How sustainable are our economies_2 pot

47 Table 3.2 Non-sustainability in development: From limitations to limits.. 71 Table 4.4 Framework for Sustainable Development Indicators FSDI.. 94 Table 5.4 Indices of sustainable

Fig 11.1 EKC hypothesis – confi rmed and rejected 199

Fig 11.2 Inconclusive evidence for the EKC hypothesis 200

Fig 11.3 Limits to growth model – components and interactions 203

Fig 11.4 Selected scenarios of the LTG model 205

Fig 12.1 Econometric input-output model (Panta Rhei) 217

Fig 12.2 Panta Rhei projections of GDP and CO2 emissions, Germany 1991–2007/2015 218

Fig 12.3 Sustainability constraints in a linear programming model 219

Fig 13.1 Natural wealth and economic growth in Botswana and Namibia 242

Fig 13.2 Maximum consumption limits in the feasibility space 246

Fig 15.1 Towards sustainability – conclusive questions 263

Fig I.1 Optimal environmental protection 281

Fig III.1 SEEA application: Germany, 1990 286

Table 1.1 Indicators of global non-sustainability 10

Table 2.1 Schools of eco–nomic thought 24

Table 2.2 Environmental sustainability: concepts and analysis 30

Table 3.1 Country categories by level of growth and development 47

Table 3.2 Non-sustainability in development: From limitations to limits 51

Table 4.1 From framework to statistics: Format and use of the FDES 65

Table 4.2 United Nations 2004 questionnaire on environment statistics, river quality 67

Table 4.3 Framework for statistical integration (FSI) 71

Table 4.4 Framework for Sustainable Development Indicators (FSDI) 75

Table 4.5 FSDI and related frameworks: Freshwater indicators 77

Table 4.6 Trends towards meeting MDG targets for access to water and sanitation 79

Table 5.1 EEA indicator assessment 88

Table 5.2 Dutch policy theme potentials for calculating theme equivalents and indicators 92

Table 5.3 Indices of sustainability: Concepts and methods 94

Table 5.4 Indices of sustainable development: Comparison of results 95

Table 5.5 Evaluation of indices of environmental and socio-economic sustainability 101

Table 6.1 Material fl ow balance and derived indicators 116

Table 6.2 Physical input-output table, Germany 1990 (Million tons) 122

Table 7.1 Simplifi ed structure of a NAMEA 138

Table 7.2 NAMEA 1997 (Netherlands) – origin and destination of material fl ows 139

Table 8.1 NDP and EDP in case studies of green accounting (lowest and highest percentages) 156

Table 8.2 Adjusted net savings, world regions 1999 (% of GDP) 158

xxix

Table 8.3 Green accounting indicators, Germany 1990,

1991 and 1995 (provisional estimates) 158

Table 9.1 Eco-balance, Kunert AG 172

Table 10.1 Environmental depletion and degradation cost in selected countries (% of NDP) 187

Table 10.2 Environmental-economic profi les: Energy and CO2 intensities, Germany 2000 (1991) 189

Table 11.1 Assumptions, purpose and critique of the LTG model 206

Table 12.1 Economic growth and effects of environmental standards, Sweden, 1985/2000 215

Table 13.1 Taxonomy of environmental policy instruments 234

Table 13.2 Evaluation of environmental policy instruments 240

Table 13.3 Eco-tax in theory and practice 244

Table 14.1 Sustainability effects of globalization: Pros and cons 253

Table I.1 Non-market effects conducive to market and policy failure 276

Questions, Questions, Questions

This introductory part raises the main questions, which the book seeks to answer Chapter 1 identifies the planet’s environmental problems and describes defensive action by the international community The scattered evidence does not confirm predictions of environmental doom; it does reveal, though, human responsibility for environmental deterioration

Chapter 2 answers the question about the role of economics as a matter of action between economic activities and the provision of environmental services; both also affect human welfare Among different schools of environmental- economic analysis, two approaches represent a fundamental dichotomy between environ-mental (market-oriented) and ecological (market-sceptical) economists Both schools want to maintain environmental services and human well-being but offer

inter-different concepts of these maintenance goals Economic sustainability relies on produced and natural capital maintenance; ecological sustainability seeks to

reduce the burden on the environment by a dematerialized economy The term

‘eco–nomics’ stands for both schools and sustainability concepts Parts II, III and

IV will look for ways of bridging, or at least clarifying, this dichotomy by tative assessment and analysis

quanti-The picture gets more complicated when introducing further social, cultural and political goals into the sustainability discussion The resulting popular para-

digm of sustainable development is opaque and suffers from an implementation

deficit This is the reason why Chapter 3 dares to ask whether the paradigm has run its course The final chapter of the book raises all these questions again It will provide some answers without pretending to know them all

Chapter 1

What on Earth is Wrong?

Environmental doom-and-gloom literature created awareness of environmental problems, as well as advocacy for environmental action The international response produced declarations, action plans and conventions Global conferences propa-gated the paradigm of ‘sustainable development’ but did not succeed in penetrating economic policy

Vision, advocacy and action plans are important means of spreading the idea

of sustainable development They need to be questioned and modified if facts and figures do not support their predictions and strategies Available indicators

and reports do show symptoms of environmental non-sustainability of particular

economic activities They are inconclusive as to the overall effect on human welfare and the sustainability of economic growth and development Extended economic analysis (Ch 2) provides the framework for assessing sustainability and its benefits

aggres-Far beyond the reach of Judaeo-Christian mythology, environmental destruction and catastrophe show the cost of human ingenuity in exploiting nature’s resources

1 References to the further-reading section at the end of each chapter are shown in brackets as FR and section number.

© Springer Science + Business Media B.V 2008

Overuse of natural resources contributed to the downfall of ancient cultures and empires like Mesopotamia, classic Maya and the Roman Empire Land degradation, brought about by overirrigation and ensuing water logging and salinization, is the main reason for the breakdown of agricultural systems Overpopulation, overtaxa-tion, rebellion and war are socio-political factors in the collapse of ancient societies

In the eighteenth and nineteenth centuries the search for new sources of natural and human-made wealth drove the needs of warring and colonizing Europe [FR 1.2] Among others, securing energy supply has been a motive for the current war in Iraq Perhaps the most ominous development is that technological advances in harnessingnuclear power and genetic resources have now the power to endanger the survival

of the planet

Is apocalypse the inevitable consequence of heeding the biblical advice? Or are environmental concerns just another bug in our social systems geared towards the creation of ever-greater wealth? Can paradise be regained or at least some semblance of it re-established? When and where, and for whom? The answers range from predictions of environmental doomsday, calling for a new environmen-tal ethics [FR 13.3], to faith in technological progress Obviously, we need to examine these proclamations with hard facts and figures – hence the book’s focus

on quantification The need to bring in economics may not be that obvious at first sight A closer look at the environmental conundrum reveals, however, that economic activities can be both the cause of the problem and part of its solution.The following section sets out, therefore, from an examination of early dooms-day scenarios and international reactions and responses Next, key indicators of the state of the environment are assessed as to their capacity of alerting to possibly disastrous transgressions of environmental thresholds The purpose is to set the stage for examining (in Ch 2) the ability of economics to deal with environmental limits in our quest for prosperity

Conspicuous pollution incidents in the 1960s and neo-Malthusian views of graphic and economic growth led to the appearance of environmental doomsday

demo-literature Titles like The Death of Tomorrow (Loraine, 1972), Silent Spring (Carson, 1965), Blueprint for Survival (Goldsmith et al., 1972), or Conservation

for Survival (Curry-Lindahl, 1972) are indicative of the environmental mood in the

late 1960s and early 1970s The use of a seemingly objective computerized global

model gained widespread attention for the Club of Rome’s Limits to Growth report

(Meadows et al., 1972) The model predicted ‘a rather sudden and uncontrollable

2 Most of the first part of this section is (with some modifications) from Bartelmus (1994a, pp 5–8; with permission by the copyright holder, Taylor & Francis).

decline in both population and industrial capacity’ within the current century if growth trends remain unchanged To avoid the disastrous consequences of transgress-ing these limits the authors called for ‘a controlled, orderly transition from growth

to global equilibrium’ Chapter 11 will critically review the assumptions and results of the model

All these publications deserve credit for creating awareness of environmental cerns and alerting us to potentially disastrous trends of environmental deterioration However, countries in the early stages of economic development could not accept zero-growth strategies with an exclusive focus on ecosystems For them, improving the standards of living appeared to be more important than concern about wildlife

con-or global pollution In their view, only affluent countries could affcon-ord the luxury of diverting some of their wealth to environmental protection Moreover, the high and wasteful consumption of the industrialized nations generated most of the stress on the resources of poor countries Developing countries thus reacted with suspicion to proclamations of global solidarity for our planetary home The only view rich and poor countries seemed to share at the time was the conviction that environmental conservation and economic development are in conflict

The international community opened the dialogue on environment and opment between developed and developing countries A preparatory seminar for the global United Nations Conference on the Human Environment (Stockholm, 5–16 June 1972) concluded that environmental problems result not only from the development process itself but also from the very lack of development (United Nations Conference on the Human Environment, 1972) Poor countries have to cope with lack of clean water, inadequate housing and sanitation, malnutrition, disease and natural disasters The metaphor ‘pollution of poverty’ illustrates this aspect of the environmental question Consequently, environmental goals should provide a new dimension to the development concept The Conference itself endorsed the principle of integrating environment and development It also estab-lished a small, but rapidly expanding secretariat, the United Nations Environment Programme (UNEP) to implement and monitor an Action Plan for the Human Environment (United Nations, 1973)

devel-Despite the call for integrating environment and development, integration did not take place Issues of population growth and urbanization, economic develop-ment, desertification, pollution and resource exploitation continued to be the responsibility of specialized departments, while macroeconomic policies focused

on maximizing economic growth Relatively weak environmental agencies addressed environmental impacts, albeit without much influence on socio-economic decision-making by the central government

‘A widespread feeling of frustration and inadequacy in the international munity about our own ability to address the vital global issues and deal effectively with them’ (WCED, 1987) motivated, therefore, the United Nations to establish a World Commission on Environment and Development (WCED) Under the generic label of sustainable development, the WCED proposed a large variety of policy recommendations that should meet ‘critical objectives’ for such development The objectives included:

● Reviving growth while changing the quality of growth

● Meeting essential needs for jobs, food, energy, water and sanitation

● Conserving and enhancing the resource base

● Reorienting technology and managing risk, and

● Merging environment and economics in decision-making

The idea of effectively merging environmental protection into socio-economic planning and policies had been discussed extensively in the wake of the Stockholm Conference The WCED advanced, however, a new approach for implementing the integration of environment and development The idea was to move from dealing with environmental effects, after their occurrence, to focus-ing on the ‘policy sources’ of these effects for preventive action This approach

shifts the discussion from environment and development to development and

environment The purpose is to include environmental issues in mainstream policy rather than to change socio-economic policies from the periphery of the environmental movement

In follow-up to the WCED recommendations, the 1992 United Nations Conference

on Environment and Development (UNCED), the Earth Summit in Rio de Janeiro, attempted to translate the new paradigm of sustainable development into a globally adopted philosophy, an Earth Charter, and an international action programme (United Nations, 1994) Figure 1.1 provides a synopsis of the results of UNCED, comprising

a watered-down Rio Declaration (as compared to a Charter) [FR 13.3], the action plan of Agenda 21, the adoption of two conventions on biodiversity and climate change, and a statement of forest principles Immediate reactions to UNCED differed widely (Bartelmus, 1994a), ranging from

● Describing Agenda 21, as ‘the most comprehensive, the most far-reaching and,

if implemented, the most effective programme of international action ever sanctioned by the international community’ (closing statement by the Conference’s Secretary General, Maurice Strong) to

● Considering the Conference as ‘a failure of historic proportions’ (Greenpeace summary critique of UNCED results)

Five years after the Rio Summit, disillusion spread widely The special session of the United Nations General Assembly, known as Rio + 5, achieved, in the words of itsPresident Ismail Razali, an ‘honest appraisal’ of meagre progress (Osborn & Bigg, 1998) Most governments did not commit to implementing Agenda 21 and the Rio conventions Contrary to the North’s promises in Rio, ‘new and additional’ resources for the implementation of Agenda 21 had not come forth (with notable exceptions), and official development aid decreased in general A renewed focus on economic growth, thinly veiled by sustainability rhetoric apparently prevailed

It comes as no surprise, therefore, that the Plan of Implementation of the 2002 World Summit on Sustainable Development (WSSD) in Johannesburg (United Nations, 2003) presented mostly a perfunctory summary of Rio’s Agenda 21 The declared objectives of the WSSD were ‘to take stock’ since Rio and foster implemen-tation by means of work plans and new ‘public-private partnerships’ It remains to be seen whether explicit targets (for sanitation, biodiversity, use of chemicals, and

harvesting of fish stocks), the inclusion of new topics (energy, transport, tion), and some focus on regions, sustainable production and consumption, and pov-erty can overcome global lethargy.3 At least the United Nations Framework Convention on Climate Change (UNFCCC) has now been translated into a concrete – some will say insufficient – commitment by governments through the ratification

globaliza-of the Convention’s Kyoto Protocol (Box 1.1)

Judging from the flurry of publications on the sustainability of economic growth and development, there seems to be no consensus on the exact meaning and impli-cations of these concepts It is easier, therefore, to look first into the main symptoms

of non-sustainability, which after all gave rise to the call for sustainable ment Chapters 2 and 3 will then explore possibilities of defining sustainability in more operational terms

Common but

differen-tiated responsibility for

- Oceans

- Freshwater

- Wastes

Finance Technology Science

Capacity building, technical cooperation Institutions Legislation Information

Biological Diversity Convention

Framework Convention on Climate Change

Statement of Principles on Forests

AGENDA 21

CONVENTIONS RIO DECLARATION

Education, awareness, training

Means of implemen -tation

Fig 1.1 Results of the Rio Earth Summit

Source: Bartelmus (1994a, fig 6.1, p 146; with permission by the copyright holder, Taylor & Francis).

3 Further information on the results and follow-up to the Summit can be found on www.un.org/ esa/sustdev For a more critical evaluation of the Summit outcomes, see WWI (2003).

1.3 Reaching the Limits?

The above-cited doomsday literature and subsequent international environmental conferences drew attention to the sorry state of the environment Activist individu-als and groups like Greenpeace, the World Watch Institute or the Club of Rome keep the environmental movement alive with unrelenting warnings about reaching the limit of the earth’s carrying capacity Box 1.2 presents typical proclamations about imminent environmental calamity

Environmental indicators – like those in Plate 1.1 – have been put forth as evidence

of environmental deterioration Typically these indicators refer to three main ries of environmental impacts:

catego-● Natural resource depletion – of forests, fish, soil/land, minerals, metals and water

● Degradation of ecosystems – involving loss of species, genetic resources and wilderness

● Pollution – either local (air, water, waste) or global (greenhouse gas emission and climate change, ozone depleting substances)

Add population growth and hunger, and you obtain what one ‘skeptical talist’ calls ‘the Litany of our ever-deteriorating environment’ (Lomborg, 2001) The reactions by environmentalists to Lomborg’s claim that we have mostly expe-

environmen-Box 1.1 Framework convention and Kyoto Protocol on climate change

At the first Earth Summit in 1992, the international community adopted the United

Nations Framework Convention on Climate Change Its ‘ultimate objective’ is to

‘achieve stabilization of greenhouse gas concentrations … at a level that would prevent dangerous anthropogenic interference with the climate system’ (http://unfccc.int/essential_background/convention/background/items/2853.php)

Five years later its Kyoto Protocol replaced the vague objective of ous interference by a target for industrialized countries to reduce greenhouse gas emissions by at least 5% below total 1990 levels during 2008–2012 With Russia’s ratification the Protocol entered into force in February 2005 (http://unfccc.int/essential_background/kyoto_protocol/items/2830.php) The Protocol also specifies key ‘mechanisms’ for achieving this target: cooperative projects of joint implementation, clean development mechanism, and emission trading (http://unfccc.int/kyoto_mechanisms/items/1673.php) Individual greenhouse gas reduction targets for industrialized countries range from −8% of 1990 emissions for the EU (USA: −7%, Protocol not rati-fied) to +10% for Iceland during the 2008–2012 period (http://unfccc.int/kyoto_protocol/background/items/3145.php) The United Nations Climate Change Conference in Bali (3–14 December 2007) could not agree on targets for the post-Kyoto era; it settled instead for ‘negotiations’ to this end to be concluded by 2009 (http://unfccc.int/meetings/cop_13/items/4049.php)

danger-Box 1.2 Reaching the limits? Some warnings

● When the last tree is cut, the last river poisoned, and the last fish is dead we

will discover that we cannot eat money (Greenpeace: www.greenpeace.org).

● Climate change and global warming are matters of life and death; ing levels of air pollution threaten the survival of nature and the well-being

increas-of people around the world (World Wide Fund for Nature: http://www.

panda.org/about_wwf/what_we_do/index.cfm)

● Our world is in a state of pervasive ecological decline; our current economies

are toxic, destructive on a gargantuan scale, and grossly unfair (WWI, 2003).

● New insights have arisen, which not only confirm the impending disasters but also indicate that the limits to growth may well have been exceeded

near-filled with nothing but base matter (Rees, 2003).

● Humans are fundamentally, and to some extent irreversibly, changing the

diversity of life on Earth (Millennium Ecosystem Assessment, 2005)

Plate 1.1 Environmental Indicators (See Colour Plates)

Source: Globus Infografic GmbH.