Ecological Economics to Protect the Planet from Ecocide and Free People from Iron Cage Consumerism

Dr. Kazi Abdur RoufVisiting Scholar

Leadership, Higher and Adult Education (LHAE)University of Toronto and

Assistant ProfessorNobel International University (USA)

Association for Nonprofit and Social Economy Research (ANSER) 2013 CONFERENCESixth Annual Conference

June 5 to June 7, 2013University of Victoria

Research Question• Nine billion people would be within decades. • Do we have a decent vision of green prosperity for such a world?

Logic • Debt driven materialistic consumption economy is unsustainable ecologically, problematic socially

and unstable economicallyMilitary Spending• Between 1939 and 1944, US military spending rose from 2 per cent of national income to 54 per

cent of national income. • Germany’s military spending reached 60 per cent of national income at its peak in 1944. • Military budgets are trillions of dollars all over the world • Currently there is no model for how common macro-economic ‘aggregates’ (production,

consumption, investment, trade, capital stock, public spending, labour, money supply and so on). • No model to account systematically for the present economic dependency on ecological variables

such as resource use and ecological services

Why green economics needed • Capitalism has fundamentally broken• Capitalism has negative effects on human lives, other living species and threat to ecology • Global economy has grown more than 5 times than it was in 1960. If it continues to grow at the

same rate, it will be 80 times bigger in 2011 than it was in 1950. • OECD estimated for 9 billion population , an economy needed 15 times of the today’s economy• 75 times bigger than what was in 1950 • by 2050 40 times bigger than today’s economy (200 times bigger than in 1950 (Jackson, p. 14).• The growth has failed the fragile ecological systems, we depend for survival. • It has failed to provide economic stability and secure people’s livelihoods. • Banking crisis of 2008 led the world to the brink of financial disaster• The capitalist economy runs on debt.• Shopping generation` -hooked on brand

Destroy Ecology• Carbon dioxide emissions from fossil fuels have increased by 80 per cent since 1970. Emissions

today are all most 40 per cent higher than they were in 1990. • Since the year 2000 they have been growing at over 3 percent per year. World consumption of coal

has increased the rate of growth in carbon dioxide emissions since the year 2000. • Extraction of iron ore, bauxite, copper and nickel is now rising faster than world GDP. • Climate change and peak oil are concern for ecological destruction and even fears of economic

collapse.• According to Kyoto Protocols emissions have risen by 40 per cent since 1990. • Tim estimated 60 per cent of the world’s ecosystem services have been degraded or over –used

since the mid-20th century• The world ends of cheap oil, rising commodity prices the degradation of air, water and soil,

conflicts over land use, resource use, water use, forestry and fishing rights and stabilizing the global climate.

• By 2050, carbon dioxide emissions would be 80 per cent higher than they are today.

Ecocide• Ecocide is a massive environmental destruction that’s alarming us, other species and our planet.

Ecological destruction, damage or loss of ecosystems is happening on a mass scale, every day. • Each day 150 living species become extinct, • 150,000 acres of tropical rainforest are destroyed. Each day, 2 million tons of toxic waste is

dumped in to our rivers and seas,• 22 million tons of oil extracted and 100 million tons of greenhouse gases are released. land

destroyed, water poisoned and air is polluted.• Biofuels played rising food prices, impacted to environmental degradations-rising carbon

emissions, declining biodiversity, rampant deforestation, collapsing fish stocks, declining water supplies and degraded soils.

• Energy growing by 45 per cent by 2030, it could hike 80 per cent in carbon emissions. • Two types of ecocides:• Human made ecocide: loss of the Amazon, nuclear war• Naturally occurring ecocide: rising sea levels, tsunamis, floods, earthquakes

Crisis in Capitalism• 1 billion people across the world are on less $1 a day-half price of a small cappuccino in Starbucks• A fifth of the world’s population earns just 2 per cent of global income. The richest 20 per cent by

contrast earn 74 percent of the world’s income. Capitalism creates huge disparities.• EU unemployment rate more than 11%, 20 million people are unemployed (January 9, 2013, BSS)• More than 20% unemployment in Spain and Greece. Youth unemployment is more than 26%• Money inflection high ever before • Govts. across the world had committed staggering $7 trillion public money-more than their GDP• Prominent villain US lending house market. ‘Toxic debts’ (Tim). • Hide information from balance sheet.• The US $787 billion stimulus package, but $290 billion in tax cuts (2009)• Even during 2008 In UK, debt was growing at the rate of £1 million every 11 minutes (Jim, p. 23).

The cumulative consumer debt stood at almost £ 1.5 trillion• Oil prices doubled in the year to July 2008, while food prices rose by 66 per cent, sparking civil

unrest in some poorer nations

Effects of Capitalism• Capitalism the culture s ‘borrow and spend’• Germany, France, Germany, Canada and the US all have public sector debts above 60 per cent of GDP.

Italy and Japan hold public sector debts that are higher than their GDP. Norway by contrast holds no public debt at all; on the contrary it has enormous financial assets.

• People’s jobs and livelihoods suffer. • Capitalist model has no easy route to steady state position. It has two states: expansion or collapse. • The debt rose from 40% of GDP to over 100% of GDP (Jim, p. 27). • External debt over 900 per cent of GDP (in Ireland)• Inequality –gap rich and poor increasing Iron cage Cosumarism• George Soros called Financial Markets ‘Super-bubble’• The economic crisis of 2008 made financial institutions became paralyzed by fear. Banks even refused to

lend even to each other;• Consumer society locks us firmly into the iron cage of consumerism• Growth has caught us economic un stability but environmental impacts ‘scale with economic output is

very important. Capitalist experience says us we won’t make much progress without confronting both the economic structure and the social logic that lock us into the ‘iron cage’ of consumerism.

Capitalism creates Consumerism Social Logic• Material artifacts constitute a powerful ‘language of goods’ • It is not just about status, but also about identity, social affiliation, • hopes for family, and dreams of the good life• This process is everywhere. Our relationships to our homes, our cars, our bicycles, our favorite

clothes, our books, our d or DVD collection, our photographs and so on all have this character.• This kind of materialism, flawed• Often used to establish social position.• Consumption is vital to us in our social and psychological processes of identity, affiliation,

aspiration, and self-expression

Demeaning of Prosperity• Prosperity as capabilities for flourishing (Amartaya Sen)• Prosperity is about material satisfaction, but opulence is not the same things as satisfaction.• In the UK percentage of very happy declined from 52 per cent in 1957 to 36 per cent today, even

though real incomes have more than doubled. • Nussbaum (USA) explains human capabilities that includes: • Life, bodily health• Bodily integrity• Practical reason (being able to form a good life)• Affiliation (being able to live with and toward others)• Basic entitlements and economic stability is important for prosperity

New start (Green Stimulus Packages) • In 2009 recovery package has aimed to ‘kick start’ consumers’ spending, protects jobs, and

stimulate economic growth again.• The global financial crisis 2008 consensus us to re-invigorate economic growth. • Both liberal and coordinated market economics call for ‘kick-start’ consumer spending• Get the economies growing again• Business as usual • Changing the social logic consumption cannot be regulated to the realm of individual choice• Social structure can shift people`s values and behaviors.Green deal for sustainable Development • Increase resource efficiency, renewable energy and reductions in material throughput• A massive technological shift; a significant policy effort;• Changes consumer values and lifestyles- free us from the damaging social logic of consumerism• Unlocked us from growth, free us from the flow of novelty- material throughput. • Aim ‘to create and saver 3 to 4 million jobs, jumpstart US economy.

Potential for ‘green’ recovery

• Green stimulus component main approach is public sector employment at green jobs.• Conservation (low-carbon vehicles, clean energy and recycling);• Quality of life (green neighborhoods and housing);• Environmental protection (including flood defense) ; and• Infrastructure IT and green transport networks • Green Recovery Process• To dismantle old institutions (capitalism) is risky.• Start opening out of a public and policy dialogue of the issues.• Develop green economics literatures, research • Three specific recommendations Jim Jackson (2011):• Establishing the limits: Resource and emission caps- and reduction targets• Fixing the economic model: Fiscal reform for sustainability’; support ecological transition • Changing the social logic. • Promote social economy (Jack Quarter, 2009); • Develop policies, acts and strategies for social enterprise organizations ( Rouf, 2011);• Expand social businesses (Yunus, 1990.

Fixing Ecological Economic ModelDeveloping an ecological macro-economics:(1). Ecological investments with strict emissions(2). Investing in jobs, (3). assets and infrastructures. Ecological investments include: (a). Retrofitting buildings with energy- and carbon-saving measures; (b) renewable energy technologies; (c) redesigning utility networks , in particular the electricity grid; (d) public transport infrastructures; (e) public spaces, green spaces, libraries and so on ; and(f) ecosystem maintenance and protectionTim Jackson (2011) recommends five points: (1).Working time policy;(2) Tackling systematic inequality;(3) Measuring capabilities and flourishing;(4) Strengthening social capital and;(5) Dismantling the culture of consumerism.

Strategies for Job Creation • By the end of 2008, an estimated 47 trillion had been spent globally in underwriting toxic assets,

recapitalizing banks, and attempting to restore confidence in the financial sector and stimulate lending (Jim, p. 110).The car industries received direct support in UK and US. The US government committed over $23 billion to bail out the ailing giants GM and Chrysler.

• To prevent large scale unemployment, sharing the available • This is the option taken by Canadian ecological economist, Peter Victor. His key policy intervention

is a reduction in working hours.

Local Economics Opportunities • Human flourishing economy contains local or community• Based social enterprise community energy projects, • Local farmers’ markets, food cooperatives, sports clubs, libraries, community health, fitness

centers• Local repair and maintenance services, craft workshops, writing centers, water sports• Community music and drama, local training and skills• Avoid using distance traveling products rather use local products • Avoid supermarket and Casino economy• These people centered activities call ‘ecological enterprises. • They are ‘Cinderella Economy’-care economy, but economists ignore this Cinderella economy• Promote micro-enterprises and encourage self-employment

Increase Ecological investment• Investment needs a balance between consumption and investment in the economy;• Traditional investment increase labor productivity; • Need to focus on resource productivity, renewable energy, clean technology, green business,

climate adaptation and ecosystem enhancement;• Low-carbon investment -a program ‘green stimulus’ -potential to secure jobs and economic

recovery• Provide energy security and technological innovation• Ensure a sustainable future for our children• Green bonds-linked directly to low-carbon (or green) investments.Three main types of investment:1. Enhance resource efficiency and lead to resource cost savings ( energy efficacy, waste reduction

and recycling);2. Substitute conventional technological with clean or low-carbon technologies( renewables);3. Ecosystem (climate adaptation, afforestation, wetland renewal and so on.

University of Massachusetts Identified Six Priority Areas for Investment:

1) Retrofitting buildings;2) Mass transit/freight rail;3) Smart grid;4) Wind power;5) Solar power and; 6) Next generation bio-fuels. Jim Jackson calculated that spending $100 million new jobs. • This money directed at household spending would generate only 1.7 million jobs;• Oil industry fewer than 600,000 jobs (15), (Jim, p. 109).

Other two options are: 1) Fiscal tightening-using national taxes to recover investment spending; 2) Government could take an equity stake in energy-related assets.

Comparison Modern Economy and Green Economy• Modern macro-economic variable is the GDP; • GDP is a measure of the ‘busy-ness’ of the economy;• It is resource hungry manufacturing sector;• Novelty keeps us buying more stuff;• Leisure the fastest growing sectors in modern economics;• Responsible for 25% carbon ‘foot print’• Profit motive stimulates • Expanding consumer demand by creating a complex social logic • Private transport is incentivized over public transport; motorists are prioritized over pedestrians;• Energy supply is subsidized and protected, while demand management is often chaotic and

expensive; waste disposal is cheap; recycling demands time and effort: • Wastage centers few and far, often overflowing with waste.

Green economists are not agreeing with the modern economists• Sustainable economy: capable of resisting the exogenous shocks;• Avoiding the internal contradiction- chaos during periods of recession; • Resilience securities for people’s livelihoods ensure distributional equity;• Limits on carbon-based products;• Protect critical natural capital; • Government spends revenues in public interest; • Balance between private sector and public sector;• Balance between consumption, and investment; • Balance in profitability and sociality;• No longer relies on ever-increasing consumption growth;• Economic activity remains within ecological scale;• Capabilities flourish-within ecological limits;• Herman Daly ‘steady state economy’;• Green growth based on non-polluting energy sources;• Encourage de-materialized ‘service’, rather than material production’ and;• Recycling, re-using, leasing productive economy.

Government/State Role• Ecological economics can instead give is a lasting prosperity- the potential to flourish, within

ecological and social limits.• State has to pay a big role in making it safer by lending in a crisis in return for regulation and

oversight. We favor today too much over tomorrow.• Increasing financial and Fiscal Prudence• Tobin tax on international currencies flow• Stabilizing financial markets• Governments would retain full control over the money supply • Revising the national accounts: GDP measures not only limits to economic activities;• Include externalities of cost of productions

Another Ecofriendly world in possible if we collectively like • It is possible if we could prevent ourselves away from more consuming, change through away

culture and develop attitudes to repairing, recycling and reusing;• Cooperating instead competing each other;• A life without shame (Tim Jackson);• Amartya Sen address this puzzle ‘simple living standard’;• Mahtma Gandhi encouraged ‘live simply and supportive community’-‘ intentional communities’;• Jack Quarter provokes for multipurpose cooperatives; • Yunus ‘no loss no dividend distribute to shareholders’; • Herman Daly urges for Eco-village: principles of social, environmental justice and respect for

nature.

Thank you

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