Can Capitalism Be Green?
TORONTO - Capitalism has proven to be environmentally and socially unsustainable, so future prosperity will have to come from a new economic model, say some experts. What this new model would look like is the subject of intense debate.
One current theory states that continuous growth can be environmentally compatible if clean and efficient technologies are adopted, and if economies leave behind production of material goods and move towards services. This is known as sustainable prosperity.
International agreements to fight global problems, like the thinning of the atmosphere's ozone layer and climate change, have used market principles to achieve compliance by the private sector.
But the problem is, "we are consuming 25 percent more than the Earth can give us each year," says William Rees, of the School of Community and Regional Planning at the University of British Columbia.
Rees and other experts have calculated that annual human consumption of natural resources exceeds the planet's ecological capacity to regenerate them by 25 percent, a proportion that has been growing since 1984, the first year they calculate that humanity crossed that capacity threshold.
"Our planet needs natural capital (resources) like trees to provide the ecosystem services of clean air and water that we all depend on," said Rees in an interview. He was one of the inventors in 1992 of the concept of "ecological footprint", an indicator of how much productive land a certain human population needs in order to supply itself with resources and to absorb its waste.
Capitalism is all about accumulation of wealth based on the consumption of natural resources, whose availability is strictly limited, he said. We are also exceeding the maximum amounts of pollution or waste products, such as carbon dioxide emissions (the main contributor to climate change), that the planet can absorb and process without affect.
Market economists call pollution and its impacts "externalities", and rarely factor them into the economic models, he said.
Rees defines sustainable prosperity as the global use of resources and generation of wastes that do not exceed the planet's capacity to regenerate and absorb. Equally important, he says, is the social dimension: true prosperity is possible only when income disparity between the rich and poor is small.
"U.S. executives are paid 500 to 1,000 times more than their workers, and this inequity continues to worsen," he said.
If everyone lived like the U.S. population, we would need five planets to provide the necessary natural resources, says the World Wildlife Fund's Living Planet Report 2006. China alone would use all the world's current resources.
Cleaner and more efficient technology is not the solution either, despite being widely touted as the path to sustainability, said Rees. Modern industrialized societies already use resources more efficiently than developing nations, but rich countries consume far more material goods and end up using more of the planet's limited natural resources.
In his opinion, the new mantras of "responsible consumption" -- buying organic or sustainably-made goods -- and dematerialization of economies -- producing services rather than products -- do not solve the problem. The only solution is to reduce pollution and consumption of resources, he said.
"All this sustainability talk implies that we don't really want to change what we are doing," he added.
Responsible shopping or corporate social responsibility won't make much of a difference, agrees Brian Czech, president of the Center for the Advancement of the Steady State Economy, a Washington, DC economic think tank.
"We have to ratchet our economic growth downwards to stabilize at a steady state," Czech, a former wildlife ecologist, said in an interview for this report.
Most developing nations still need to grow economically, but rich countries have to reduce their use of resources so that can happen, he says.
The idea that growth can be sustainable by dematerialization is "nonsense", in Czech's opinion. Producing services requires use of natural resources like energy and the money generated will be used to buy something.
"Neoclassical economists at the World Bank, USAID (U.S. Agency for International Development) and elsewhere continue to believe there are no limits to growth," Czech says.
Economic success needs to be redefined: instead of increasing wealth it should be increasing well being, says Nic Marks, head of the Center for Well Being at the New Economics Foundation (NEF), in London.
The British government has recognized that the economy has to exist within the reality that there is only one planet and we are living well beyond its means, Marks said in an interview.
"However, it is politically unsustainable to say less economic growth is the way forward," Marks noted.
Instead, greener, cleaner and dematerialized growth is seen as the solution to "one-planet living". Marks says these are necessary along with major reductions in resource use.
U.S. entrepreneur Peter Barnes says the way forward is for capitalism to shift from exploiting natural resources like air and water to protecting them as "common wealth trusts" of humanity. They would belong to everyone on the planet and would have the power to limit use of scarce resources, charge rent, and pay dividends to everyone, Barnes writes in a new book "Capitalism 3.0".
Barnes envisions a large number of ecosystem trusts around the world, administered by trustees who cannot act in their own self-interest. They would be legally obligated to act solely on behalf of beneficiaries -- all citizens and future generations equally.
"Neither government nor corporations represent the needs of future generations, ecosystems, and nonhuman species. Commons trusts can do this," he writes.
This story is part of a series of features on sustainable development by IPS and IFEJ -- the International Federation of Environmental Journalists.
Copyright © 2007 IPS-Inter Press Service.