Transforming the system: Is eco-innovation enough?

The challenge of the 21st century is to align our political, economic, social and technological systems with the science of sustainability and the reality of resource limits, while maintaining wellbeing for citizens. In Europe in 2011, we are facing the decade of the ‘turbulent teens’. As the banking system scrambles to save itself from collapse (at the unjust expense of ordinary citizens), we also face the challenges of ‘peak oil’ (total global reserves declining), a slow (or no) growth decennia and increases in the prices of energy, food, and raw materials, which will impact citizens’ buying power, and the stability of our societies.

These events represent an opportunity for a re-evaluation of the values that our economic system is based on and an opportunity for transition toward a more sustainable, resilient and just society.

Eco-systems and global resources such as arable land, fish stocks, and oil reserves are in decline and Europe is faced with scarcity and access problems in the field of energy (gas and oil), water, and critical raw materials that Europe does not have. In addition, climate change needs to be addressed. These constraints are design challenges and opportunities for innovation. Societies, businesses, and governments that take a systems view and have the foresight to develop strategies in alignment with sustainability principles will avoid hitting the walls of the funnel (‘The Natural Step’ concept of the funnel – see diagram) and in the process capitalise on the strongest long term trend globally. However, Professor Tim Jackson has estimated that the level of innovation and industrial improvement required to de-carbonise our systems sufficiently by 2050 is ten times faster than ever achieved in industrial history. The sustainability U-turn, if it happens at all, has to happen fast.

Growth Our current economic system, which requires ‘growth’ to pay back ‘interest’ on loans, has failed to create a sustainable society for humanity, and has failed to recognise that we live in a finite world with resource limits and ecological limits. There are physical limits to continuing economic growth based on resource use. The economy is a subsystem of a larger finite system, the biosphere, hence permanent growth is impossible. Thus, the term ‘sustainable growth’ becomes an oxymoron (unless the economic activity is ‘de-coupled from environmental and resource impact).

Without growth this economic system becomes unstable and crashes. Wuppertal Institute has estimated that a total global resource extraction of around 80 billion tonnes in 2020 (200% of the 1980 value) will be necessary to maintain global economic growth. On a planet with finite resources there is obviously a conflict here. The resources, bio-diversity and eco-systems our species’ relies on, continue to be consumed or destroyed. As Satish Kumar said ‘Humanity is cutting the branch upon which it sits’.

Will GDP growth solve environmental and resource problems?

GDP growth will not solve these problems. In the late 20th century ways to decouple resource use from economic growth were hypothesised by environmental economists. A hypothesis, called the environmental Kuznets curve (EKC), predicts increasing decoupling of resource use from GDP/capita as technology improves and material substitution occurs. In some cases, this accurately describes reality. In other cases, the resource flow continues to increase with increasing GDP/capita. An EKC hypothesis has not been validated. If it were validated then it would imply that economic growth is the means to environmental improvement.

Can we rely on the market to solve resource issues?

The market cannot be relied on to solve the problem. According to an Aldersgate report ‘Beyond carbon: Toward a resource efficient Europe’ markets respond to short-term supply restrictions, they do not anticipate constraints in natural resource stocks. Therefore a prudent policy would promote low resource consumption as an important part of securing future competitive advantage, in advance of the market and before resource-constraint shocks force change in the economy. Acting on resource efficiency ahead of the market would support the transition to a low carbon resource efficient economy. Market failures in resource management must be overcome.

The future of resource efficiency and eco-innovation

Technological innovation is one of the main approaches governments emphasise to maintain the growth required to keep this system going, and to address resource constraints governmental policy approaches to date have focused on decoupling GDP growth from resource use. This is an important step in ensuring non-renewable resources are not exhausted. Some relative decoupling of economic growth from materials and energy consumption has been achieved by a number of EU countries during the past 10 years, however ‘business as usual’ has not achieved absolute decoupling of economic growth and resource use in the EU.

As part of the EU 2020 strategy the European Commission is putting forward seven flagship projects. One of these is called “Resource Efficient Europe” to help decouple economic growth from the use of resources. This involves a shift towards a low carbon economy, increasing the use of renewable energy sources, and promoting energy efficiency. In the U.K., a recent WRAP report states that resource efficiency can make a significant contribution to achieving climate change targets for reducing greenhouse gas emissions and that resource efficiency could reduce carbon emissions with no significant negative effect on GDP.

In Ireland, the need to become a low carbon and resource efficient society was explicitly recognised in Comhar Sustainable Development Council’s Green New Deal report. The Irish government’s own high-level group on Green Enterprise also identified a key role for resource efficiency in the green economy. There is a need to assist front-runners and eco-innovators in Ireland. In my opinion the synergies and alignment of resource efficiency priorities, green public procurement and eco-innovation could make a significant contribution to achieving a more environmentally and economically sustainable Ireland. (The public procurement spend is ~€12 billion per annum, so GPP has significant potential to drive innovation. Minister Gormley’s department published a GPP consultation, but the GPP national action plan was not published before the party left office.) According to the Wuppertal Institute the world market for eco-innovation is likely to double by 2020 (market volume estimated at €3,100 billion).

The Irish government will likely need to develop a ‘National Action Plan for Resource-efficiency and Eco- innovation’, that will add value to current initiatives, address priorities, and create new multi-stakeholder initiatives. A policy framework would need to be developed in a co-operative way that increases uptake across all sectors of Irish society and economy. Comhar Sustainable Development Council is currently conducting research to provide recommendations in these areas. Recommendations could include the launch of Irish multi-stakeholder eco-innovation networks or transition platforms; the development of co-operative eco-enterprises (sharing innovation and open-source developments are becoming key ways of achieving sustainability); and developing or acquiring technology (including mid-level technology) that is not reliant on fossil fuels or resources that have a high supply risk.

Tools such as ‘environmental footprint, life-cycle analysis, material flow analysis, sustainable design (such as ‘cradle to cradle’, ‘zero-waste systems’, design for disassembly and longevity), and sustainability planning frameworks, such as ‘The Natural Step’ are relevant. Across the developed world significant resource efficiency developments and eco-innovations are taking place, but…

Is resource efficiency enough to reduce resource use?

It is (in my opinion) unlikely that resource use can be reduced by resource efficiency improvements alone. Relying on resource efficiency will be insufficient to de-couple GDP growth from environmental and resource degradation. Most economists tend to think that greater efficiency enhances sustainability, however many environmental scientists think that it doesn’t. William Jevons stated in 1865: ”an increase in efficiency in using a resource leads, in the medium to long term, to an increased usage of that resource rather than to a reduction in this use”.

This contention has been called the “Jevons paradox”. In many cases, due to increased efficiencies the resource flow per unit of product or service created tends to decrease with increasing GDP/capita. However, this decoupling of resource use from GDP growth is often not sufficient to curb the total flow of resources, because total consumption continues to increase as a result of the consumption of more units. This effect can be explained to some extent by price mechanisms (decreasing price induces growing demand).

The gap between the decreased use of resources that is expected from increased “eco-efficiency” and the actual utilization has been called the “gross rebound effect” (GRB). An example described by the International Energy Agency is that although efficiency in the usage of energy per unit of product or service in the OECD-countries improved by about 30% between 1970 and 1991, the use of energy in these countries increased by about 20%. GRB describes the net effect of societies overall resource use/environmental impact due to consumption patterns, population development and degree of eco-efficiency.

A study conducted by scientists at the Department of Ecology and Environmental Science, Umea University indicated that improved efficiency in the use of natural resources is insufficient to prevent further increases in global resource use and is insufficient to counterbalance the effects of increasing affluence and increasing population.

The study finds that the ecological footprint across 135 countries did not decrease at high levels of GDP per capita. The improved eco-efficiency, which is seen in many wealthy countries, is associated with economic growth which increases the global ecological footprints of these countries. One example of this ‘catch 22’ is that “Finland, a wealthy and eco-efficient country has been classified as both the most sustainable country (Devitt and DeFusco, 2002) and the country that caused the fifth largest per capita ecological footprint in the world (Loh, 2002)”. 

In addition, a separate report ‘Analysing Rebound Effects’ from the Wuppertal Institute states “the policy conclusion one may drive from neo-classical analysis could be that stimulating efficiency gains for conservation purposes is not very useful or even harmful”.

In my opinion resource efficiency needs to be viewed as part of the wider system that it is operating within, and it is the destructive effect of the ‘system’ we need to alter. To echo McDonagh and Braungart, the key is not to make human industries and systems as resource efficient as possible but to redesign them in a way that has zero impact on (or contributes to) the natural systems that we rely on.  The Natural Step sustainability framework is an example of a scientific methodology for redesigning our systems toward the ideal of full compliance with the laws of a sustainable biosphere.

Is technological innovation enough to create a sustainable society?

These concepts have been described using the Holdren/Erlich equation I=PAT, where I represents environmental impact, P is population size, A is affluence per capita and T is the effect of technology. A factor describing behaviour/lifestyle (B) has also been added (I=PBAT).

The Umea study maintains that to find a way to sustainability, it will be justified to determine sustainable levels of resource and energy flows locally–globally; adapt population (P), change individual consumption (A) and improve technology (T) in the IPAT equation so that sustainable resource and energy flows are reached. Another policy proposed is that rebound effects need to be limited by price policies (e.g. a tax on resources which experience efficiency gains).

Unless economic activity that violates the laws of sustainability (for example The Natural Step principles) is reduced or stopped for conservation purposes, the problems will continue. A sustainable steady-state economy based on the science of sustainability and resource limits needs to replace the current system.

Redesigning the system

A Green Economy needs to be more than just a technology platform for eco-industries. It has to be guided by a vision of what a sustainable society should look like in the long run. In my opinion the economic system needs to be redesigned based on the Science of Sustainability (which includes ecological and resource limits) The Natural Step Scientific framework for Strategic Sustainability, is an example of a successful framework for moving toward environmental, social and economic sustainability and is being utilised in over 30 countries. In 2009, I authored a policy proposal to government to embed peer-reviewed scientific sustainability principles in all government departments to create policy alignment and a shared understanding of sustainability in our system.

In the absence of effective de-coupling, economic systems and models must be considered that are in alignment with the resource-efficiency constraints. The human economy must be enabled to function within the limits of the environment and its resources and in such a way that it works with rather than against natural laws and processes of a sustainable biosphere. A strong concept of sustainability is needed, in which economy adapts to ecological imperatives, rather than seeks technological substitutes that may fail to deliver the same range of functions and services.

The evidence is clear – economic growth has not been decoupled from creating significant environmental impacts. Economic growth is depleting the finite resources upon which our species relies. In the current monetary system ‘economic growth’ is required to pay back ‘interest’ on the loans that banks issue. Therefore the concept of interest on loans must be re-evaluated to enable the economy to function in a steady-state that does not create increasing environmental impacts.  The work of ecological economist Herman Daly is of relevance. In addition to re-evaluating the concept of ‘interest’, the global monetary system could be further reformed to issue ‘debt free’ money – this would reduce environmental stress since almost all the money we currently use is created as debt, people have to produce and sell more things in order to service and repay debt than they would if money were put into circulation debt-free.

In the absence of a move toward systems, such as steady-state economics or ecological economics, re-allocation of growth to more environmentally friendly sectors is to be expected. Systemic effects due to peak oil may pre-empt any redesign. Due to global resource constraints, in particular ‘peak oil’, there are systemic risks to the global economy and our current systems for acquiring energy, food, goods and services. It is important therefore that local and national resilience planning is promoted in Ireland.

A Sustainable Ireland

Very little adherence to sustainability principles over the past 20 years has left Ireland overdependent on foreign oil, foreign investment, foreign goods and borrowing. We have built little ‘self-reliance’. Resource efficiency and eco-innovation will be an insufficient strategy for sustainability in the years ahead. In light of global resource challenges, the economic downturn, winter freeze and seasonal flooding we urgently need national and local community resilience planning. While maintaining Ireland’s place in a globalised society, more support and planning law needs to be directed to creating a more ‘self-reliant’ Ireland in terms of food, energy, water, technology and economy. We need a new vision and design for the future direction of Ireland that is based on sustainability policy, otherwise we will remain vulnerable to external factors.

The philosophy of sustainable living must underpin everything that we strive for. Ireland is blessed with many natural attributes that are advantageous including: adequate rainfall and mild climate for food production and water supply; renewable energy potential; ; and highly educated people. We have the capacity to re-invent our nation. Intelligent management of the oil and gas reserves off the west coast (estimated worth > €640 billion) is needed. It is up to us – increased ‘quality’ is always within our capability. A ‘Sustainable Ireland’ can emerge that values fundamental human needs, quality of life, a progressive economy, and the environmental system upon which we all rely. Awareness that our species is part of an interconnected and interdependent web of life is key. Education, co-operation, optimism and leaders with vision are needed for the transition.

Mark Keenan has worked with the Department of Energy and Climate Change, U.K. and with Comhar Sustainable Development Council, Ireland. He has a Masters Certificate in ‘The Natural Step’ sustainability framework, BTH, Sweden; MSc studies in Sustainable Development and Climate Change, DMU, UK; and PhD research experience in Sustainability Strategy, Institute of Energy and Sustainable Development, UK.

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25 Responses to Transforming the system: Is eco-innovation enough?

  1. Hi Mark, good article and in my opinion, an urgently needed, clear eyed assessment of the current situation facing Ireland and the world.

    I’d just add one more perspective on the work we should be embracing now, and that’s the potential for shifting much of our activity into rebuilding biological and social capital, restoring ecosystem services, regenerating our communities…we have drawn down so much of the reserves that we have to now focus our genius on their restoration. We can if we move with intent and resolve. This is activity which will create employment while it rebuilds genuine prosperity and resilience…for humans as well as the rest of the family we share the place with.

    But to get there, we need a big shift in attitudes toward what makes life worthwhile, and fun to live. A D.I.Y. obsession around restoration would be a healthy passion to cultivate, and eventually the “leaders” might cop-on and start to follow.

    I blogged about some of the opportunities developing around a restoration economy last December, and listed a series of promising frameworks (including The Natural Step) and links to resources on valuing ecosystem services:

    Erik van Lennep

  2. Theresa Carter says:

    Great piece Mark

    I wish this could be the manifesto of the incoming government but somehow the logic of your points goes way above the short term, unsustainable thinking of the representatives that will run the country.

  3. Mark Keenan says:

    Hi Erik,
    Thankyou for the kind words. Great to see you highlighting these frameworks on your blog and important developments such as the TEEB study. Putting a financial value on the environment is an important means to get economists to factor the environment into policy making and economic strategy. My tuppence worth on TEEB is that we must remember, however, that environmental economics is not a scientifically rigorous discipline. How can we put a financial value on for example the last golden eagle or the last fresh water lake in a region, how much is it the lake worth after being polluted etc. Full cost accounting leads to profound intellectual difficulties – how do you calculate the true cost of something that has been destroyed, such as lost biodiversity or rainforest? In my view we must therefore keep short term economic analyses from being the main policy driver – governments must begin to base policy on the science of sustainability as a successful economy is a subset of a sustainable biosphere and sustainable resource base.
    Kind regards

  4. Mark Keenan says:

    Hi Theresa,
    Thank you so much for your kind words. Yes I notice John Gibbons has already pointed out some of the issues with the FG manifesto. Can only hope the evolving nature of the demographic speeds toward ‘getting’ sustainability. Will there be a ‘tipping point’ of understanding also ? Living in hope 🙂
    Kind Regards

  5. Dear Mark, enjoyed the article very much. One comment I have is this.Any policy that is part of a ‘sustainable Ireland’ has to ensure that human, animal and aquatic life is not endangered by polluted water in any form. Clean water assurance comes before banks, businesses, industry and commerce. People need to be well to work and grow in these sectors. When they are well and strong they will sustain health, work better and contribute to society in economic and social terms. Any policy which contributes to wellness is sustainable and any policy which is known to deplete or damage is unsustainable.
    Water fluoridation is unsustainable and most of Europe has stopped for many years now. Hope the greens will make a priority of ending compulsory water fluoridation which allows a known toxic cumulative corrosive acid plus other pollutants like lead, mercury and cadmium into the homes of whole communities for life without any health studies being done in over 47 years.
    Good health starts with clean water, and when the toxic load of fluoridation is ended, there will be improvement in health, less damage to water pipes and environment and more money in the public purse for cash starved projects and business outlined by greens.
    Kind regards,
    Mary Hilary, Fluoride Free Water Ireland

  6. Duncan Martin says:

    There’s a lot of good sense here, Mark, though I’m not so sure about this passage:

    “For example, investments in rail transport can lead to a local decrease in air pollution, but also increase the economic activity in a region, which in turn leads to a net increase in the human ecological footprint.”

    Surely that development would almost certainly have occurred – but elsewhere – so the rail service causes no net increase in footprint?

    Moreover, if that development elsewhere would have been based on road transport and the investment in rail succeeded in diverting it, the rail service would cause a net decrease in footprint, rather than an increase.


  7. Duncan Martin says:

    A more general comment on the contrast between the good sense and long view of Mark’s article – and the rhetoric of Ireland’s current election campaign……

    Every party – even the Greens – promises economic growth as our Get Out Of Jail Free card. (Many of the Greens know better, of course, but no-one ever got elected by telling voters the whole truth, as far as I can recall. I don’t think Churchill’s promise of “nothing but blood, sweat and tears” is taken from an election manifesto!)

    The Irish Farmers Association has bought into this agenda hook, line & sinker. At a recent election meeting where I was observing, members were told that the burgeoning world population will create a huge market for top-class Irish meat and dairy products. So we can look forward to a massive increase in the output from our farms – and in farm incomes.

    How detached from reality can you get?

    A few reality checks:
    1. How many of those teeming millions will have the money to buy the basics, let alone expensive imports?
    2. If they have money, will they spend it on imported food before they spend it on imported oil?
    3. How will farmers pay for the massive oil-based inputs to agriculture when the pincer movement of increasing demand and falling supplies causes ALL prices to rocket?
    4. How will farmers farm at all if growing climate instability greatly increases the frequency of extreme weather events?

    Climate change sceptics may doubt the last – but the others are all certainties.


  8. Mark Keenan says:

    Hi Mary, Thankyou for your kind words. I fully agree health is paramount. Water fluoridation has been stopped in many countries globally. The Green Party did not manage to obtain their objective of banning fluoridation. My understanding is that the party secured an agreement with FF for a study to be conducted on the levels of fluoride in the Irish population. I do not know whether this study was ever carried out. John Gormley or the parties’ Water policy group should be able to clarify. Is there a legal basis for fluoridation to take place in Ireland ?. Also how much does it cost the state to implement this – is there a cost reduction argument ?
    Kind regards to you

  9. Mark Keenan says:

    Hi Duncan. Thankyou for your kind words and for your excellent points. Yes if the development took place elsewhere (anyway) and was road based rail would represent a net EF decrease due to lower carbon intensity. Rail likely represents a net EF increase compared to the development not taking place at all. Electric transport systems run off a de-carbonised grid (powered by renewables) in a more ideal world. As you have highlighted, reality checks/education on the systemic risk of peak oil (as emphasised by David Korowicz and others) for farmers, wider society and politicians is required.
    Best regards

  10. denis says:

    Hi Mark—–we desperately need people like you, to think about and to get discussion going about how we are going to organise ourselves to be able to live a decent and sustainable life on this amazing world, in the future.
    My contribution to this is to point out, that we will probably have to look elsewhere for the energy to power our future society, other than from renewables, as it would now appear that capturing kinetic energy from water or wind, or photons from the Sun, will require an energy investment to build and maintain the capturing devices and infrastructure to distribute the energy, that will, if not totally deplete our remaining fossil fuel resources, will most certainly mean that we will have to use huge amounts of this fossil fuel in a very short length of time to build these renewable devices, thereby increasing hugely our output of CO2, and in return leaving us with no more, or very little fossil fuel in reserve.
    This might be OK, if the renewable devices that we have constructed, would last for a long time, thus enabling us to transition to some other now unknown energy supply.
    However this will not be possible, as the renewable energy capturing devices will only have a very short lifespan, probably no more than 20 years, and the limited and sporadic energy given out by these devices, would not be able to supply us with the energy needed to sustain life, and build new energy capturing devices at the same time.
    This is truely cutting off the energy branch on which we are now sitting.
    We have to be a lot more clever with our remaining fossil fuel energy, than to waste it on building machines that can never power our society more than a few years out into the future.
    If you have not done so already, I urge you to read the link I am providing,so that you may be able to start to understand the fatal drawbacks of renewable energy.
    Jeff is an engineer as well as an attorney.

  11. Mark Keenan says:

    Hi Denis. Thanks so much for your kind words and contribution. Yes I am aware of the critical issue you have raised in relation to the energy and investment it will take to build these devices. I recall one of my fellow bloggers on specifically highlighting this issue in a discussion a couple of years back emphasising that the huge number of wind turbines ‘required’ in Ireland and elsewhere would simply not be built due to the energy input required and the rising cost of that input ( I hope I am not misquoting his words). I will examine the analysis that you have highlighted. I often quote The Natural Step principles as a pure scientific definition of sustainability conditions in the biosphere. An ecologically conscious society must emerge for humanity to live in alignment with these conditions. Quantitative analysis is needed to establish valid energy pathways. How we aquire energy and what we do with it, should be re-evaluated in this context.
    Kind regards

  12. EWI says:

    @ thinkorswimmers

    OT. Tol still in hiding from sceptical bloggers on his FUND, I see, but not too preoccupied to be pestering the BBC with emails about utterances on climate change and then feeding the answers to Delingpole:

    I wonder how much public funds goes to to ‘fund’ Tol’s little anti-science hobby?

  13. Colin says:

    Hi, this is a well put together article. However, I’ve been reading recently about the Jevons paradox on Climate Progress and that it may be overstated.

    I know that Joe Romm can be a tad polemic but I have come across Jon Koomey (mentioned in the second link) professionally with regard to data centres and I would have great respect for his opinions.

    I guess my take away message is, dont be inclined to throw away energy efficiency just yet!

  14. Mark Keenan says:

    Hi Colin. Thank you for your input and the links you have posted. I am not advocating that we ‘throw away’ energy efficiency, but that the other factors mentioned are relevant in addressing the sustainability challenge. Imo energy efficiency alone (as part of a destructive system) can make that system a bit less destructive or in many instances its benefits can be offset by the rebound effect. I believe energy efficiency needs to be viewed not as a stand alone, but as part of the wider system that it is operating within, and it is the effect of the ‘system’ we need to alter.To echo McDonagh and Braungart, the key is not to make human industries and systems as resource efficient as possible but to redesign them in a way that has zero impact on (or contributes to) the natural systems that we rely on. To reduce the T (technology impact) factor in the above equation toward 0. The Natural Step sustainability framework is an example of a scientific methodology for redesigning our systems toward the ideal of full compliance with the laws of a sustainable biosphere. I may write a post on ‘The Natural Step’ to expand on this.
    Kind regards to you

  15. Brian O'Brien says:

    What is abundantly clear to everyone who follows this topic is that nothing short of a calamity can shock ‘western civilisation’ out of its spend-borrow-growth loop. The forces pursuing this model are overwhelmingly powerful, and in truth, they’re inside most people’s heads as well. Just listen to Enda Kenny, Eamon Gilmore, Micheal Martin or Barack Obama for that matter. It comes back to the same old same old.

    We have one great big bottle of Cure-All, and it’s labelled “Economic Growth”. Shake well and apply liberally to whatever ails you, then stand back and admire the tremendous results. For a while, that is. Like all Ponzi schemes, this racket is at its peak immediately before the precipice phase. Some say it’ll be debt, others reckon peak oil, food prices, water crises or wide-scale climate disruption that tip us over the edge. Maybe it’ll be a little of each, rather than any one shock. Either way, things are going to get pretty ugly before we wake from our complacent slumber.

    The only issue at that point is how much can we hope to save, because we’re on the cusp of the greatest Step Backwards since the industrial revolution got underway two centuries ago. Losses will be severe, across every walk of life. We can only hope that non-critical systems take the brunt of the impact (a bit like being shot in the tummy and hoping the bullet only hits your Appendix, and somehow misses your spleen, stomach, bowel, liver, pancreas or kidneys). Problem of course is just how many natural systems are in fact critical, whether or not we know it…

  16. Simon Ross says:

    I enjoyed reading this article. I would go back to Ehrlich’s (one of Population Matters’s patrons) famous equation that (Human) Impact = Population x Affluence x Technology. We really should be addressing all of these, given the issues we face: seeking to reverse population growth, moderating consumption by the wealthy while accepting it must rise for others, and adopting greener technologies. The P is often less discussed than the A or the T: how we encourage the will and the means for couples worldwide to accept that a smaller family is a sustainable family and thus to accelerate the existing decline in the global birth rate until we reach sub-replacement levels.

  17. denis says:

    @ Simon Ross
    I would agree with your analysis, but would like to point out that adopting so called “green” technologies, by which I presume you mean to produce or save energy, is really the same as increasing consumption, as this tecnology uses a great deal of energy to implement, and does not give back the energy with an energy profit, that was used in its implementation.
    The term consumption in economic analysis, really means the consumption of energy and natural resources wrapped up in manufactured products.
    Making more stuff, even if it is it is termed to be “green”, is not going to address the basic problem of reduced energy availability in the future.
    The promoters of the “green” future being pedalled to us, unfortunately do not know what they are talking about.

  18. james nix says:

    Well set out Mark. Do we know of any economist/s working on valuing all that we need, looking at the worth of what remains preserved, not simply what’s exploited, and subtracting where production/consumption causes negative impact (accidents, pollution, etc)? Without a new financial appraisal framework that weighs up and counts all that needs to be counted it seems to me little progress can me made.

    Even fixing goals among those who realise the importance of our environment is difficult without much greater input from economists and valuers interested in this area who are willing to help society prioritise?

  19. Mark Keenan says:

    @ Brian O’Brien. Thanks for your input Brian. Another issue is that when the flaws in the growth-based debt-based system become widely apparent then investor confidence will wain and the current economic model may crash before a ‘sustainable’ alternative has been developed.

    @ Simon Ross. Thanks for your post Simon. Yes population gets little mention in comparison to other factors. Carrying capacity is relevant. If we lived like Americans the global carrying capacity has been estimated ~1.5 billion. Even with generally lower per capita consumption, European countries exceed their ecological means. The Netherlands’ population consumes the output of ~14 times as much productive land as its national land area. The UK’s ecological footprint has been estimated at 7 times its land area.
    “Carrying capacity is a function of characteristics of both the area and the organism… We therefore distinguish between biophysical carrying capacity, the maximal population size that could be sustained biophysically under given technological capabilities, and social carrying capacities, the maxima that could be sustained under various social systems (and, especially, the associated patterns of resource consumption)”. (Gretchen C. Daily and Paul R. Ehrlich)

  20. Mark Keenan says:

    Hi James. Yes as we know one of the many flaws of GDP is that it fails to account for the depletion of natural capital – forests, marine life, minerals, topsoil, biodiversity, a stable atmosphere and biosphere. As you emphasise, putting a financial value on the environment is perhaps a necessary stepping stone to get economists to factor the environment into policy making and economic strategy. Environmental economics includes methods for measuring the depreciation of an economy’s ‘total stock’ of non-renewable resources. However, (imo) we must remember that environmental economics is NOT a scientifically rigorous discipline.

    How can we put a financial value on for example the last golden eagle or the last fresh water lake in a region, how much is it the lake worth after being polluted etc. Full cost accounting leads to profound intellectual difficulties – how do you calculate the ‘true’ cost of something that has been destroyed, such as lost biodiversity or rainforest? In my view we must therefore keep ‘short term’ economic analyses from being the main policy driver – governments must begin to base policy on the ‘science of sustainability’ as a successful economy is a subset of a sustainable biosphere and sustainable resource base. Identifying sustainable resource and waste flows via quantitative ‘material flow analysis’ and basing economic activity on these flows. (Ideally identifying and protecting the resource stocks that should be ‘off-limits’ to further depletion or economic globalisation.) Ecological economics (for example Herman Daly, Robert Constanza) differs from environmental economics, as it treats the economy as a subsystem of the ecosystem and emphasises the protection of natural capital. However, given the size of the global population, and bearing in mind that the scale of paradigm shift needed for this to occur quickly may be unrealistic, perhaps ‘environmental economics’ is the route to take (?).

    (Note: Alternative’s to GDP include the Genuine Progress Indicator. GPI factors in resource depletion. This is a major improvement on GDP as it shows the negative consequences of pursuing growth without accounting for costs and depletions. GPI tracked GDP until about 1980 then it sharply declined.
    (Note: Economic approches to valuing eco-system services and stock of natural capital include TEEB), see also .)
    (Note: In Ireland, FEASTA (Foundation for the Economics of Sustainability) has been developing mechanisms for sustainable economics and progress measurement).

  21. Colm says:

    Hi Mark,
    A case well made – coherent, articulate, and with passionate!

    Certainly, you have the vision that’s needed. Nevertheless, apart from The Greens, what current Irish political party would truly want to invest in a sustaninable Ireland, I wonder? Given that the The Green Party is facing meltdown in the election today, will the likely next FG-led government have the bravery to look beyond short-term “crowd-pleasing” decisions and bet on your aforementioned longer-term visionary programs – with no immediate perceivable ROI – to get Ireland truly onto the path of inclusive growth? I suppose that’s the $64,000 question…

    As the Chinese say “May you live in interesting times”…and this is certainly make-or-break times for our country.

    As I am not actively involved in this Sustainable Ireland movement, rather a keen “man-in-the-street” observer looking from the outside in, is there a strong enough lobby movement to actively encourage FG to truly embrace this initiative?

  22. Mark Keenan says:

    Hi Colm. Thankyou for your kind words. In relation to ROI, organisations, corporations and local governments that adopt sustainability principles, such as TNS have saved on costs and increasing profits. Examples include Ikea, Electrolux, Nike, Scandic etc. Interface Corporation, saved an estimated $400 million and became the largest flooring and carpetting maufacturer by transforming its supply chain, manufacturing, product life-cyle processes toward sustainability as defined by TNS. The DOW Jones Sustainability Index has to my knowledge been outperforming the DOW. Sustainability makes sense for business as well as for the environment. Kind regards Mark

  23. Auntiegrav says:

    Nice work, Mark. I try to tell people that “sustainability” isn’t enough. We can’t just reduce and reuse and recycle. We have to be generous to the planet that we depend upon, and be ready for catastrophe by doing more than just “enough”. We have to learn to give more than we take from the environment which spawned us. I call it Net Usefulness or Net Future Usefulness. I don’t think humanity is going to get there without a huge dieoff or collapse first, because the current paradigm of consumption is based on marketing (religion, consumption) or through bullying (politics, business). In order for humanity to become net useful to its own future and contribute more than it consumes, it has to lose the bullies, the competition with nonhumans, and the ignorance which it has embraced. Civilization has basically become a producer of evil systems (With “evil” being defined as any action taken based on unquestioned belief.). The more spectacular the belief, the more consumptive and the faster the rate of consumption, the more people seem to Believe that particular system is a “success” (cashflow and consumption rates are coincident). Cooperation is not profitable until profits are obsolete (people are starving).

  24. Auntiegrav says:

    Correction: Cooperation is not profitable until profits are obsolete (people are starving EQUALLY).

  25. Mark Keenan says:

    Thank you for your kind comment. I have long considered and studied the subjects of which you mention. A human evolution toward what could be called eco-consciousness may be required. It may take a number of generations and a lot will of course happen over time with the collapse of the flawed system and the emergence of necessary alternatives. However we can also take heart in the increasing number of people that are understanding and waking up to these civilisation defining issues.

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