Assess the prospects for a successful sustainability transition away from industrialism. How would this transition be similar to, or different from, previous transitions?
“Thus for the first time since his creation man will be faced with his real, his permanent problem-how to use his freedom from pressing economic cares, how to occupy the leisure, which science and compound interest will have won for him, to live wisely and agreeably and well” (Keynes, 1963: 371)
Writing in 1930, the famous British economist John Maynard Keynes declared that future generations will have solved the problem of economic scarcity. Accordingly, Keynes suggested a fifteen hour work week should suffice for people to live comfortably, making leisure time the centerpiece around which social life would be organized. Alas, as most people would confirm,Keynes’ prediction has not quite materialized. While the fabric of contemporary life would perhaps appear unrecognizable to Keynes’ eyes, its economic foundations remain relatively unchanged. Rather than leisure, production and consumption are as integral an economic feature as ever.
While enormous advances in the quality of life have been achieved, the sustainability of current consumption patterns have come into question. Steffen et al. (2015) highlight that, based on the planetary boundaries concept, two out of nine boundaries have already been breached, with a further two, climate change and land use change, soon to follow. While the global community has agreed that a two degree Celsius increase above pre-industrial levels of average global temperatures is the upper level of manageable climate change, emissions mitigation commitments made by states ahead of the latest global climate conference amounted to an estimated three degree increase. Concrete manifestations of such breaches include massive air pollution in India and China, periods of prolonged drought in California, as well as increasingly unpredictable weather patterns.
Hence, the unsustainable nature of contemporary industrial production is being challenged. This essay will argue that, in principle, there are two alternative pathways towards a transition away from industrialism. The first is based on a green growth paradigm, which is premised on the notion of a decoupling of growth from resource consumption. The second pathway does away with growth as the underlying driver of the world economy, putting in place deep cuts in resource consumption. Both pathways are faced with considerable challenges in economic, social, political and environmental terms.
What exactly makes a system sustainable is a considerably complex matter. For the purposes of this exercise, the subject matter is the entire world economy, which is characterized by millions of individual decisions made on a daily basis. Hence, any claim about sustainability should be critically assessed. At a basic level, “a sustainable system is one which survives or persists” (Costanza and Patten, 1995: 193). However, such a definition would not account for severe drops in living standards as a result of unsustainable practices. Arguably the most well-known definition of sustainability comes from the Brundtland Commission’s report, which states that “sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs” (Brundtland, 1987: 43). Thus, there is a temporal dimension to sustainability, but also a philosophical component associated with intergenerational justice. The basis on which this essay will proceed is that concluded at the United Nations Conference on Sustainable Development in 1992. Hence, the three mutually constitutive pillars of sustainability are social, economic, and environmental.
The Green Growth Pathway
Goal 9 of the recently adopted Sustainable Development Goals (SDGs) includes the notion of sustainable industrialization. The goal states that
“inclusive and sustainable industrial development is the primary source of income generation […] and provides the technological solutions to environmentally sound industrialization”, [adding that] “without technology and innovation, industrialization will not happen, and without industrialization, development will not happen” (United Nations, not dated).
Thus, the aim of green growth is to decouple resource consumption from economic growth. This could be achieved by a combination of technological innovation, system integration, smart policy-making, and the nudging of individual consumers to induce certain behavioral patterns. In concrete terms, this means an economy powered by renewable energy, supported by recycled materials, optimized by computerized processes and driven by knowledge accumulation and innovation.
Green growth as a paradigm can already be observed in pockets of many countries’ current economic systems. Countries such as Denmark and Germany have instituted policies to shift their energy supply towards a pathway characterized by renewables. In Germany, innovation in the renewable energy sector has not only accelerated the uptake of solar, wind and biogas solutions, but has also generated significant employment within this new, green industry (O’Sullivan et al., 2014). With no significant natural resources of their own, the countries that have put a premium on creating alternative energy systems have been able to benefit in economic terms as well. Hence, the green economy holds the potential to not only support the transition towards sustainability, but to also solve some of the underlying issues associated with slow economic growth and stagnation in many parts of the developed world (see e.g. UNEP, 2008).
Today, one of the world’s most valuable companies, Alphabet, which holds online search giant Google, generates the vast amount of its revenues through the provision of services. Alphabet is only one example of the new generation of technology companies whose business model is not primarily based on selling physical products. This could signal a transformation within the economy, towards a post-industrial system constituted by service providers, particularly those native to the digital world, and away from the industrial giants of yore. In essence, this vision is premised on the emergence of the knowledge economy, which values innovation – particularly in terms of information technology and artificial intelligence – above resource extraction and manual labor. In other words, human capital becomes much more important than natural capital. After all, technological advances based on innovation allowed the world economy to escape the Malthusian trap. The notion of the knowledge economy and post-industrial society, however, can arguably be traced back to the 1970s (e.g. Bell, 1974). Hence, this is not an entirely new concept. Where value is increasingly being captured is within the realm of service provision, while the digital world has morphed from supporting player to center stage.
The post-industrial society gives the impression of an economy that is less resource intensive. Yet, at least two objections need to be raised. For one, the post-industrial society, at least for now, is a very western-centric notion. Given that we are looking at a sustainability transformation on the global level, the fact that more value is being captured within the service sector as opposed to manufacturing and agriculture in highly advanced countries is not very revealing. To some extent, the global sectoral distribution has shifted, and industrial pollution has been outsourced by consumer countries in the global north to producer countries in the global south (Davis and Caldeira, 2010). A green growth strategy will furthermore have to contend with the efficiency rebound phenomenon (Greening et al., 2000). As energy efficiency increases, the price per unit of energy drops, allowing consumers to use more energy as a result. Hence, while in advanced industrialized countries energy is being used much more efficiently than in previous times, consumption is also markedly higher. How to generate an economy that passes the sustainability test in terms of overconsumption of natural capital is a question that the green growth paradigm continues to struggle with (Antal and van den Bergh, 2016).
The No-Growth Scenario
While industrialization has undoubtedly made a huge contribution towards improving general standards of living, most significantly in the countries of the global north, it has also locked us into a particular narrative. This narrative suggests that more will always be better. Industrial production is necessarily associated with concurrent consumption patterns, which put a strain on global natural capital. However, the narrative of the benefits and inevitability of industrialism allows people to ignore the significant negative externalities that come with this particular form of economic production. Hence, advocates of deep ecology argue that cutting consumption in absolute terms constitutes the only viable solution towards a sustainability pathway. This implies a transition away from the current economic model predicated on growth. As acknowledged even by the World Bank (2012), growth in high income countries could be unfeasible in ecological terms.
Studies on the ecological footprint of current global consumption indicate that ecological changes associated with anthropogenic activity are massive (e.g. Sutcliffe et al., 2008). The implication is that the global biosphere may not be able to handle anywhere close to the kind of environmental destruction that even a green growth scenario would entail. The ecosystem services that a large part of the global population depends on would cease to be available (Millennium Ecosystem Assessment, 2005). This assessment also derives its salience from the circumstance that a significant number of people have not yet made the transition towards an industrial system. As people are lifted out of poverty, move away from livelihoods based on agricultural subsistence and enter the modern consumer market, new strains will likely be put on the global environmental carrying capacity. Koven et al. (2011) indicate that warming in the arctic could cause further methane emissions, which would lead to feedback loops associated with runaway climate change. Haberl et al. (2011) point out that, at the current pace of the globalization of industry, no technologically feasible scenario would be available to remain within the earth’s ecological carrying capacity. These findings put into doubt the assumption that technical and regulatory solutions, as suggested by the green growth paradigm, can be enough to build the bridge towards a sustainable future.
A no-growth scenario would very likely require a significant transformation of both the political system and social relations. Given a context in which, in monetary terms, aggregate living standards would no longer continue to rise unchecked, a new consensus around how to distribute economic resources would be vital. With no absolute gains to be made, the economic distribution would have to be more equitable to ensure social stability. Hence, significant political transformations would be a prerequisite in order for such a future to become feasible, particularly given the protracted nature of decision-making in mature democracies. A no-growth vision would also demand new ways of accounting for well-being. Currently, gross domestic product, however imperfectly, is being used as a proxy for aggregate living standards. Its advantage lies in its intuitive nature and its ability to communicate complexity within a single number. Of course, GDP does not take account of externalities or natural capital depletion. New sustainability indicators (Moldan et al., 2012) would have to replace GDP as the dominant factor behind decision-making, giving both individual consumers and policy-makers the requisite incentives to take the kinds of decisions that would further sustainability. Such indicators would be required to be legitimate and accepted by the public.
A Different Transition
In fundamental terms, the difference between the transition towards sustainability and previous transformations of the world economy is this: whereas before, innovations were required to enable individuals to access more resources in order to generate more economic activity, the sustainability mandatedemands a reduction in resource consumption. In general terms, demographic factors, coupled with exponential economic growth and the shift in consumption patterns has meant that the rate at which natural capital is being depleted far outstrips the rate at which it can be replenished. This concept is reflected by the planetary boundaries concept referred to above. The transition towards sustainability also requires us to consider leaving certain resources untouched. Studies have indicated that, in order to have a chance to prevent runaway climate change, the vast majority of fossil fuel reserves – oil, coal, and gas – will have to be left in the ground (Allen et al., 2009; Meinshausen et al., 2009). The two pathways outlined above deal with this challenge by increasing the efficiency of resource and energy consumption in the case of green growth, and by restructuring the economic system and cutting absolute consumption in the case of a no-growth pathway. Hence, in limited or comprehensive fashion, this transition requires contraction rather than expansion, which appears to be a novel phenomenon.
This essay has sketched two alternative transitions towards sustainability. While the green growth scenario builds on innovation and enhanced technological capabilities, the no-growth scenario requires deep cuts in consumption and a significant restructuring of lifestyles and the economic system. While the former does not seem to be workable in environmental terms, the latter is difficult to imagine in political terms. Unless environmental degradation leads to significant demands for political revolution, a transition towards the kind of sustainability that would respect planetary boundaries appears unlikely.
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