The Growth Illusion by Douthwaite Growth in the Greenhouse Chapter 11 Page 210 A little preamble for this lengthy quote. This is the second of three chapters that deal with pollution, the environment and how it has been affected by the growth of industrialism. From one of my old Whole Earth magazines, I read a fairly technical article on what is called the carbon cycle. Though I don't feel I have a scientific turn of mind, I read a fair amount of science but this article challenged my attention. Though I can't remember the details and perhaps others could give a more complete description, I was amazed at this information. It appears to me from memory, that if a lot of carbon was not locked up in vegetation, oil and coal and in living organisms and all that carbon was in the atmosphere, then we would die because the ratio of carbon dioxide to oxygen would not support our life form. So nature, through it's processes of life, death and decay has a large amount of carbon in other states than carbon dioxide thereby allowing oxygen breathing life. Pretty important balance I would say. Now, the latest thinking is that the massive release of carbon into the atmosphere through petroleum products, coal and deforestation has released too much carbon dioxide into the atmosphere and this is contributing to the greenhouse effect, which is a fancy term for the heat of the sun to be trapped within the atmosphere, much like warmth in a greenhouse on a winter day. And it is becoming apparent that this imbalance is now noticeable and that without some slowing down and reversing this side effect of burning carbon, in all its forms, we could be jeopardizing all life on the planet, not just having some small adjustments to make. Note that economics, accounting and capitalism do not include the cost of maintaining this balance in their use of energy - they assume that paying for the production and delivery is already too much of a burden. Therefore when they are made aware of this, it was in their interest to discount or minimalize this information so that they will, (a) not incur any extra costs on current and future production, or (b) be held accountable for the effects of their actions, much as the tobacco companies have finally been taken to account for the health side effects of their product. Because of the collusion between government, which is trying to keep employment going so it has a tax base and business, who want to keep costs down and profits up, there exists a high degree of self interest to deny the problem and procrastinate on finding out the true state of affairs. And because one has the power and the other the money, they are, by and large able to keep this away from full blown media exposure. Media, of course being owned by capitalists and regulated by government has its own self interest to protect. To start bringing some awareness to this problem is the solution the Internet provides - lets use it. So how do we bring about the necessary cuts in carbon dioxide emissions, given that capitalism depends on continuous economic growth for its survival and that we can either reduce greenhouse gas levels or continue to grow, but not both? There is no way that we can scrap the capitalist system and replace it with another one in the few years we have available. Capitalism is the only working economic system in the world today, and we have no option but to use it. This is a very interesting observation and unfortunately true. Much though I personally might like to do away with capitalism, it is the one tool that is world wide and working and as Douthwaite so cleverly suggests, "we have no option but to use it." What we can do, however, is change its nature. As we noted in the introduction, politicians have taken pride recently in leaving decisions to the market, with the result that market forces have shaped society rather than society shaping the market. This is the tail wagging the dog. We have forgotten that the people are the point of economic activity and behaved as if economic activity is the point of people. I love clarity of insight. Of course this is the success that the neo-cons have attained so spectacularly over the last 30 years. They have to challenged at a basic level. Let's try this: Your business license is issued to you by the government which derives its power from the vote of the people. You are subservient to the will of the government - period. Now let's get on with the business of saving the planet or cash in your chips, take your money and find a place to retire while the rest of us get on with the job. All this must change. Society has to tell the capitalist system in which direction it wants to go. It has to give it signals in terms that it understands-prohibition, taxes and incentives-so that it takes us very quickly and efficiently, as it can do, to our desired end. Naturally, we have to agree what that end is to be, something we have avoided doing of late, preferring to work for an increase in the undifferentiated bundle of goods and services that is GNP rather than towards the accomplishment of particular, and finite, objectives fortunately the decision has been largely made for us: we have to reduce greenhouse gas emissions by an amount that, within fifty years, will stop global temperatures rising beyond the increase of 1 to 2 degrees to which we are already committed. True, some people would accept a lesser target and limit temperature rises to 0.1 degrees a decade, a rate to which they think it may be within the power of natural system to adapt. But for now that does not matter because both schools of thought agree on the path we must take for the first part of the way. Douthwaite is more polite than I would be but our conclusions are the same - we have a major problem, it could kill my children - wipe out the races of man and species of animals - how much more justification do we need, we have fought wars over more trivial reasons. Another thing that we can agree on-in principle if not in practice-is the that the cut in emissions must be achieved without making life worse for the world's poor and disadvantaged, if only because it was the rich who caused global warming in the first place. Right! This is the humanitarian speaking. A capitalist would say that we cannot interfere with the marketplace and if there truly was a problem, we would find a way to efficiently solve it, so butt out people and government. However, there is a problem here as a result of our having to use the capitalist market system to get us to where we want to go. Ted Trainer prints a wonderful definition in big capital letters in his book Developed to Death (1989). "A market economy is an ingenious device for ensuring that when things become scarce only the rich can get them", A statement so blindingly true you wonder why you never realized it before. What it means in our case is that unless we are careful about the way we limit fossil fuel consumption, the rich will still use as much as they ever did before, leaving the poor to go without. Fortunately there is an answer to this, and which, since it has frequently been used in capitalist countries in times of war, may be considered to be ideologically sound. It's called rationing. You're going to love this solution. It is the sword that cuts the Gordian Knot because it integrates. You see, what the corporate mindset does is divide and conquer. It will not let the people see the real problems by constantly advocating we fight the problems they allow the media to dramatize such as, unemployment, nuclear power, the stock market, political scandals, education, youth, crime and drugs and the death of Princes Di and host more. It is not that these are not problems, it is just that worrying about a hangnail as you are being led to the gallows may not be an appropriate use of your remaining time. The right to burn 500 kg of oil a year or its equivalent in other fossil fuels belongs to every human being, not just those who by hard work or good fortune have the money to pay to do so. However, if every country implements an initial 20 percent cut in its consumption, as the Toronto conference urged, the situation will be equivalent to be "equality of sacrifice" proposed by the wealthy gentleman in this thirties cartoon, and those on the lowest wrongs of the ladder will be submerged. The only way to avoid this is to distribute fossil fuel ration cards to everyone on Earth, giving us all the same basic entitlement; when we want to buy a litre of petrol or a ton of coal we pay over a specific number of coupons to the merchant before we receive our supplies. This idea, proposed in the thinking of the author and others can now be updated as "more potentially practical" due to the convergence of technologies. We could issue, rather than coupons, a card with a bar code and security identification to each citizen, from babies being born to seniors about to die. The credit could be put on the card on a monthly, quarterly or yearly basis and whenever you went to a point of purchase, you would run your card through a card reader, give your security code, much like we do now it banking cards at the supermarket. A few supercomputers, satellites and we would have a fairly automated and effective method of "rationing" these resources in real time. Buy if such a system were implemented, an unofficial market in energy would quickly spring up. No attempt should be made to discourage this, because it would enable people who were prepared to organize their lives so that they could manage without using some of their coupons to be well paid for their efforts by others who were more profligate. In fact an international trade in coupons would build up as the energy-intensive nation's paid the traditional ones for the right to burn more than their natural share. This trade would not only bind into the system those countries that might otherwise want to go their own way but it would also represent a substantial shift of resources from rich to poor, a reversing of the trend to financial concentration. And, as we saw in Chapter 4, shifts in income from rich to poor have done more historically to improve people's well-being than overall rises in national consumption ever appear to have done. Using my interactive card idea, a method of reassigning credits voluntarily in exchange for the current market value of surplus resources (those not used by those who are issued them) and crediting the card with a cash value could be an effective method to handle the trades of those who do not use their full allotment. As to the benefits of a "shift(s) in income from rich to poor have done more historically to improve people's well-being than overall rises in national consumption ever appear to have done." It would in one massive readjustment change the economies of countries, the lifestyle of the poor, without imposing any hardship on the rich except the inconvenience of buying the excess credits from the marketplace. It seems an awful lot of work to distribute a ration card to everybody on Earth-and, as someone is bound to say, "Think of all those trees to provide the paper." Unfortunately, there is no alternative, because if allocations were made on a national rather than an individual basis, many governments would distribute the fuel bureaucratically or to political supporters, or-to raise income for themselves-would sell the right to supplies on the open market using carbon taxes. These alternative methods of allocation have serious flaws. Distributing fuel in line with government decisions centralizes power, opens the door wide to corruption, and is liable to generate the miss allocation of resources that eventually brought down the centrally planned economies of Eastern Europe. I totally agree that, "if allocations were made on a national rather than an individual basis, many governments would distribute the fuel bureaucratically or to political supporters, or-to raise income for themselves-would sell the right to supplies on the open market using carbon taxes." However, the worst drawback of the alternative methods is that none of them automatically does anything for the poor. This makes them unacceptable, because whatever system is adopted, the price of goods with a fossil energy content will move up, and unless the less well-often are compensated, people who are already living on the margin will be tipped over the brink. The poor must be protected not least because, in their search for renewable energy sources wealthier nations will start using land now under food crops to produce alcohol for their cars and rape seed oil for their lorries. Food prices will rise as its supply drops and the poor will need additional resources if they are not to go hungry. And here is the nasty solution coming down the capitalistic track. The converting of biomass from cropland into fuel, thereby setting up a lose/lose situation where the carbon cycle keeps getting worse and the poor starve even more. The principle of "One person, one vote" is widely excepted as the best way of insuring that a country has a government that takes its people's interests into account. Other systems might be less troublesome or more efficient but they rarely work out well in the end. The distribution of energy ration cards to everyone is equivalent to giving people the vote. Politicians are bound to think they could manage the distribution of energy just as well without rationing, just as they think they could run their countries as well, if not better, without regular elections. In both cases, though, it would be a mistake to let them try. There has been a fair amount of comment in publications about the inefficiencies of governments and how business can do everything better. It is only a small step to go from a national/world emergency to a "fascist" form of government where democracy is suspended while this problem is being solved by government and industry. We must not let this solution happen. (Read Bertram Gross - Friendly Fascism - for a full range of the meaning implied in "fascism" as I am using the term. The beauty of a rationing scheme is that it kills a lot of birds with one stone. For the World Resources Institute published some heroic estimates in 1990 that suggested that 45 percent of West Germany's annual contribution to the greenhouse effect came from CFCs while methane from rice growing and livestock made up 45 percent of India's. On Brazil and the Ivory Coast, the WRI thought, were just as bad as the United States as polluters, although there fossil fuel usage was very much lower because of the carbon dioxide released when their forests were burned. A rationing system could easily be adapted to make allowances for this: an international commission could assess each country's non-fossil-fuel contribution to the greenhouse effect annually and adjust the number of coupons its citizens. got accordingly, allocating extra coupons to countries that were to slow down the warming by planting trees. Special allocations would also be possible to pay countries to preserve their tropical rain-forest for the good of us all. It is easy to see why 65 or so of the world's governments would happily support an international rationing scheme: on average their 2,000 million people use less than the 500 kg allowance, and the right to sell coupons they do not need would in effect give them something for nothing. But why would the remaining more powerful countries (a group that includes China, whose 1,088 million people used 580 kg of fuel each in 1988) go along with something that essentially means they have to pay more for something they are probably finding rather expensive already? The answer is that there is no certainty that they will-in fact, the precedents are against it. Human society has a very bad record (except, strangely, in wartime) of making sacrifices today for the sake of a better tomorrow. It will take a tremendous effort by ordinary people working through pressure groups to defeat the forces defending the status quo, although one hopeful sign is that GATT suggested an energy rationing scheme with tradable coupons in a report it published in early 1982 in preparation for the Earth Summit. A consideration that should ease the task of getting governments to accept rationing is that its initial effects would be very mild. In the first year enough coupons would be issued to cover all but, say, 3 percent of the previous year's total world greenhouse emissions. Then these would be distributed to everyone in the world, but the price they would be worth on the unofficial market would be so low-as demand and supply would be so nearly balanced-that the whole exercise might not seem worth undertaking. However, this would be an illusion. Once investors believe that the world really is going to cut emissions they will plunge huge funds into designing, developing and producing the systems to enable it to do so. The growth imperative would at last start running in the planet's favour as any country that failed to adapt fast enough would find itself buying coupons from its thriftier neighbors, while those that cut back fastest would find that they had coupons to sell. Similarly, those firms that developed the best ways of saving energy would become the most profitable, licensing their systems or exporting their equipment all over the world. Each year the number of coupons issued would fall, but by the time the really deep cuts in consumption came to be made, rather than the shavings off the flab, national economies would be much better prepared to make radical changes and there would be powerful industrial lobby groups to force everything through. And what about countries that refused to play ball, or fell by the wayside as the cuts got tough? Economic sanctions should do the trick; at the very least maverick exports should be subject to tariffs based on their energy content to "level the playing field" for their virtuous competitors. There are already encouraging signs that the growth imperative is beginning to encourage countries to restrict energy use. The Germans, shocked at the damage done to their forests by pollutants from the burning of oil and coal, realize that their country cannot continue to develop along the lines it has followed since the second World War. If they restrict fossil energy use now, they reason, their industry will be forced to develop systems to cope, and these systems will then be able to be sold throughout the world when other countries are forced to economize too. A massive export market could open up; low energy technologies could be the source of a whole new round of German industrial expansion. Accordingly, in conjunction with the Dutch and the Dane's who think the same way, they have pushed the Environmental Directorate of the European Commission to propose the introduction of energy taxes through out the EC. "The EC target is to be world leader in carbon dioxide reduction," an environmental directories officials, Leo de Nocker, told a conference on ecological taxes I attended in Germany in spring 1991. The commission's plan is that a $3 a barrel tax on oil be imposed in all EC countries in 1983 rising by a dollar a year until the year 2000. This would bring the total tax-take up to $10 and add approximately 50% to the pre-refinery price of oil. Taxes would also be imposed on other power sources on the basis of their energy yield and the carbon dioxide they release: nuclear power would bear the least tax and the cost of coal would double. However, these rates will not even stabilize the EC's carbon dioxide emissions: it is estimated that an $18 a barrel tax on oil and proportionate levies on other fuels would be required to do that. And although these rates represent a doubling of the price of oil and a quadrupling of that of coal, much higher taxes still would be required to provide a long-term answer to the greenhouse effect if that was the control method chosen. Although I have argued throughout this chapter that continuing GNP growth is incompatible with a drastically cut, constant level of fossil fuel use, at least some sectors of the economy would grow for a period if we began reducing carbon dioxide emissions. We need them to do so because the total restructuring of the economy we are discussing requires a very different national capital stock, with fewer cars and more public vehicles, better insulated houses, and power stations based on renewable rather than irreplaceable energy. Investment would probably continue for generations, but at a steadily declining rate, bringing us ever closer to our goal of a stable society in which there would be no net change in overall output levels from year to year. This, to me, is the only logical goal to aim for - a stable society. Common sense of even the neo-con mindset must agree on this mega goal, for even from their way of looking at the world, continuous deficits lead to bankruptcy. We are in a kind of energy deficit. Nature gave us the keys to Ft. Knox when its processes locked carbon up in a way that technology can release and convert into usable energy for our human purposes. We have drawn on that bank account with reckless abandon and now that the end is in sight, the latest figures of the remaining reserves of oil are between 2030 -50 with 2005 being the year estimated for passing the halfway mark. Even without the carbon cycle, we are facing massive problems of finding enough energy to replace petroleum for all the uses we have developed for it. In 2005, the prices start going up on fuel, plastics, heating oil, etc. Remember, "A market economy is an ingenious device for ensuring that when things become scarce only the rich can get them", and whether that scarcity is food, fertilizer, gasoline or something else, the rich stand to continue to exploit the poor. Now is the time to stop the problem. Of course some sectors would undoubtedly decline as a result of the economy's new course - and they would need to do so to release the energy and other resources required for the expanding sectors. In consequence, it is impossible to say whether the GNP figure would go up or down - not that it matters, anyway, because GNP, as we have seen, is a largely meaningless figure. What does matter is that in the short term we keep the level of investment high to avoid the slump that Jeffrey Lean feared would necessarily result from Green Party economic policies. However, with our knowledge of the relationship between interest rates, the level of investment, and inflation, there should be no fear of that. As we approach our goal of the stable state, the rate of return from our investment will fall off while, as our capital stock rose, the level of resources we need to devote to maintaining it will steadily rise. Eventually the annual amount we invest will be vanishingly small while most of whatever we produce which we do not ourselves consume will go into maintenance. It may be that output growth will never actually stop because technological improvements will permit more and more to be made from the same inputs of land, labour and solar and fossil energy without placing the environment under threat. However, each improvement will tend to yield a smaller benefit than the last as we as asymptotically approach an ultimate level. The important difference between this path and the one we are on is that stability, rather than growth, will be our aim. The transition from a growing to a stable economy will be exciting if it is carried out in a planned way while we still have the energy resources to do so. It will be a period in which cultures and communities blossomed rather than being trampled underfoot by a one-economy world. In energy and equity (1974), which was born out of the energy crisis of the early 70's, Ivan Illich maintains that the use of large quantities of energy degrades social relations as inevitably as it destroys the environment. Ivan Illich is worth reading. Way ahead of most thinkers in the 60's and 70's, he touched some sacred cows that others skirted, but he is not easy. Only a ceiling on energy use can lead to social relations that are characterized by high levels of equity. The one option which is presently neglected is the only choice within the reach of all nations. It is also the only strategy by which a political process can be used to set limits on the power of even the most motorized bureaucratic. Participatory democracy postulates low energy technology. Only participatory democracy creates the conditions for rational technology. What is overlooked is that energy and equity can grow concurrently only to a point. Below a threshold of per capita wattage, motors improve the conditions for social progress. Above this threshold, energy grows at the expense of equity. Further energy affluence then means decreased distribution of control over that energy. Illich argues that once some people move faster than the speed of a person on a bicycle, a speed everyone can achieve and afford, there are no limits at all then to the resources and energy the better-off will pour into faster and faster travel modes for themselves so that they can control ever larger parts of the world. Exactly the same argument can be made in relation to manufacturing industry. Unless there is a limit to the amount of energy an entrepreneur can employ, he will take over larger and larger share of the market at the expense of less energy-intensive competitors. The first casualty of a move to a lower energy world would be transport, the most energy-intensive sector of all. Higher transport costs would allow small producers to re-emerge to use local resources to supply local markets. This would, in turn, create greater local, regional and national autonomy, reversing the concentration of economic power that has taken place in the last century. What a flowering of cultures, communities and individuals there could be! And isn't this what we all want for ourselves and our children and the children of other people, "a flowering of cultures, communities and individuals,". But now let me tie this long argument into a focus for FutureWork. In essence, an energy credit is a form of Basic Income, given to everyone in the world. The rural poor can convert their surplus into productivity through cottage industry or subsistence agriculture, while the urban poor can convert some of their surplus into cash for the purchase of goods and services within a city. Now, if each nation could add to this Basic Income with a supplement from the individual wealth of their nation collected through taxation, we could find a National Basic Income that would vary with the individual wealth and productivity of countries. Some, such as Europe and North America would have a higher National Income than poverty stricken nations who may be able to add very little to the Basic Income from energy credits. However, this would in all cases provide income for those who are or about to be displaced from work because of technological innovation and the downsizing that will result when we acknowledge the finiteness of our planets resources and respect for it's balances.
