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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.

Paul Krugman on Limits to Growth: Beware the Bathwater

by Brian Czech

BrianCzechCongratulations to Paul Krugman, whose New York Times opinion on “Slow Steaming and the Supposed Limits to Growth” hit the bulls-eye of at least one balloon. Landing at Washington-National the very day his opinion column appeared was like crashing back into the growth fetish of the American Fourth Estate. Out came the fresh air of an Australian balloon; back to the polluted, cynical rhetoric that “there is no conflict between growing the economy and protecting the environment.”

Why the drama with Krugman’s column? Partly due to uncanny timing; partly due to the stark juxtaposition of opinions. Having delivered the keynote address–on limits to growth no less–at the Australian Academy of Science’s annual conference on environmental science, it struck me that decades of careful research could be undermined by the presumptuous pen of a well-placed economist. Something is wrong with that picture.

But only for so long, because those of us who recognize limits to growth have sound science, common sense, and burgeoning evidence on our side. The same cannot be said for Krugman’s opinion.

Krugman got off to a shaky start with the very title of his column. No matter what he could say about “slow steaming,” this was bound to be an article wrong-headed in using one sector (shipping) for drawing broad conclusions about a macroeconomic issue (economic growth). To extend a conclusion from the part to the whole is to commit the fallacy of composition. In this case, it’s a bit like Krugman saying, “Your fingernails keep growing; why not the rest of you too?”

The mistake is common and destructive. When this mistake is made by a highly acclaimed economist in a widely-read opinion, the potential for destruction is multiplied. Politicians hide behind such Pollyannaish opinions to pull out all the stops–fiscal and monetary–for economic growth. The casualties include not only environmental protection but the future economy and ultimately national security.

Next, in Krugman’s lead-in paragraph he laments the “unholy alliance on behalf of the proposition that reducing greenhouse gas emissions is incompatible with growing real GDP.” Already we have two more problems. First, the argument alluded to in the title–that is, refuting limits to growth–is reduced to refuting just one negative impact of growth (that is, climate change). What about all the other impacts and limitations of economic growth: liquidation of natural resources, pollution at large, habitat loss, biodiversity decline, and social side effects such as noise, congestion, and stress?

Second, in a maxed-out, over-stimulated, 90% fossil-fueled economy, Krugman wants us to believe we can grow the economy even more while reducing greenhouse gas emissions. No need to worry about little trends such as tar-sands mining in Canada, coal mining in China, and fracking in the USA. Slower steaming will save the day on climate change, and presumably for the rest of the planetary ecosystem.

Let’s not let Krugman delude us. “Growing real GDP” isn’t about an efficiency gain here and there. It means increasing production and consumption of goods and services in the aggregate. It entails a growing human population and/or per capita consumption. It means growing the whole, integrated economy: agriculture, extraction, manufacturing, services, and infrastructure. From the tailpipe of all this activity comes pollution.

Krugman seems to have fallen for the pixie dust of “dematerializing” and “green growth” in the “Information Economy.” He may want to revisit Chapter 4 of The Wealth of Nations, where Adam Smith pointed out that agricultural surplus is what frees the hands for the division of labor. In Smith’s day that included the likes of candle-making and pin manufacturing. Today it includes everything from auto-making to information processing, but the fundamentals haven’t changed. No agricultural surplus, no economic growth. And agriculture is hardly a low-energy sector.

Adam Smith was among the great, classical economists who readily recognized limits to growth, all the way until at least John Stuart Mill. After that and throughout the 20th century, things got murky for economists as they turned increasingly to microeconomics, losing the forest for the trees. Mr. Krugman appears to be yet another victim of the “neoclassical” evolution of economics. Look to him for insightful opinions on banking regulations, fiscal politics, and other such topics that fit naturally under the rubric of an economics columnist. These are his babies, but beware the bathwater. Take his opinion on limits to growth at your peril, and that of your grandkids.

Sliding Down the Slippery Slope: A Truth Too Big for Obama

by Brian Czech

BrianCzech“Now, the good news is, we can make meaningful progress on this issue [climate change] while driving strong economic growth.”

With that sentence from his State of the Union address, President Obama capitulated to paltry cynicism. Alas, he will not be the president who finally comes clean on the trade-off between economic growth and environmental protection. Obama is now committed to win-win, green-growth rhetoric.

“Look,” as every politician likes to say, our economy is 90% fossil-fueled. Fossil fueling = greenhouse gases = climate change, says science. So expecting “meaningful progress” on climate change “while driving strong economic growth” is like expecting less gun violence while driving strong sales of assault weapons. The linkage between growing the economy — increasing production and consumption of goods and services in the aggregate — and spewing more greenhouse gases is even more certain than the link between weapon sales and violence.

Obama’s run down the slippery slope dates back to January 18, 2011, when he issued Executive Order 13563, “Improving Regulation and Regulatory Review.” The first stipulation was, “Our regulatory system must protect public health, welfare, safety, and our environment while promoting economic growth, innovation, competitiveness, and job creation.” Read it fast and it sounds great, but there is a fallacious devil in the details: “Our regulatory system must protect… our environment while promoting economic growth.”

Some of us tried to warn the President, his advisers, and whoever might listen that he had ventured onto a slippery slope. It seemed to begin so innocently. It was, by all accounts, only his first step onto the tantalizing talus, and one foot was yet firmly on the path of truth. He could have pulled himself back like a climber who sensed the danger in time.

But it wasn’t long — halfway between then and now — when Obama started doing the two-step on the slippery slope. That’s when he announced, “I do not buy the notion that we have to make a choice between having clean air and clean water and growing this economy in a robust way. I think that is a false debate.” As if air and water pollution could somehow become “uncoupled” from activities such as agriculture, oil extraction, manufacturing, transportation… you know, just those little sectors that make the whole economy run.

So by January 2012, it would have been difficult for Obama to become the courageous leader we need, the one who tells it like it is about the trade-off we face between economic growth and environmental protection. It would have been difficult, but not impossible. Obama could have gotten off that slope with some skilled slaloming back to the forest where the trees of truth were verily rooted. But no, the vote must have seemed like an elusive leaf, wafting downslope over the talus, and that is the route he chose.

slippery slopeShould we try to get him off that slippery slope of unsustainability? Probably not. He’s out there so far now, sliding downward so fast, that getting him off would be too risky. By “risky,” I mean a tremendous amount of effort could be spent on salvaging the truth for Obama’s legacy. Such effort could easily be for naught, as Obama shows no signs now of propagating the new paradigm of sustainability he once alluded to. He’s uttered the win-win rhetoric one too many times; now he’d have to admit his mistake in addition to explaining the trade-off between economic growth and environmental protection.

It’s a particular problem for politicians, the inability to admit a mistake. Perhaps it’s less a matter of the politician’s personal propensities and more so a matter of political party pressure. Either way, it’s part of political life. You never admit a mistake. That’s why potential appointees get grilled mercilessly in their confirmation hearings. They are made to look foolish for their faux pas by enemies who know they won’t admit they were wrong. “Were you wrong,” Senator Blah asks Senator Bleh, in a tone of voice devoid of inquiry. Senator Blah is making a statement more than asking a question. Meanwhile Senator Bleh wiggles and waffles as if weapons of mass destruction were hiding in his pants.

Don’t put it past the politician to reinvent terms such as sex, crook, tax, and amnesty. Why, a politician confronted with his own mistaken statement will torture a term like a jock on steroids.

This latter propensity – reinventing words to justify fallacious statements or outright lies – helps to explain the otherwise inexplicable complicity of Al Gore in the ignominious win-win propaganda. Such internalized terminological tinkering must have been what allowed Gore to say with a straight face, “There is no conflict between growing the economy and protecting the environment.” Gore surely knew that perpetually growing population and per capita consumption (the two arms of economic growth) was irreconcilable with environmental protection. But he also feared for his political life, so he probably thought something to the effect, “I can use ‘growing the economy’ in a way that means economic activity, just as trees ‘grow’ in a forest without the forest growing bigger.”

But in the real world, economic growth means more economic activity, more population × consumption, more GDP. It means more greenhouse gas emissions, less biodiversity, and a growing ecological footprint. It certainly doesn’t make for “meaningful progress” on climate change.

Now since even Al Gore, Earth in the Balance and all, went the way of the win-win greenwash, imagine how much less inclined President Obama would be to tell the truth about the fundamental conflict between economic growth and environmental protection. The inconvenience of this truth must seem too much to bear. Too much to get elected with and — once elected — too much to stay in favor with the party.

So it’s easy enough to empathize with Obama. But that doesn’t make him a great president. No, Obama is shooting down the slippery slope — Farewell Mr. President! — and it’s time to look elsewhere for bona fide 21st-century heroism. It’s time to look for a future president capable of advancing the steady state economy as the sustainable alternative to growth.