Taking ecological and energy limits seriously

• Extended supply chains

• Weakening of community bonds

• Climate change imposes limits on consumption and transport

The irresistible pressure for economic growth and its connection to money creation

An economy dependent on energy Unbalanced nature of resource

ownership and use What green business would look like

‘Growth for the sake of growth is the ideology of the cancer cell’ Edward Abbey

http://vimeo.com/8947526

Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist

Kenneth Boulding

Most money (around 97% is made by private banks as debt)

Money made in one period can make a claim on goods and services in the future

These goods and services use energy and resources

The money supply is hugely increasing This is the driving force behind

economic growth

0

500

1000

1500

2000

2500

1970

1973

1976

1979

1982

1985

1988

1991

1994

1997

2000

GDP index

Broad money (M4)index

13

Source: Dan O’Neill, CASSE

0

1

10

100

1,000

10,000

100,000

0 1 10 100 1000 10000

Energy Supply (Mtoe)

GD

P (

Bill

ion

$)

If we were to add together the power of all the fuel-fed machines that we rely on to light and heat our homes, transport us, and otherwise keep us in the style to which we have become accustomed, and then compare that total with the amount of power that can be generated by the human body, we would find that each American has the equivalent of over 150 'energy slaves' working for us 24 hours a day. In energy terms, each middle-class American is living a lifestyle so lavish as to make nearly any sultan or potentate in history swoon with envy.

Heinberg, R. (2005), The Party’s Over: Oil, War and the Fate of Industrial Societies (Gabriola Island, BC: New Society), pp. 30-1

Entropy law: second law of themodynamics: while quantity remains the same (First Law), the quality of matter/energy deteriorates gradually over time.

Inherent tendency towards chaos or „less orderliness“

‘a measure of the amount of energy no longer capable of further conversions to create useful work’

• Entropy as a „biophysical limit to growth“

• We use low-entropy inputs and create high-entropy wastes

• Only the use of a huge amount of energy can offset this process

Can you think of economic growth that would not require more energy?

Can you find some examples of how the entropy law is reflected in economic activity?

What is the difference between a recession and a no-growth economy

Is a steady-state economy an appealing objective, when nature is all about dynamism and change?

USA Europe Asia Africa World

Energy 8520 3546 892 580 1640

CO2

emissions

20.3 8–12 <1 <1 3.85

Daily water 430 159 172 47 173

An economy based on renewable resources carefully managed for sustained yield and long-term productivity of all its resources can provide useful, satisfying work and richly rewarding life-styles for all its participants. However, it simply cannot provide support for enormous pyramided capital structures and huge overheads, large pay differentials, windfall returns on investments, and capital gains to investors.

‘Henry Wallich, a former governor of the Federal Reserve and professor of economics at Yale, said: “Growth is a substitute for equality of income. So long as there is growth there is hope, and that makes large income differentials tolerable.” But this relation holds both ways round. It is not simply that growth is a substitute for equality, it is that greater equality makes growth much less necessary. It is a precondition for a steady-state economy.’ (quoted in Wilkinson and Pickett, 2009: 221-2).

Extraction of value leads to more pressure on resources

Work directed by profit rather than need

Money-work nexus leads to debt-fuelled growth

By 1995 US-based firms were spending about $1 billion year on environmentally related PR

Accentuate the positive; deny and conceal the negative

Donate money to environmental groups and co-op them

Invent stakeholder dialogues to take up their time

Production of ‘educational materials’

In 2001 its revenues were almost US$135bn. and it had 90,000 employees in 140 countries.

Last year profits were annual earnings of £13.9bn, largest ever and more than £1.5m an hour.

Shell gives about £200,000 to environmental organizations every year and the Shell Foundation distributes £7.5m to development projects around the world.

Brent Spar rig disposal Appalling record in the

Niger delta, including the murder of Ken Saro-Wiwa

Lying about its oil reserves

Founder member of the Global Climate Coalition

In January 2004 Shell was forced to admit it had over-estimated its reserves by 3.9bn. barrels, 20 per cent of the total.

In Ogoniland, 95% of extracted natural gas is flared8 (compared with 0.6% in the United States). It is estimated that the between the CO2 and methane released by gas flaring, Nigerian oil fields are responsible for more global warming effects than the combined oil fields of the rest of the world

Prosperity without Growth:Alternative hedonsimQuality not quantity

‘The impact of income inequalities on sustainable development in London’: report to the London Sustainable Development Commission Inequality drives consumerismHigher income groups produce more

CO2

A bioregional economy would be embedded within its bioregion and would acknowledge ecological limits.

Bioregions as natural social units determined by ecology rather than economics

Can be largely self-sufficient in terms of basic resources such as water, food, products and services.

Enshrine the principle of trade subsidiarity

http://www.bbc.co.uk/programmes/b007tjf8

‘The critical argument now within environmental circles is between those who operate from a human-centered resource management mentality and those whose values reflect and awareness of the integrity of the whole of nature.’ (Snyder, 1990: 194).

www.greeneconomist.org

gaianeconomics.blogspot.com

Green Economics: AnIntroduction to Theory, Policy and Practice (Earthscan,

2009)

Environment and Economy(Routledge, 2011)

How do we shift to a new consumption ethic?

What aspects of your personal lifestyle would be most difficult to change?

How much of the solution is structural and how much is personal?

Discuss with your group the greenest business you know well—what makes it a green business?