The International Political Economy and Sustainable Development

Managing Sustainable Enterprise

GCSE 7508Griffith Business School

Asia Pacific Centre for Sustainable EnterpriseJanuary 2013

Jeremy [email protected]

@jeremybwilliams@TheGreenMBA

facebook.com/profjeremybwilliamsjeremybwilliams.net

Session 5:

The International Political Economy and Sustainable Development

The Brundtland Report (1987)

• The most widely accepted definition:‘development that meets the needs of the present without compromising the ability of future generations to meet their economic needs’.

Gro Harlem Brundtland

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Inter-generational and intra-generational equity

• Principle 3, Rio Declaration: ‘… to equitably meet developmental and environmental needs of present and future generations’.

• inter-generational equity– a necessary condition for sustainability

• intra-generational equity– a necessary condition for development

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The ends-means spectrum

Daley (1973)

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Criticisms of GDP as an indicator of economic well-being

Traditional criticisms:• Measurement problems:

The underground economy Domestic production Quality and composition of

output• Leisure time• Income distribution

Contemporary criticisms:• The counting of ‘defensive’

expenditures as positive contributions to GDP

• Failure to account for changes in the value of ‘natural capital’.

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GDP and its detractors…

Mike Nickerson, The Sustainability Project, Ontario, 1997

Source:http://www.foe.co.uk/campaigns/sustainable_development/progress/annex1.html

‘If a truckload of toxic chemicals spills somewhere, the money spent cleaning it up is added to the GDP. If nearby residents can no longer use their wells for water, their expenditures on bottled water is added

to GDP. If they become sick from exposure to the substance, their medical costs are also added to the

official measure of well-being’.

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Barber B Conable Jr, Former Republican

Congressman and Former President, World Bank,

1989

‘Unfortunately GDP figures are generally used without the caveat that they represent an income that

cannot be sustained. Current calculations ignore the degradation of

the natural resource base and view the sale of non-renewable resources

entirely as income. A better way must be found to measure the prosperity

and progress of mankind.’

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Simon Kuznets, (creator of GDP concept) 1962


‘The welfare of a nation can scarcely be inferred from a measurement of national income as defined by the

GDP... goals for ‘more’ growth should specify of what and for what.’

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The GPI for the United States

Source:http://www.foe.co.uk/campaigns/sustainable_development/progress/international.html

Further reading:

Clifford Cobb, Ted Halstead, and Jonathan Rowe (1995), ‘If the GDP is Up, Why is America Down?’, Atlantic Monthly Source: http://www.rprogress.org/newmedia/articles/9510_atlantic.pdf

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The ISEW for the UK

Source: http://www.gpionline.net/othergpi.htm

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The GPI for Australia

Source: http://www.gpionline.net/index.htm

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What the GPI counts that GDP doesn’t …

• Personal consumption • Income distribution • Public consumption expenditure • Value of household and

community work • Costs of unemployment • Costs of underemployment • Costs of overwork • Private defensive expenditure on

health and education • Services of public capital • Costs of commuting • Costs of transport accidents • Costs of industrial accidents • Costs of crime

• Costs of noise pollution • Costs of irrigation water use • Costs of urban water pollution • Costs of air pollution • Costs of land degradation • Costs of loss of native forests • Costs of depletion of non-

renewable energy resources • Costs of climate change • Costs of ozone depletion • Costs of problem gambling • Value of advertising • Net capital growth • Net foreign lending

Source: http://www.gpionline.net/whatis.htm

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GDP and the neo-classical circular flow model

• What is ‘assumed away’ in the model?

Households

Payments for products

Wages, profit, rent, interest

Goods and services

Resources

Firms

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The neoclassical world view

The economy

The environment

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The ecological economics world view

The environment

The economy

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The economy and the environment

Economic growth

Reduction in natural capital

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At some point, the flows between environment and economy become unsustainable

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• The Economics of the Coming Spaceship Earth

By Kenneth E. Boulding, 1966

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Source: Daly, H.E. (2005) ‘Economics in a full world’, Scientific American, September, p. 102.

Chinese proverb: “Better to give a man a rod than a fish”

… the supply of fishing rods is no longer the problem

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• It is a shortage of trees, not chainsaws, that threatens timber production

15 football pitches per day

Image source: nationalgeographic.com

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• Water itself has become scarce relative to the powerful pumping technologies used to access it

The Aral Sea once the fourth largest lake in the world, continues to shrink and is now 10 percent of its original size

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Santa Fe residents "flood" the Santa Fe RIver's dried up riverbed

Everyone's holding blue because that's where the river should be flowing

Source: 350/org

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Examples of ecosystem services (Costanza et al 1997)

Ecosystem service Examples

Climate regulation Greenhouse gas regulation, dimethyl sulfide production affecting cloud formation.

Disturbance regulation Storm protection, flood control, drought recovery and other aspects of habitat response to environmental variability mainly controlled by vegetation structure.

Water regulation Provisioning of water for agriculture (e.g. irrigation) or industrial (e.g. milling) processes or transportation.

Water supply Provision of water by watersheds, reservoirs and aquifers.

Soil formation Weathering of rock and the accumulation of organic material.

Nutrient cycling Nitrogen fixation, nitrogen, phosphorous and other elemental or nutrient cycles.

Waste treatment Waste treatment, pollution control, and detoxification.

Pollination Provision of pollinators for the reproduction of plant populations.

Biological control Keystone predator control of prey species, reduction of herbivory (plant eating by insects) by top predators.

Food production Production of fish, game, crops, nuts, fruits etc. by hunting, gathering, subsistence farming or fishing.

Raw materials Production of lumber, fuel or fodder.

Genetic resources Medicine, products for materials science, genes for resistance to plant pathogens and crop pests, ornamental species (pets and horticultural varieties of plants).

Recreation Eco-tourism, sport fishing and other outdoor recreational activities.

Cultural Aesthetic, artistic, education, spiritual and/or scientific values of ecosystems.

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Welcome to the Anthropocene

http://vimeo.com/39048998

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The ecological footprint concept• How many planets would

we need if everyone lived like you?

http://www.myfootprint.org

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Worldwide, there exists about 1.9 biologically productive global hectares per person

Image source: www.adbusters.org

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At what stage do you think humankind will outstrip its supply of biologically productive hectares?

A. 2010B. 2020C. 2050D. 2100E. No answer

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Image source: http://www.footprintnetwork.org/

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Paul Gilding

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Source: nationaljournal.tumblr.com

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© Jeremy B. Williams 2007

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New colours on the temperature map

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The Stern Review, October 2006

• On climate change:“The greatest market failure the world has ever seen”

Sir Nicholas Stern

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IPCC Fourth Assessment Report

February, 2007: Evidence of Human-caused Global Warming is ... “Unequivocal”

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November 2012:

The 10 warmest Novembers have occurred in the past 12 years, and November 2012 was the 36th consecutive November and 333rd consecutive month with global temperature higher than the 20th century average.

Source: The National Oceanic and Atmospheric Administration (NOAA) of the US Department of Commerce

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James L. Powell reviewed 13,950 peer-reviewed papers published between January 1991 and early November 2012, and only 24 (0.17%) clearly reject global warming or endorse a cause other than CO2 emissions for observed warming.

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2005: CO2 = 379ppm

350.org

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Source: http://www.21school.ox.ac.uk/news/archive/200702_inaugural_lecture.cfm

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Source: http://www.21school.ox.ac.uk/news/archive/200702_inaugural_lecture.cfm

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Upsala Glacier, Argentina

1928

2004

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Blomstrandbreen Glacier, Norway

1922

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Blomstrandbreen Glacier, Norway

2002

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The Imja Glacier, Himalayas

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The Imja Glacier, Himalayas

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Anhui Province, China, August 2006 Southeastern China, February 2011

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Floods in Southern China, June 2011, 550,000 left homeless

Floods in Southern China, June 2011, 550,000 left homeless

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Forced migrations

• UN study estimates that there were 50 million environmental refugees around the world in 2010

• Same study estimates that as many as 100 million people live in areas that are below sea level or liable to storm surge

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• 1 metre sea level rise will inundate more than 15 percent of Bangladesh, displacing more than 13 million people

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Annual carbon dioxide emissions• Bangladesh: 172kg per capita• United States: 21 tonnes per capita

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China

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71John Howard refused to sign Kyoto

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Kevin Rudd signed on his first day in office

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Julia Gillard’s government introduced a carbon tax in July 2012

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Envisioning the future

Case Study:

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The future

• If you don't know where you're going, you end up somewhere else

• We have to decide where we want to go, and balance that with where it is possible to go

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Envisioning

• The processes of envisioning and goal setting are extremely important

• They are also very underdeveloped skills in our society!

• In order to effectively envision, it is necessary to focus on what one really wants, not what one will settle for.

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For example:

Really want • Self-esteem • Serenity • Health • Human happiness • Permanent prosperity

Settle for• Fancy car • Drugs • Medicine • Higher GDP • Unsustainable growth

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Two world views

Technological optimist• Technical progress can deal

with any future challenge• Competition• Linear systems with no

discontinuities or irreversibilities

• Humans dominant over nature

• Everybody for themselves• Market as guiding principle

Technological sceptic• Technical progress is limited and

ecological carrying capacity must be preserved

• Cooperation• Complex, nonlinear systems with

discontinuities and irreversibilities• Humans in partnership with nature• Partnership with others• Market as servant of larger goals

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Four visions of the future

Optimists right Sceptics right

Technological optimist ? ?Technological sceptic ? ?

Real state of world

Wor

ld v

iew

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Dystopian ‘Mad Max’ world?81

Alternative ‘Star Trek’ world?82

Controlled ‘Big Brother’ world?83

Ecotopian world?84

Four visions of the future

Optimists right Sceptics right

Technological optimist

Star Trek Mad Max

Technological sceptic

Big Brother Ecotopia

Real state of world

Wor

ld v

iew

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Watch archive footage in 2055

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Trace the events back to 2013 from 2055 … what happened?

• Sketch out one of the four visions of the future

• Reflect upon the various initiatives that might, or might not have been taken, and the prospective consequences

• Prepare a 10-12 minute presentation

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Education

The International Political Economy and Sustainable Development