Friday, May 17, 2013

The Odd Coupling: Asking the Wrong Questions about "Decoupling" Environmental Impacts from Economic Growth

(Cross posted from the Economics and the Common Conference communication platform.)

The great green panacea for salvaging the market/state economic growth model from its own environmental consequences is that it may somehow be possible to "decouple" GDP growth from resource consumption. The rationale for decoupling GDP is summarized in the 2011 United Nations Environmental Programme report, Decoupling Natural Resource Use and Environmental Impacts from Economic Growth:
Decoupling at its simplest is reducing the amount of resources such as water or fossil fuels used to produce economic growth and delinking economic development from environmental deterioration. For it is clear in a world of nearly seven billion people, climbing to around nine billion in 40 years' time that growth is needed to lift people out of poverty and to generate employment for the soon to be two billion people either unemployed or underemployed.
Critics of economic growth have pointed out that even though relative decoupling of resource use from GDP has always been characteristic of industrial society, absolute decoupling – in which the amount of resource consumed actually decreases, even as the market economy continues to grow – has never happened. The Sustainable Development Commission's report, Prosperity Without Growth, for example, explained that greater efficiency in resource use also saves money and that money gets spent on even more goods and services resulting in a rebound effect, also known as the Jevons Paradox. "In short, relative decoupling sometimes has the perverse potential to decrease the chances of absolute decoupling."

But asking whether relative decoupling of GDP from resource consumption can eventually result in absolute decoupling is asking the wrong question. As the clearly indicated, GDP growth is not advocated as an end per se but as a means of generating employment.

Although GDP growth and employment are indeed highly correlated, the growth rate of GDP among the industrially developed countries (OECD) between 1991 and 2009 was about three times as fast as the growth rate of employment. To put this in perspective, energy consumption in the OECD countries increased over the last two decades at roughly the same pace as employment. In other words there has been virtually no relative decoupling of energy consumption and employment in the wealthier countries.

Globally the situation is even worse. From 1991 to 2009 world GDP increased by 93 percent. Employment increased by 33 percent and energy consumption increased by 36 percent. So even though energy consumption per dollar of GDP fell by nearly 30 percent over that period, energy consumption per employed person increased by two and a half percent. If the purpose of GDP growth is job creation, it makes absolutely no sense to talk about the energy intensity of GDP while ignoring the energy intensity of jobs.

As Thomas Pynchon wrote in Gravity's Rainbow, "If they can get you asking the wrong questions, they don't have to worry about answers." What happens when we start asking the right questions? "When we try to pick out anything by itself," John Muir wrote in My First Summer in the Sierra, "we find it hitched to everything else in the Universe." Industrial jobs are hitched to energy consumption which is hitched to GHG emissions. The right question, then, is how can we unhitch human flourishing from natural resource consumption and environmental impacts? 

Giacomo D'Alisa and Claudio Cattaneo ask the right questions in their research on "Household work and energy consumption: a degrowth perspective." Their research reveals the dangers, in terms of energy consumption, of promoting so-called "economic growth" through the substitution of commodity-based economic activity for household-based production.

The Buen Vivir movement that originated with the indigenous people of the Andes asks the right questions. Barbara Unmüßig, Wolfgang Sachs and Thomas Fatheuer summarize that movement's core principles in their Critique of the Green Economy:
Firstly, the good life is contrasted with development, which is seen as unilinear and imposed from above. According to this view, development is a mental process as well as a socioeconomic one. The aim is nothing less than a decolonization of the imagination.
Secondly, there are different narratives of Buen Vivir in different cultural traditions. Indeed, there are different nations – the Bolivian constitution describes the country as plurinational – each with their own language, history, social forms and ways of adapting to natural conditions. Biological diversity begets cultural diversity and vice versa.   
Thirdly, it is a community-based narrative that emphasizes relationships with one’s fellow humans, the plant and animal world and the cosmos instead of starting with the individual as the Western tradition does. Buen Vivir means living well with the surrounding world, which includes both the natural environment and other people. 
Fourthly, the forests, land and seed are to be tended jointly; collective work and machines are also common property. Social rules and methods can change, but in ways that the community decides. 
Fifthly and finally, nature is the basis of humans’ existence and they are part of the community of all living beings. Mountains and rivers, plants and animals are included in the common narrative as living subjects with whom one can converse.
The Texas Environmental Law Center and Our Children’s Trust asked the right question when they brought suit to have the atmosphere declared a public trust. As David Morris reported in On the Commons, Peter Barnes proposed treating the sky as a public trust in his 2001 book, Who Owns the Sky. Barnes's idea was the basis for a "cap-and-dividend" bill proposed in the U.S. House of Representatives in 2009. In July 2012, Judge Gisela Triana, of the Travis County, Texas, District Court ruled in favor of the plaintiffs.

In The Moon Belongs to Everyone, I traced the way that "everything is hitched to everything else" back from greenhouse gas emission to hours of industrial employment and proposed that the most direct way to cap emissions would be to cap hours of paid work. My policy proposal may not be the final answer but I think I'm asking the right questions.


john c. halasz said...

Capitalism is driven by the "imperative" of maintaining the "value" of invested capital by means of the rate-of-profit. Which leads to its "growth" dynamic, since such "growth" is driven by increasing the capital-intensity of production to raise the productivity of labor via the substitution of capital for labor, which generates both increased surplus labor supply and increased potential and actual output to be absorbed.

That's why employment growth and growth in resource consumption "must" necessarily go together. Without both the re-absorption of both surplus labor and surplus output, the "value" of capital can't be maintained, since it is measured by labor both as a necessary complement of production (else there's nothing to be substituted for) and as a prime source of consumption demand.

For the technical means of production to be invested in resource efficiency and as a complement to natural processes and limits, vast amounts of current infrastructure and productive capital stocks must be devalued (together with their financial "asset" claims), even as new forms and modes of infrastructure and productive techniques must be developed and built.

The coordination problems and cultural changes involved in such a transformed political economy are rather mind-boggling to contemplate.

Peter Dorman said...

OK, I'm going to kick myself for doing this, but here goes.

Let's suppose that what we need to do is reduce our environmental footprint, measured according to several key variables (and especially CO2), by about 90% in the space of a few decades. This was proposed over a decade ago by Greening the North (Sachs et al.) and still stands as a reasonable benchmark. My question is, approximately what proportion of this do you propose to achieve with reductions of GDP, and about how much through changing the content of GDP and the way it's produced, i.e. decoupling?

Incidentally, this is the old IPAT question I learned when I first started studying this stuff in the 1970s. Back then the mantra was "we need to reduce population!" and Barry Commoner said, well, let's look at some numbers. Now how many people need to disappear in the coming years?

Seriously, S-Man, what proportion of our footprint reduction do you want to achieve by reducing GDP?

Sandwichman said...

I'm not against growth, Peter. I'm against calling cannibalism "growth" and then insisting that we need to accelerate the cannibalism to provide nutrition for the growing population. John Halasz has summarized the mind boggling dilemma in his comment. It's all about maintaining the value of existing capital and accumulating more. Fuck the huddled masses yearning to breath free.

There are genuine economic growth strategies that don't depend on increased resource extraction and that have known for centuries. They won't be implemented by the powers that be. Why? Because 1. they do not contribute to the accumulation of capital and 2. they relieve the political pressure for policies that do contribute to the accumulation of capital.

Seriously, Peter, how much footprint reduction has been achieved over the last two decades by "decoupling GDP growth for resource consumption"? What makes you think that will change if we keep doing the same things?

Sandwichman said...

P.S. Just to add, I'm not simply being glib when I use the image of "calling cannibalism growth". There's a lot of research and theoretical discussion on this issue, some of which I refer to in Income, GDP Growth and Double Counting.

It gets rather discouraging to have to keep pointing out that "growth" is a euphemism for what produces revenue and has very little to do with "economy" in the sense of either improving human well-being or conserving the amount of resources consumed to provide for well-being.

As the title to this post and the quote from Pynchon point out, "If they can get you asking the wrong questions, they don't have to worry about answers." GDP asks the wrong questions. Peter's "what proportion of our footprint reduction do you want to achieve by reducing GDP?" is profoundly a wrong question.

Reducing GDP will not reduce our footprint. But reducing our footprint MAY reduce GDP. If the choice is between a bigger GDP with a bigger footprint or a smaller GDP with a smaller footprint, I would prefer the latter. If there is another alternative to those two choices, it is up to the proponents of GDP growth to demonstrate its practicality and political possibility. Three-card decoupling is not a viable alternative. It's a con.

Peter Dorman said...

Well, maybe we aren't so far apart after all. I don't think there can be much doubt that reducing our footprint will reduce GDP or at least greatly slow its rate of growth. This is one reason why a substantial reduction in working hours is a logical comcomitant of strong environmental policy.

My gripe is that way too many enviros reverse the cause and the effect. Obstructing GDP growth is not an environmental policy. If it were, I would have a poster of Angela Merkel on my wall.

Sandwichman said...

"Degrowth" is a lousy slogan. It implies that stopping GDP growth is the strategy. That's not what sophisticated advocates of degrowth think. But if you have to explain your one-word slogan, it's already failed.

Conversely, "growth" is a great slogan because it is misleading! Being against growth is like being against health. Just like labeling high-fructose corn syrup "health food"...

I agree that reducing our footprint will eventually reduce GDP and I assume that is what you mean, Peter. A transitional program may, however, actually increase GDP temporarily through increased investment in cleaner, more durable goods and infrastructure.

I have argued that the initial effects of work-time reduction would boost productivity, possibly even to the extent that it more than offsets the anticipated effect of a fall in aggregate hours. It's a counter-intuitive result that is consistent with Chapman's theory of the hours of labour.

Myrtle Blackwood said...

"....we argue that the future adaptability might require policies reallocating resources towards the unpaid and the community." [From the linked research paper abstract].

"Earth is abundant with plentiful resources. Our practice of rationing resources through monetary control is no longer relevant and is counter-productive to our survival."
Jacque Fresco