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Review: Prosperity Without Growth? by Professor Tim Jackson
Charles Siegel, Sierra Club
When a British government commission publishes a report calling for an end to economic growth, it suddenly seems that we live in a world that is changing its direction. Growth has been the central goal of economists since the beginning of the industrial revolution. But Prof. Tim Jackson, the Economics Commissioner of the UK’s Sustainable Development Commission has written a book that sums up the current state of our knowledge about economic growth and that demonstrates convincingly that growth should end.”
We have all heard about the environmental effects of growth, such as resource depletion and global warming, but the conventional wisdom says that better technology can deal with these problems. This book argues that, if growth continues at its present pace, better technology alone cannot reduce greenhouse gas emissions sufficiently. “The global economy is almost five times the size it was half a century ago. If it continues to grow at the same rate the economy will be 80 times that size by the year 2100.” That rapid rate of growth is likely to overwhelm our attempts to use better technology to reduce greenhouse gas emissions: by 2050, carbon emissions per unit of gross world product would have to be 130 times lower than today to avoid the worst effects of global warming.
If we are serious about controlling global warming, we must adopt better technologies as quickly as possible, but we must also move beyond the technological fix and deal with economic growth itself.
Reining in growth will not necessarily involve hardship. The book summarizes the evidence showing that, beyond a certain point, growth does not increase our well being.
…Yet it is very difficult for us to break our addiction to growth. The conventional wisdom says that growth is needed to control unemployment and to promote economic stability. As we can see during the current recession, when growth stops and demand falls, businesses’ revenues drop, which leads them to reduce their levels of investment and to lay off workers, which makes the economy less efficient and generates high unemployment. Growth also seems necessary to help us pay off our high levels of personal and national debt.
In response to these concerns, this book cites the studies of Peter Victor, a Canadian economist, who has run computer models of how the Canadian economy would react to the end of growth with differences in macroeconomic variables such as the savings rate, the rates of public and private investment, and the length of the work week. Results are dramatically different with different values for these variables. In one run, the end of growth brings economic instability, high unemployment, and rising poverty. In another run, the end of growth brings economic stability, cuts both the unemployment and poverty rates in half, and reduces the ratio of debt to GDP by 75%. In part, the difference comes because the second scenario has a higher savings rate, a lower rate of private investment, and a higher rate of public investment. In addition “unemployment is avoided … by reducing both the total and the average number of working hours. Reducing the working week is the simplest and most often cited structural solution to the challenge of maintaining full employment with non-increasing output.”
There are very few macroeconomic studies of this sort, and we clearly need more to help us make a successful transition to a slow-growth or no-growth economy.
full commission report: Prosperity without Growth? – The transition to a sustainable economy.
Will Workers Be Left Behind in a Green Transition?
Joe Uehlein, The Nation
As Congress gears up to craft much-needed legislation to protect the earth from global warming, many American workers are wondering what it will mean for their jobs. They may be wondering even more if they hear about the House Energy and Commerce Committee’s proposal for carbon regulation legislation, The American Clean Energy and Security Act of 2009, released March 31. It is 648 pages long. But Section 424 on “Worker Transition” has only three words: “to be supplied.”
Unfortunately, “transition assistance” in the past has often meant little more than a funeral for workers and communities threatened by the side effects of globalization, environmental protection and other public policies. Without a clear program to protect workers from the effects of climate protection, the struggle against global warming can all too easily come to be perceived as a struggle against American workers. Workers have often felt threatened by measures to protect the environment. Today such fears are likely to be augmented, especially in a time of soaring unemployment, by the large changes necessary to protect the planet from global warming.
Environmentalists have often addressed this challenge by pointing out that a transition to clean energy would create far more jobs than it would eliminate. While that may be true, it entirely misses the point. The fact that some people get new jobs provides little solace for the people and communities who have lost theirs.
…Perhaps surprisingly, some of the best ideas for protecting workers and communities hit by the side effects of public policy decisions were embodied in legislation championed a few years ago by Republican Senator John McCain to protect tobacco workers from the effort to reduce tobacco consumption.
McCain’s 1997 Universal Tobacco Settlement Act passed out of committee nineteen-to-one but was defeated on the Senate floor. Workers and farmers would have received transition assistance from the fund if “the implementation of the national tobacco settlement contributed importantly to such workers’ separation” from their jobs. Looking ahead to the next generation, the bill also provided education benefits to members of a “tobacco farm family.”
A similar program should be developed for workers who lose their jobs because of climate protection policies.
…But climate protection legislation should go further. During the Great Depression a regional economic development program, the Tennessee Valley Authority, transformed one of America’s poorest regions by means of massive energy development. Seventy-five years later, the TVA has lost much of its original vision and become a target of environmental protests. But the principle of regional economic development through investment in a new energy source can be applied to the Appalachian coalfields today.
A small-scale version of such a post-coal economic development program is poised to begin in the Southwest. The closing of a highly polluting generating station has provided the owner, Southern California Edison, with an estimated $30 million annually in pollution allowances, which can be sold under the US Acid Rain Program. The Just Transition Coalition, composed primarily of Hopi, Navajo and environmentalist allies, developed a plan to use the funds for a transition to renewable energy.
The Just Transition plan would direct 30 percent of the pollution credits to local villages to invest in solar, wind and ecotourism; 10 percent to job retraining; 40 percent to alternative energy development and production; and 20 percent to tribal government programs previously supported by coal royalties.
(5 May 2009)
Greener Companies “More Crunch-Proof”
Claire Baylis, Worldchanging
New report tracks value of sustainability commitment during recession
Businesses with a ‘true commitment’ to sustainability are weathering the downturn better than their rivals, according to a new report. Green Winners: The Performance of Sustainability-Focused Companies in the Financial Crisis looked at 99 companies on the Dow Jones Sustainability Index and/or the Goldman Sachs Sustain focus lists. And it found they were outperforming their industry peers – by an impressive average of 10% over three months and 15% over six. Far from being seen as a luxury, sustainability spending is a tool to beat the recession, concludes the report.
The study, by management consultancy firm A.T. Kearney, warned that green initiatives need to be truly embedded in the company’s value chain; it finds scant justification for efforts made “simply to improve public relations or catch up with industry leaders”.
The most surprising finding, says the report’s co-author Louis Besland, was the consistency between industries: in 16 out of 18 of them the companies on the sustainability lists came out ahead financially as well.
(5 May 2009)
