Precautionary Principle > Ignored • Coal Industry – Mine Effluent / CSG Mining • 60% of ecosystems degraded • GHG emissions increase 40% since 1990 • Scarcity of crucial resources looming – oil, food, water

18. How the World Eats!

19. Food Security? • FAO – enough food for 12 bill. • Proportion of undernourished in developing world declining since 1960s • Source: FAO (2010) State of Food Insecurity in the World Issues • Wastage 30 to 40% • Protectionism VS Globalisation • Food resource intensity – foodmiles – 8000km for Cup of Yoghurt from Germany • Commodity speculation • Biofuels competition • Extreme weather – global warming

20. FAO Food Insecurity Report 2010

21. If 9 bill. at Affluence Level of OECD Need a World Economy Size increase by: • 2050 of • 2100 of • This is a Totally Absurd, Unsustainable Goal • 15 times larger • 40 times larger

22. Need a New Economic /Political Paradigm Focus on Community ownership / control – Energy / Water / Food / Shelter Eg. Danish Windfarm Coops • Steady State Econ. • Ecological limits • Re-defining Value • Cooperation • Minimising Waste • Using renewable inputs • Redistributing Wealth

23. Jackson's Argument Age of “Systemic” Irresponsibility • Driven by “Economic Rationalism” • Growth Imperative rules • GFC - rogue individuals and slack regulators??? Caused by “Systemic Problem” • Growth imperative > shaped Architecture of Modern Econs. • Expansion of credit > fuel for growth • Inherently ecologically and economically unstable

24. Need to Redefine Prosperity from: Old Paradigm - Growth Imperative • Material Focus - more is better • Unlimited Freedoms • Ever increasing GDP rules • Any type of innovation / novelty is good • Only way to create jobs New Paradigm - Prosperity means “human’s capacity to flourish” • Vital social and psychological aspects • Participate meaningfully in life of society • Range of “bounded capabilities” • Live within Ecological Limits

25. Energy Consumption of the Rich & Famous Mariah Carey’s pet dog, “Jack”, used to fly first class but has grown too big. He now travels by private jet or in a chauffeur-driven Mercedes. Source: Sunday Mail 20 April 2008

26. In Defence of Growth • Material opulence necessary to flourish • Provides basic entitlements – health, education etc. • Maintains economic and social stability • Material possessions > allow participation in society > status, identity, social affiliations. • Economic resilience > protect against external shocks > prevent collapse • Expand fast enough to offset labour productivity

27. Conventional Response - Decoupling • Reduce material and energy throughout intensity • Lots of room to move • Evidence – energy /unit of econ. O/P declined 30% in last 30 yrs • Carbon intensity has decreased > 1kgCO2/$ to 0.77kgCO2/$ Relative Decoupling • Intensity decreases but resource impacts rise but more slowly – Eg. when GDP grows faster than resource intensity decreases - total carbon emissions increased 40% since 1990 Absolute Decoupling • Resource impacts decline in total

28. Material Intensity - OECD

29. Critique of Decoupling • Evidence for overall reductions hard to find • Scale required is huge Eg. to Stabilise Climate at OECD level of aspiration for all, need 130 times lower C-intensity by 2050 770g CO2/$> 6gCO2/$ of Econ. O/P Rule of Thumb • In a growing econ. with increasing average income, absolute decoupling will occur when the rate of relative decoupling is greater than the rates of increase in population and income combined.

30. Iron Cage of Consumerism • Profit motive – newer, better, cheaper • Survival in market – adapt and innovate • Demand for novelty essential > STATUS Perfect Complements • Restless consumer • Restless innovating entrepreneur > Relentless pursuit of novelty > undermines social well-being

31. A New Disease – AffluenzaWhen too much is never enough $30,000 Diamonds $100,000 SUV Weight 4 tonnes Fuel Economy 10L/km O-100kph in 2 secs $2 Mill. McMansion 500 m2 4 bathrooms 12 entertainment rooms Aver. Occupancy 1.5 (Source: CM “Life” Section 16/7/05, & Hamilton)

33. After the Crisis – Reinvigorate at all costs Keynesian Approach • Public spending Eg. infrastructure • Tax cuts to stimulate demand • Ultimately Still rely on Consumption Growth Variations - Green New Deal Invest in: • Energy security • Low-C infrastructure – RE, EE and CCS • Ecological protection – Barrier Reef pollution

34. Renewable Energy

35. Macro-economics for Sustainability Goals: • Economic and social stability • Ecological sustainability • New Modelling shows that these goals are achieveable Failure of Old Models • GDP poor measure of success of economy - no asset base adjustment - measures goods and bads - blind to indebtedness - external costs not included • Assumes substitution always possible

36. GNP vs Sustainable Economic Welfare Index 1990 GNP 1972 ISEW (Source: Weizsacker, p.273)

37. Canadian Study by Peter Victor • Uses a fairly conventional econ. model • Includes output, consumption, public spending, investment, employment, trade etc. • Calibrated against statistical data

38. Low-Growth Scenario for Canada: Collapse

39. Low Growth Scenario for Canada: Resilience

40. Difference between Collapse & Resilience Collapse • Focus of investment in private goods • Investment and employment BAU Resilience • Focus of investment in public goods • Unemployment falls by reducing work hours

41. New Macro-economy Variables to include: • Energy and resource dependency • Value of environmental services and capital stocks Investment in: • Resource productivity, • Renewable energy • Clean technologies, • Greening business • Climate adaption • Ecosystem maintenance and protection

42. Restructuring Consumerism • Dismantle perverse incentives for unproductive status competition • Provide structures to participate socially • Government’s role is to reverse focus on individual “materialism” Key Elements • Building Sustainable Macro-econ. • Protecting social capabilities • Respecting Ecological Limits

43. Reflections and Criticisms • Is it just “frigging with the rigging” of a fundamentally flawed system • Global pressures probably demand ‘war’ like response • Market information now Internet based – must be “educated” to assess good from bad • Tax reform crucial – need to Tax the bads, not the goods. • The Haves don’t want to relinquish material wealth

44. References • Beder, S. (1993). The Nature of Sustainable Development. Newham, Scribe Publications. – what does sustainable development really mean? • Beder, S. (2003). Power Plays. Scribe Publications. – expose of the failure of privatisation of the electricity industry in US, UK, Aust and Nz. • Cocks, D. (1996). People Policy. UNSW Press. – examines population policy in Australia & pros / cons. • Diesendorf, M. (2007). Greenhouse Solutions with Renewable Energy. UNSW Press. – outlines viability of renewable energy and energy efficiency as cost effective and environmental benign solution to energy concerns and the barriers to their uptake. • Ekins, P. et al (1992) Wealth Beyond Measure – An Atlas of New Economics. GAIA Books. - examines the basic flaws in the economic rationalists approach and suggests pathways forward to account more fully for environmental and social costs. • Hamilton, C. et al (2005) Affluenza. Allen and Unwin. – examines the impacts of our over-consumption of goods and services, environmentally, socially and politically. • Hawkins, P., Lovins, A & H (2000). Natural Capitalism. Allen and Unwin. (extract viewable at www.rmi.org) – gives pathway forward for economic change based on resource efficiency and renewable energy. • Homer-Dixon, T. (2006). The upside of down – catastrophe, creativity and the renewal of civilisation. Island Press. – examines the large systemic stressors on civilisation and solutions. • Foran,B & Poldy,F (2002). Futue Dilemmas – Options to 2050 for Australia’s population, technology, resources and environment. CSIRO Publishing. - key dilemmas facing continued BAU growth in Aust. Economy.

45. Karlson et al (2005). The Natural Advantage of Nations. Earthscan. – examines sustainability and pathways forward for business and countries. • Lenzsen, M. (1998). Primary energy and greenhouse gases embodied in Australian final consumption: an input-output analysis. Energy Policy, Vol. 26, No. 6, pp. 498-506. • Meadows, D.L & D.H., Randers, J. (1992) Beyond the Limits. Earthscan Publications. – sequel to Club of Rome Report, “Limits to Growth”. - revisits the trends and limits outlined in the original report with updated computer modelling. • Mishel, L. (2007). State of Working America 2006-2007. • Millenium Report of Secretary-General of the UN (2000). www.un.org/millennium/sg/report/ • Nielsen, R. (2005). The Little Green Handbook – A guide to critical global trends. Scribe Publications. – analysis of key statistics global on population, resource use, climate, pollution etc. • O’Connor, M. Et al (2008). Overloading Australia – How government and media dither and deny on population. Envirobook. • Pearce, D. (1991). Blue Print 1 & 2 , Greening the World Economy. Earthscan Publications. – examines the problems with current economic system and methods to change to account more fully for environmental and social costs. • Victor, P. (2008). Managing without Growth – slower by design not disaster. Chleltenham: Edward Elgar. • Von Weizsacker, E., Lovins, A & H. (1997). Factor 4 –Doubling Wealth , Halving Resource Use. Allen and Unwin. – a report to the Club of Rome on potential resource efficiency. • Yencken, D and Wilkinson, D. (2000). Resetting the Compass – Australia’s journey towards sustainability. CSIRO publishing. – outlines the big ‘sustainability’ issues facing Australia.