Max Koch, Lund University Capitalism, Sustainability and Social Policy

1. Is green capitalism possible? 2. Is environmental sustainability compatible with economic and social sustainability? 3. What kind of transformation is required to make society environmentally sustainable?

Ad 1: Theoretical approaches

• Neoclassical economists see economy as cycle linking money and commodities with households and companies. ‘Return of capital’: original capital, plus a surplus, comes back to the owner. In focus is the frowth of monetary value, while the roles of energy and natural resources are sidelined or not mentioned at all

• Physiocrats, Smith, Ricardo, Mill and Keynes did not regard economics as largely synonymous with a science of prices and growth of monetary value

• Thermodynamic economists stress the role of matter and energy in production and consumption

Marx: Distinction of use value and exchange value as the ‘pivot on which a clear comprehension of political economy (and ecology!) turns’

• Exchange value: Reduces concrete works and matter and energy to repositories of abstract labour; regards land, raw materials, fuels as ‘free gifts’ from nature and sources of rents; tends towards an infinite expansion of scale to produce more exchange value / capital

• Use value: Bound up with rearranging matter/energy; expansion of scale translates into increasing throughput of finite raw materials, auxiliaries etc; accompanied by degradation of environment and increase in greenhouse gas emissions

• These structural tensions take different shapes in different institutional accumulation regimes (Fordism, finance-driven capitalism) and correspond with energy regimes and modes of environmental governance (e.g. Pigouvian taxes vs. carbon markets)

• Theoretically, a capitalist growth economy based on solar and renewable fuels is imaginable

Empirical answer: No socially just scenario of continually growing incomes for 9 billion peope and the UN climate targets to meet (Jackson)

• With 0.7% population growth and 1.4% income growth the average carbon content of economic output would need to improve 21-fold by 2050, relative to 2007

• If 9 billion people are to have an income of EU citizens today, the world economy would need to grow 6 times by 2050. Achieving the IPCC targets by 2050 would mean pushing down the global carbon intensity of economic output by 9% every year

• Empirically, let alone in the very short time frames climate scientists mention, there is no indication for a ‘green capitalism’ to arise

Ad 2) Green growth vs nogrowth: Welfare regimes and sustainability

- Gough and Meadowcroft see social-democratic welfare states as better placed to manage the intersection of social and environmental policies than liberal welfare regimes (ecological modernisation discourse, green growth)

- Socio-economic and ecological values are seen as mutually reinforcing: ‘synergy’ hypothesis

- Theoretical alternative is to regard the green dimension of the state in competition and conflict with its welfare dimension

Operationalising the welfare and ecology dimensions for 28 European countries (1995 and 2010)

1. Welfare: Decommodification: Overall expenditure for social protection as % of GDP; stratification: Income Inequality, GINI Index

2. Ecology: Performance:Electricity generated from renewable sources as % of gross electricity consumption; CO2 emissions per capita, National Ecological Footprints Regulation: Environmental taxes as % of GDP, public expenditures for environmental protection as % of GDP

3. Sources: EUROSTAT, OECD, Worldbank, Global Footprint Network

BE95

DK95

DE95

IE95

EL95

ES95

FR95

IT95

LU95

NL95

AT95

PT95

FI95

SE95

UK95

CZ95

EE95

LV95

LT95HU95

PL95

RO95

SI95

SK95

NO95

CH95 TR95

BG95

BE10

DK10

DE10

IE10

EL10

ES10FR10IT10

LU10

NL10

AT10

PT10

FI10

SE10

UK10

CZ10 EE10

LV10

LT10

HU10

PL10

RO10

SI10

SK10

NO10CH10

TR10

BG10

0.5

0.5

λ1=0.148(41.6%)

λ2=0.077(21.5%)

ECOLOGY +

ECOLOGY -WELFARE -

WELFARE +

Correspondence analysis: Positional Changes of Countries in the Eco-social Field

Koch, M & Fritz, M, Building the Eco-Social State: Do Welfare Regimes Matter? Forthcoming in Journal of Social Policy 43 (4)

  Relatively good environmental performance in 2010

Medium environmental performance in 2010

Relatively bad environmental performance in 2010

Progressive development since 1995

Portugal, Spain, Austria, Slowak Republic

Denmark, Germany, Poland, Hungary, Estland

Belgium

Stagnation Sweden, Switzerland, Romania

Norway, Italy, UK, Finland, Ireland

Netherlands, Luxembourg, Czech Rep.

Regressive development since 1995

Turkey, Latvia France, Slowenia, Lithuania, Bulgaria, Greece

-

State environmental performance compared

Results- No quasi-automatic development of the green state on top of already

existing welfare institutions: representatives of social-democratic welfare regimes are spread across established, emerging, failing and deadlocked eco-states

- This does not exclude that social-democratic and market coordinating institutions indeed facilitate the building of the green state. In this case, this potential would need to be actualised much more

- Social welfare and sustainability has nowhere been sufficiently decoupled from GDP growth

- Dialectics of welfare state: to enable the ‘masses’ to lead ecologically harmful lifestyles

Ad 3: De-prioritising GDP growth in policy making:Towards a stable state economy (SSE)

• An SSE aims at the lowest feasible matter and energy throughput in production and consumption and a relatively stable population (Daly)

• Growth would not be abandoned in all sectors of the economy but viewed as a process that is consciously and politically monitored and regulated (Barry)

• Nogrowth scenarios are backed up by other disciplines that are in need of theoretical integration: happiness research, sociology of consumption, psychology of well-being as well as economic and philosophical approaches of the living standard and capabilities

Challenges for research and policy making

• ‘Eco-social’ policies are necessary to bring about a ‘radically different environmental/welfare policy regime’ and a ‘redistribution of carbon, work/time and income/wealth’ (Gough) at international (where a new global deal not unlikely the Bretton Woods agreements would be necessary including a new mix of property forms), national and local/individual levels

• Research should identify conflicts and the potential for synergy between economic, social and environmental policies in areas such as wealth and income, working time, taxation, housing, transport and community development as well as policies encountering shifts in producer and consumer behaviour

Developing eco-social policies (at national and European levels)

        

       

 

Environmental goals and policies

Distributional dilemmas

Countervailing social policies

ECO-SOCIAL POLICIES

Examples for (as yet) fragmented countervailing social policies:- identification of minimum and maximum income limits; - carbon rationing including personal allowances and trading schemes;- alternative uses of revenues from mitigation policies; - state education strategies to limit conspicuous consumption

Conclusions and discussion

• Empirical evidence for a ‘green capitalism’ is very weak

• Policy priorities would need to shift from maximising GDP (or exchange value) towards physical parameters such as material throughput and resource use (or use value). The role of markets in economic governance would need to shrink in a new mix of property forms

• More interdisciplinary research is needed to understand welfare in sustainable terms and on the as yet not integrated policy tools en route to a SSE