Posts

Finding Real Economic Leadership in the Wake of Rio+20

by Brent Blackwelder

Twenty years after the seminal “Earth Summit” on sustainable development in Rio de Janeiro, Brazil once again has hosted a “fate-of-the-earth” meeting (Rio+20) focused on the themes of a green economy and institutional change.  In the aftermath of the 1992 meeting, too many nations, including the United States in particular, failed to reverse the downward trend in planetary ecosystem health. Today, with a global population of 7 billion consuming resources beyond the ability of the earth to replenish itself, we’d better hope there’s a better attempt at the transition to a sustainable economy after this meeting.

Change must begin with the structure of the economy because a nation’s economic policy is also its social and environmental policy. National economies all over the world are failing — failing to provide economic stability, failing to secure resources for future generations, failing to protect ecosystems and non-human species, and failing to achieve social justice.

In anticipation of the Rio+20 summit, Foundation Earth published a report called “The Economic Rethink: Who Does It Well?.” It challenges leaders to adopt big changes and gives them examples to follow from a variety of nations.  In preparing the report, Randy Hayes, founder of the Rainforest Action Network, and I reviewed over a dozen scorecards that grade nations on their performance — some focus on corruption, others on empowerment of women, still others on environmental protection.

In our 16-category analysis, Brazil, the host of the Rio+20 meeting, receives a failing grade, missing the boat in 13 categories of action toward a sustainable economy. Brazil’s political leadership is intending to make the nation a global powerhouse in agricultural exports, an intention that would mean sacrificing the world’s greatest tropical rainforest, the Amazon, to accommodate industrial plantations for food and biofuel exports.

But the report goes beyond the question of accountability for Brazil. It highlights significant positive steps that some nations are taking to shift to a new economy. In most of the 16 categories, at least a few nations are taking leadership roles. The twin goals of an environmentally restored earth and a socially just civilization are not part of a utopian fantasy: people have adopted inspiring policies and taken forward-looking actions in real places around the globe. The challenge is to make sure that the following examples become the rule rather than the exception:

  • Bhutan is leading the way in development of new indicators of progress. The “gross national happiness” measures deeper values that cannot be captured by GDP.
  • The Dominican Republic, which shares the island of Hispaniola with deforested Haiti, is demonstrating leadership forest restoration. Since 2003, forest cover in the Dominican Republic has increased from 32% to almost 40%.
  • In the energy sector, several leaders are stepping forward. Sweden, Costa Rica, and British Columbia (Canada) have instituted carbon taxes to include the ecological cost of energy use in its price. And Germany has blazed a clean energy trail with outstanding results in solar and wind power.
  • Cuba is an innovator in organic community agriculture. Havana grows 50% of its fresh produce within the city limits.
  • In a world awash with financial scandals and offshore tax havens, New Zealand has become the “least corrupt nation” because of its effective legal framework, fiscal transparency, and accountability.
  • Bolivia and Ecuador have put a rights-of-nature provision in their legal codes as have several cities and towns in the United States.
  • Iceland, number one on the Global Gender Gap rankings, is a nation of empowered women. Women in the Land of Fire and Ice hold the majority of jobs in university education and have nearly equal representation in parliament.
  • In contrast to Brazil’s determination to fill the Amazon with massive dams, the United States has led the world in one category: restoration and protection of rivers. Over 1,000 dams have now been removed in the U.S. to restore fisheries and water quality. Furthermore, more than 250 rivers have been safeguarded in the National Wild and Scenic Rivers System.
  • In the Netherlands, “repair cafes” are beginning to address the problem of over-consumption. Such cafes encourage reuse of broken and weathered possessions, providing free repair services.

These examples of leadership are well worth celebrating, but many challenges remain along the path to a sustainable economy. The biggest challenge is that no nation adequately addresses carrying capacity, planetary limits to growth, or sustainable economic scale. All nations must overcome this challenge to ensure a healthy planet and flourishing civilization for future generations.

It remains to be seen what progress will flow out of the Rio+20 meeting, but examples of real leadership in “The Economic Rethink” offer hope that we can dispose of the “disposable economy.”   There’s no longer room for an economy that treats the earth like it’s the site of a liquidation sale.

What Is a “Green Economy?”

Herman DalyA green economy is an economy that imitates green plants as far as possible. Plants use scarce terrestrial materials to capture abundant solar energy, and are careful to recycle the materials for reuse. Although humans are not able to photosynthesize, we can imitate the strategy of maximizing use of the sun while economizing on terrestrial minerals, fossil fuels, and ecological services. Ever since the industrial revolution our strategy has been the opposite. Fortunately, as economist Nicholas Georgescu-Roegen noted, we have not yet learned how to mine the sun and use up tomorrow’s solar energy for today’s growth. But we can mine the earth and use up tomorrow’s fossil fuels, minerals, and waste absorption capacities today. We have eagerly done this to grow the economy, but have neglected the fact that the costs of doing so have surpassed the benefits – that is to say, growth has actually become uneconomic.

In spite of the fact that green plants have no brains, they have managed to avoid the error of becoming dependent on the less abundant source of available energy. A green economy must do likewise – seek to maximize use of the abundant flow of solar low entropy and economize on the scarce stock of terrestrial low entropy. Specifically, a green economy would invest scarce terrestrial minerals in things like windmills, photovoltaic cells, and plows (or seed drills) – not squander them on armaments, Cadillacs, and manned space stunts. A green economy can be sufficient, sustainable, and even wealthy, but it cannot be a growth-based economy. A green economy must seek to develop qualitatively without growing quantitatively – to get better without getting bigger.

There is another kind of green economy that seeks to be green after the manner of greenback dollars, rather than green plants. Green dollars, unlike green plants, cannot photosynthesize. But dollars can miraculously be created out of nothing and grow exponentially at compound interest in banks. However, Aristotle noted that this kind of growth is very suspect, because money has no reproductive organs. Unlike green plants, green money seeks to grow forever in the realm of abstract exchange value, even as we encounter limits to growth in the realm of the concrete use values for which money is supposed to be an honest token and symbol.

Recently we have grown, or rather “swollen”, by expanding the symbolic realm of finance. Debt is a mere number (like negative pigs) and can easily grow faster than the real wealth (positive pigs), by which it is expected to be redeemed. Wall Street has bought and sold an astronomical number of negative pigs-in-a-poke – they have “sold bets on debts and called them assets”, as Wendell Berry succinctly put it. We have recently experienced the failure of this fraudulent attempt to force expansion. Yet we have so far been unable to imagine any policy other than restarting the old growth economy for another round. After the next crisis we should try to avoid the Ponzi scheme of growth and build a steady state economy – a green economy that is sustainable, just, and sufficient for a good life.