Economic Growth - Our Common Foe

By Neil K. Dawe

03 April, 2006
countercurrents.org (India)

The recent Independent article re climate change and the admission by four senior British Labour Party ministers that their government's official policy for fighting climate change has failed, finally hits the nail on the head ( http://news.independent.co.uk/environment/article354055.ece ). The ministers make the case for “abandoning the 'business as usual' pursuit of economic growth, which has been the basis of Western economic policy for two hundred years." Importantly, there seems to be recognition that economic growth is the root cause of climate change along with a host of other environmental problems.

Economic growth is a continual increase in the production and consumption of goods and services and is predicated on increasing population and per capita consumption. Most significantly to the conservation cause, economic growth invariably results in the conversion or draw-down of natural capital (i.e., ecosystems and their biodiversity). The result is an increasing and cumulative loss or degradation of ecosystem services, the very services that allow and sustain life on this planet.

According to the recent Millennium Ecosystem Assessment (MEA), some 60 per cent of the planet's ecosystem services are currently being degraded by human activities.
(see http://www.millenniumassessment.org/en/products.aspx ). The World Health Organization's contribution to the MEA notes that “In the 200 years for which we have reliable data, overall growth of consumption has outpaced increased efficiencies in production processes [= technology], leading to absolute increases in global consumption of materials and energy. This means that in practice, economic growth tends to increase consumption of energy and materials [= natural capital].” Apparently, technology is not solving the problem.

How is it that, despite all our conservation efforts, we have come to this point? A recent paper by Czech in the Wildlife Society Bulletin may shed some light
(http://www.wildlife.org/publications/wsb2801/2sc_czech.pdf). Czech suggests that, because economic growth eliminates welfare factors for species through the principle of competitive exclusion, economic growth is a limiting factor to conservation. In ecology, a limiting factor is a factor, such as food or water that controls a process, such as sustaining a wildlife population. The key point is that, if you don't address the limiting factor, it doesn't matter what else you do, the population is in trouble.

If economic growth is the limiting factor to conservation, as Czech suggests, then it doesn't matter how many streams we clean or how many old growth forest valleys we secure, economic growth will eventually undo all the conservation effort we've undertaken. That seems to be what is happening.

Today, there are more conservation and environmental organizations, more environmental regulations and legislation, more protected areas, and more environmental awareness than ever before, and yet there is more environmental degradation than ever before. What we're doing to protect biodiversity is not working. And it's not working because conservationists are not addressing the root cause of the degradation: economic growth.

One reason that economic growth is the main culprit flows from the faulty model under which conventional economics operates. Neoclassical or conventional economics is rife with flaws that are now being questioned by ecological economists and others around the world. See http://adbusters.org/metas/eco/
truecosteconomics/neoclassical.html for a brief review of the flaws as well as http://adbusters.org/metas/eco/truecosteconomics/ ; also look at the post autistic economic movement-- http://www.paecon.net/ -- for an example of what students around the world are doing to counter the "dismal science." If you want to know more, Google Herman Daly or Robert Costanza for a start.

Undoubtedly the deadliest flaw of the neoclassical economic model is the fact that it is a circular flow model (perpetual motion machine) with no connectivity to the biosphere. Simply, it ignores both physical and ecological laws, such as thermodynamics and carrying capacity; it's as if the laws have been repealed specifically for humanity. Of course, they haven't.

In addition, natural capital is considered expendable because neoclassical economists believe in perfect substitutability between factors of production (= manufactured capital, labour, and land, or resources). This has led one Nobel economist to proclaim: “If it is very easy to substitute other factors for natural resources, then…the world can, in effect, get along without natural resources, so exhaustion is just an event, not a catastrophe.” So, don't worry about biodiversity loss--we'll find a substitute.

This problem has garnered concern within the scientific community to the extent that a number of professional organizations such as The Wildlife Society, The Society for Conservation Biology, and the Canadian and American Societies for Ecological Economics have adopted position statements on economic growth. They note that, among other things, there is a fundamental conflict between economic growth and biodiversity conservation and a fundamental conflict between economic growth and the ecological services underpinning the human economy (see e.g., http://www.conbio.org/Sections/NAmerica/NAS-SCBPositionOnEconomicGrowth.cfm ).

At the Qualicum Institute (a local grass-roots think-and-act tank), we have been focusing on sustainability issues in the Parksville-Qualicum Beach region of Vancouver Island. Over the past four years of our existence, we have yet to meet one decision-maker who we believe truly understands what it means to be sustainable.

In sustainability workshops we've attended, led by people ranging from "smart growth" advocates to municipal councilors to former premiers, invariably the words "economic growth" or "healthy growing economy" form part of their plan for sustainability. Those are telling words, for exponential growth of material things on a finite planet is impossible (see physicist Albert Bartlett's comments on the subject http://jclahr.com/bartlett/ . Bartlett contends that "The greatest shortcoming of the human race is our inability to understand the exponential function.")

We at the Qualicum Institute (QI) believe the time is ripe to carry a new conservation message forward. If ever we hope to become a sustainable society, we must move from an economy based on economic growth to a steady-state economy that is in balance with the carrying capacity of the planet ( see http://dieoff.org/page88.htm and http://www.steadystate.org/ and e.g., books by Herman Daly). This, we are not doing, and by many measures we appear to have exceeded the earth's carrying capacity back in the mid-1980s (see, e.g., Fig. 1 Page 3 of Asia-Pacific 2005: The Ecological Footprint and Natural Wealth
http://www.footprintnetwork.org/newsletters/
gfn_blast_ap_report_2005.html ). This means we are no longer simply living off the “interest” but rather we're eating into our “natural capital.”

While all the actions that conservationists have taken over the years may have bought us some time, we believe we can no longer afford to continue as we have in the past, dealing with only the symptoms (e.g., cleaning degraded streams, protecting older forests, securing critical habitats and recovering species at risk). Rather, we need to start dealing with the root cause.

The QI recognizes three problems that will soon come together to confront humanity: peak oil, global climate change, and biodiversity loss. They will likely hit us in that order and while peak oil and climate change may arrive first--and their impacts will undoubtedly be severe--it is biodiversity loss that will ultimately seal our fate. And it's doubtful these problems will be solved using our old conservation methods. Perhaps now is the time to rid ourselves of our "sunk costs"
(see http://www.ecologyandsociety.org/vol9/iss1/art6/ ) and work to address the prime cause of our environmental problems, not only for our children and their children but for ourselves. We encourage all conservationists to learn more about this faulty economic growth paradigm and its deadly interactions with the biosphere (a good start can be found here: http://www.wildlife.org/publications/index.cfm?tname=wsb2801).

We at the QI also believe this is a rare opportunity for conservation organizations. Conservationists can choose to come together with one loud and unequivocal voice against economic growth, the limiting factor to biodiversity conservation, or we can continue to see our fragmented efforts continuously eroded by a faulty economic paradigm. The latter choice isn't likely of much comfort to all those species dependent for their survival on healthy ecosystems, and is certainly of no comfort at all to those species humanity has already pushed over the brink of extinction.

Neil K. Dawe
for the Directors,
The Qualicum Institute
A Society for ecological, social, and economic sustainability