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Midwest Book Review
"A wise read for the world's future, Moving Toward Sustainable Prosperity is a solid and much recommended read for environmental and science collections."
"A wise read for the world's future, Moving Toward Sustainable Prosperity is a solid and much recommended read for environmental and science collections."
Making the Green Economy Work for Everybody
In June 2012, Rio de Janeiro will host the United Nations Conference on Sustainable Development, more commonly referred to as Rio 2012 or Rio+20. The meeting marks the twentieth anniversary of the U.N. Conference on Environment and Development in 1992, also held in Rio. That landmark gathering adopted the Framework Convention on Climate Change and opened the Convention on Biological Diversity for signature. The conference was itself a milestone in the evolution of international environmental diplomacy, taking place two decades after the 1972 Stockholm Conference on the Human Environment.
On one level Rio 2012 marks a continuity of efforts to rally governments and civil society around the ever more urgent goal of reconciling human development with the limits of Earth's ecosystems. In 1992, the end of the cold war and rising environmental awareness seemed to open new horizons for global cooperation. The years since then have in many ways been a sobering experience, with sustainability aspirations often running headlong into discomforting political realities, orthodox economic thinking, and the staying power of materials-intensive lifestyles.
Among the obstacles to moving toward a more sustainable world order, writes Tom Bigg of the International Institute for Environment and Development (IIED), are "the interests of powerful constituencies that defend their turf and can manipulate the political system to stymie change; the hierarchy of policy and politics in almost every country which places environmental issues towards the bottom and economic growth and military security at the top; and the difficulty of achieving strong global regimes to effect change at a time when multilateralism is on the retreat."
Environmental governance has largely taken a backseat to the pursuit of corporate-driven economic globalization—a process that has been marked by deregulation and privatization and thus a relative weakening of national political institutions. Comprehensive intergovernmental agreement on strategies for sustainability remains elusive. Despite multiplying numbers of solemn declarations, plans, and goals, no nation is even close to evolving toward a sustainable economy. The growth model that has emerged since the start of the Industrial Revolution, rooted in structures, behaviors, and activities that are patently unsustainable, is still seen as the ticket to ensuring the "good life"—driven in no small measure by massive advertising. Western industrial countries hold fast to this model even in the face of rising consumer debt, while people elsewhere aspire to it.
Michael Renner is a senior researcher at the Worldwatch Institute and co-director of State of the World 2012.
The Rio 2012 conference presents a much-needed opportunity to take stock of progress toward sustainability and development goals—and to create a new take on what prosperity means in the twenty-first century. Success will require not just official summitry but also imaginative initiatives to "lead from below" and qualitatively new relationships among governments, civil society, corporations, and the media.
A Complex Crisis
Humanity is confronting a severe and complex crisis. Mounting ecosystem stress and resource pressures are accompanied by growing socioeconomic problems. The global economy is struggling to get out of a severe recession that was triggered by the implosion of highly speculative financial instruments but more broadly is the result of bursting economic bubbles and unsustainable consumer credit. The economic crisis is sharpening social inequities in the form of insecure employment and growing rich-poor gaps within and among countries.
All this has led to a growing crisis of legitimacy of economic and political systems, as massive bank bailouts stand in sharp contrast to austerity and curtailment of spending for the public benefit. The de facto appeasement of a run-amok financial system has blocked the emergence of a vision of how the real economy could be both rescued and made sustainable. Growing numbers of people sense that their interests are not represented in legislative and policymaking processes whose outcomes are increasingly influenced by money. Over the years, this has led to declining voter participation in elections and to political apathy.
On the other hand, and more recently, disenchantment with the status quo has spawned rapidly multiplying bottom-up protests now known as the "Occupy Movement." Before Occupy Wall Street was born, the "Indignados" (or Outraged) had camped out at the Puerta del Sol square in Madrid, and protesters took over public squares in Chile and Israel. The new movement derives some inspiration from the Arab Spring in the Middle East, suggesting a commonality of concerns across economic and political systems. The movement spread like wildfire. By mid-October 2011, Occupy protests had taken place in more than 900 cities around the world; by late December, there were activities in more than 2,700 locations.
These protests have largely focused on social and economic concerns. But on the sidelines of the 17th Conference of the Parties (COP17) to the U.N. treaty on climate change that took place in Durban, South Africa, in December 2011, protesters made a connection to the fundamental issues of environmental sustainability. Organizers of Occupy COP17 argued that "the very same people responsible for the global financial crisis are poised to seize control of our atmosphere, land, forests, mountains and waterways." From Madrid to Manhattan to Durban, these actions are driven by deep frustration with the failure of governments and international conferences to address the fundamental problems that threaten human well-being and survival.
In the two decades since the 1992 Earth Summit, pressures on the planet's natural resources and ecological systems have increased markedly as the material throughput of the economy keeps expanding. Not surprisingly, the bulk of human consumption is concentrated in cities. Urban areas account for half of the world's population but 75 percent of its energy consumption and carbon emissions.
Ecological stress is evident in many ways—from species loss, water scarcity, carbon buildup, and nitrogen displacement to coral reef die-offs, fisheries depletion, deforestation, and wetlands losses. The planet's capacity to absorb waste and pollutants is increasingly taxed. Some 52 percent of commercial fish stocks are fully exploited, about 20 percent are overexploited, and 8 percent are depleted. Water is becoming scarce, and the supply is expected to satisfy only 60 percent of world demand 20 years from now. Although agricultural yields have increased, this has happened at the cost of declining soil quality, land degradation, and deforestation.
A 2009 study of "planetary boundaries" showed that nine critical environmental thresholds had been crossed or were on track to be crossed, threatening to destabilize ecological functions on which economies, societies, and indeed all life on Earth critically depend. Humanity has been acting as if fresh resources were always waiting to be discovered, as if ecological systems were irrelevant to human existence, as if an Earth 2.0 were waiting in the wings in case we finally succeed in trashing this planet. There are isolated examples in human history of civilizations that outstripped their resource base, crashed, and vanished. But never before has this happened on a planetary scale; humanity is crossing into totally uncharted territory.
While the impacts will be felt everywhere and especially in the poorest quarters, it is the actions of a minority that have gotten us to the edge of the precipice. According to the World Bank, people in the world's middle and upper classes more than doubled their levels of consumption between 1960 and 2004, compared with a 60 percent increase for those on the lower rungs of the income ladder. The global consumer class, about a billion people or so, mostly lives in western industrial countries, but the last two decades have witnessed the emergence of growing numbers of high consumers in countries like China, India, Brazil, South Africa, and Indonesia. Another 1–2 billion people globally aspire to the consumer life and may be able to acquire some of its trappings. But the remainder of humanity—including the "bottom of the pyramid," the most destitute—have little hope of ever achieving such a life. The global economy is not designed for their benefit.
Over the last decade, countries outside the Organisation for Economic Co-operation and Development (OECD) have increased their share of the world economy. From 40 percent of global gross domestic product (GDP) on a purchasing-power parity basis in 2000, their share has risen to 49 percent in 2010 and could grow to 57 percent by 2030. And economic expansion in countries like China, India, and Brazil has improved the economic lot of many people. According to OECD statistics, the number of poor people worldwide declined by 120 million in the 1990s and by nearly 300 million in the first half of the 2000s. And according to a World Bank analysis, the share of China's population earning less than $1.25 a day (in 2005 prices) dropped from 84 percent in 1981 to 16 percent in 2005. In Brazil the figures went from 17 percent in 1981 to 8 percent in 2005, and in India, from 60 to 42 percent.
But it would be a mistake to regard the steady expansion of the global consumption-intensive industrial economy as a surefire path toward overcoming poverty and social marginalization. The OECD notes: "The contribution of growth to poverty reduction varies tremendously from country to country, largely due to distributional differences within them. In many cases, growth has been accompanied by increased inequality." From 1993 to 2005 Brazil reduced poverty more than India did, even though its growth was much lower (1 percent versus 5 percent annually). This is because inequality has fallen in Brazil with the assistance of welfare programs like Bolsa Familia, but it has risen in China and India.
Globalization has gone hand in hand with increased volatility and turbulence—and with great vulnerability for those unable to compete. The economic crisis that broke into the open in 2008 caused the ranks of the unemployed to swell from 177 million in 2007 to an estimated 205 million in 2010, with "little hope for this figure to revert to pre-crisis levels in the near term," the International Labour Organization (ILO) notes. Fears about "jobless growth" are borne out by an ILO analysis noting that the recovery of global GDP growth in 2010 was not paralleled by a comparable jobs recovery. And global emissions of carbon dioxide from fossil fuel burning rose by half a billion tons in 2010—the largest annual increase since the start of the Industrial Revolution. It is difficult to avoid the conclusion that the economy no longer works for either people or the planet.
Even among those with a job, at least 1.5 billion persons worldwide—roughly half the workforce—are in highly vulnerable employment situations. The conditions they face—often referred to as "informality"—include inadequate or highly variable earnings, low-productivity work, temporary or insecure employment, and poor workplace conditions, especially in terms of occupational health and safety. Informal-sector workers typically earn about half as much as people in the formal sector.
Rising numbers of people in industrial economies face precarious employment conditions as well. In the United States, wage stagnation and growing income inequality have been prominent phenomena since the late 1970s. Even though U.S. labor productivity expanded 80 percent between 1979 and 2009, average hourly compensation for workers rose just 8 percent, with most of the gains realized by the top earners. The number of Americans living below the official poverty line, about 46 million in 2010, is the highest in the 52 years since government statistics have been published on this topic. In Germany, long a high-wage country, the low-wage sector grew to more than 20 percent of all employees as of 2008. In Japan, one third of the country's labor force is part-time and contract workers who lack job security. More than 10 million Japanese workers earn less than the official poverty line.
There is a paradox. Wages are under pressure and employment is uncertain for many, yet consumerism remains alive and well. Materials-intensive lifestyles are financed not just by taking on additional jobs but also by going deeply into debt. The ILO explains that "in advanced economies, stagnant wages created fertile ground for debt-led spending growth—which is clearly unsustainable." In the United States in particular, high consumption was enabled by leveraging exaggerated housing values during the years of the real estate bubble.
Worldwide, an extremely unequal distribution of wealth has emerged, with consequences for who has an effective voice in matters of economics and politics—and thus in how countries address the fundamental issues of sustainability and equity that confront humanity. A 2008 study by the UN University's World Institute for Development Economics Research (UNU-WIDER) offers data for the year 2000. (Data gaps and lags render a more up-to-date reckoning difficult.) The richest 1 percent of adults owned 40 percent of global assets. (See Figure 1–1.) For the top 5 percent, the share rises to 71 percent, and the top 10 percent controlled 85 percent of global wealth. By contrast, the bottom half of humanity together had barely even 1 percent of all wealth. The average member of the top 1 percent therefore was almost 2,000 times richer than the average person from the poorer half of humanity.
It is unlikely that the last decade has brought a turn toward greater equality. Undoubtedly the regional distribution of wealth has undergone some shifts with the rise of countries like China, India, and Brazil. They now have a larger number of very wealthy individuals than in years past, and there is a rising middle class. But from a global perspective, these developments have not undone the observations from 2000 because, as the UNU-WIDER study documents, domestic wealth inequality is high in most countries.
National data indeed suggest that inequality has been on the rise in many countries in recent years. In 2007, the richest 1 percent of Germans controlled 23 percent of the wealth in the country and the top 10 percent had 61 percent (up from 44 percent in 1998). The bottom 70 percent had just 9 percent. And in India, the top 1 percent had 16 percent of wealth in 2006; the top 10 percent had 53 percent. The bottom half of the population in India shared just 8 percent of the nation's wealth. In the United States, the share of wealth held by the top 5 percent increased from 59 percent in 1989 to 65 percent in 2009. The bottom 40 percent saw their net wealth fall from an already tiny 0.2 percent to a negative 0.8 percent. In fact, in 2009 almost a quarter of U.S. households had a zero or negative net worth, as consumer and mortgage debts cancelled or surpassed assets.
Green Growth and Degrowth
In times of economic crisis, environmental needs are quickly relegated to the status of a luxury. The conventional impulse is to "prime the pump" to get the economic engine moving again by whatever means necessary. Yet there is growing acceptance that the goals of environment and development are not necessarily in conflict. They can—and they need to—be reconciled. When governments reacted to the outbreak of the global economic crisis in late 2008, they did devote small portions of their economic stimulus efforts to a variety of "green" programs. Worldwide, an estimated 15 percent of stimulus funds went to support renewable energy and other low-carbon energy technologies, energy efficiency in buildings, low-carbon vehicles, and water and waste management efforts.
In the face of crisis, new concepts such as a Global Green New Deal were developed. In the United Kingdom, the New Economics Foundation published a pioneering report on the topic, and the U.N. Environment Programme (UNEP) became a prominent advocate. UNEP also commissioned landmark reports on green jobs and the green economy.
While the term "green economy" has gained currency, its meaning is still up for interpretation among governments, corporations, and civil society groups. UNEP defines a green economy quite broadly as one that results in "improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities. In its simplest expression, a green economy is low carbon, resource efficient, and socially inclusive." UNEP argues that "the greening of economies need not be a drag on growth. On the contrary, the greening of economies has the potential to be a new engine of growth, a net generator of decent jobs, and a vital strategy to eliminate persistent poverty."
Excerpted from State of the World 2012 by Erik Assadourian, Michael Renner, Linda Starke. Copyright © 2012 Worldwatch Institute. Excerpted by permission of ISLAND PRESS.
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