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Preempting a Misleading Argument: Why Environmental Problems Will Stop Tracking with GDP

by Brian Czech

Brian CzechI hate to say I told you so, and could be too dead to do so, so I’ll tell you in advance: One decade soon, environmental problems will stop tracking with GDP.

But the reasons? Well, they probably aren’t what you think, especially if you’ve been drinking the green Kool-Aid.

For decades, big-picture ecologists and eventually the “ecological economists” pointed out the fundamental conflict between economic growth and environmental protection. Every tick of GDP came with the tock of habitat loss, pollution, and, as we gradually realized, climate change. A growing GDP requires a growing human population or a growing amount of goods and services per person. In the American experience of the 20th century, it was easy to see both – population and per capita consumption – spiraling upward, and just as easy to see the environmental impacts reverberating outward. Much of the world saw the same, although in some countries GDP growth was driven almost entirely by population growth.

Photo Credit: Simon Fraser University

In areas where shale-drilling/hydraulic fracturing is heavy, a dense web of roads, pipelines, and well pads turn continuous forests and grasslands into fragmented islands. Photo Credit: Simon Fraser University

Unfortunately, a lot of time was spent overcoming fallacious but slick-sounding shibboleths like “green growth,” “dematerializing” the economy, and the “environmental Kuznets curve.” It seemed these were – or easily could have been –designed by advertisers on Madison Avenue, Big Money in general, or economists in their service, to prevent consumers and policy makers from responding rationally to environmental deterioration. Suggestive phrases such as “consumer confidence” spurred the consumer along, buying more stuff to increase the profits of corporations and, in turn, the campaign purses of politicians.

Meanwhile, those who studied, wrote, or simply worried about the effects of economic growth on the environment (and therefore the future economy) were portrayed and marginalized as tree huggers, earth firsters, or, as I once heard them called by a Scotland Yard detective at an intelligence conference, “the great unwashed.”

Some of us had to go so far as debating economists and, shockingly, ecologists who parroted the 1990’s political rhetoric that “there is no conflict between growing the economy and protecting the environment.” I even debated a future president of The Wildlife Society (TWS), who at the time was a biologist employed by the timber industry and a gadfly in TWS attempts to formulate a TWS position on economic growth. After our debate, I was told he was roundly defeated, and in subsequent years he refrained from the win-win rhetoric. (Hopefully it was that ability to reconnoiter with the truth that explains his electoral victory.)

Those of us who recognized the conflict between economic growth and environmental protection won the debates because we were right and we demonstrated it, ad nauseum, theoretically and empirically. We had to study the issue up and down, inside and out, because Big Money had far more resources to try defeating us at every turn. Eventually we published enough articles, organized enough conferences, and won enough debates that today, at least in professional natural resources circles, you’d seem, well… no smarter than a hedgehog if you tried to claim we can have our cake and eat it too.

So it is with ample irony that soon enough, we’ll enter an age where GDP won’t track with biodiversity loss, pollution, climate change, and other indicators of environmental deterioration. Why? Because, at some point during the 21st century and perhaps very soon, there won’t be enough resources left for GDP growth. Just as surely as the conflict between economic growth and environmental protection, there is a limit to growth, and it’s not as far off as the growth polyannas would have you think.

Long after GDP growth grinds to a halt, biodiversity will continue declining.  Photo Credit: Smudge 9000

Let’s consider what happens to biodiversity – nonhuman species in particular – in the days beyond growth. Long after GDP growth grinds to a halt, biodiversity will continue declining for two reasons. The first is that many of the environmental effects of earlier GDP growth will be delayed. For example, when a species’ habitat is degraded by a pipeline here and a timber sale there, the species doesn’t instantly disappear. Yet a marginal drop in the rate of reproduction and a marginal increase in the rate of mortality can put the species on a path to extinction just as surely as you pay taxes.

Furthermore, habitat degradation can itself be a drawn-out process. The polar ice caps are on their way out, and polar bears along with them. Yet the ice won’t be gone and the polar bear won’t be extinct for some decades, probably well after GDP has stopped growing. And the polar bear is on the tip of the iceberg, as species en masse may be ushered off the poles as if on some geological conveyor belt running at the speed of climate change.

The second reason biodiversity will continue to decline long after GDP stops growing is because the cessation of GDP growth doesn’t mean corporations and countries will stop trying to grow the GDP. Far from it. As long as economic growth remains the primary policy goal of nations, the environmental impact of pursuing such growth will worsen, because nations will be pulling out all the stops to achieve it. This too is a process already underway; witness the mining of tar sands for exceedingly crude oil.

Yet tough times for the truth await because the next wave of polyannas will be busy perverting the truth from a different angle. Instead of arguing that GDP growth was a benefit to biodiversity  – with the shallow argument that it put more money into conservation programs – they’ll be pointing to the fact that species are declining despite no growth in GDP. “Where’s the correlation,” they’ll ask, “between GDP and biodiversity loss?”

Alas, we’ve been careful all along, as good scientists are, to note that correlation doesn’t prove causality. Likewise, a lack of correlation doesn’t disprove causality. Economic growth – increasing production and consumption of goods and services in the aggregate, entailing a growing population and per capita consumption – has been the limiting factor for wildlife in the aggregate for the broad sweep of Homo sapiens’ reign on Earth. Beginning in the 1930s such growth was measured with GDP, and beginning in the 1970s species endangerment in the U.S. was measured by the length of the list of federally listed threatened and endangered species.

For decades the correlation between GDP and species endangerment was like the correlation between chickens and eggs. A statistic called the R-squared value was even used to measure just how tight. As such, the correlation was simply additional, circumstantial evidence for the conflict between economic growth and biodiversity conservation. It was never essential, though, for it was bloodily evident that the causes of species endangerment were a list of economic sectors, infrastructure, and byproducts. To think it wasn’t the economy causing all that species endangerment was like thinking all that lung cancer in the 70’s had nothing to do with cigarettes.

Now when the Marlboro man stopped smoking, he didn’t stop choking. No, he continued choking, all the way to death, from lung cancer and chronic obstructive pulmonary disease. But hey, in those final non-smoking years, the correlation between cigarettes and cancer cells was non-existent. Would anyone put it past Big Tobacco (the Seven Dwarves come to mind) to use this lack of correlation as evidence that tobacco doesn’t cause cancer?

Didn’t think so.

Well, Big Money – Wall Street, Madison Avenue, K Street too – we’re on to you. We know you’ll claim in decades to come that economic growth is not the cause of environmental deterioration. You’ll use the lack of correlation between GDP and species listings as one of your unscrupulous arguments. And you’ll be as wrong then as you have been heretofore.

Stick that in your pipe and smoke it preemptively.

The Top Three Actions to Fix the Economy

by Rob Dietz

Fixing the economy will require more than tax code tweaks and stock market peaks.  Anyone who’s been paying attention knows that we need big changes to the way we run things on this planet. Even a partial list of today’s social and environmental problems sounds grim:

  • An unfathomable number of people (2.7 billion) live in poverty, scraping by on less than $2 per day.
  • Our penchant for burning fossil fuels has increased carbon dioxide in the atmosphere such that scientists are throwing around phrases like “runaway climate change.”
  • National governments are drowning in debt, while the global financial system teeters on the verge of ruin.
  • The health of forests, grasslands, marshes, oceans, and other wild places is declining, to the point that the planet is experiencing a species extinction crisis.

ResultEnoughIsEnough_Final_LoRess like these arise because the global economy has grown too big for the broader systems that contain it. We have too many people consuming too much stuff. Sure, the engine of economic growth has driven technological advances and provided a dizzying array of consumable goods. But it’s hard to argue that these material benefits outweigh the costs of social breakdown and environmental upheaval.

So we need a systemic change, but what are our options? We could try to increase the size of the planet, or try to find another one that’s habitable. But maybe it would be more prudent to focus on changing the economy. That means shrinking, and then stabilizing, the economy so that it can meet humanity’s needs while conserving and protecting the ecosystems that support life on Earth. The book I wrote with Dan O’Neill, Enough Is Enough, describes policies to do that, but as Peter Victor has noted:

The dilemma for policy makers is that the scope of change required for managing without growth is so great that no democratically elected government could implement the requisite policies without the broad-based consent of the electorate. Even talking about them could make a politician unelectable.

Victor’s statement rings true. For example, in the last U.S. Presidential election, the candidates sparred with each other over who could grow the economy faster and create the most jobs. Suppose that instead of trying to “outgrow” his opponent, President Obama had run on a platform of stabilizing the economy. You can almost hear President Romney’s inaugural address about more oil pipelines, more highways, more consumption, more, more, more. But to the climatologists, conservation biologists, and ecological economists (and even the butchers, bakers, and candlestick makers) who are tracking the limits to growth, it is becoming increasingly clear that we need to make room for our leaders to discuss economic stabilization. It’s time for them to begin working on an economy that aims for enough instead of always chasing more.

Victor_Managing_wo_GrowthFrom Victor’s quote, we can deduce the top three things we need to do to begin the transition to such an economy.

1. Achieve widespread recognition that our planet is finite and that our economy has to fit within ecological limits. Politicians can’t talk about the limits to growth because most of the electorate remains unaware of the limits. Even with increasing attention paid to climate change and other developing crises, the conversation rarely turns to overconsumption in the economy. Schools are not teaching ecological economics, and people are too distracted by the routines of daily life to pay much attention. We need compelling stories and broad public education to get people discussing critical topics  such as the relationship between environmental and social systems, humanity’s place within nature, and the benefits of a steady-state economy.

2. Provide a set of practical policies for achieving a steady-state economy. All citizens (even the politicians) need to understand what can replace the growth-obsessed policies in use today. As soon as people begin to get a feel for how a well-conceived set of steady-state policies can outperform the obsolete policies of endless growth, politicians will gain the broad-based support they need to overhaul the system. The heart of Enough Is Enough describes this set of policies, but even a quick glance at them confirms Victor’s point: the scope of change required is indeed great. That’s why we need more than just awareness of the problem and a set of policy proposals.

3. Cultivate the will to act. Economic changes won’t materialize on their own. People have to want out of the current system, and they have to demand the transition to a new one. Without such pressure, entrenched elites (in both politics and business) have no incentive to overturn the status quo. There’s an awful lot of networking and organizing to be done.

With these three actions, we can get the economy we want and the planet needs. The unelectable politicians will be the ones who cling to the wishful thinking of perpetual growth. It’s time to take a stand, to put aside the destructive mania for more, and let our lawmakers know that enough really is enough.

Real Dichotomies Are Not Made “False” by Soft Science or Political Pandering

 by Brian Czech

It’s a good thing, the proliferating discussion about economic growth and environmental protection among ecologists. Such discussion was sorely lacking just ten years ago. Without addressing the subject of economic growth, the ecological professions would be but marginally relevant to society and doomed to extinction. Money is running out for research that appears benign at best and wasteful at worst in the days of fiscal austerity, otherwise known as the 21st century.

Much of the discussion about economic growth may be attributed to scientific, professional societies that got the ball rolling by developing technical reviews and position statements over the past decade. Some of these positions are scientifically sound, while others stop short. None are perfect, of course, yet some of the professional societies have described in rigorous detail the “fundamental conflict” between economic growth and environmental protection with the fortitude of their scientific convictions. A short list would include The Wildlife Society, U.S. Society for Ecological Economics, and American Society of Mammalogists. The leadership provided by these societies has been invaluable and is finally reaping rewards for students, faculty, programs and universities.

How about an ice-cold glass of "sustainable growth?"

A few other professional societies haven’t yet run out of green Koolaid. The Ecological Society of America, for example, still calls for the supremely oxymoronic “sustainable growth.” Many ESA members who get it about limits to growth have been, to put it perhaps too frankly, victimized and embarrassed by a vocal and influential minority that refuses to shed their political training wheels on the racetrack of economic policy matters.

And so it came as no surprise to see the recent exchange (February and March, 2012) on the “Value of Nature” between Bernd Blossey and Michelle Marvier in Frontiers in Ecology and the Environment. The fact that they carried out this discourse in Frontiers suggests exposure to ESA deliberations, publications, and politics. An ESA background can make an author susceptible to muddling the message on the relationship between economic growth and environmental protection. Consider Marvier’s second-from-last paragraph:

“I have found that many conservationists view striving for material gains and the prioritization of people above non-human nature as societal pathologies that need to be cured. This is an unproductive and misanthropic attitude…”

So far so good, for the most part. Her first sentence would be hard to argue with. Her second one has a large dose of truth as well. On the other hand, “liquidator syndrome” is every bit as misanthropic, as I described in Shoveling Fuel for a Runaway Train. Liquidator syndrome occurs when a conspicuous consumer gets psychologically mired down in Maslow’s fourth level (the pursuit of self-esteem) rather than progressing to the fifth (self-actualization). Liquidator syndrome manifests in such behaviors as Hummer driving, McMansion building, fur-coat wearing, etc. Let’s face it: it’s bad for the environment, biodiversity, and the grandkids.

But neither Marvier nor I are psychologists. We shouldn’t quibble about which end of the spectrum – extreme conservation or extreme consumption – is more misanthropic. We’re ecologists and, therefore, economists of nature. Therefore the bigger bone to pick starts with the next sentence:

“… Setting up dichotomies between economic growth versus protection of nature is a dead-end for conservation. In a separate survey of 800 American voters… 76% felt that ‘we can protect land and water and have a strong economy with good jobs for Americans at the same time, without having to choose one over the other.’ Only 19% felt that ‘sometimes protections for land and water and a strong economy are in conflict and we must choose one over the other.’ However, when the question is framed such that people are forced to choose, the economy wins handily.”

There is enough wrong in these sentences to fill a small textbook, but let’s start with the most obvious. “Setting up dichotomies” sounds too close to “making up dichotomies” or “inventing dichotomies” for comfort. It reminds me of the time some colleagues and I were attacked for supposedly “assuming” there was a conflict between economic growth and biodiversity conservation, when in fact our group had concluded, after many years of study, that indeed there was such a conflict. Meanwhile the accusers had virtually no background in the subject of economic growth.

In ecological terms, due to the tremendous breadth of the human niche, the human economy grows at the competitive exclusion of nonhuman species in the aggregate. That’s sound, peer-reviewed science. Those individuals and organizations that have conducted due diligence on the topic have invariably concluded as much.

We can’t make a dichotomy a false one by wishing it away and ignoring the ecological and physical sciences. But we can sure confuse readers by conflating economic growth with a “strong economy.” Unfortunately, that is exactly what Marvier does.

An economy can be strong, with low unemployment, fiscal soundness, and a stable currency, regardless of whether it is growing or non-growing. Ultimately, in fact, the only sustainable alternative is a steady state economy; neither growth nor recession may continue perpetually. More importantly, long before a growing economy breaches its long-run carrying capacity, economic growth starts causing more problems than it solves. In that sense it is “uneconomic growth” and not worthy of the label “strong.”

It behooves ecologists who want to weigh in on economic growth to stop and think about precisely what it is. Of course you can always try to reinvent the phrase when your argument is failing. But that’s unproductive because economic growth is what it is, and the policy maker knows what it is. Economic growth is increasing production and consumption of goods and services in the aggregate. (It’s not the growth of the bicycle sector while the SUV sector crashes.) Economic growth absolutely entails a growing human population and/or per capita production and consumption. It is indicated by increasing GDP, or gross domestic product. It’s a policy goal with clear-cut fiscal, monetary, and trade policy levers and buttons. It’s also a policy goal with widespread public support.

Which brings us to the final flaw (for our brief purposes) of Marvier’s editorial. Her argument seems to be: “The public is enamored with economic growth. Therefore, we should not talk about the trade-off between economic growth and environmental protection.” But that slope is so slippery that we should expect someone further down to chime in, “Yup, in fact we should say that there is no conflict between economic growth and environmental protection.”

Now that’s a dead-end for conservation. Yet that is exactly what many ecologists — not to mention economists and politicians — have said for decades. It is a fallacy of epic proportions and, in my opinion, the single biggest failure of the ecological professions and the environmental community thus far.

It’s also a failure that is being rectified as one professional organization after another puts its scientific integrity where its mouth is, clarifying the fundamental conflict between economic growth and environmental protection.

Let’s not underestimate the public’s ability to deal with a conflict, once it’s been clarified. The American public eventually dealt strongly with the use of organochlorines, the deterioration of the ozone layer, and even with smoking. In each case, step 1 was coming clean on the science and refuting such revolting rhetoric as “I believe that nicotine is not addictive.”

In this case, step 1 is coming clean on economic growth, refuting the revolting rhetoric that “there is no conflict between growing the economy and protecting the environment.” Let’s tell it like it is, plainly but also with the nuance earned by studying the matter. By telling it like it is, we’ll have a message that resonates with the public’s common sense. That’s what produces respect, relevance, and ultimately effectiveness in the policy arena.

How to Fix a Household Crisis

by Rob Dietz

Economics is a field in crisis.  The failure to prevent or even predict the global financial meltdown is a sure sign of this fact.  Over the last few decades, a number of body blows have dented the credibility of mainstream economists.  But the utter failure to foresee the financial fiasco was like a Muhammad Ali knockout punch to the jaw.  The crisis of credibility is due to the disconnect between what’s happening in the real world and what’s offered in the classroom and economics journals.  For confirmation of the disconnect, witness the Dynamite Prize dished out by the Real-World Economics Review to “honor” those economists most responsible for blowing up the global economy.

Not to be outdone, ecology is also a field in crisis.  This crisis, however, is not about credibility.  Instead, ecology’s crisis stems from the seemingly insurmountable nature of the problems faced by its practitioners.  Imagine going to work each day and having to confront mounds of malaise-inducing evidence of ecological decline, from species extinctions to habitat loss to climate destabilization (just to name a few).  It’s a testament to their dedication that they even show up for work.  Many who do show up tend to focus on localized problems or minor information gaps as entire ecological systems crumble around them.  Who can blame them?  It’s daunting and maybe even depressing to walk out on the tracks and try to stop a train that’s bearing down at full speed.  So instead, they work on a small section of track, hoping to keep the train from derailing for a bit longer.

Wordsmiths will recognize that the names of these two crisis-riddled fields share a common root – oikos, the Greek word for household.  So basically, our entire household is in a state of crisis, and it’s threatening the health of the family, the cat, the dog, the yard, and the whole neighborhood.  When there’s a serious problem in your household, the best course of action is to figure out the cause of the problem, make a plan to address that cause, and take concrete steps to implement your plan.

Step 1 – Figure out the cause.

The cause of the crisis in our two “households” is the pursuit of perpetual economic growth.  From the ecological perspective, the household cannot thrive if its support structure is always under pressure to provide increasing resources for a growing economy.  Unsustainable liquidation of natural resources to produce ever more stuff is no way to run a household.  From the economic perspective, the household will fall if it is built on a faulty financial foundation.  In a financial system that requires exponential growth, claims on wealth (money) will inevitably surpass the availability of real wealth (actual goods and services), and a collapse is bound to follow.  Societal commitment to growing a bigger economy, including the commitment to a financial system geared for such growth, is the root cause of the ecological and economic crisis.

Step 2 – Make a plan.

For their part, economists will have to recognize and accept the inevitable limits to growth, and get to work on the institutions and policies needed for a prosperous steady state.  Ecologists will have to get more involved in economic affairs and be prepared to inform policy makers about the best scientific information on resource resilience.  Such shifts within the disciplines of economics and ecology will require professors to teach different material, students to get a broader education, and practitioners to collaborate with one another.  These are huge shifts that call for the two households to break down some walls and unite under one roof.  Fortunately, Herman Daly, Robert Costanza, and plenty of other inspiring thinkers have given us a substantial start on building the combined household of ecological economics. There has been a tendency to think of ecological economics as a sub-discipline or specialty of economics, but that is entirely inadequate for addressing the root cause of the crises.  We need to think of ecological economics as an evolution of the two disciplines – an integrative game-changer.

Step 3 – Take concrete steps.

Organizations that support ecological economics and the steady state are on the rise, but make no mistake – such groups can hardly be considered mainstream.  CASSE is a tiny organization compared to the anachronistic Club for Growth.  The U.S. Society for Ecological Economics doesn’t have the clout of the American Economic Association.  Let’s make CASSE more influential than the Club for Growth.  Let’s make the USSEE more influential that the AEA.

When we increase our members and solidify our base of support, we’ll have the political power to begin turning concepts from ecological economics into policies.  Then we can commence the tough job of repairing our household.  We’ll get the family into counseling.  We’ll take the cat and dog to see the vet.  We’ll tear up the ornamental grass in the yard, restore some habitat and plant a garden.  Pretty soon the neighborhood will feel like a community shared by all who live there.