How about a green recession?

Overproduction and overconsumption are major factors in the ecological crises the world faces today.

Smoke billows from the chimneys of a power plant during sunrise in Jiaxing
A radical economic transformation could make a smaller ecological footprint a reality [Reuters]

It is easy to see how any casual observer following today’s environmental news might conclude that the one and only thing required to rescue the Earth, and thereby humanity, is a halt to global warming. That’s because in the small public space set aside for “green” debate, there is little talk these days of anything but climate. Carbon dioxide has the power to blanket and transform the entire planet, so it makes for the perfect headline – the one molecule that can unite people of every nationality and economic class behind a new ecological vision.

That headline should have worked, but it hasn’t. There has been no substantial progress on climate. Greenhouse emissions dip once in a while, but only during recessions. And after several years of stagnation, the voices of political and business leaders across the global North are united in perfect harmony, calling for a resumption of strong economic growth. If they get what they want, we’re all in trouble. Damage to the atmosphere will once again accelerate.

It’s no longer a deficiency of knowledge that stops us from curbing greenhouse emissions. Evidence of the threat has become irrefutable. Rather, it is the deep awareness at the top of the global economy that any serious attempt to stave off ecological crisis will curtail growth and send profits tumbling.

Why Americans doubt man-made climate change

Therefore, environmental movements should put out a new headline: “The Bloated Economies of the Global North Need to Go on a Crash Diet, and Soon.”

Warning: Please stay behind the line

The ecological limits that science has warned us about for decades are coming into view, and it’s now possible to see how little room remains for growth. According to calculations by Vaclav Smil of the University of Manitoba, the human economy has already reduced the total weight of plant biomass on the Earth’s surface by 45 per cent. About 25 per cent of each year’s total plant growth, and a similar proportion of all fresh water flowing on the Earth’s surface, is already being taken for human use. And if you could put all of our livestock and other domestic animals on a giant scale, they would weigh 25 times as much as the Earth’s entire dwindling population of wild mammals.      

Three years ago, a group of 29 scientists from seven countries published a paper in which they defined nine “planetary boundaries” within which humanity can “operate safely”. If we cross those boundaries and don’t pull back, they reasoned, there could be catastrophic ecological breakdown on a global scale. Given the uncertainties involved in any such projections, they proposed to set the limits not at the edge of the precipice but at some point this side of it, prudently leaving a modest “zone of uncertainty” as a buffer.

They were able to attach numbers to seven of the nine boundaries that are not to be crossed:

  • an atmospheric carbon dioxide concentration no greater than 350 parts per million;
  • no more than 5 per cent damage to the stratospheric ozone layer;
  • industrial fixation of nitrogen (chiefly for fertiliser) at no more than 25 per cent of the annual rate of fixation by the Earth’s natural ecosystems;
  • integrity of aragonite (a calcium compound that’s an indicator of the health of coral and microscopic sea organisms) maintained at 80 per cent of its level before industrial acidification of the oceans;
  • human use of fresh water kept below 4,000 cubic kilometres per year;
  • no more than 15 per cent of the Earth’s ice-free surface converted to cropland; and
  • no more than ten extinctions per million species annually.

The group noted that we have already transgressed three of the limits: carbon dioxide concentration, species extinction, and nitrogen output. In addition, they concluded, “humanity is approaching, at a rapid pace, the boundaries for freshwater use and land-system change” (while we’re rapidly degrading the land that’s already sown to crops.) They added that the ocean acidification boundary is at risk as well.

There was not yet enough information to set precise limits for two other factors – chemical pollutants and air pollutants other than carbon dioxide – but boundaries are out there and could well be crossed.

If we regard limitless growth of the human economy as being essential, then we are asking for the impossible. We’ll burst through all nine of those boundaries (and others), ecosystems worldwide will crash, and that will succeed in doing what we failed to do: to put a permanent stop to economic growth.

Reversal of growth could instead be achieved preemptively, to ward off such a collapse. The burden of that intentional contraction, however, must be borne by the rich corporations, governments, and populations of the global North, because that’s where the sheer volume of growth has been greatest, with a corresponding impact on the ecosphere. Impoverished nations, on the other hand, have contributed far less to global breakdown and must be permitted some headroom for the growth required to meet people’s basic needs.

The differences in scale are immense. When growing at a healthy 5 per cent annual rate, the economies of sub-Saharan Africa are collectively adding about $30bn to their gross domestic product in a year. At the same 5 per cent growth rate, India adds $85bn. On the other hand, for the combined economies of the United States, the European Union, and Japan to grow not at 5 but at only 2 per cent (a rate considered by politicians and economists to be anemic or worse) still requires $770bn worth of expansion each year. Compared with India and Africa combined, those rich regions would require six to seven times the volume of new economic activity, all to achieve less than half the growth rate – and to the benefit of only half as many people.

Those relative dollar values translate roughly into ecological damage. Even if nations become more resource-efficient as they grow richer, expansion of economic activity swamps out efficiency gains. Resource consumption and ecological footprints tend to grow along with wealth. Efforts to “dematerialise” growth usually focus on creating needs for new goods and services of little substance that people hadn’t know that they needed, or on drawing previously noncommercial activities into the cash economy.

Halting or reversing growth in rich nations will be fiercely resisted by the “one percenters” in the upper reaches of the global economy, because it’s unfettered growth that sustains their accumulation of wealth. Naomi Klein wrote last year that when industry cheerleaders “react to evidence of human-induced climate change as if capitalism itself were coming under threat, it’s not because they are paranoid. It’s because they are paying attention”. And on that point, the capitalists are right and the sunny forecasts of green optimists are wrong. The world’s wealthy nations can either have strong capital accumulation or they can prevent ecological collapse, but they can’t do both.

A shrinking economy could be stronger

Most economists have no tolerance for any discussion of limits. They tend to think of ecosystems simply as pools of resources from which the economy’s inputs can be extracted individually. In economic theory, resources always have substitutes, and economic growth can be unhitched from consumption of material resources; under such assumptions, growth could continue indefinitely. But an oil-palm plantation is not a substitute for a native tropical forest, and when a complex ecosystem breaks down, there is no substitute that can be dropped into its slot to maintain its many functions.

Ecologists point out that the human economy depends on ecosystems not only for resources like lumber and fish but also for “services” like regulation of the water cycle. Those services can be supplied only by intact, healthy landscapes and seascapes. In extracting useful resources, economies pull the props out from under ecosystems, a few at a time. The extracted resources boost the economy while the systems that provide them manage to hang on tenaciously, appearing to survive if not thrive. But there are limits. Ecosystems are vulnerable to thresholds – points of no return, beyond which recovery is impossible. They crash with little warning.

Economic limits need to be drawn in a way that keeps degradation well shy of crucial thresholds, or at least well shy of where we think the thresholds are.

An economy that contracts in a fair and orderly way, out of respect for ecological limits and basic human needs, could be very different from an economy that’s just stuck in an old-fashioned recession. Peter Victor of York University in Toronto has shown how – if public policy and productive forces are explicitly directed toward sustaining a high quality of life for all and not toward enriching a few – a negative-growth economy could enjoy deep reductions in unemployment and poverty rates, with a decrease in debt as well. Greenhouse-gas emissions would also decline steeply, by as much as 80 per cent.

The idea that an economy can manage sufficiency for all, even while shrinking, provides little comfort to economists, politicians, and corporate boards. They would greet any suggestion of growth reversal with dire warnings of stagnation. But, of course, chronic stagnation and unemployment have already become all-too-familiar features of the world economy. And ironically, at the root of that stagnation is not a lack of productivity but rather the same phenomenon that has fostered ecological crisis: overproduction.

It is difficult to imagine a globally ethical, timely, and politically feasible resolution to the global ecological crisis in which populations in the North do not reduce the number of hours worked per capita.”

– Juliet Schor, economist

Corporations – especially the mega-corporations that have come to dominate the world’s economies – are simply too good at what they do. They squeeze more production and profit out of their workforces every year, and capital piles up faster than they can invest it profitably. Production outstrips demand, and companies find themselves directing their excess wealth into ever-more elaborate mechanisms of sales and marketing aimed at stimulating demand domestically and internationally; into increasingly sophisticated technology to support the marketing effort; into state ventures (primarily the military-industrial complex); or, increasingly in recent years, into the finance, insurance, and real estate sectors, which of course are sources of the increasingly catastrophic bubbles that have made this such an interesting century so far.

Politicians often talk about jobs as if they are businesses’ gift to society – a concept typified by that favorite comment of bloggers and talk-show callers that “no poor man ever gave me a job”. In the real economy, employers keep their workforces as lean as they can. Intensifying pressure on employees, outsourcing jobs, and substituting fossil-powered technology for human power are all reliable ways to increase profitability. The result has been long strides in productivity, defined as wealth creation per worker. That has provided businesses huge payroll savings and boosted profits, but at the cost of accelerating the slide toward overproduction, stagnation, and unemployment.

If ecological limits lead to a shift away from energy-hungry technologies back toward human power, many more jobs will be created. And because the working people who have achieved those big increases in productivity have not so far been rewarded with higher pay, we might as well take advantage of those gains by instead working shorter hours to produce the same or a smaller volume of goods rather than continuing to overproduce.

In the view of Juliet Schor, a Harvard economics professor now teaching at Boston College, “it is difficult to imagine a globally ethical, timely, and politically feasible resolution to the global ecological crisis in which populations in the North do not reduce the number of hours worked per capita”. Tim Jackson, author of Prosperity Without Growth: Economics for a Finite Planet, has also suggested that employment be shifted over to low-productivity jobs of high social value.

Of course, such restraint would trigger a severe allergic reaction in any major economy. That should be taken as a sign that it’s the economy, not the idea of restraint, that is defective. Shorter work weeks, slower production, lower consumption, smaller ecological footprints, and, yes, a stable climate, can become a reality – but only after a radical economic transformation.

Stan Cox is a senior scientist at The Land Institute in Salina, Kansas, US and author of Losing Our Cool: Uncomfortable Truths About Our Air-Conditioned World.