Green Economy
Can Capitalism Be Green?

By Stephen Leahy
Inter Press Service
May 14, 2007

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 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
industrialised 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 dematerialisation 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 Centre for the
Advancement of the Steady State Economy, a Washington, DC economic think tank.

"We have to ratchet our economic growth downwards to stabilise 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 dematerialisation 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 Centre for
Well Being at the New Economics Foundation (NEF), in London.

The British government has recognised 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 dematerialised 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.


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