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

a review and critique

ByTrevor Berrill

Sustainable Energy Systems Consultant and Environmental

Educator

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 peopleNow 4:1

In few decades > 7:1

(Source: Nielsen, p.238) ? ? ?

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

Prof. Tim Jackson’s Findings

“Prosperity without Growth” Report

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

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

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

Issue’s and Criticisms

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

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)

Least Efficient Transport Mode

0.6% Shifts Driver

12% Moves Car

99.4% Fossil Fuel WASTED

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)

CEO to Aver. Worker Pay

Rich

Poor

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

Real Cost of Middle East Oil to USA

> $450 per barrel Iraq war in 1990

Source: RMI Newsletter(1990), Vol. VI, No. III

Bulletin, 28 Sep 2003

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

How the World Eats!

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

FAO Food Insecurity Report 2010

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

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

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

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

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

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

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

Material Intensity - OECD

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.

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

A New Disease – AffluenzaWhen too much is never enough

(Source: CM “Life” Section 16/7/05, & Hamilton)

$30,000Diamonds

$100,000 SUVWeight 4 tonnesFuel Economy 10L/kmO-100kph in 2 secs

$2 Mill. McMansion500 m2

4 bathrooms12 entertainment roomsAver. Occupancy 1.5

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

Renewable Energy

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

GNP vs Sustainable Economic Welfare Index

GNP

ISEW

1972

1990

(Source:

Weizsacker, p.273)

Canadian Study by Peter Victor

• Uses a fairly conventional econ. model

• Includes output, consumption, public spending, investment, employment, trade etc.

• Calibrated against statistical data

Low-Growth Scenario for Canada: Collapse

Low Growth Scenario for Canada: Resilience

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

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

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

1. Building Sustainable Macro-econ.

2. Protecting social capabilities

3. Respecting Ecological Limits

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

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.

• 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.

Internet Sites

Alternative Technology Association www.ata.org.au

Australian Building Greenhouse

Rating www.abgr.com.au

Australian Consumer Association www.choice.com.au

Australian Government

- Australian Greenhouse Office www.greenhouse.gov.au

- ESD www.environment.gov.au/epcg/esd/integ.htm

Australian and New Zealand

Solar Energy Society www.anzses.org

Centre for Alternative Technology www.cat.org.uk

Clean Energy Council www.cleanenergycouncil.org.au

Environmental Building News www.greenbuilding.com

Environmental Defenders Fund www.edf.org

Environmental Protection Agencies www.epa.gov; & www.epa.qld.gov.au

Rocky Mountain Institute www.rmi.org

The Australia Institute www.tai.org.au

Magazines and Journals in the Library

Choice - Australian Consumer Association quarterly magazine

Eco-generation – Journal of Clean Energy Council of Australia

ECOS – CSIRO journal

Habitat - Australian Conservation Foundation quarterly magazine

Renew - Alternative Technology Association quarterly magazine

Solar Progress – Aust & NZ Solar Energy Soc. Quarterly magazine