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Time to Stop Worshipping Economic Growth

By Brent Blackwelder

Brent Blackwelder

There are physical limits to growth on a finite planet. In 1972, the Club of Rome issued their groundbreaking report—Limits to Growth (twelve million copies in thirty-seven languages). The authors predicted that by about 2030, our planet would feel a serious squeeze on natural resources, and they were right on target.

In 2009, the Stockholm Resilience Center introduced the concept of planetary boundaries to help the public envision the nature of the challenges posed by limits to growth and physical/biological boundaries. They defined nine boundaries critical to human existence that, if crossed, could generate abrupt or irreversible environmental changes.

The global economy must be viewed from a macro-perspective to realize that infringement of the planetary boundaries puts many life support ecosystems in jeopardy. Without functional ecosystems, the very survival of life forms, as well as human institutions, is put in doubt, including any economy. There is no economy on a dead planet!

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Scientists are concerned that we have already overstepped the boundaries on biogeochemical flows (nitrogen) and biosphere integrity (genetic biodiversity). [click image for larger view] Image Credit: F. Pharand-Deschênes /Globaïa. 

These boundaries apply to the economy because the economy is a wholly-owned subsidiary of the ecosystems that make life on earth possible. (Some understanding of ecology should be a prerequisite for an advanced degree in economics!) Scientists are concerned that we have already overstepped the boundaries on biogeochemical flows (nitrogen) and biosphere integrity (genetic biodiversity).

Today’s global economy and the various regional and national economies regularly neglect planetary boundaries. Crossing a boundary is tantamount to crashing through a guardrail and plunging over a cliff. The blind encouragement of economic growth that does not respect these boundaries is setting up human civilizations for collapse. Two of the most harmful types of growth are ruthless and futureless.

Ruthless growth benefits a few at the top but does nothing for the middle class. One of the reasons that Bernie Sanders’ presidential campaign has attracted larger and larger audiences is that he says the most crucial issue facing the United States is the gross discrepancy between the middle class and the billionaire class.

Futureless growth destroys resources, such as water, forests, fisheries, and farmland that will be needed by our children and grandchildren, and by wildlife. Futureless growth directly conflicts with common family values. We tell our children to save for the future rather than squander their money. We don’t tell them to outspend their peers. We don’t tell them to judge the quality of their lives based on material possessions and quarterly financial reports.

To remain within the nine planetary boundaries, nations must shed the fetish of economic growth and transition to a true-cost, steady state economy. Some of the critical transition steps include:

  1. Replacing the GDP as a measure of well-being (lots of work has been done on coming up with an index of sustainable productivity).
  2. Getting the Securities and Exchange Commission (SEC) to require corporations to disclose their pollution externalities (the SEC is not hopeless, as can be seen by its recent decision to require CEOs to publish their salaries along with those of the average workers at their companies).
  3. Going to a four-day work week to secure fuller employment (this has happened in some European countries; Canadian economist Peter Victor has papers on why this is a crucial transition step).
  4. Dematerializing the economy (i.e., so that it’s cheaper to repair an appliance than it is to buy a new one).
  5. Identifying the areas in which the economy should grow—and those where it should shrink or degrow (i.e., the usage of fossil fuels must shrink sharply, and in so doing, roof-top solar will grow to become a much larger part of the global economy).
  6. Identifying the most heinous types of economic growth (ruthless and futureless) and showing how their costs exceed their benefits.
  7. Stabilizing population to keep humanity from further transgression of the nine boundaries.

There are about seven billion people on earth today, and forecasts indicate there will be nine billion by 2050. Already, almost one billion malnourished people are feeling the squeeze, as they painfully bear testimony to the truth of what Malthus predicted two centuries ago. Key first steps to stabilizing population in a progressive way are:

  1. Empowerment of women.
  2. Requiring all foreign assistance to be designed so that women will be better off as a result.
  3. Making contraceptives widely available.

Our global economy is treating the planet as if it were a business in a liquidation sale. Even environmental organizations—devoted to environmental protection— have been slow to acknowledge the major causes of environmental degradation, such as perverse economic incentives encouraging raw resource extraction and non-renewable energy use. We need environmental leaders to speak out for a new, just, and true-cost economy; and to challenge the mindless embracing of economic growth—even ruthless and futureless growth. Environmental leaders should be driving the push toward refocusing economic thinking on the changes that we will have to make if we are going to move to a healthier economy that exists within the nine planetary boundaries. Only if humanity stays within these nine boundaries can it continue to develop and thrive for generations to come.

 

 

A Sustainable True-Cost Economy Promises an Escape from Massive Water Pollution

by Brent Blackwelder

Brent Blackwelder

A year ago, I wrote about how a true-cost steady state economy would deal with water pollution. Last August, the alarming green slime at the west end of Lake Erie was so bad that it shut down Toledo’s water supply for half a million people. Who would pay the tremendous damages caused by the green slime? Certainly not the industrial agricultural interests who were responsible for about two-thirds of the problem!

Our current U.S. economy routinely lets polluters off the hook and even rewards them with subsidies, and the same is generally true for the global economy. During the past twelve months, water pollution has gone from bad to worse as exploding rail freight trains loaded with tar sands oil have caught on fire, causing derailments and spilling contaminants into rivers.

Many people are under the mistaken impression that violations of the Clean Water Act are rare. The Potomac Riverkeeper Network has just completed an analysis of water pollution violators in a section of the Potomac River Basin. (full report forthcoming; for background, see the Potomac Riverkeeper Network’s Upper Potomac River Basin campaigns.) Basin wide, there are over 2000 facilities with permits to discharge pollutants into the Potomac River. Of the 293 facilities in the Upper Potomac region, more than 10% had violated their permit conditions during the last three years! Just think of the increased enforcement costs if a region jumps from 5% to 10% non-compliance. The enforcement workload doubles!

Reports from the Pacific coast, from California to Alaska, are disturbing because they indicate that some fisheries and shell fisheries may be on the tipping point of collapse. Worldwide, we are seeing industrial civilization screw up clean water through nutrient loading from gigantic crop monocultures and animal factory slums. It’s a recipe for catastrophe. Several dead zones at the mouths of great rivers like the Mississippi have gained notoriety, but the public is not aware that there are now hundreds of such zones worldwide.

Animas River.Schatzl and Pickles

The Animas River before the toxic metals of the Gold King Mine spill turned it bright orange. Photo Credit: Schatzl and Pickles.

The latest water pollution debacle occurred just this month (August 2015) in the Colorado Rockies. A state of emergency was declared as the Animas River turned orange when millions of gallons of toxic heavy metals and carcinogens from the Gold King Mine spilled and created a hazardous mess at the very peak of summer recreation.

Recreation in this part of Colorado is a crucial component of the economy. One river outfitter has had to lay off over twenty employees. Agencies have allowed the leakage at gold mines like the Gold King Mine to persist for years without being cleaned up.

These accidents would be far less likely to occur in a sustainable steady state economy. A steady state economy would not incentivize pollution. It would not allow externalization of pollution and health costs, and it would eliminate subsidies for extraction of hardrock minerals and fossil fuels. Globally, an estimated $600 billion per year in subsidies is provided annually to the fossil fuels industry, in contrast to $100 billion for wind, solar, and other renewable energies.

A sustainable economy would place genuine value on the many benefits provided by clean water and free flowing rivers, including diverse fisheries, a variety of recreation activities, beautiful scenery, and a healthy water supply. The global economy looks upon water more as a commodity, and trade agreements attempt to facilitate the privatization of water. A sustainable true-cost economy, on the other hand, does not externalize pollution impacts or exclude from economic calculation the numerous but less tangible benefits obtained from free-flowing rivers.

A sustainable true-cost economy holds so much promise, but the immense challenge of transitioning to such an economy can seem daunting. Tackling our water pollution crisis illuminates some highly actionable steps we could take immediately to start making a steady state economy a reality.

The Securities and Exchange Commission (SEC) could take an initial step toward a true-cost economy by requiring the many companies reporting to it to disclose their pollution impacts (externalities). Impossible you say? A few years ago it seemed impossible to get the SEC to require disclosure of CEO salaries. But guess what? It just happened—thanks to leadership by Senator Elizabeth Warren (D-Mass) along with tremendous grassroots pressure.

The SEC will now require publicly-owned corporations to disclose how much their CEOs make compared with the median wage of their workers. The Washington Post reported that the pay gap between executives and unskilled workers is about 300 to 1, not 30 to 1 as most Americans think. This precedent-setting action by the SEC should be followed by other campaigns directed at the SEC, starting with action on externalities.

In a true-cost economy, the price tag for goods and services that cause serious damage to life support systems would be so high that such products would not be produced. We would do well to recall that there is no economy on a dead planet. Critics who say that civilizations are nowhere close to causing ecosystem collapses do not consider the scientific evidence on planetary boundaries, nor the lessons from past collapses of societies. I think we should seize on the outrage over all the water pollution disasters in 2014 and 2015 and push for new economic structures that will provide long-term solutions.

Progress Toward a True-Cost Economy Now Comes From Developments in Renewable Energy

by Brent Blackwelder

Brent BlackwelderA renewable energy revolution is sweeping the planet. This revolution has profound implications because it signals that the global economy is moving to stop the growth of our human carbon footprint.

The global economy has run for a century primarily on fossil fuels but is now undergoing a rapid transition to a global economy based significantly on rooftop solar, wind, and efficiency. This is a tangible movement toward a steady state economy because with wind and solar, the amount we use today does not affect tomorrow’s supply; and unlike fossil fuels, the pollution externalities are small and do not harm fellow competitors or the public.

This revolution is more than a technical fix because it is shifting the ingredients of the material products and services of the economy from toxic, polluting, non-renewable substances and ingredients to ones that are renewable and dramatically lower in pollution. It is demonstrating that renewable energy can avoid imposing dangerous impacts onto the public or onto future generations.

Skeptics over the last two decades have argued that renewable sources such as wind and solar are trivial and simply incapable of providing the power needed by the global economy—that all they will ever do is provide only a small percentage of the world’s electricity. I remember the days when utility executives belittled renewables, warning that more than about 5% of wind or solar electricity in a region would crash the grid!

Photo Credit: janie.hernandez55

The renewable energy revolution is a stepping stone toward a sustainable true-cost economy. Photo Credit: janie.hernandez55

I want to present a few startling and uplifting facts that demonstrate the dramatic progress recently made by solar and wind power around the world. 1 These facts give the lie to the phony assertions made by utilities in their efforts to block renewable energy.

Rooftop solar is growing worldwide by 50% per year. In 1985 solar cost $12 per watt, but today’s prices are closer to 36 cents per watt. Every five hours the world adds 23 MW of solar—which was the global installed capacity in 1985.

In January of 2014 Denmark got 62% of its electricity from wind. In 2013 Ireland got 17% of its electricity from wind, and Spain and Portugal both exceeded 20% from wind. Today China gets more electricity from wind (91,000 MW) than it does from nuclear reactors. The United States is second in the world in installed wind turbines, with South Dakota and Iowa obtaining over 26% of their electricity from wind.

As we look to achieve a true-cost, steady state economy, questions are constantly raised about the behavior of other powerful nations that might appear to have no interest in a sustainable economy. The renewable energy revolution provides breakthrough opportunities here. China is already putting its energy future into more and more renewable energy. It plans to more than double its current wind capacity with an expansion goal of 200,000 MW by the year 2020.

Even the French, who rely on nuclear reactors for 75% of their electricity, are planning on increasing their wind generating capacity to 25,000 MW from their present 8,300 MW.

The renewable energy revolution will enable civilization to stop the growth of highly polluting fossil fuels. It will enable society to leave the majority of the remaining reserves of fossil fuels alone and unburned. Acceleration of this revolution helps in solving many problems and is a key to restoring and maintaining the life support systems of the earth.

For a number of reasons, this renewable energy revolution is a stepping stone toward a sustainable  true-cost economy. First, unlike fossil fuels, the footprint of wind and rooftop solar is minimal. Wind turbines erected on farmland use very little land and allow farming to continue. Rooftop solar can be placed on flat commercial and industrial roofs in metropolitan areas where connections to the grid are available.

In comparison, extraction of fossil fuels can create some of the worst pollution and habitat destruction ever seen. Consider the devastation being caused in the biologically diverse mountain forests of West Virginia by mountaintop removal coal mining. Or look at the obliteration of Alberta’s landscape and contamination of its lakes and rivers from tar sands mining.

This point is substantial because far too many of the products of the global economy involve externalization of enormous pollution costs.

Second, the usage of wind and solar today does not affect the amount of wind and solar available tomorrow. They are renewable. Furthermore, wind and rooftop solar are basically waterless technologies, whereas fossil fuel and nuclear power plants use enormous quantities of water for cooling. As water shortages multiply worldwide as a result of population and industrial growth, and climate disruption, this benefit will become even more significant.

Third, wind and solar are big job creators. In Germany the number of jobs in wind and solar is about 400,000 versus 200,000 in coal and conventional fuels. This amazing boost in clean energy jobs has happened in the last decade. Job creation is a major concern in any transition to a sustainable economy.2

Those who are serious about getting to a true–cost economy should help accelerate the renewable energy revolution as a way to achieve it.

 

Notes

  1. See The Great Transition by Lester Brown and colleagues at the Earth Policy Institute for a superb account of the global renewable energy revolution that offers hope to all.
  1. See Energiewende for the job figures; see also Peter Victor in Tim Jackson’s Prosperity Without Growth for a discussion of transition scenarios and jobs.

Crossroads on Global Infrastructure

Massive Global Infrastructure Projects Could Prevent Achievement of a Sustainable Economy While Undermining Life Support Systems of the Earth

by Brent Blackwelder

BlackwelderPlans by the world’s most powerful countries are well underway to spend trillions of dollars for new mega-infrastructure projects to rejuvenate the global economy. The hope of the G-20 nations, the World Bank, China, and other powerful actors is that the infusion of several trillion dollars for infrastructure will boost the growth of GDP by 2.1% over current trends by 2018 and rescue a “sluggish” global economy.

The new feature of this approach to infrastructure involves expanded use of public money (taxes, pension funds, and aid) to offset the risks involved in huge projects. The approach also relies heavily on public-private partnerships, where the issue of accountability and failed projects has been a serious concern.

Those seeking a sustainable, true-cost, steady state economy should be alarmed at the new approach to global infrastructure because trillions of dollars spent on mega-projects in the energy, transportation, agriculture, and water sectors could put a sustainable, true cost economy further out of reach. Reviews of completed projects in these sectors have raised questions about corruption, cost overruns, fiscal accountability, human rights abuse, and the alarming destruction of natural resources.

Who are the Major Players?

The primary mover of a global infrastructure plan has been the G-20 nations (see here for the list of member countries). Afraid of being marginalized by the G-20, the World Bank has jumped into the scramble. In October of 2014, the World Bank launched a new Global Infrastructure Facility to reclaim the leadership on global infrastructure from the G-20. Just before the G-20 Summit last November, the World Bank and the IMF, along with seven multilateral development banks, issued a press release announcing their intention to provide $130 billion annually for infrastructure financing.

In 2014, China launched the Asian Infrastructure Investment Bank with 21 Asian countries as founding members, along with $100 billion in capital.

The Crossroads

A momentous choice is before us. On the one hand, the G-20, the World Bank, and other international lending institutions want more mega-highway projects, more centralized electric power plants and electricity grids, more mega-dams and gigantic irrigation schemes with huge water transfers, and the like.

On the other hand, an entirely new approach to infrastructure is possible. An approach that, for example, eschews big central electric power plants and relies more and more on decentralized wind and solar investments and avoids the horrendous mistakes made in the past in transportation, energy, water, and agriculture. Those interested in a true cost, steady state economy should advocate change in the massive new infrastructure lending so as to support projects that enable society to stay within the carrying capacity of planet earth. Such projects could lead the way toward a different type of global economy as they shift away from the business-as-usual approach in energy, transportation, water, and agriculture.

We know the impact of too many of these schemes is the destruction of ecosystems and undermining of the life support systems of the earth. They are pushed by the economic or finance ministries that have little understanding of the limits to growth, the significance of biodiversity, and the functioning of ecosystems that make life on earth possible. Environmental ministries are likely to have little influence in the choice of mega-projects.

There is not enough time to present the infrastructure investment choices in energy, agriculture, water, and transportation that would be made in a steady state economy, so I will mention a couple of examples in the transportation sector.

Freight Trucks - futureatlas dot com

We need infrastructure projects that don’t rely on highways at the expense of public transportation and rail. Photo Credit: futureatlas.com

Consider the unsustainability of the US transportation system that has focused almost entirely on highways to the neglect of passenger and freight rail and public transportation. The US is a poor transportation model for the world. Even with state and federal gasoline taxes, the revenues are insufficient to halt the massive deterioration of road and bridge networks, to say nothing of billions of dollars of backlog in deferred maintenance. The United States let passenger railroads go to hell and allowed the movement of more and more freight by trucks rather than trains (which are three to four times more energy efficient than trucks). This proved to be the wrong infrastructure choice.

Decades ago, some US bankers were questioning the viability of maintaining the infrastructure to support sprawling suburbs. A Bank of America report likened the servicing of sprawling suburbs to the nightmare that a military commander would face in trying to keep a 1,000-mile-long battlefront line supplied with food and ammunition.

Take a look, for example, at transportation required to supply our food. One study in Germany focused on a container of yogurt on a grocery store shelf where all of the ingredients were available locally, but in this case had traveled over 1,000 kilometers to reach the distribution center. A greater emphasis on local food production could result in dramatically reduced “food miles” and utilize a much smaller transportation network–an affordable network that could be maintained.

We are at a critical moment where two approaches to infrastructure are diverging. The infrastructure path of a true cost economy can lead to smaller-scale, smarter infrastructure and a healthier earth. The proposed path of the G-20 and World Bank, on the other hand, will replicate and intensify numerous unsustainable projects and cause human civilization to exceed the carrying capacity of the earth. Scientists point out that we are already consuming about one-and-a-half planets’ worth of resources. Infrastructure choices need to be made to alleviate rather than exacerbate this situation.

Note: For more information see the report by Nancy Alexander, “The Emerging Multi-Polar World Order: Its Unprecedented Consensus on a New Model for Financing Infrastructure Investment and Development,” Heinrich Böll Foundation.

Do U.S. Election Financing Laws Force Politicians to Ignore Limits to Growth?

by Brent Blackwelder

BlackwelderThis fall, huge election campaign spending to influence the outcome of U.S. Congressional races, gubernatorial races, and state legislative races exceeded $3 billion.

Money in politics has stopped progress toward real economic reform and slowed efforts to move to a true-cost, sustainable, steady state economy. It will continue to do so unless people seeking to end today’s cheater economics, with its global casino-style economy, join in the ongoing efforts to change the election financing laws.

Recent decisions by the Supreme Court have made a bad situation much worse. In Citizens United v. FEC, (2010) the Court ruled that it was unconstitutional (a violation of First Amendment-protected free speech) for the government to restrict political spending by corporations. While there are limits on what individuals and corporations may give directly to candidates, there is no limit on corporate contributions to independent political spending to benefit or to smear candidates. The massive floodgates of electoral spending have been opened wide for industries, and today’s electoral spending in the United States amounts to a system of legalized bribery.

Billionaire brothers David and Charles Koch assembled a secretive network of wealthy political donors set to spend about $300 million in the Congressional races in 2014, which is approximately the total spent by Bush and Kerry in the 2004 presidential race. By early September, a full two months before Election Day, Koch-funded groups already had paid for about 44,000 ads in U.S. Senate battleground races. That means approximately one out of every ten TV ads aired in those states had Koch fingerprints.

But fortunately, several dozen organizations are fighting back. For example, Common Cause, United Steelworkers, Sierra Club, United Autoworkers, and other national groups have already had success with a big effort to reverse the Supreme Court’s decisions in Citizens United v. FEC, (2010) and McCutcheon v. FEC (2014). These efforts involve supporting a constitutional amendment permitting Congress and the states to set reasonable limits on political spending. Leadership of these groups has been instrumental in the passage of ballot measures and legislative resolutions in 16 states and about 500 localities, calling on Congress to pass a Constitutional amendment and send it to the states for ratification. These jurisdictions are home to more than 120 million Americans, which is more than one-third of the U.S. population.

Why would cleaner elections matter for achieving a true-cost, steady state economy? The large volume of money that Wall Street puts into elections effectively stymies efforts to reform the U.S. Tax Code. Tax codes around the world tend to subsidize pollution, tolerate externalization of costs, and penalize recycling while rewarding extraction of natural resources and exempting poisons from sales taxes. The United States is not alone among nations providing generous subsidies to polluters: globally, $1.5 billion is provided by governments to fossil fuel industries.

There are many other ways in which corporate money in elections can subvert democracy and block paths to a true-cost economy. Having lobbied Congress for over 40 years, I have seen how the huge amounts of fossil fuel money for politicians have made a lot of Members “climate deniers.”

Chevron & Ecuador, Caroline Bennett-Rainforest Action Network

Hundreds of Chevron’s abandoned open toxic pits remain in Ecuador. Photo Credit: Caroline Bennett-Rainforest Action Network

But it happens in category after category. For instance, as early as the 1990s, I saw the huge influence of corporate money enabling the passage of so-called free trade agreements. Many trade agreements contain a dispute settlement mechanism that allows corporations to sue a government. Such a challenge is not heard in the normal court system of a nation but rather in a secret, three-person tribunal. Currently, a Canadian mining company is suing the government of Costa Rica for $1 billion for denying a permit to mine copper and gold in a tropical rainforest. Costa Rica wants to conserve its rainforests because eco-tourism is a key part of their economy. Chevron has used the secret tribunal process to avoid payment of damages for persistent, serious oil spills in Ecuador.

Another example can be seen in ballot measures such as Proposition 92 in Oregon, which would require labeling of genetically engineered foods. This measure was opposed by major transnational corporations such as DuPont, Coke, and Monsanto, and their war chest was estimated at $25 million. When people use ballot measures to deal with legislatures that refuse to act on issues of public health and environmental protection, industries pour out millions in propaganda to defeat such measures.

In poll after poll, voters say that they care about clean air, clean water, and the environment, but the reality is that it is harder today than at any time in the last 40 years to pass significant legislation to safeguard air, land, and water. The problem has grown much worse since the 1970s, when 30 major environmental laws were passed, and a big part of the problem is the cost of elections.

Twenty-five years ago, I was one of about a dozen environmental leaders called to a U.S. Senator’s office to hear a sobering message about what the staggering costs of elections were doing to Members who were not independently wealthy. He said to us:

To be reelected, this means my having to raise $10,000 every day on average until election day. For you it means two things: 1) I have little time to study issues and legislation and 2) while I may vote with you from time to time, I cannot champion any legislation that would prevent me from getting campaign contributions from major industrial interests.

As recording setting amounts have just been set in the 2014 elections, the need for election financing reform is paramount if we are to prevent these major industrial interests from keeping us on the path of cheater economics.

An Economic Game Plan to Prevent Water Pollution

by Brent Blackwelder

BlackwelderEven though the Clean Water Act is more than 40 years old, its goals have not been met, and America is still beset with chronic water ailments and acute pollution incidents. Already this year major toxic spills from coal operations in West Virginia and North Carolina have provided grounds for demanding comprehensive changes to a broken system of pollution control.

On January 9, 2014, people in Charleston, the capital of West Virginia, began vomiting while others complained of a strange pervasive licorice odor. The problem was traced to chemicals from a malfunctioning chemical/coal facility just upstream from the city’s water supply intake. A state of emergency was declared to provide after-the-fact protection to the 300,000 people who get their drinking water from this system. Both the water supply company and the chemical company allowed the emergency to unfold despite repeated warnings over the years about unsafe structures and operations.

On February 5, 2014, a spill from a coal ash impoundment unleashed 78 million pounds of arsenic-laden sludge into the Dan River, the source of drinking water for cities and towns in Virginia and North Carolina. Duke Energy, a giant utility, operates fourteen coal-fired power plants in North Carolina, and it dumps the toxic combustion byproduct, coal ash, into unlined ponds. The result: groundwater contamination and toxic spills into drinking water supplies. The Duke Energy spill comes with a sad, but familiar footnote. Pat McCrory, the governor of North Carolina, used to work for Duke Energy and has been on a crusade to weaken pollution controls ever since he took office.

Ongoing experience with such grotesque toxic spills, and even growing awareness of global water shortages have failed to generate sufficient responses. Today’s economic framework blocks significant progress on such crucial problems because it props up extractive and highly polluting industries.

Governments are stuck in a business-as-usual, growth-at-all-costs mindset, and they face constant pressure to deregulate industries. Since industry is fixated on profits and growth, it attempts to pay as few costs as possible; cost externalization is a built-in feature of the economic system. But someone always pays — just look at the people downstream or the species and ecosystems where spills occur.

The key to preventing and cleaning up water pollution is to shift the economy from the pursuit of unending growth to the pursuit of stability. Why would water pollution decline in a steady-state economy? Here are three reasons.

Coal ash in the Dan River

Coal ash in the Dan River from the Duke Energy spill in North Carolina (photo credit: Dan River Basin Association).

(1) Changing the macroeconomic goal away from growth and toward maintenance of life-support systems would change the way businesses and other institutions behave. The goal of a true-cost economy is sustainable and equitable well-being, rather than continuous growth. Actors in such an economy would care more about the medium and long-term future than quarterly returns.  For example, in a true-cost economy, chemical companies would engage in green chemistry, and utilities would produce renewable energy. The costs of using fossil fuels and other toxic substances would simply be too high to pay. Regarding the outrageous scenario of having decaying storage tanks full of dangerous chemicals directly upstream from the water supply intake for a state capital: it would never happen in a true-cost economy.

(2) Companies would be required to have eco-auditors just as they are now required to have financial auditors. Such eco-auditors would assess whether a company was externalizing costs and whether the company’s production was harming life-support systems. Eco-auditors could also show businesses how to avoid pollution. Companies would disclose their ecological impacts in an annual report just as they do with financial audits.

(3) There would be consequences for repeat polluters. For example, in the decade prior to its gigantic oil spill in the Gulf of Mexico in 2010, BP had been responsible for a refinery fire in Texas with significant loss of life and two oil spills in the Arctic Ocean from the Trans-Alaskan Pipeline. Why not three strikes and you’re out? Why not deny BP the right to do business in the U.S.? Instead, the Obama administration has done the opposite by giving BP the go-ahead to drill again in the Gulf of Mexico!

Another example: given the repeated incidents of pollution oozing from Duke Energy’s numerous coal ash ponds, despite years of complaints and penalties, shouldn’t it be denied the right to do business in North Carolina? Shouldn’t its facilities be turned over to more responsible utilities? After all, the vulnerability of coal ash impoundments has been making headlines since December of 2008 when a TVA storage pond in East Tennessee burst and contaminated the Clinch River. Clean-up efforts continue to this day, and costs have exceeded $1.5 billion. TVA said it could never happen again, but in January of 2009, not even a full month later, another coal ash pond failed, this time in Alabama.

We need to adopt a broader, transformative economic approach and stop thinking that pleading with companies and government agencies will suffice. We need to (1) change the goal from growth to sustainability, (2) change company reporting to include ecological audits, and (3) change incentives by denying companies the right to operate when they dodge their responsibilities. Under the current economic paradigm, pollution will persist and natural resources, including soils, waters, forests, and oceans, will continue to decline. Only a new economic game plan can protect our shared water resources and prevent pollution.

Surprises Lurk with Pending Obama Trade Deals

by Brent Blackwelder

BlackwelderPresident Obama is pushing two massive new free trade agreements: the Trans-Atlantic Free Trade Agreement (TAFTA) and the Trans-Pacific Partnership (TPP). These far-reaching agreements, which are being negotiated in secret, constitute major threats to democracy and to the health of the planet and its people. Passage of these new trade deals would make it more difficult than ever to obtain a sustainable, true-cost economy.

Rather than raising all boats, international trade agreements over the past twenty years have encouraged a race to the bottom. If a country has a strong food safety law or a clean energy requirement, you can bet that some corporation is filing or planning to file a trade complaint in a secret tribunal established by a trade agreement.

TAFTA and TPP would give companies the right to file lawsuits against governments in opaque tribunals. The result is likely to be fewer standards against fraud, corruption, and tax dodging, as well as weakened momentum for pollution control, food safety, and clean energy.

Corporate claims of over $14 billion are already pending before three-person trade tribunals that meet in secret to pass judgment on climate and energy policies, medicine patents, and pollution cleanups. Taxpayers have already been forced to pay more than $400 million as a result of trade complaints concerning toxics bans, land-use regulations, timber policies, and other environmental issues.

Secret Tribunals at Work

Texaco’s oil drilling in Ecuador in the 1980s (which was later purchased by Chevron) severely contaminated tribal lands in the Amazon rainforest. The affected peoples filed a lawsuit in New York City, but Chevron had the case moved to Ecuador, under the assumption it would win. In a surprising decision, Chevron lost the lawsuit and even lost an appeal and was ordered to pay $18 billion in damages.

At that point Chevron chose to file a trade complaint in the secret tribunal established by the U.S.-Ecuador free trade agreement. Under this procedure a panel of three (one chosen by Chevron, one by the government of Ecuador, and a third by mutual consent) met in secret and voided the judgment against Chevron.

In 2013 under the Central American Free Trade Agreement, a Canadian gold mining company filed a billion-dollar trade complaint against Costa Rica for denying it a mining permit. Costa Rica was trying to protect a rainforest, but may be forced to pay $1 billion if the secret tribunal rules in favor of the mining company. This case illustrates the way corporations are seeking to undermine the sovereignty of nations trying to protect their long-term environmental and economic interests.

The trade deals and tribunals impede efforts to build a sustainable, true-cost economy by blocking progress in three critical policy areas:

1. Tax Standards

A sustainable economy requires basic reforms designed to prevent tax dodging and reckless speculation with taxpayer dollars. Regrettably, TAFTA and TPP seek to weaken reforms that ensure corporations pay a fair share of taxes. The average U.S. corporation pays roughly 12% of profits in taxes, not the 35% that is on the books. Some companies with billions in profits such as Apple, GE, and Google hide their cash in offshore accounts and pay little or nothing in comparison to their profits.

With the defunding of governments as a result of offshore tax havens, governments worldwide have insufficient funds to enforce pollution laws, protect public lands, or regulate risky hedge fund behavior.

2. Food Safety Standards

Safe and sustainable food production provides the foundation for a sustainable economy. The proposed trade agreements, however, set up conditions that allow countries to undermine one another’s efforts to operate a healthy food production system.

For example, food companies in the European Union have targeted the U.S. Food Safety and Modernization Act of 2011 as a trade barrier. This law gives the Food and Drug Administration the power to recall contaminated food. Remember the meat adulteration scandal of 2013 in which the U.K. was exporting “beef” to the U.S. that was later found to contain horse meat. This sort of scandal could become business as usual if the Act is weakened.

At the same time, the owner of Kentucky Fried Chicken wants to force the E.U. to accept chlorinated chicken. U.S. pork producers also want to eliminate the E.U. ban on ractopamine, a drug used in pork, beef, and chicken production, but this drug has been banned or limited in 160 countries due to risks to human and animal health.

Major food and agribusiness firms are seeking to bring arguments before the trade tribunals to challenge crucial food safety requirements around the globe and to force nations to import foods they have deemed to contain risks.

3. Energy and Climate Standards

Passage of TAFTA has the potential to undermine automobile fuel economy standards, energy efficiency labeling programs, and requirements for governments to buy green in procurement contracts.

Tax credits for wind and solar energy could be affected by the agreement. Under E.U. rules, the Swedish Vattenfall company has filed billion-euro trade complaints against Germany’s phase-out of nuclear power and its regulation of coal power plants.

It’s bad enough that the proposed trade agreements risk undermining these three critical policy standards, but the Obama administration is also working to bypass the U.S. Constitution to fast-track the agreements.

Stop_TPPThe Constitution provides that Congress, not the Executive Branch, must approve trade agreements. The President is given the authority to negotiate trade agreements but must submit these to the Senate for approval by a two-thirds majority. The Senate can amend proposed treaties negotiated by the President. President Nixon was able to temporarily change the approval process for trade agreements by getting Congress to pass “fast-track” authority that permitted the President to negotiate and sign a trade agreement and then send it to Congress, not as a treaty that requires a two-thirds vote, but as a piece of regular legislation. Under this approach both chambers of Congress stage an expedited debate with no amendments and have an up-or-down by vote on the agreement. Obama is seeking to employ the same Constitutional bypass that Nixon did forty years ago.

TAFTA and TPP are major threats to democracy. They undermine the authority of an open, accessible, and transparent court system. They favor corporate wishes over sound trade, consumer, and environmental policies.

You don’t have to connect very many dots to see the rationale behind the proposed trade agreements. They are meant to prop up economic growth and secure higher corporate profits. As usual, few people (including Obama and his trade advisers) are asking the right questions about the utility of further growth in production or profit.  When it comes to trade, governments ought to be asking:

  • What volume of trade is sustainable?
  • Do product prices reflect long-term social and environmental costs, or are pollution externalities being shoved off on the public, nature, and future generations?

Considering such questions opens a doorway on the topic of steady state economics and leads to the realization that the economy can get better without growing bigger. Too bad “bigger” seems to be the only option on Obama’s agenda.

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Insanity Reigns at the World Bank

by Brent Blackwelder

BlackwelderThe finance ministers of the world convened in Washington for the annual meeting of the World Bank. Their goal: high risk/high reward mega-infrastructure projects (big dams, power plants, pipelines, grids, etc.). The two big questions: aren’t there better approaches to infrastructure today? And won’t the ministers’ plans put a sustainable economy further out of reach? The happy answer to the first question is “yes,” but “yes” is also the sad answer to the second question.

The World Bank’s plan to build such gigantic projects contradicts its stated objective to end poverty. This plan resurrects nightmarish approaches that have increased poverty, disempowered women, devastated life-sustaining ecosystems, and created massive debt burdens.

That is why International Rivers, Amazon Watch, and many other groups gathered outside the World Bank on October 12th to protest the plan for high risk/high reward projects and promote “Power 4 People.” In a true-cost economy the objective for infrastructure would be low risk/high reward projects. Such an economy would avoid casino-style investments and embrace infrastructure that leapfrogs the costly, destructive, and outdated approaches favored by the World Bank.

Despite serious mining and health issues, construction of cell phone infrastructure has been more environmentally sound than the old standard of installing high-cost telephone lines in remote areas. Today over 400 million people have cell phones but lack access to electricity. Taking a cue from the cell phone revolution, there’s an opportunity to construct a low risk/high reward energy infrastructure consisting of dispersed solar and wind projects. These renewable technologies can reduce the need for long and expensive transmission lines, and they don’t require water to generate electricity. Furthermore, with the cost of rooftop panels having rapidly dropped, solar energy has clear cost advantages for supplying electricity to rural communities.

In Africa about 600 million people lack access to electricity, and most are unlikely to be served by the dams and coal power plants proposed by the world powers because the transmission lines from central power stations would cost too much. That’s why the International Energy Agency reports that 70% of the world’s un-electrified areas are best served through mini-grids or off-grid solutions.

The advantages of a dispersed energy infrastructure include ability to reach the poor, reduced cost, less risk, and fewer socially and environmentally harmful impacts. Bangladesh, where something like 35,000 rooftop solar systems are being installed each month, is demonstrating these advantages.

The release of Bruce Rich’s book, Foreclosing the Future, comes at a critical moment, for it provides an insightful, well-written history of the World Bank’s inability Bank to learn from its past failures. Rich exposes the shocking first year of Jim Yong Kim’s term as Bank President, even though Kim came to the job with knowledge of the harmful impacts of past Bank projects.

Solar array at a Gambian hospital

This solar array at a Gambian hospital demonstrates a better way to generate electricity (photo credit: Daltoris).

In September of 2012 Kim extolled the work of the Bank’s International Finance Corporation (IFC) in South Africa where only three weeks earlier, the worst massacre since the apartheid era occurred as 34 workers on strike were shot to death at the IFC-supported Marikana platinum mine.  On his Africa trip Kim lauded the Bank’s $3 billion loan to South Africa for the dirty Medupi coal project, the fourth largest new coal plant in the world with annual greenhouse gas emissions greater than 100 of the world’s countries.

Kim also promoted the gigantic Inga III dam in the Democratic Republic of the Congo (DRC), even though the Inga I and II dams have been operating for decades with poor results for the citizens of the DRC. 85% of the electricity from these two previous World Bank projects has flowed to the mining industry. At the same time, less than 10% of the population has access to electricity.

The good news is that promising, low risk solutions are available to construct a sustainable energy infrastructure, achieve humanitarian goals, and move the world toward a true-cost economy. But the clear message is to forget about the G-20, the World Bank, the Chinese, the U.S. export-import banks, and the finance ministers to support these solutions.

Power politics drives the decisions of these power players. Big construction companies scheme with governmental ministries to develop larger and larger projects where lots of money can be skimmed. Under such corrupting conditions, the risk that mega projects could have disastrous consequences for life-support systems on earth doesn’t seem to matter to the people in charge.

The ecological concerns of proposed infrastructure projects are substantial. Sediments from the Congo River have created a 300,000 square-kilometer fan on the floor of the Atlantic Ocean. The high sediment load and oxygen content produce huge amounts of phytoplankton — phytoplankton that sequesters carbon and is a key factor in enabling the Atlantic Ocean to act as a carbon sink. The Inga III dam would damage the sediment fan. Do we want finance ministers ignorantly proposing plans to interrupt the crucial climate-regulating dynamics of the lower Congo River with a mega-dam project?

Hopefully the finance ministers heard our answer of “no” on October 12th, but now is not the time for self-satisfied silence. In fact, it’s a good time to continue protesting the insane ideas emanating from the World Bank and promoting alternatives from organizations that value people and places above profits.

Fixing Food and Farming with a True-Cost Economy

by Brent Blackwelder

BlackwelderPending farm legislation in Congress could eliminate food stamps ($80 billion worth of support per year) for families in need, while increasing subsidies for very large farm operations. Programs to promote stewardship of the land through soil and water conservation could also face dramatic cuts.

You might have hoped that subsidies to super-sized farms would instead have been on the chopping block. You might also have hoped that stewardship of the land through soil conservation programs would have been boosted on food security grounds. Well, your hopes are in the process of being shredded in the halls of Congress.

But maybe there’s still room for hope. A paradigm shift is underway in our nation’s approach to food and agriculture. Movements are gaining steam that support organic food, local food, farmers markets, local food security, and food safety. On the food safety front, outrage is growing over the inability to inspect more than two percent of imported food, especially in the wake of food scandals abroad (e.g., melamine in pet food, pork treated with chemicals to taste like beef, deaths of children from school lunches prepared in used pesticide containers).

For these movements to work, they’ve got to influence policies at home and abroad. Economic and agricultural policies that favor financial profits over healthy food systems won’t work. U.S. farm programs are failing to address serious food supply issues. At the same time, many nations are ceding control over their best farmland to outside interests, as if the notion of local food security had no meaning. Such maneuvers could increase the risk of famine and starvation in the event of droughts, floods, or other disruptions in food supply.

Millions of acres of prime farmland around the world have already been bought up by countries such as Saudi Arabia and China, as well as by corporations. A large Chinese agribusiness pork producer has just put up over $4 billion to buy the Smithfield company located in Virginia. Tens of millions of acres of prime farmland in Africa are now owned by countries and corporations that have little interest in local people, many of whom are evicted from their ancestral lands.

Along with these land grabs, population growth is putting pressure on farms to produce even more, especially as the gains in yield from the Green Revolution wind down. At dinner tonight there will be 219,000 new mouths to feed. How is civilization going to meet the challenges posed by a growing global population when the planet’s productive soil is being lost and contaminated?

Authors like Lester Brown have called attention to the deterioration of productive farmland throughout the world. Although there are examples of land restoration efforts such as in part of China’s Loess Plateau, these do not offset ongoing declines. In the United States the annual erosion loss is 1.7 billion tons of topsoil.

Managing these weighty issues in the food system requires a complete economic overhaul. In a global, true-cost, steady state economy, the agriculture and food goals for each nation would be to rebuild foodsheds with greater local sustainability and secure resilient food systems.

Each nation would maintain an agricultural base sufficient to feed its people, including backup plans in case of crop failure or natural disasters. Such resilience is needed because climate destabilization has dramatically increased the number of weather disasters. From 1900 until 1970 the number of global disasters remained below 100 per year. Now the average is over 300 with several years spiking to over 500. These disasters pose serious threats to food production and stress the emergency response resources of governments.  In addition, the increased frequency of these disasters is making rescue operations and aid from other nations less common.

A pioneering farm bill for a true-cost economy would begin redesigning the food system, based on principles of ecology, justice, and health. Such a system would be fair sustainable, and humane. The federal government would be encouraging, not impeding, local and community agriculture that would employ many more people on ecologically sound farms.

Abusive soil practices would become a thing of the past as the connections between soil fertility and food security become more obvious. Degradation of soil would be seen as a direct threat to long-term national security and well-being.

Interest in genetically engineered food and organisms would wane as attempts by Monsanto and other food/chemical giants to control the world’s food supply are beaten back by the power of expanding local and community food organizations.

For more information on how U.S. farm legislation could be changed, check out the great work being done by the National Farm Family Coalition. For descriptions of many exciting and challenging food initiatives, read Philip Ackerman-Leist’s book Rebuilding the Foodshed: How to Create Local, Sustainable, and Secure Food Systems.

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.