Why the Economy Should Stop Growing - and Just Grow Up

(Photo: Jessica Lucia/flickr/cc)

by David Korten, Common Dreams: http://www.commondreams.org/views/2016/05/09/why-economy-should-stop-growing-and-just-grow 

Listen to the political candidates as they put forward their economic solutions. You will hear a well-established and rarely challenged narrative.

“We must grow the economy to produce jobs so people will have the money to grow their consumption, which will grow more jobs …” Grow. Grow. Grow.

But children and adolescents grow. Adults mature. It is time to reframe the debate to recognize that we have pushed growth in material consumption beyond Earth’s environmental limits. We must now shift our economic priority from growth to maturity - meeting the needs of all within the limits of what Earth can provide.

Global GDP is currently growing 3% to 4% annually. Contrary to the promises of politicians and economists, this growth is not eliminating poverty and creating a better life for all. It is instead creating increasingly grotesque and unsustainable imbalances in our relationship to Earth and to each other.

Specifics differ by country, but the U.S. experience characterizes the broader trend. Corporate profits as a percentage of GDP are at a record high. The U.S. middle class is shrinking as most people work longer hours and struggle harder to put food on the table and maintain a roof over their heads. Families are collapsing, and suicide rates are increasing. 

The assets of the world’s 62 richest individuals equal those of the poorest half of humanity - 3.6 billion people. In the United States, the 2015 bonus pool for 172,400 Wall Street employees was $25 billion - just short of the $28 billion required to give 4.2 million minimum wage restaurant and health care workers a raise to $15 an hour.

Humans now consume at a rate 1.6 times what Earth can provide. Weather becomes more severe and erratic, and critical environmental systems are in decline. These distortions are a predictable consequence of an economic system designed to extract Earth’s natural wealth for the purpose of maximizing financial returns to those who already have more than they need.

On the plus side, as this system has created the imperative for deep change, it has also positioned us to take the step toward a life-centered planetary civilization. It has:

• Globalized awareness of humans’ interdependence with one another and Earth,
• Produced a system of global communications that allows us to think and act as a global species,
• Highlighted racism, sexism, and other forms of xenophobia as threats to the well-being of all, and
• Turned millennials into a revolutionary political force by denying them the economic opportunities their parents took for granted.

We cannot, however, look to the economic institutions that created the imbalances to now create an economy that meets the essential needs of all in balanced relationship to a living Earth. Global financial markets value life only for its market price. And the legal structures of global corporations centralize power and delink it from the realities of people’s daily lives.

Restoring balance is necessarily the work of living communities, of people who care about one another, the health of their environment, and the future of their children. The step to maturity depends on rebuilding caring, place-based communities and economies and restoring to them the power that global corporations and financial markets have usurped. Local initiatives toward this end are already underway throughout the world.

“How do we grow the economy?” is an obsolete question. The questions relevant to this moment in history are “How do we navigate the step to a mature economy that meets the needs of all within the limits of a finite living Earth?” How do we rebuild the strength and power of living communities? How do we create a culture of mutual caring and responsibility? How do we assure that the legal rights of people and communities take priority over those of government-created artificial persons called corporations?

Living organisms have learned to self-organize as bio-regional communities that create and maintain the conditions essential to a living Earth community. We humans must take the step to maturity as we learn to live as responsible members of that community.

This article was written for YES! Magazine, a national, nonprofit media organization that fuses powerful ideas and practical actions. Licensed under a Creative Commons Attribution-Share Alike 3.0 License.

Dr. David Korten (livingeconomiesforum.org) is the author of Agenda for a New Economy, The Great Turning: From Empire to Earth Community, and the international best seller When Corporations Rule the World.

He is board chair of YES! Magazine, co-chair of the New Economy Working Group, a founding board member of the Business Alliance for Local Living Economies, president of the Living Economies Forum, and a member of the Club of Rome. He holds MBA and PhD degrees from the Stanford University Graduate School of Business and served on the faculty of the Harvard Business School.

How Psychology Can Help Us Solve Climate Change

Bicycles - almost no carbon footprint (Wikipedia)

by Rachel New, University of Oxford and Nadira Faber, University of Oxford, The Conversation:  https://theconversation.com/how-psychology-can-help-us-solve-climate-change-58957

The Paris agreement on climate change calls for a global responsibility to cooperate. As we are often reminded, we urgently and drastically need to limit our use of one shared resource - fossil fuels - and its effect on another - the climate.

But how realistic is this goal, both for national leaders and for us? Well, psychology may hold some answers.

Psychologists and economists have long explored the conflict between short-term individual and long-term collective interests when dealing with shared resources. Think of the commons dilemma: the scenario in which a field for grazing cattle works well when everyone cooperates by sticking to one cow each, but which leads to the so-called “tragedy of the commons” if more selfish drives take over.

It is useful to think about overuse of fossil fuels and its effect on the climate as a similar dilemma. If we were to think of this from a purely economic perspective, we would likely act selfishly. But psychological research should make us more optimistic about cooperation.

Appeal to moral sense

Are you more likely to overuse a shared resource when it is framed as an ethical concern or a business transaction? Research shows people behave less selfishly when it’s framed ethically, or if we emphasise what people will gain rather than lose by reducing their use of fossil fuels.

Using the phrase “global warming” rather than “climate change” also engages us emotionally and makes us more supportive of the issue. We also need a balance of good and bad news if we are not going to be overwhelmed by the enormity of the challenge and feel like running away. So wording when communicating to the public as well as in international agreements can make a difference, and we shouldn’t be afraid to appeal to people’s moral sense of what the right thing to do might be.

Reinforce social norms 

Social norms in behaviour around climate change include things such as “most people recycle”, or “it’s not acceptable to take too many flights”. It’s been shown that communicating these norms can make people adjust their behaviour.

Collective behaviour. Recycling by Shutterstock

When behaviour is phrased as the default – for example, “my neighbours don’t use too much electricity” - people are also more likely to behave in that way, as we found in a series of experiments.

Research also shows that we need to believe that others sharing the resource think fairness is important if we are to act fairly, or cooperate, ourselves. So we also need a sense of shared identity, which in turn means we are more likely to think others share our values. Shared national identity could be emphasised through communication from government and media; and at a more local level by encouraging more community involvement.

Trustworthy feedback

When we communicate with fellow users of a shared resource, we trust each other and cooperate more. We also keep communicating. Feedback about how much we’ve used a resource (like household electricity using a “smart home app” or a carbon footprint calculator) makes us use it less. This also works for institutions who use fair decision-making procedures, such as the local council aiming to conserve water.

We also need to know how many people are using a resource, and what its capacity is. And, as we showed in recent studies, we need to know on which information we should base our behaviour and what follows from this information. So countries and local authorities being transparent about their fossil fuel usage is key and, even better, easily achieved.

Incentives 

Rewards and sanctions can work well to improve cooperation, from lower tax for buying an environmentally friendly car to a carbon tax for businesses. One potential problem is that this approach can make us feel as if we can’t be trusted and need incentives to do the right thing. But, like schoolchildren with an enlightened teacher, if we get to decide on the incentives and appoint our own leaders to monitor them, then a sense of trust can be rebuilt.

Social beings

We don’t identify and act just as individuals but as members of social groups. We may belong to a family, a community, a nation and the planet, and behave in ways that benefit the group rather than the individual. A shared group identity (such as identifying yourself as a member of your nation or the local school community) can increase cooperation, especially if we believe that group shares our values about the environment. If you strongly identify with your community you don’t need an incentive to cooperate.

But at what level should this shared identity be emphasised? Emphasising national identity can prevent cooperation between nations, by increasing competition between them. However, this can be used to an advantage, since nations care about their reputation. So perhaps they could compete to be better than others at meeting climate change goals?

Local competition (like a clean city award) can incentivise, too. But we also need to strengthen our sense of being part of the planet - a better global identity could motivate us to empathise with other countries and even future generations.

Big decisions

Implementing the Paris agreement will involve big top-down decisions about how much each country is going to reduce their fossil fuels by. This reduction is essential to meet the goal to drastically limit the temperature increase to 2ºC. But how should the amount of fossil fuels used in different countries be reduced when proportions vary between them? For example, half of the remaining gas and oil reserves are in the Middle East.

One analysis shows that to keep the planet’s atmosphere below the target of 2ºC, 94% of Europe’s gas reserves can be used but only 30% of those in the Middle East. Given that the Middle East has a larger share, should it be expected to use less than other countries? Should the level of development, population or wealth of a nation also be relevant? And what about how much fuel they have already used?

Fair share? Oil by Shutterstock

Myles Allen has argued that we don’t have the right to stop countries such as India from using its coal. He suggests instead making companies that use fossil fuels responsible for burying an equal amount of carbon to reduce net emissions.

But there is also scope for appealing to the ideals of international cooperation. We should be optimistic in light of the above psychological research about the capacity of the human race to put the long-term needs of the many above the short-term needs of the few.

Big decisions could be facilitated by many of the psychological processes we have described, that focus on global identity, long-term gain rather than short-term loss, intergroup competition and reputation, rewards, shared norms, providing sufficient and clear information, and instilling trust and transparency.

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Published in conjunction with Oxford University’s Practical Ethics blog

Rachel New, Researcher, University of Oxford and Nadira Faber, Research Fellow , University of Oxford

This article was originally published on The Conversation. Read the original article.

Environmental Score Card Shows Australia is Once Again in Decline

Brushtail Possum (trichosurus vulpecula) (Wikipedia)

by David Summers, Australian National University and Albert Van Dijk, Australian National University, The Conversation: https://theconversation.com/environmental-score-card-shows-australia-is-once-again-in-decline-58583

After some unusually wet years, our landscape and ecosystems have once again returned to poorer conditions that were last experienced during the Millennium Drought.

That is the main conclusion of Australia’s Environment in 2015 - an environmental score card and accompanying data explorer that we have just released.

Australia’s natural environment is the bedrock of our economy, and our unique ecosystems and landscape are a fundamental part of our society and national identity. This latest report shows that for most of the country, our environmental fortunes are closely tied to the highs and lows of rainfall.

We combined and analysed huge amounts of satellite imagery, ground data and landscape modelling and compiled this data into 13 environmental indicators. With most data extending back to the year 2000, we can start to see how Australia’s environment is changing over time.

The big picture

National level environmental indicators show that soil moisture and river flows fell to near record lows in 2015, while tree cover continued its decline to reach the lowest level since 1972. Soil exposure, the lack of protection from vegetation or mulch cover, also returned to levels last seen during the drought.

Many of these changes are strongly driven by changes in rainfall. Other processes also play a role, however. For example, some of the estimated 530,000 hectares reduction in forest area in 2015 was due to clearing, particularly in southern Queensland, where around 300,000 ha were cleared in 2013-2014 (land clearing data for 2015 are not yet available).

Change in tree cover as percentage of country area

We can combine some of these indicators to get an overall score of the environment’s condition. Such a measure can only ever be an artificial and subjective index, similar to composite indices used for the economy, for example. But because most environmental indicators are strongly linked to water availability, the overall pattern still remains similar if different calculations are made.

Change in national environmental condition score

The national environmental score declined from around average in 2014 (4.8) to well below average in 2015 (3.6). This is a cause for concern, particularly given the relatively short time since the plentiful rains that saw off the drought in 2010.

Winners and losers

While useful to understand general trends, the national indicators hide much regional variation. For example, scores increased to above average values in the Australian Capital Territory and New South Wales, which received good rains across most of the state in 2015. On the other hand, in Queensland conditions were already relatively poor in 2014 and declined further in 2015, in some parts of the state to the worst conditions since at least 2000.

Environmental condition scores and changes from 2014

The different indicators also did not always change in the same way. For example tree cover declined in all states and territories except in Tasmania, where new plantations exceeded harvesting rates (these numbers do not include the impact of large bushfires in early 2016). Tree cover also increased in some other regions, whereas relatively strong losses occurred not only in Queensland, but also as a result of urban expansion in most metropolitan areas.

On the other hand, despite the general decline of agricultural land, the majority of our national parks remained in good shape in 2015 (you can see these regional patterns in our data explorer, which shows indicators by state, council area, catchment, national park, wetland, and so on).

Tree cover change by region, showing largest decreases in red and increases in blue

Back to lean years

The Millennium Drought was arguably the worst drought on our historical record. Lasting around a decade, it had profound impacts on water resources, rivers and wetlands, ecosystems and agriculture. The very wet years that followed brought some much needed relief to the desiccated ecosystems. Unfortunately, our report shows that the bounce was short lived, and that environmental indicators are once again in the red.

While this is a concern, we are still some way from experiencing the worst impacts of the Millennium Drought. We have only had three years with relatively low rainfall rather than ten, and some of the events that occurred towards the end of the Millennium Drought have not yet come to pass.

For example, many wetlands in eastern Australia have declined in extent, but not quite yet to the record lows observed before. The same is true for many of our water storage reservoirs, which have returned to the low levels seen during the first half of the last drought, but not yet the lows of later years.

Still, it is concerning that the lean years have come back so fast. Apparently, the rainfall abundance of 2010-2012 did not create a long lasting reserve, once more leaving our environment exposed to the next drought. Indeed, we may already be in it.

David Summers, Research academic, Fenner School of Environment & Society , Australian National University and Albert Van Dijk, Professor of Water Science and Management, Fenner School of Environment & Society, Australian National University

This article was originally published on The Conversation. Read the original article.