Eaarth and Carbon Nation offer pragmatic, clear solutions.

On the cover of Eaarth, Barbera Kingsolver writes that the reader should read through to the end, that “whatever else you were planning to do next, nothing could be more important.”  One of my classmates advised me not to pick it up until after our Fall trimester is over next month. With what I know of Bill McKibben an his 350.org campaign, I figured this would be a depressing read.  McKibben confronts the fact that we very likely live on a planet different than the one that human civilization prospered on:

“The Earth has changed in profound ways, ways that have already taken us out of the sweet spot where humans so long thrived.  We’re every day less the oasis and more the desert.  The world hasn’t ended but the world as we know it has – even if we don’t quite know it yet.  We imagine we still live back on that old planet, that the disturbances we see around us are the old random and freakish kind.  But they’re not.  It’s a different place.  A different planet.  It needs a new name.  Eaarth… This is one of those rare moments, the start of a change far larger and more thoroughgoing than anything we can read in the records of man, on par with the biggest dangers we can read in the records of rock and ice.”

McKibben offers plenty of quantitative and qualitative evidence describing our new home, but this is not a dense tract; in fact, it is refreshing in its readability.  I read it over a week before bed, and found his writing to be concise and clear.  While the subject, our future on this rock he now calls Eaarth, is a serious and grim, McKibben offers some great recommendations for how we can live on the new planet.  He singles out growth as enemy number one, along the lines of ecological economists like Herman Daly and Robert Constanza.  McKibben doesn’t think that an ecological New Deal, as recommended by Thomas Friedman and others, will be able to prevent the planet from continuing to change:

“The next decade will see huge increases in renewable power; we’ll adopt electric cars faster than most analysts imagine.  Windmills will sprout across the prairies.  It will be exciting.  But its not going to happen fast enough to ward off enormous change.  I don’t think the growth paradigm can rise to the occasion; I think the system has met its match.  We no longer possess the margin we’d require for another huge leap forward, certainly not fast enough to preserve the planet we used to live on.”

McKibben recommends some words that encompass the future we will need to live on our new planet: durable, sturdy, stable, hardy, and robust.  McKibben argues for smallness instead of bigness, smaller national purposes:

“So the first point is simple: the size of your institutions and your government should be determined by the size of your project.  The second point is more subtle: The project we’re now undertaking – maintenance, graceful decline, hunkering down, holding on against the storm – requires a different scale.  Instead of continents and vast nations, we need to think about states, about towns, about neighborhoods, about blocks.”

At times like this one, McKibben sounds closer to the Tea Party than the modern environmental movement with his talk of small government.  The one distinction, of course, is that the Tea Party supporters largely deny climate science; they believe growth can save us again and again, with the planet providing no inherent limits.

McKibben calls for communities to get closer together, to develop local solutions for energy and food.  “If the eaarth is going to support restaurants, they’ll need to look like the Farmers Diner” (in Quechee, Vermont, a favorite destination of m wife and I).  McKibben doesn’t just recommend local commerce, but sharing and connecting with neighbors, a lost tradition.  Eaarth is a useful book for this moment, because it appears that a price on carbon will not be set anytime soon.

Along the same lines, in a different vein, the upcoming documentary Carbon Nation, which I recently watched, offers useful solutions for tackling our problems with carbon, in a slightly more optimistic manner.  Peter Byck‘s new film has an intriguing tagline: A Climate Change Solutions Movie (That Doesn’t Even Care If You Believe in Climate Change).  The argument is simple: there are actions that we can all take, that are already being taken, that can begin to solve the problem’s we face.  The film’s argument makes financial sense; in fact the clip above is representative of the film in general, optimistic, aimed at an audience that includes conservatives.  One of my professors, a rock ribbed New Hampshire conservative, thinks the film will be generally successful in communicating to conservatives. Carbon Nation offers some solutions that we would be wise to listen to.  Even the Shell representative who appears in the film says that a price on carbon is crucial to our future.  However, the film discusses issues that range from traditional alternative energy, to biofuel, soil conservation and cover crops.

Carbon Nation premiere’s in New York in January, but screenings are occurring now across the country at conferences.  Eaarth is out now.  Both offer pragmatic, cohesive solutions about the reality we face, and the steps we must take to survive on this planet.

Ecological economics: the next logical step

The American economy, and much of the world economy, is organized around principles of neoclassical economics (NCE).  Neoclassical economists consider perfect markets without any outside interference the ideal means to build an economy with. Those economists believe that NCE principles create the most efficient allocation of resources throughout the economy.  The goal for neo-classical economists is growth; economic growth signifies the distribution of market goods and services, and in the minds of neo-classical economists, economic growth is a proxy for consumer satisfaction.

While NCE is the dominant paradigm, ecological economics (EE) offers better framework during a time of ecological constraint.   Many of the resources that through their abundance created the conditions for the Industrial Revolution and the rapid economic growth of the last two centuries are becoming scarce.  Ecological economists recognize that Earth and its ecosystems are not subsets of the human economy, but rather that the human economy is a subset of the Earth.  As such, ecological economists are concerned with the question of scale, what the appropriate and sustainable size of the economy is relative to the ecosystems that support it.

Both NCE and EE recognize the concepts of marginal cost (the additional cost of producing a market good) and marginal utility (the additional satisfaction one receives from a market good), and seek out the optimal scale whereby the greatest marginal utility is achieved at the most efficient marginal cost.  However, NCE only considers these concepts in terms of the microeconomic and not the macroeconomic level; EE examines the optimal scale of the larger macro economy.  By looking at the big picture, ecological economists examine the throughput of the human economy, and recognize a conceptual flaw in NCE.

Neoclassical economists look at the economy as the whole, and the natural capital that the Earth and its ecosystems provide as a mere subset of that economy.  The NCE view of the economy is a circular one, between production and consumption: businesses and consumers interact to create supply and demand.  The circular flow model that neoclassical economists use to illustrate those relationships is simple, but like their view of the economy as the whole, it does not properly recognize the natural capital that allows the economy to operate.

The NCE model creates the illusion of a perpetual motion machine, which is impossible.  The Second Law of Thermodynamics identifies that any closed system degrades through entropy.  In the case of the macro economy, this means that resources cannot be recycled completely.  The throughput of the macro economy is enormous, and growing.  However, this enormous throughput occurs on a finite planet, with finite resources.  Specifically the fossil fuels and minerals that drive the macro economy, nonrenewable on a human scale, are finite.  The capacity of the Earth’s ecosystems to provide water and waste services is finite.  Ecological economists recognize that growth is not sustainable, but differentiate growth from development.

That distinction between growth and development is helpful when considering how a business might operate through the principles of ecological economics.  Minimizing the throughput of resources is crucial on the finite Earth.  A business might consider offering a service instead of a product, and designing the materials to be provided to customers with their entire life cycle in mind (through a Life Cycle Assessment).  Interface, Inc. designed their modular carpet tiles with those very goals.  Interface will replace individual tiles when they become worn, and recycle those tiles as much as possible.  In fact, Interface works continuously to minimize the amount of petrochemicals in their product, and the ecological footprint of its supply chains.  By offering a service instead of a product, a business can maintain customers over the long term instead of trying to sell as many products as possible while cutting costs to maximize profit margin.  On a finite planet, that behavior is simply not sustainable.

While EE principles are appealing, they do present limitations, especially within the dominant NCE paradigm that defines the macro economy.  First of all, a business must consider optimal scale carefully; long supply chains are not sustainable over the long term in a finite world.  Second, finance is a quandary, especially if the business is for-profit.  Investors and stockholders will demand healthy and steady profit margins, which are difficult to maintain when competing against businesses that consider growth as the primary goal.  Finally, the concept of providing a service instead of a product is difficult in terms of modern accounting practices.  Interface, for example, whose customers tend to pay through capital expenses, are sometimes reluctant to shift those costs to current expenses.   However, EE provides a growing framework for sustainable business that is already evident in developments like the B Corporation.  In a finite world, ecological economics provides a necessary course correction to neoclassical economics.


Is climate policy like prohibition?

Walter Russel Mead, the Henry Kissinger senior fellow for U.S. Foreign Policy for the Council on Foreign Relations, and a professor at Yale University, just wrote an unconventional and thought provoking analysis on the state of climate policy.

Mead, a Democrat who voted for President Obama in 2008, says, “the Big Green Lie is falling apart:”

“And it’s not about Climategate and Glaciergate.  It’s not about the science.  It’s not even about public confidence in the integrity of the green movement — although this confidence is unlikely to regain the levels of 2009.  Humpty Dumpty has fallen from the walls, and all the establishment commissions and investigations in Europe cannot glue him together again… Both the greens and their opponents need to understand that the reason that the Great Global Green Dream is melting lies in the sad truth that whatever the scientific facts of the matter, the global green movement is so blind and inept when it comes to policy and process that it has deeply damaged the causes it cares most about.”

Mead compares environmentalists to anti-alcohol activists before Prohibition:

“Who convinced Americans that the problem of alcohol abuse was real, destructive, and likely to get worse unless addressed.  These farsighted activists were absolutely correct: with the introduction of the motorcar alcohol was more destructive than ever; with more than 500,000 alcohol related highway deaths between 1982 and 2008, more Americans have been killed on our roads as a result of drunk driving since 1915 than have died in our wars. The problem is that the remedy proposed, Prohibition, not only failed to solve the problem — it made the problem of alcohol abuse worse, and it also reduced respect for the law and led to the rise of organized crime in the United States on an unprecedented scale.

The Prohibitionists were brilliantly, scientifically correct about the problem: they were foolishly and destructively blind about how to deal with it.”

Mead also compares environmentalists to Peace Activists who predicted World War II and tried to outlaw war to prevent it.  He also brings up comparisons to the Nuclear Freeze movement in the 1980s.  Mead views the sum of Green policy prescriptions as Malthusian panic attacks, with anti-growth policies and corporate resentment sprinkled on top.  He acknowledges that Global Warming is a problem, but what does he think we should do about it?

Mead proposes that we simply “nudge” the economy towards energy efficiency, and lower

Walter Russel Mead compares Green policies to Prohibition.

taxes.  Mead proposes local solutions that will not be organized under one grand agreement, but rather be aimed to work on local problems; he brings up the example of the Indian government pushing to end fuel subsidies.  But will “relatively small steps, or larger steps often undertaken for reasons that have little directly to do with the climate” work?

Mead blithely describes criticism of neo-classical unending growth as “Malthusian fantasies” He ignores the real and growing evidence that the Earth has a limited carrying capacity, and we are creeping towards Earth’s limits.  By comparing environmentalists to an alarm clock “making shrill and irrational noise,” one wonders if he truly understands what it will take to create a sustainable world.  He prescribes, above all, serious attention and careful thought to the question of how to create that sustainable world.  He pines for a humanity that leads “richer, fuller lives in a cleaner, sustainable world.”  The mystery for me is how we will be able to continue this unending growth without reaching the Earth’s limits.  Ecological economists like Herman Daly and Robert Costanza are creating a new economics that boldly goes beyond the Copenhagen policies.  Certainly, environmentalists would be well served to carefully consider what steps need to be taken.  I agree that we will not solve our problems with one global treaty.  However, we cannot simply rely on the whims of laissez-faire economics to deliver us to the sustainable future that Mead hopes for.

Reid to climate: drop dead. Can we afford inaction?

Ross Douthat admits Global Warming is a problem, but argues for inaction.

Today, in the New York Times, Paul Krugman and Conservative wunderkind Ross Douthat present competing theories on why climate change legislation is dead this year.  Douthat, surprisingly, admits that Global Warming is a genuine problem:

“…Conservatives who treat global warming as just another scare story are almost certainly mistaken.  Rising temperatures won’t “destroy” the planet, as fear mongers and celebrities like to say. But the evidence that carbon emissions are altering the planet’s ecology is too convincing to ignore. Conservatives who dismiss climate change as a hoax are making a spectacle of their ignorance.”

Douthat blames the demise of legislation on conservatives; in his words there is “seemingly an unbridgeable gulf between the conservative movement and the environmentalist cause.”  Of course, that framing of Global Warming is purposeful.  In Douthat’s mind, Global Warming is a problem for bird watchers to worry about.  In fact, Douthat provides the argument for inaction by making a dangerous assumption:

“…The assumption that a warmer world will also be a richer world — and that economic development is likely to do more for the wretched of the earth than a growth-slowing regulatory regime. But it’s also grounded in skepticism that such a regime is possible. Any attempt to legislate our way to a cooler earth, the argument goes, will inevitably resemble the package of cap-and-trade emission restrictions that passed the House last year: a Rube Goldberg contraption whose buy-offs and giveaways swamped its original purpose… Not every danger has a regulatory solution, and sometimes it makes sense to wait, get richer, and then try to muddle through.”

Douthat does not discuss the concept of externalities, and this is key.  An externality is the result of a transaction that is borne by neither the buyer nor seller directly, but rather by a third party.  In the case of our fossil fuel supplies, the externalities are only growing.  In addition to greenhouse gasses, you have pollution from coal plants that has measurable health impacts on communities surrounding them, and you have the ghastly side effects of hydraulic fracturing of shale for natural gas.  Of course, don’t forget about the oil spill in the Gulf of Mexico.  The scary thing?  We subsidize these fossil fuels.  Douthat, however, just wants to rely on unending growth to solve all of our problems.  Unfortunately, the Earth will not support unending growth.  Douthat would be wise to read Tim Jackson’s Prosperity Without Growth.

Paul Krugman, on the other hand, points the blame for the demise of climate legislation in a more

Krugman advises us to follow the money.

believable and useful direction.  In Krugman’s mind, we need to just follow the money:

“The economy as a whole wouldn’t be significantly hurt if we put a price on carbon, but certain industries — above all, the coal and oil industries — would. And those industries have mounted a huge disinformation campaign to protect their bottom lines.  Look at the scientists who question the consensus on climate change; look at the organizations pushing fake scandals; look at the think tanks claiming that any effort to limit emissions would cripple the economy. Again and again, you’ll find that they’re on the receiving end of a pipeline of funding that starts with big energy companies, like Exxon Mobil, which has spent tens of millions of dollars promoting climate-change denial, or Koch Industries, which has been sponsoring anti-environmental organizations for two decades.  Or look at the politicians who have been most vociferously opposed to climate action. Where do they get much of their campaign money? You already know the answer.”

That is the key of course.  Producers of fossil fuels do not want to have to account for externalities of their products.  They would rather society at large bear those costs.  We are slaves to growth and slaves to consumption, unable to see the forest for the trees.  As Krugman points out, 2010 is the hottest year on record.  Inevitably we will need to place a cap on carbon emissions; the longer we wait, the more difficult it will be.

Ross Douthat should read this book.

How do we solve these problems?  Herman Daly, an ecological economist, offers some viable prescriptions.  I will highlight one of the most important ones, which you will not see any politician advocate: ecological tax reform.  Right now labor and capital (the value added) is taxed; ecological tax reform would end value added taxes and instead tax that to which value is added: the throughput of resources extracted from nature (depletion) and returned to nature (pollution).  Ecological tax reform would reward entrepreneurs who are able to add value and innovation efficiently.  We want to encourage value added, and discourage depletion and pollution.  It sounds simple, but it goes against the neo-classical devotion to unending growth.  As such, Douthat and his fellow conservative denizens continue to believe in Business as Usual.

Bob Constanza on ecological economics and a shared vision for the future

What will you wear to the apocalypse?

Dr. Robert Costanza, Professor of Ecologcal Economics at the University of Vermont, spoke last month at Yale University about ecological economics, a field that he helped create along with Herman Daly.  In 1997, he wrote the seminal article “The Value of the World’s Ecosystems and Natural Capital,” which helped to define the economic worldview encompassed in ecological economics.

At Yale, Constanza spoke of creating a shared vision about a sustainable future:

“A key element in allowing us to do this is to create this vision of what a sustainable and desirable future would look like.  A vision communicable enough to a broad enough audience, to make the point that it is not a sacrifice to make this transition, really it’s a sacrifice not to make this transition.  I don’t think that choice has adequately been put before the public; I don’t think the public has been adequately involved in creating that vision.”

With ecological economics, Constanza is helping to create that vision.  He contrasts the empty worldview, in which growth is limitless, more is always better, and no resource is sacred, with a more realistic view of a full world, which considers the natural capital that is not considered within traditional economic measurements like Gross Domestic Product.  The full worldview considers the biophysical and sink services that the Earth provides, and many other assets that we take for granted, like water.

Constanza is onto something with his goal of creating a shared vision.  Many people look at the environment as a competitor with the economy; a resource can be protected, but only if it doesn’t constrain growth.  Unfortunately, that constraint is inevitable.  Finding a way to break through that traditional binary logic is a key to involving people in this discussion.