The Great Economic Transition
Transitioning to a sustainable economy is imperative for building a sustainable world.
Building a sustainable world means transitioning to a sustainable economy. Here’s what that might look like.
The extraction, allocation, and production of goods and raw materials are critical for the functioning of modern society, but are also profoundly destructive in our present engagement.
Dictated by market demand structured on continuous economic growth, resources are extracted only to be consumed and discarded into an ever-growing waste stream. Those who consume and discard these resources are also least likely to be adversely affected by said waste streams.
This is made possible because we have an economic system that is centred on the interests of capital rather than the interests of humans. If we are to build a sustainable world where we keep the advances of modern life while staying within our planetary boundaries, it is essential to address both the wastefulness and the inequity of our global economy.
“What might such an economy look like?”
A critical first step would be to dramatically curtail global consumption habits. High consumption lifestyles under any economic system are unsustainable, especially as the global middle class grows.
This would need to be done in tandem with eliminating the economic disparity between the very wealthy and the impoverished, as the most wealthy consume resources disproportionately to the rest of the world, and the impoverished do not have enough resources to ensure a basic standard of living.
Easy targets for curtailing consumption habits are to dramatically reduce or eliminate the consumption of animal products and to restrict carbon-intensive transit (e.g., flying) to essential travel only.
To handle other aspects of the consumer economy, caps could be instated to limit purchasing of certain resource-intensive commodities (e.g., personal vehicles, electronics, clothing, etc.) and mandate that consumer goods of all kinds are built to last as long as possible, be easily repairable, and when they reach the end of their usable lifespan, easy to recycle at the manufacturer’s expense.
This would likely collapse the consumption-based economy as we know it. To prevent the worst fallout from such a massive economic overhaul, a massive transfer of wealth from the wealthiest individuals to the most vulnerable would be necessary.
This could be instated through a variety of programs including jobs and professional retraining programs, instituting a basic income, and other measures carefully designed to ease the transition from our present unsustainable paradigm to a circular economy.
The wealth required could be acquired through wealth caps, instituting a maximum income, and other measures designed to radically redistribute wealth throughout society. The net impact of this would be to dramatically reduce our demand for new resource extraction, while ensuring those most vulnerable to massive economic disruption are not left behind.
To the extent that it is possible, we can minimize the footprint of the extractive industry by decreasing our demand for new resources and recycling resources from products that have reached the end of their useful life.
However, solely limiting our demand is not enough to fully address the problems inherent to extractive industry, it is also important to minimize the harm resultant from resource extraction and production.
Our task is not just to alter our way of living into being less destructive, but to radically transform our way of living into one that is stable over timescales that encompass millennia. To operate in the manner of least harm and create such an economy, the areas that we develop for extraction should be chosen with respect to the impact on local ecology.
We could further balance the harm of extractive industry with the needs of our society through a powerful centralized economy. A designated governing body could rigorously consider the impact of extractive industry on geologic timescales and evaluate societal needs for extractive industry on the timescale of decades to centuries.
Such a governing body would be tasked with the responsibility of balancing the two in a manner that ensured a high standard of living for all, while staying well within planetary boundaries.
The linear life cycle of present consumer goods requires an enormous extractive industry, prioritizes short-term appeal, and contributes to an enormous stream of non-recyclable waste. An alternative system is a circular economy, where raw materials cycle through production, use, and recycling, continuously, rather than being relegated to a waste stream.
An analogous system for a circular economy would be the tight nutrient cycling in a coral reef or a rainforest, where nutrients are continuously cycled through the system, waste is reabsorbed as raw material into living organisms, and minimal nutrient losses occur.
Such an economy would vastly reduce the need for new raw materials, and also be more adequately prepared to enter a “post-growth” economy, where an economy is judged more on how well it meets the needs of those it serves rather than how rapidly it can accrue capital.
Increasingly, economists are moving away from using capital-centered metrics (e.g., GDP) as the sole indicator of a nation’s well-being. GDP, in particular, fails to convey the many nuanced ways in which an economy can successfully meet or fail to meet the needs of its citizens as well as its relative resource intensity.
While no new metrics have yet to see widespread adoption, the nation of Bhutan has adopted a metric of Gross National
Happiness which possesses four pillars (sustainable and equitable development, environmental conservation, preservation and promotion of culture, and good governance) and nine domains of happiness (well-being, health, time use, education, cultural diversity and resilience, good governance, community vitality, ecological diversity and resilience, and living standards).
Kate Raworth’s “Doughnut Economics” model echos a similar view that is centered on human and environmental well-being rather than the creation and acquisition of increased wealth.
In “Doughnut Economics,” human well-being is measured by twelve-dimensions for a social foundation (food, water, health, education, income & work, peace & justice, political voice, social equity, gender equity, housing, networks, and energy) and constrained by an environmental ceiling of nine planetary boundaries (freshwater withdrawals, land conversion, biodiversity loss, air pollution, ozone layer depletion, climate change, ocean acidification, chemical pollution, and nitrogen and phosphorus loading).
The goal with such a model is to offer a high standard of living while preserving the environment; this heavily contrasts with today’s growth-centric models for economic well-being, where cumulative growth without social or environmental equity is measured as success.
In a system like “Doughnut Economics,” economic development would manifest as continuous improvements to quality of life across a broad array of metrics while improving environmental stewardship. Rather than leading to increased poverty and the cessation of technological progress, a “post-growth” world could look remarkably more livable than the world we currently inhabit.
Whatever metrics we use to redefine what it means for a nation to be an economic success, it will require us to consider both human and environmental well-being.
Environmental pressures demand that we change our relationship with the land, while inequity and structural oppression demand that we change our relationship with each other.
The transition we must make is to give birth to a world unlike the one we were born into, but increasingly the path forward is becoming illuminated. It is up to those of us alive today to start taking the first steps.