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Where is Pope Francis on Economic Growth?

by David Kane

Maryknoll Center for Global Concerns, Washington DC Oct. 27, 2008 © Rick Reinhard 2008

Those who believe that there is a fundamental conflict between economic growth and environmental protection will find Pope Francis’ recent encyclical, Laudato Si (Praised Be), a welcome addition to the literature; as well as an important tool in helping others, especially Catholics, to understand and accept the limitations of economic growth. Pope Francis explains how the environmental and social crises we are experiencing will require “profound changes in lifestyles, models of production and consumption, and the established structures of power which today govern societies.” Few in the world have as large a reach as the pope, so it is encouraging to hear him speaking so clearly on these crucial issues.

Environmental and Social Crises

Pope Francis begins by describing the many ecological crises ravaging the planet today. While the media have focused almost exclusively on his inclusion of climate change, referring to it as the climate encyclical,” he actually discusses a host of other ecological crises as well, from the loss of biodiversity and forests, to water and air pollution.

The earth, our home is beginning to look more and more like an immense pile of filth.

He then delves into a number of social crises, including inequality, societal breakdown, and declining quality of life, directly relating them to the ecological crises.

Human beings too are creatures of this world, enjoying a right to life and happiness, and endowed with unique dignity. So we cannot fail to consider the effects on people’s lives of environmental deterioration, current models of development and the throwaway culture.

The human environment and the natural environment deteriorate together; we cannot adequately combat environmental degradation unless we attend to causes related to human and social degradation. In fact, the deterioration of the environment and of society affects the most vulnerable people on the planet.

Causes

Technocratic paradigm

Francis.presidencia.gov.ar

Photo Credit: presidencia.gov.ar

The pope suggests some fundamental causes of these crises including a very interesting discussion around technology. While some have accused Pope Francis of being against, or at least afraid of, technology, that is far from the truth.

Technology has remedied countless evils which used to harm and limit human beings. How can we not feel gratitude and appreciation for this progress, especially in the fields of medicine, engineering and communications?

The problem for Pope Francis is not technology per se, but “the way that humanity has taken up technology and its development according to an undifferentiated and one-dimensional paradigm.”

Men and women have constantly intervened in nature, but for a long time this meant being in tune with and respecting the possibilities offered by the things themselves. It was a matter of receiving what nature itself allowed, as if from its own hand. Now, by contrast, we are the ones to lay our hands on things, attempting to extract everything possible from them… [h]uman beings and material objects no longer extend a friendly hand to one another; the relationship has become confrontational. This has made it easy to accept the idea of infinite or unlimited growth, which proves so attractive to economists, financiers and experts in technology. It is based on the lie that there is an infinite supply of the earth’s goods, and this leads to the planet having every last drop and more squeezed out of it.

In a thoughtful conversation around this technocratic paradigm and its effects, Pope Francis laments how this paradigm tends to dominate economics and political life, degrade the environment, benefit small sectors of society, magnify humanity’s effects on Earth, and create overspecialization, obfuscating the bigger picture.

Culture of relativism

A culture of relativism in which “human beings set themselves at the centre [and] give absolute priority to immediate convenience and all else becomes relative” is another root cause of our crises, according to Pope Francis.

 [The culture of relativism] is also the mindset of those who say: Let us allow the invisible forces of the market to regulate the economy, and consider their impact on society and nature as collateral damage.

This same ‘use and throw away’ logic generates so much waste, because of the disordered desire to consume more than what is really necessary.

Growth and consumption

Another fundamental cause of today’s crises proffered by Pope Francis is the almost exclusive focus on economic growth and ever-increasing consumption as solutions to social problems.

Social exclusion, an inequitable distribution and consumption of energy and other services, social breakdown, increased violence and a rise in new forms of social aggression, drug trafficking, growing drug use by young people, and the loss of identity. These are signs that the growth of the past two centuries has not always led to an integral development and an improvement in the quality of life. Some of these signs are also symptomatic of real social decline, the silent rupture of the bonds of integration and social cohesion.

Since the market tends to promote extreme consumerism in an effort to sell its products, people can easily get caught up in a whirlwind of needless buying and spending. Compulsive consumerism is one example of how the techno-economic paradigm affects individuals…That paradigm leads people to believe that they are free as long as they have the supposed freedom to consume. But those really free are the minority who wield economic and financial power.

Solutions

If we acknowledge the value and the fragility of nature and, at the same time, our God-given abilities, we can finally leave behind the modern myth of unlimited material progress. A fragile world, entrusted by God to human care, challenges us to devise intelligent ways of directing, developing and limiting our power.

On an individual level, Pope Francis speaks of the importance of people experiencing an “ecological conversion” in which they develop a deepened appreciation and love for life in all its forms: “a loving awareness that we are not disconnected from the rest of creatures, but joined in a splendid universal communion.” It becomes clear to them that “nature cannot be regarded as something separate from ourselves or as a mere setting in which we live. We are part of nature, included in it and thus in constant interaction with it.”

Fortified by this conversion, people become more active in their communities usually through one of the “countless array of organizations which work to promote the common good and to defend the environment, whether natural or urban.” Actively engaged citizens are more likely to become environmental educators at their school, in their family, at church, and elsewhere. This education includes “a critique of the ‘myths’ of a modernity grounded in a utilitarian mindset (individualism, unlimited progress, competition, consumerism, the market without rules)…and helping people, through effective pedagogy, to grow in solidarity, responsibility and compassionate care.”

On a societal level, Pope Francis lays out some principles to guide our actions into the future. He says that for too long, political decisions have been made based on outdated economic ideologies and by specialized technicians seemingly incapable of seeing the bigger picture.

Politics must not be subject to the economy, nor should the economy be subject to the dictates of an efficiency-driven paradigm of technocracy.

Today, in view of the common good, there is urgent need for politics and economics to enter into a frank dialogue in the service of life, especially human life.

Another of Pope Francis’ guiding principles is the need for more long-term thinking. He believes that politics and business have been dominated by short-term thinking for too long, making important changes difficult. He speaks often of intergenerational solidarity and the need to consider future generations in our decisions today.

The myopia of power politics delays the inclusion of a farsighted environmental agenda within the overall agenda of governments.

Caring for ecosystems demands farsightedness, since no one looking for quick and easy profit is truly interested in their preservation.

Pope Francis says that it is wrong to believe that market-based solutions are always the best solutions.

Environmental protection cannot be assured solely on the basis of financial calculations of costs and benefits. The environment is one of those goods that cannot be adequately safeguarded or promoted by market forces.

We need to reject a magical conception of the market, which would suggest that problems can be solved simply by an increase in the profits of companies or individuals. Is it realistic to hope that those who are obsessed with maximizing profits will stop to reflect on the environmental damage which they will leave behind for future generations?

As an alternative to market-based solutions, Francis suggests treating the climate and other important aspects of nature as common goods (a term he repeats twenty times throughout the document). Nobel economist Elinor Ostrom has documented hundreds of examples of communities organizing their resources as commons. For this to work, another important principle that Pope Francis stresses throughout Laudato Si is the need for subsidiarity—that people affected by decisions should be involved in making those decisions. Too much environmental and social destruction has been caused by decisions being made by people thousands of miles away who will never live with the results of those decisions.

Laudato Si is an important document written at an important time in the history of the cosmos. With the vast reach of the papacy, I hope it and Pope Francis’ exhortations will serve as a wake up call for many and a manual for change for those dedicated to changing the world. He is clear that it is important that we act now.

The pace of consumption, waste and environmental change has so stretched the planet’s capacity that our contemporary lifestyle, unsustainable as it is, can only precipitate catastrophes, such as those which even now periodically occur in different areas of the world. The effects of the present imbalance can only be reduced by our decisive action, here and now. We need to reflect on our accountability before those who will have to endure their dire consequences.

 


 

David Kane (João Pessoa, Brazil) is a researcher for the Faith-Economy-Ecology project of the Maryknoll Office for Global Concerns (MOGC). As a Maryknoll lay missioner from 1995 to 2012, he served in Brazil working with recyclers in city dumps and with the Jubilee Brazil campaign, as well as in Washington, D.C. Dave helped found Faith, Economy, Ecology, Transformation, a group of mostly faith-based organizations and individuals inspired to assist in the transition to a more sustainable and equitable economy. Currently, Dave educates and advocates for economic justice, particularly around trade, Latin America, and ecological economics. (David Kane photo credit: Rick Reinhard)

 

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.

Animal Welfare: Seeing the Forest for the Denizens

by Brian Czech

BrianCzechIf you’re a Huffington Post reader, your love of animals has been nurtured by “Hedgehogs Being Adorable,” “Baby Hippo Has Won Our Hearts,” and other such gems. The Post, The Animal Blog, and various animal-lover media take a heartfelt approach to the appreciation of animals–wild as well as domesticated–reminding us of the needs and vulnerabilities of our fellow creatures. It’s a refreshing approach, compared to the stodgy science and economics of conservation.

And it’s important. Mahatma Gandhi said, “The greatness of a nation and its moral progress can be measured by the way in which its animals are treated.” Abraham Lincoln said, “I care not much for a man’s religion whose dog and cat are not the better for it.” Animal welfare is a barometer of national “goodness” in a sense that resonates with our common sense.

Yet if we are serious about animal welfare, we have to get beyond the mere adoration of hedgehogs and hippos. We have to face up to the big-picture, systematic erosion of wild animal welfare. It’s all around us and getting worse by the day, and our public policies precipitate it.

The most prevalent source of animal suffering is habitat destruction. Habitat includes food, water, cover, and space. When any of these elements are destroyed or depleted, wild animals suffer and often die more miserable deaths than if killed by hunters or predators.

Some animals survive an initial wave of habitat destruction only to be stranded in an unfamiliar, unforgiving environment. When a food or water source is destroyed, wild animals may starve, die of thirst, or suffer from malnutrition and the associated agonies. When thermal cover is lost, animals expend valuable time and energy trying to regulate body temperature. This lowers the time and energy available for feeding, playing, and mating. When hiding cover is lost, wild animals experience fear and stress, seeking cover from predators that may or may not be present.

What kind of a life does that sound like? It would be like getting thrown out of your home, into a perilous world with no social net, no health system, no Salvation Army, and no street corner to beg from. Yet it’s the life we’ve been forcing animals into by the million. How can we stop?

Nervous now, future worse: pronghorn antelope at the edge of a growing economy. Photo Credit: Michael Shealy

Nervous now, future worse: pronghorn antelope at the edge of a growing economy. Photo Credit: Michael Shealy

We often hear of “human activity” being the cause of habitat loss. That’s a start, recognizing our basic role in the problem, but we have to dig deeper to detect precisely what type of human activity is problematic. After all, the habitat destruction caused by humans beings isn’t spiritual activity, or neighborhood activity, or political activity (at least not directly), but almost always economic activity.

The macroeconomic nature of the problem is evident when we consider the causes of species endangerment. These causes are essentially the sectors and byproducts of the whole, interwoven economy, starting with agricultural and extractive sectors such as mining, logging, and livestock production. These activities directly remove or degrade the habitat components required by wild animals.

Another major cause of endangerment is urbanization. Urbanization reflects the growth of the labor force and consumer population as well as a variety of light industrial and service sectors. Few types of habitat destruction are as complete as urbanization. While extractive activities can be a traumatic experience for the denizens of wildlands, logging, ranching, and even mining usually leaves some habitat components. But when an urban area expands, it does so with pavement, buildings, and infrastructure. These developments are devastating to most of the animals present.

The economic system extends far into the countryside, too. Roads, reservoirs, pipelines, power lines, solar arrays, and wind farms are examples.

It would be hard to conceive of a more prevalent danger to animals than roads. Roads and the cars upon them leave countless animals mangled and left, during their final hours, to be picked apart by wild and domestic scavengers. Power lines induce electrocution, a significant source of bird death and crippling. Power line collisions cause their share as well. Wind farms and solar arrays, thought to be the keys to “green growth,” are the latest hurdles for migratory birds.

Pollution is an inevitable byproduct of economic production. Pollution is an insidious and omnipresent threat to wild animals. Whether it’s nerve damage from pesticides, bone loss from lead poisoning, or one of the many other horrible symptoms of physiology gone wrong, pollutants ensure some of the most excruciating diseases and slowest deaths in the animal kingdom.

Climate change is another threat to species, although its mechanisms are less direct. Temperature is a key factor in the functioning of ecosystems and the welfare of the animals therein. Climate change is pushing polar bears and other polar species off the ends of the earth; at what point will this climate-controlled conveyor belt stop? Climate change, too, is a result of a growing (and fossil-fueled) economy.

We should give thanks for the Humane Society, International Fund for Animal Welfare, and Society for the Prevention of Cruelty to Animals. These and related organizations do the good work that Gandhi and Lincoln would have endorsed. Yet when is the last time you’ve heard these organizations give a hoot about economic growth, the single biggest threat to animal welfare?

And why does no one put in a word for our furry and feathered friends when Congress, the President, and the Fed pull out all the stops for GDP growth? Where are the advocates of humane treatment of animals, when the biggest decisions are made about the rate of habitat loss and therefore animal suffering? When a hundredth percentage point less in GDP growth could save hundreds of thousands of animals a year?

Why don’t we have a mainstream media, which isn’t afraid to expose nastiness to horses and chickens, talking about the millions of animals suffering at the cumulative hand of economic growth? Has economic growth become the inconvenient truth for animal welfare?

It’s definitely inconvenient–and that’s an understatement–for millions of animals.

Giant Mats of Green Slime in Lake Erie Signal a Need for New Economic Approaches to Pollution

by Brent Blackwelder

BlackwelderFor the past 40 years, I have spent family summer vacations in Northern Michigan to enjoy a fresh water paradise of small lakes and rivers, along with the Great Lake Michigan.

Ghanbani, Slimeade

What does this have to do with economic growth? Photo Credit: Haraz N. Ghanbari of AP

This year, not all of the Great Lakes turned out to be great: Lake Erie was covered with massive algal mats at its western end, forcing the closure of Toledo’s water supply that serves 400,000 people. A sample of the intake water for Toledo looked like a glass of thick green slimeade.

So, what is the link between this latest water pollution debacle, economic growth, and a true-cost economy? I will argue that in a steady state, true-cost economy, there would be much less reliance on pollution regulations. The chief tool would be bans, along with significant harm charges, on those products and processes that threatened public health or jeopardized the functioning of life support systems for the earth.

What causes me to advocate such a major change in the U.S. approach to pollution can be seen in three big water pollution events this year. My CASSE blog in March dealt with two significant water pollution events earlier this year–the coal-processing spill that shut down the water supply to Charleston, West Virginia, and the bursting of a coal waste storage pond in North Carolina, sending toxic sludge 70 miles downstream in the Dan River.

In my March blog, I discussed better economic approaches to pollution that would be pursued in a true-cost, steady state economy.  Before going into these approaches, it is important to understand the huge frustration that the American public was experiencing in the 1960s from hundreds of water pollution incidents and the failure of governmental bodies to put a halt to this.

In the early 1970s, many of us worked to obtain the 1972 Clean Water Act that featured the promise of making waters of our nation fishable and swimmable by 1986. Two remarkable examples helped drive public awareness and force Congress to enact this law: the Cayahoga River catching on fire and Lake Erie becoming a dead lake.

If someone had told us that 40 years later Lake Erie would experience massive green slime algal mats, we would have said, “No thanks, we need a truly strong law that would bring back Lake Erie from the dead, not a law so permissive that four decades later we would have a monster slime blob in 2011 stretching 120 miles from Cleveland to Toledo, followed by yet another huge slime mass in 2014.”

So now we are confronted with the abysmal failures of the regulatory system at the state and federal level, along with the tepid responses to the latest pollution disaster in Lake Erie. The time has come to demand a change to our economic approaches to pollution and begin the transition to a true-cost, sustainable economy.

To get down to brass tacks on the Lake Erie green slime, we must recognize that the chief cause is agricultural runoff. According to Don Scavia, director of the Graham Sustainability Institute at the University of Michigan, “the primary driver is the amount of phosphorus entering Lake Erie from agriculturally dominated watersheds.” The state of Ohio reports that two thirds of the phosphorus comes from farm lands.

So let’s start calling for a national ban on gigantic animal factory farms with hundreds and hundreds of animals crowded together. Such factory slum operations would not occur in a steady state economy. They are a microcosm of what happens with too much growth in numbers and pollution. When any population of animals or people get into overly crowded conditions, pollution overwhelms the carrying capacity of the land and water, disease increases, and violence breaks out.  Today, industrial agriculture is increasing in size and adverse impacts, although organic farming is making inroads.

While pushing for bans, we should also demand harm charges for the damages bad agricultural practices have on lakes. Look at the cost of losing a city’s water supply, the health costs, and the costs to the recreation economy in the region. Today animal factory operations and industrial agriculture escape monetary responsibility for the many harms they cause.

The Securities and Exchange Commission (SEC) could require businesses to disclose their pollution externalities when they file their annual financial reports. The Dodd-Frank Act requires companies to disclose conflict minerals in their supply chains, thus setting a precedent for the SEC to act. Revelation of these pollution externalities would constitute the first step in forcing the creators to cover their true costs of production.

My argument runs counter to the major thrust taken to deal with air, land, and water pollution since Earth Day 1970, which was primarily a regulatory approach. Some of the pollution laws have worked quite well, providing crucial health benefits and safeguarding ecosystems, but many are not set to deal with the magnitude of the pollution issues of the 21st century. For example, powerful bee-killing pesticides are causing collapses of bee colonies nationwide. Such pesticides should be banned since they threaten human food supply, about two thirds of which depends on the pollinators. Other pesticides and herbicides kill vegetation relied upon by butterflies such as the monarch that needs milkweed to lay its eggs on.  Bans are possible. Several European countries banned the powerful herbicide atrazine in the early 1990s, but this poison is widely used in the United States despite substantial scientific evidence about its health impacts.

The response taken by environmental groups and official state and federal agencies to the grotesque pollution of Lake Erie has been primarily to call for better regulation, which leads to more bureaucratic procrastination and few results. No one has called for a ban on bad practices of industrial agriculture or called for a shutdown of the big, filthy animal feedlots that are a cesspool of pollution and disease. These should be outlawed! It is not impossible. The Michigan legislature did ban phosphorus in lawn fertilizer.

The industrial agriculture system has grown so large in the United States that it is transgressing planetary boundaries, causing algal blooms and dead zones in lakes, bays, and estuaries. Certain parts of the economy, like those associated with industrial animal slums, need to shrink. Bans and harm charges must become frequently used economic tools.

Iraq and the Military-Industrial Complex versus a True Cost Economy

by Brent Blackwelder

BlackwelderIraq has been in the news again as civil war looms. President Obama has sent several hundred military advisers to Iraq, perhaps in preparation for Iraq War III. George W. Bush proclaimed victory in Iraq War II and told the American Legion “Slowly but surely, we are helping to transform the broader Middle East from an arc of instability into an arc of freedom.” But the grim fact today is that US actions have achieved the very opposite of what was officially described to the American public as the objective.

A true cost or steady state economy can never be reached in a society consumed with perpetual war, especially warfare over oil. A steady state economy must have its energy supply based on renewable sources like solar and wind. To reach a true cost, steady state economy, the resources currently devoted to waging war must be transformed, and the use of natural resources like oil that are causing wars must be shifted.

Recent developments in Iraq highlight the decades of failure to put in place renewable energy that would have minimized the use of oil in the transportation sector. Trillions of dollars have now been spent on the Iraq II war, where more civilians than soldiers have been killed and billions more will need to be spent caring for severely wounded veterans from these ongoing wars.

A look at news coverage of the situation in Iraq shows what has been really driving the situation. In a June 3, 2013 New York Times article “China is Reaping Biggest Benefits of Iraq Oil Boom,” Michael Makovsky, former Defense Department official under the Bush administration, complained that “We lost out. The Chinese had nothing to do with the war, but from an economic standpoint they are benefiting from it, and our Fifth Fleet and air forces are helping to assure their supply.”

One year later, the New York Times featured a story about all this “progress” being put in jeopardy with the intense military offensive by extremist insurgents. The president of the oil service company Mediterranean International told the Times “The collapse of Iraq would bring an international oil crisis.”

Solar Panels

An important step towards escaping perpetual warfare over oil. Photo Credit: Michael Mazengarb

To escape from perpetual warfare over oil, I propose that the biggest category of funding in all the world’s military budgets should be for installing rooftop solar energy and wind turbines. These renewable resources are widely available, they do not require large central generating facilities for electricity or refineries and pipelines for oil and natural gas usage, they are tension reducers rather than enhancers, they are essentially waterless technologies, and they do not produce the serious pollution and climate disruption caused by fossil fuels.

The younger generation does not realize that Iraq War I in 1991 caused the largest oil spills in history: on the land, in the sea, and in the air. Massive clouds of oily pollution carried as far away as India. Did stability come as a result? Rather than stability, resentments worsened over the US behavior. Osama bin Laden cited the actions of the United States and transnational oil companies as the reason for his launching the terrorist bombing on 9/11.

While some strong efforts are being made to transform energy economies into a more environmentally sustainable form, particularly in some European nations, vast sums continue to be provided to support wars in Iraq and Afghanistan. The sums that could have been used for a solar revolution have fundamentally been undermining the movement for renewables.

But there is good news on the solar front. In one month this year, Germany got more than 70% of its electricity from renewable energy. Germany, with 36,000 megawatts (MW) in solar capacity, leads the world. But in 2013, China added at least 11,300 MW, making it second to Germany with 18,300 MW in overall capacity.

Solar power is starting to take off in the United States with about 4,800 MW added in 2013, increasing our total photovoltaic capacity by 65 percent to 12,000 MW–still far behind Germany, which is about the size of Montana.

President Obama supports legislation to deal with global climate disruption and has made some significant gains in transportation fuel economy, but the US is not a leader in bringing electric vehicles run by solar power into widespread use.

The price of rooftop solar has dropped 75 percent in the last five years and flat roofs are available throughout metropolitan areas, so the opportunity for Obama to do a lot more is present, but oil wars in the 20th Century have continued under his administration, even as many top military people worldwide are calling attention to environmentally driven conflicts as being top security threats.

Before launching a war against any country, the United States should take the vegetable test: would we be on the attack if that country’s leading export were carrots or green beans?

The key step to reaching a true cost, steady state economy is to keep the emerging solar revolution going full speed ahead. It is the underpinning of stability–the kind of stability needed for an environmentally sustainable economy.

Top 5 Threats to the World’s Beaches (and a Systemic Solution)

by Brent Blackwelder

BlackwelderProfessors Orrin Pilkey and Andrew Cooper are writing what promises to be an outstanding book. In The Last Beach (to be published this summer by Duke University Press), they describe the top five threats to beaches around the world. Even a quick overview of these threats suggests a strategy for confronting the degradation and loss of beaches. It’s no surprise that a comprehensive, long-term beach protection strategy requires significant changes to our economic system — a system that has overdeveloped and polluted beaches to the extent that they have become unhealthy places to swim or even play in the sand.

Beach Threat #1 — Physical Alteration of the Natural Shoreline. Overdevelopment of the shoreline with miles and miles of high-rise buildings can cause pollution and when threatened by storms, create demand for seawalls. If the demand is met and seawalls are built, over time they end up destroying the beach — the very asset that attracted visitors in the first place.

Beach Threat #2 — Polluted Runoff from Urban Areas and Malfunctioning Sewage Plants. The Environmental Protection Agency estimates that every year up to 3.5 million people in the U.S. become ill because of contact on beaches with raw sewage that has overflowed from local sewers. Most of the illnesses are minor, but some are very serious. 2011 saw a total of 23,481 beach closure days because of concerns about health from water pollution.

Beach Threat #3 — Contaminated Sand. The scientific literature indicates that beach sand is more polluted than the adjacent waters. Researchers found that fecal bacteria on three beaches in South Florida were 2 to 23 times more common on the wet intertidal beach than in the water column. The concentrations of fecal bacteria on the upper dry beach above normal high tide were 30 to 460 times the concentration in the adjacent surf zone. Just a few decades ago, you could build a sand castle that didn’t that didn’t need to be disinfected.

Beach Threat #4 — Unsound Practices and Ill-Suited Uses. Driving on beaches and mining beaches for sand (done in Morocco, Singapore, and some Caribbean islands) can destroy wildlife habitat, impair the natural productivity of the coast, and ruin tourism.

Beach Threat #5 — Engineering the Beach after Weather Disasters. The U.S. Army Corps of Engineers is ready to come to the rescue in an effort to protect buildings on the coast by means of seawalls, jetties, and sand replenishment, but these measures are usually maladaptive. Pilkey and other scientists have found that when beaches are eroding, seawalls tend to destroy the beach by causing the sand to disappear in the deeper offshore waters.

Polluted vs. pristine beach

Different types of beaches result from different types of economies. Photos by Len Matthews (l) and Adam Fagan (r).

Many beaches are suffering at the hands of these five threats — thousands have been temporarily closed around the world each year due to poor water quality. The expected increase in storm intensity in coming decades, sea level rise, and increased population pressure are likely to cause even more pollution in the future. And individuals and governments will face massive expenses as they seek to protect or reconstruct buildings on the coast. It is a road to bankruptcy, but a road already being traveled by Congress. Earlier this year, in the midst of a vicious fight to find $100 billion in budget cuts, Congress passed legislation with over $50 billion to help New York and New Jersey rebuild after Hurricane Sandy.

Only an economy that externalizes environmental and social costs would underwrite coastal development practices that are pushing beaches to the brink of extinction. Any strategy to combat these threats must address the economic drivers behind the problems.

A true-cost, steady state economy would conserve beaches and limit the build-out, because it would account for the long-term value of natural beach ecosystems, whether for recreation and tourism, public health and spiritual refreshment, or fish and shellfish. These values are consistently absent from economic calculations that focus on quarterly returns. Instead, today’s economic philosophy — the philosophy of growth at all costs — disregards the pollution of sand and water caused by overdevelopment and directs billions of tax dollars to shoreline engineering projects that ultimately eliminate sandy beaches.

Pilkey reports that almost all problems with beaches — from erosion to lack of replenishment, and from degradation to pollution — are related to development. Less beachfront development means less of these problems, while allowing for the the possibility that more beautiful beaches will be around for our children and grandchildren to visit.

Lest readers think a paradigm shift in beach management as advocated by Pilkey and Cooper is pie-in-the-sky, it’s worth noting that the U.K. made such a shift over half a century ago. Today the biggest coastal landowner is a charity called the National Trust. Since the 1960s the Trust has been purchasing scenic and pristine sections of the British coast, and its policy is not to interfere with natural processes via construction and coastal engineering schemes. Now that’s a development on the beach worth celebrating.

What Kind of Example Is Canada Setting?

by Brent Blackwelder

BlackwelderIs any nation on Earth taking seriously the need for a true-cost economy, where we live sustainably in a steady state? I have been working with Randy Hayes, founder of the Rainforest Action Network and executive director of Foundation Earth, on a report card to determine if Canada might be such a nation. The report card reveals whether Canada is setting the example for how to run a country sustainably in the 21st century, or following the path of maximal exploitation of natural resources (the path followed by most nations and urged by the World Bank, IMF, WTO, and growth-obsessed economists).

We chose to examine Canada in part because of its history of compassion and global concern. Canada also has abundant natural ecosystems, lots of land and fresh water, and a relatively small population. This combination of assets puts Canadians in a better position than most to set policies for achieving a sustainable economy.

The report card, scheduled for release in June by Foundation Earth, grades the administration of Prime Minister Stephen Harper, as well as the provinces of Alberta and British Columbia, on key actions and policies in economics, ecology, and equity. It will present grades in sixteen categories.

Canada has the potential to achieve high marks across all categories (in fact, the report card highlights initiatives around the world that show what can be done to earn high grades). But much to our chagrin, we found that instead of taking actions to enhance the health of people and the planet, Canada has been reverting to the crass and outdated ways of cowboy economics: “exploit now, answer questions later.” The Harper administration receives failing grades in most of the sixteen categories, while Alberta and British Columbia do only slightly better. Although Vancouver, Toronto, and other locales have undertaken a number of sustainable economic initiatives, the Harper administration is promoting overly exploitative projects in most areas.

Given the collapse of leadership in the U.S. on innovative ecological and economic policy, Canada could have emerged as a worldwide leader on the shift to clean energy. The nation could have rejected mega-extraction projects that pollute the air and water and damage or destroy forests, grasslands, rivers, lakes, mountains, and valleys.

Instead, Canada is following the U.S.’s lead and dropping the ball. For example, Harper could have extended British Columbia’s carbon tax law of 2008 to the rest of the country. Sweden adopted a carbon tax in 1991 with good results. Harper could have pushed for extensive solar energy in Alberta and Saskatchewan where cities such as Edmonton, Calgary, and Regina have equal or better solar potential than Rome, Italy. Germany and Denmark have shown that northern nations can lead the way on solar, wind, and other renewable energy sources.

To get a sense of the grades we’re compiling in the report card, here’s a rundown of four categories:

1. Climate Disruption and Pollution

On climate policies, Canada is ranked 58th out of 61 nations that the European Climate Action Network analyzed. Only Saudi Arabia, Iran, and Kazakhstan ranked worse. This woeful ranking stems from projects like the Enbridge pipeline. Harper has pushed for this pipeline project that would carry tar sands oil across British Columbia to the port of Kitimat where supertankers would attempt to navigate difficult channels (and jeopardize the province’s magnificent northern coastline).

By removing protections from 99% of Canada’s natural water bodies, Harper has left 30,000 lakes and rivers vulnerable to corporate pollution. The Prime Minister has also sought to weaken water pollution standards and given permission to use more lakes as dumpsites.

2. Women’s Rights

When it comes to empowerment of women, Canada under Harper has fallen three places in the Global Gender Gap Index and now ranks 21st. Harper cut funding for the Status of Women department by 38% and closed twelve of its sixteen regional offices.

3. Rights of Indigenous People

In January 2006, Harper cancelled the Kelowna Accord, a historic agreement to clean up pollution that is poisoning First Nation people. The Harper government, along with some provincial governments, has systematically failed to respect indigenous rights and has cheered energy projects that severely impact the health of native people, their lands, and their waters.

4. Science-Based Decision Making

Reminiscent of an Orwellian state, Harper’s administration has eliminated scientific programs and refused to regard scientific findings on toxic contamination and the health of forests, fisheries, and oceans. Harper has led an outright assault on environmental groups, allocating millions to the charitable tax agency harassing these organizations.

Key institutions carrying out scientific work on the health of the Earth have been gutted and even shuttered, including the Polar Environment Atmospheric Research Laboratory in the High Arctic, the Experimental Lakes Area (an extraordinary 58-lake research venue in western Ontario), the national program on contaminants in marine mammals, and the Department of Fisheries and Oceans.

All scientific research in the National Parks has been terminated, and Environment Canada has cancelled its work on climate adaptation by laying off all eighteen scientists in the program. Top experts on ocean pollutants, marine mammals, contaminants in the St. Lawrence River, toxic flame retardants, and endocrine disruptors in fish have been dismissed.

The report card on Canada under the Harper administration will inform people of these disgraceful changes. Canada is moving farther and farther from a sustainable economy and is now a record-setting polluter where the gap between rich and poor is widening; where women, First Nations, and conservationists are under major attack; and where energy and mining companies are given a blank check to pillage the nation and the planet.

Many have tried to influence Harper to do what’s best for the environment and the economy over the long run. If the saying is true that, “You can lead a horse to water, but you can’t make it drink,” then maybe it’s time to put Harper out to political pasture. Although with the policies he’s been supporting, he might have a tough time finding drinkable water in that pasture.

China’s Infinite-Growth Haze

by Eric Zencey

Eric_ZenceyA few weeks ago, air quality at the U.S. embassy in Beijing registered 755 on a scale to 500. A thick, choking haze enveloped the entire city. You couldn’t see from one high-rise office tower to the next; flights were cancelled, some highways were closed, schoolchildren were kept indoors, hospital admissions soared. China’s air quality problems aren’t limited to Beijing — a 2010 study found that air pollution led to 1.2 million premature deaths nationwide — and killer air is just one of the country’s ecological sorrows. One-half of its surface water is so polluted it can’t be treated to make it drinkable, and half of that is so bad it can’t even be used for industrial purposes. Seventy percent of the country’s rivers and lakes receive raw sewage or untreated industrial toxins. Cancer rates are up, and the country has been losing an area the size of Connecticut every year to desertification, brought on by unsustainable farming practices in grassland ecosystems.

In protest, Chinese people have begun taking to the streets in demonstrations that have increasingly become clashes, sometimes bloody, with riot police.

Between 1978 and 2008 the Chinese economy grew tenfold, outpacing the rest of the world. (For comparison: U.S. real GDP tripled in that period.) The growth has come at considerable and notorious cost in contaminated air and water and other “disamenities” — pulmonary disease, cancer, riots.

Are these the necessary costs of development? Of course not. So why is China paying them? As with most real-world questions there is no single answer, but one of the clearest, strongest, and saddest parts of a complete answer is this: China listened to the wrong economists.

EKC

Theorized relationship between pollution and income

Those economists are neither crazy nor blind. They can see the human cost of pollution and environmental degradation. But they’ve got a theory that reassures them the problem is only temporary and will fix itself: the Environmental Kuznets Curve (EKC), which plots a supposed relationship between pollution and income as an upside-down U. Before development, this theory says, pollution levels are low; pollution then increases as economic activity and income both rise; and then, at some tipping point, pollution hits a peak and begins to decline with additional income, as a wealthier population demands and can afford better environmental quality.

This, the standard economics textbooks say, is “intuitively appealing.” And it is — if your intuition has been shaped by traditional economic theory. If ecological damage can always be reversed, and if environmental quality isn’t a God-given gift or a basic human right but a commodity like any other, then it makes sense to think that you can buy a better environment when you get more income. Implication: “Growth is the Key to Protecting the Environment, Not its Enemy,” as one article on the EKC puts it.

This logic leads to an absurd conclusion (always a bad sign for a theory): the reason we have climate change is that the richest countries the planet has ever seen are still not rich enough to afford the environmental good known as “climate stability.” Nor can the EKC be defended on empirical grounds, as good science. The New Palgrave Dictionary of Economics acknowledges that most EKC studies “are designed to yield inverse-U-shaped pollution-income paths, and succeed [in doing so by] using a variety of assumptions and mechanisms” — an approach more consistent with preservation of a faith than with scientific inquiry.

The faith that’s at stake are the dogmas of infinite growth. If pollution doesn’t at some point decrease permanently as income increases, we have to admit that there are ecological limits to economic activity.

While the inverted U of the EKC does describe the relationship between some key pollutants and GDP growth in most developed countries, that finding has fatal conceptual flaws. “Key” pollutants are not all pollutants, and particular pollutants aren’t the sole and permanent marker of ecological degradation. Policies that control one kind of pollutant (and which thereby send its EKC down) may simply encourage a shift to manufacturing processes that produce other kinds of pollutants — ones that aren’t (yet) regulated and haven’t ever been measured, so there’s no possible way to chart their history on an EKC.

SmoggyBeijing_byAnimaSuri

Beijing’s gamble with the EKC has become a health hazard (photo credit: AnimaSuri)

Another kind of shift establishes an EKC for a pollutant in one country because the manufacturing process itself moves somewhere else. No EKC study has ever definitively excluded the possibility of this “pollution haven” effect. If exporting a dirty industrial process to a country with little or no regulation is cheaper than meeting regulatory standards at home, why would a profit-maximizing company do anything else?

In the effort to shift an economy’s pollution footprint to another country, the EKC is a big help. It reassures the recipient nation that poisoned air and water are a necessary phase of economic development; that someday it too will be rich enough to restore the environmental quality it once had. What the EKC doesn’t say: ecosystems can be degraded past any hope of repair or reclamation, as many a previous civilization learned the hard way. It doesn’t say: loss of biodiversity is a definitive element of ecosystem degradation, and an EKC for it is a logical impossibility. It doesn’t say: we live on finite planet, and there’s no guarantee that when you want to restore your country’s environmental quality, you’ll be able to find fresh pollution havens willing to accept your economy’s footprint.

Thus, China. In 2005, Pan Yue, then the vice minister of environmental protection, lamented his country’s acceptance of the EKC: “The assumption [was] that the economic growth [we pursued] will give us the financial resources to cope with the crises surrounding the environment, raw materials, and population growth.” Whether China can now reverse the damage and outsource the pollution-dump services that its environment has been asked to provide remains to be seen. One thing is clear: other parts of that country’s ecological footprint are being exported. China is now shopping for farmland in Africa and long-term agricultural leases in South America because its degraded landscape can’t support the human population it holds.

Still, the EKC has its defenders and continues to be treated as a sturdy economic finding — probably because if the EKC isn’t true, then a discipline dedicated to infinite growth will have to face up to the fact that there are limits to what nature can give to us and to what it can absorb from us. Evidence and logic — and the air quality in Beijing — say that yes, there are limits. It’s time for economists to stop seeing the world through the distorting, poisonous haze of an unsupportable theory and to start seeing the world as it is. The fate of our civilization depends on it.

Eric Zencey is a Fellow of the Gund Institute for Ecological Economics at the University of Vermont. He is the author, most recently, of The Other Road to Serfdom and the Path to Sustainable Democracy, from which this essay is drawn.

What Kind of Economy Says OK to Tar Sands Oil?

by Brent Blackwelder

BlackwelderOn Sunday, February 17, I marched in the largest climate change protest in U.S. history. About 35,000 people gathered on the Washington Monument grounds for a rally and then marched past the White House, calling on President Obama to deny permission for the construction of the Keystone XL pipeline that would transport oil from Canada’s tar sands through the heart of the U.S. to the Gulf Coast.

Two of the victims of tar sands development in Alberta, Chief Jackie Thomas of the Saik’uz First Nation and Crystal Lameman of the Beaver Lake Cree First Nation, spoke of the contamination of their lands and people. Even without the pipeline, the gigantic oil extraction operation is already causing plenty of harm.

If carried to completion during the next several decades, over the objections of the indigenous people who have been stewards of this land, tar sands mining will have transformed an area the size of Florida or Wisconsin. A land teeming with fish and wildlife will have been turned into a grotesque zone of toxicity where the lakes will act as predators as they entice unsuspecting waterfowl to land in their polluted waters.

What kind of economy would find such an activity acceptable? At the very least, the economy must be making some perverse calculations to justify such devastation.

As if the direct devastation of the land and water were not enough, the utilization of tar sands oil by the U.S. and other countries means “game over” for the global climate, according to NASA scientist James Hansen. In other words, the energy-intensive extraction followed by the burning of tar sands oil will put so much carbon pollution into the atmosphere that we will enter an era of radical climate destabilization.

The exploitation is proceeding on Cree lands against their consent and in violation of the Canadian Constitution. It represents a blatant refusal to abide by Article 32 of the U.N. Declaration on the Rights of Indigenous Peoples that says: “States shall consult and cooperate in good faith with the indigenous peoples… in order to obtain their free and informed consent prior to the approval of any project affecting their lands particularly in connection with the development, utilization or exploitation of mineral, water or other resources.”

President Obama appears poised to give permission to build the pipeline and contribute to this industrial nightmare. So what can we do in the aftermath of the big protest?

The time has come to reject the premises of today’s economy, because it is not a true-cost economy, and it undermines good governance. It is an economy set up for cheaters and gamblers. It is also an economy that exploits those lacking political clout and that disrespects international law, except when it comes to trade agreements that enable polluters to enter special secret courts (see the Chevron trade case against Ecuador for one recent example).

A true-cost, sustainable economy would not countenance commercial activities like tar sands mining that are tantamount to an all-out war against the natural environment and a form of industrial genocide. The genocide is underway not because of racial hatred, but because tribal people have stood in the way of a major money-making venture. Furthermore, the indigenous people lacked political power to stop the transnational corporations from ruining their lands.

Protests of the Keystone XL pipeline should blossom into protests of our unsustainable economy.

Protests of the Keystone XL pipeline should blossom into protests of our unsustainable economy.

A true-cost economy would exemplify resilience. It would be less susceptible to disruptions from speculation, violent weather events, and terrorism. Such an economy would not pursue activities that generate or are likely to generate irreversible pollution. No one has to worry about a “solar spill” or a “wind spill” ruining their drinking water.

Today’s economy, on the other hand, is permitting all sorts of damaging activities that violate the criterion of reversibility and bequeath a legacy of poison. Consider the contrast between renewable energy projects and coal mining.

If a wind farm or solar rooftop array is causing problems, it can easily be removed without leaving centuries of pollution behind. The roof or the land can be returned to other uses. In fact, wind farms are fully compatible with agricultural production around the wind turbines. One wind farm I visited near Dodge City, Kansas, consisted of 150 turbines in a 20-square-mile area, and the land requirements were just seven acres.

In contrast, coal mining in West Virginia through mountain-top removal is converting biologically diverse, forested mountains into a Martian landscape. In the words of former Congressman Ken Heckler, reclamation amounts to “putting lipstick on a corpse.” Such mining projects violate the principle of reversibility, just like tar sands oil extraction. What will be available to people in the future who want to live in and explore places like West Virginia’s formerly bountiful mountains and valleys?

Whenever concerns are raised over the destructive impacts of big extractive projects, the predicament of joblessness always comes up. But joblessness cannot be solved with the current economic strategy that allows temporary construction jobs to destroy permanent jobs and livelihoods. Big extraction projects cannot create the volume of jobs that can be had by pursuing renewable energy. In fact, the oil industry generates the fewest jobs of almost any industry in the federal government’s database.

It is time to start demanding a true-cost economy that will create diverse jobs without creating no-go zones of carcinogenic and mutagenic wastes.

A Practical Proposal to Erase Externalities

by Randy Hayes and Brent Blackwelder

As the global economy grows, it expands into pristine habitats, interferes with critical ecosystems, consumes more resources, and emits more pollutants. Many activities that fall under the banner of economic growth are undercutting the planet’s ecological systems. At the heart of this tragedy are pollution damages that are imposed on society but not factored into company costs. These damages are called externalities because they are externalized by the businesses generating them.

Every day, producers of myriad products impact the biosphere in ways unknown to customers, investors, and policy makers in both host and home countries. By not undertaking the measures necessary to protect ecosystems, these companies avoid responsibility for the damages. And because they have failed to account for the true costs of their businesses, they can sell their products at lower prices than more ecologically responsible companies, gaining an unfair advantage and reaping undeserved profits.

The consumption patterns in many product markets would change if the true costs of production were reflected in the prices of the products, or even if customers, investors, and policy makers had better access to accurate information. There are many possible paths to full internalization of these externalities, but there is no clear map of the territory. As the United Nations Environmental Programme puts it, “in the current absence of sufficient and comparable company disclosures on the environmental impacts of operations and supply chains,” it is difficult to puzzle our way out of the dilemma. In fact, it is virtually impossible to achieve a sustainable economy unless something is done about pollution externalities.

A true-cost economy would align our economic system with nature’s life support systems. Biologists teach us that each living system has feedback loops that allow it to adjust and operate within carrying capacity limits. The human economy is no exception, but we’ve short-circuited an important feedback loop by letting companies externalize the costs of their pollution. The time has come to adopt systematic rules that add pollution costs to the prices of goods and services. Such rules would provide critical information that is necessary to keep the scale of the economy within the planet’s carrying capacity. A true-cost system would solve real problems, but how can we put such a system in place?

A small change at SEC headquarters could have big effects.

The mission of the U.S. Securities and Exchange Commission (SEC) is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation. Although the SEC requires public companies to disclose certain financial information, it does not require them to disclose information about their health and environmental externalities. Changing the requirements could produce widespread positive impacts.

Public companies are responsible for as much as one-third or more of all pollution externalities. By requiring these companies to track and report the costs that they typically externalize, we would not only set a legal precedent, but we would also begin to instigate the much deeper social and cultural changes needed to achieve a true-cost economy. If we can compel the largest and often most intransigent corporations to disclose how they are impacting the planet, truth and honesty can begin to displace “dark costs” and secrecy. With such a cultural shift, we will perhaps no longer be talking about imposing disclosure requirements, but rather enjoying increased cooperation and forthrightness.

In the meantime, the transition to a true-cost economy calls for mandatory, annual disclosure of externalities — ecological impact disclosures — by every company that falls under SEC jurisdiction (effectively all U.S. public companies and some foreign issuers as well). Adoption of ecological impact disclosures can be done by successfully petitioning the SEC, passing federal legislation, or both.

CERES (a prominent nonprofit organization), religious groups, and pension funds have pushed for shareholder resolutions and achieved important successes toward institutionalizing broader disclosures. Other groups have petitioned the SEC to adopt a flexible environmental, social, and governance (ESG) reporting framework, such as that developed by the Global Reporting Initiative. These efforts are worth applauding, but we need a bigger, bolder solution that confronts the magnitude of the problem and paves the way for a sustainable, true-cost economy.

The best route is to empower the SEC to force each public company to provide an annual ecological impact disclosure. Such a disclosure would be more effective than a flexible or voluntary framework — it would require specific data, reported in standard forms. Each reporting company would provide information about its own operations as well as those of other companies in its supply chain. In addition to aggregate, company-wide information, companies would provide site-specific data so that the public can determine where impacts are occurring.

Many investors have been calling for this sort of information to help them make better decisions about where to put their money. But this is precisely the kind of information that has been kept from the public for the past century. Keep an eye on the efforts at Foundation Earth over the next year to remedy this situation.

Randy Hayes is the founder of the Rainforest Action Network. Brent Blackwelder, a regular contributor to the Daly News, is the president emeritus of Friends of the Earth.