Thursday, June 21, 2012

Worst green economy argument yet: the "leap of faith"

A truly asinine article on Nat Geo today, by Stephen Leahy. Let's go through it piece-by-piece.
RIO DE JANEIRO Delegates in Rio will need to take a leap of faith and agree on concepts like the green economy and sustainable development goals without really knowing what they involve, suggest experts on the sidelines of the Rio+20 Earth Summit.
“The green economy is a black box right now. We don’t know what will make it tick,” said Davinder Lamba, director of the Mazingira Institute, a sustainable development NGO in Nairobi, Kenya.
Hearing "leap of faith" in an economic context is like a red flag to signal that bad arguments are coming up ahead. If we "don't know what will make it tick", how do we know that a "green economy" can even work?
Overcoming the reluctance and opposition to creating green economies will require “transparency and agency,” Lamba said at the Forum on Science, Technology and Innovation for Sustainable Development, a five-day meeting on the sidelines of Rio+20.
By “agency” Lamba means that those at the bottom, the poor and poorest countries, must have a role in shaping what green economies are and how they will work.
When I hear "transparency and agency", I mentally translate to "oversight by government." By definition, everyone has agency in an economy, by choosing which products to spend their money on. Sounds like the real goal is an international regulatory body, which will allow poor countries to dictate policy in more-developed regions. If poor countries are largely poor because they have bad institutions, why would giving them more "agency" over the global economy be a positive step?
Conventional economic terms like capital don’t apply to many of the important aspects of green economies and sustainability and must be questioned.
“We need to be very critical of economic terminology and concepts” in making the transition to greener economies, said Tim Jackson, an economist and professor of sustainable development at the University of Surrey, UK.Natural capital – the goods and services provided by nature such as clean water, air, and soil – is a very different kind of capital than manufactured goods. If a natural landscape is left alone its capital stocks improve, whereas products like automobiles or computers lose their value over time, Jackson told TerraViva.The same applies to the term “productivity,” which is considered universally good in economics. “Applying productivity to services like those provided by doctors, teachers, artists makes no sense,” he said.
People can have lots of natural capital, but still bad living standards. In prehistoric times, the water and air was all clean, the food was all organic... and lifespans were less than half of what they are now. Leaving the "natural capital" alone doesn't make anyone better off, except environmentalists who get to feel a sense of mental satisfaction.

The bolded claim is just false. We can discuss productivity in context of willingness to pay: an artist is more productive if people are happy to purchase his/her work, a doctor or teacher is productive based on how much people will pay for those services.

Currently, the government controls much of education and health care, which has distorted the market in those goods and made productivity improvements slow in coming. But rejecting the language of productivity as a result is basically just shooting the messenger.
There is wide recognition that every country is wrong to focus on increasing Gross Domestic Product (GDP) because it ignores environmental and social impacts, said Ronaldo Seroa da Motta, senior researcher at the Research Institute for Applied Economics (IPEA) in Rio de Janeiro.
However, it is very difficult to measure “natural capital” and “social capital” and how to account for changes or flows, da Motta told conference attendees.
One of potential outcomes from the Rio+20 Summit on Sustainable Development here is agreement amongst nations to establish an alternative measure to GDP such as a Genuine Progress Indicator (GPI) to measure what GDP leaves out. A GPI will be zero if the financial costs of crime and pollution equal the financial gains in production of goods and services, all other factors being constant.
“We don’t really know what a Green GDP (like GPI) is at this point. Certainly not enough to make daily decisions,” de Motta said.
It's true, GDP is a very rough measure of living standards. But measuring the costs of crime and pollution is even rougher. How do you quantify the harm from a factory's smoke, or the damage done by a corrupt bureaucracy? More to the point, how do you match those up against production of goods and services to figure out what is causing those costs? Economists have found some methods to estimate, but they're far from the precision I'd want to base an entire economy on.

GDP already does a pretty decent job of measuring costs of financial wrongdoing. U.S. household income and GDP fell dramatically following the housing crisis, and countries with corrupt governments also tend to have low per capita GDP. But do we add an extra negative factor on, to account for the "crimes" committed by leaders in the banking and regulatory industries? This seems even more open to manipulation than GDP figures.
Many years ago there was little information or data to support the “Brown GDP” so there is no reason not to continue to pursue a Green GDP, he said.
But doing so requires clarity, openness to diversity of views, honesty about winners and losers, and real democracy said Melissa Leach, director of the Pathways to Sustainability Centre at Institute of Development Studies at the University of Sussex in the UK.
The concept of “sustainability” is a social and political term, not a neutral one as many assume. There will always be many different visions of sustainability depending on the context, Leach said. Those visions arise from our worldviews and values, which shape our perception of the world.
“We need to challenge the dominant pathways,” both the status quo and the dominant vision for a green economy, she said.
That is why absolute clarity is needed on what the goals of a green economy are, as well as consensus on what the terms involved like “growth,” “progress,” or “prosperity” really mean.
Then we get to the "empty platitudes" section, intended to conclude the article. If sustainability will always depend on context, what exactly are we taking a leap of faith towards, anyway? Sounds like a blank check to the environmental movement, or whoever else has public credibility to enforce their chosen version of "sustainability."

Yeah, let's challenge the dominant pathways, man! Then after the moralistic high has worn off in a few years, we can start to evaluate the gigantic "green" regulatory state which will have emerged while we all had our heads in the clouds.

Here's a thought: let's take a leap of faith that technology will advance rapidly, we'll reach a singularity and transcend our human bodies, then visit forests and grasslands within the realms of virtual reality.

There are plenty of reasons to doubt the techno-optimist view also, but at least the goal is something tangible (increased material living standards) rather than the ephemeral goal of "sustainability", whose defenders can't even agree on what it means... as if that is supposed to make the case for supporting it more convincing.

No comments:

Post a Comment