Monday, May 14, 2012

Rio + 20 part 4: What if?

            So we are now just over a month away from the big event that most people still don’t know about (the Rio summit on sustainability, which is a follow up to the one we had in 1992, also in Rio).  In my first three articles on this subject, which I pledged to write once a month, until July, I concentrated on explaining the public good aspect of global sustainability.  I used various examples of the folly of the assumption that we can achieve a sustainable path based on collective voluntary goodwill.  We now know that we can never get everyone to voluntarily sign up to a binding commitment to behave responsibly, because the benefits of non-collaboration, especially if some do decide to sign on to being good global citizens are just too tempting.  We also know what happened to the economies of the willing good Samaritans who took it upon themselves to try to save the world.  The examples of the EU and California can tell us all we need to know about the pain involved in being responsible.  As for the benefits, the EU effort, to keep emissions at 1990 levels had the effect of reducing global emissions growth from about 42%, to the actual 40% increase we registered during this period.  Not much of a reward, given the amount of pain it took to achieve what they did.  My March article on the Rio summit provides a more detailed analysis for those who are yet to read it, and are interested.  For those who do not have the time, or the interest, I prepared the graph bellow, which speaks volumes.

Data Source EIA[i].

Note:  The yellow line represents what the world’s emissions would be like if Europe would have done absolutely nothing to mitigate emissions output, but would have done the opposite instead, which is to concentrate solely on economic growth, which would have probably led to their emissions rising by an average of 1% per year.  There are many who would take issue with my graph, and I agree with them, because we should keep in mind the outsourcing effect that EU environmental policies had on dirty industries.  There is indeed a strong argument that can be made that in reality, the yellow line I presented, should not even exist on the graph, because EU policies made in fact no difference to the level of global emissions.

                 Now, if I was a European and I would be looking at this graph, I would be quite angry at the fact that my elites did this on my behalf, especially if I were currently a young person, unable to get my foot through the door and find a job.  If I were a citizen of any country in the “global village”, I’d be worried that my government would do the same on my behalf, while other countries will not, causing my family, friends, and community to suffer extreme hardship, or that due to the hardships, I may not even have a chance to start a family, as is the case with many young people in Europe now.  So how open would I be then to accepting arguments on the need to do something about the environment?

            There have been many explanations given in regards to the current trend of environmental skepticism.  We have anthropologists, social behavior experts all trying to come up with complex analysis of the social resistance to environmentalist views.   There is indeed an effort to misinform.  There are cultural and even religious grounds to oppose the arguments for environmental protection.  In the end, we have to understand that the majority of people have immediate concerns, and let us face it, for those who do not have secure positions, such as academics do, and live from paycheck to paycheck, the last thing they want to hear is that their elites are looking to sacrifice their competitiveness in the global labor market, for the greater good of all.

            In fact I don’t think that they realize it, but the environmental crusaders who may have celebrated as they managed to convince the EU or California to engage in voluntary goodwill and self-sacrifice, in fact caused the war to be lost, even as they won a battle.  They gave environmentalism a bad name, and discredited in the process any attempt to do something of actual consequence.  I know that it is hard to admit to this, but nevertheless it has to be done, because as the upcoming summit will prove to us, there is little voluntary goodwill left.

What if we reject it?

            There is precious little we can do to change the outcome of the summit at this point.  What we could do, but I fear we will not, is recognize its failure, and reject the notion that the approaches that made little impact in the past two decades, will somehow bear fruit in the next two.  Then and only then, we will be ready to look at real alternatives.

            In my book, I provided an alternative, in the form of the sustainability trade tariff.  This is a proposal for standardized tariffs that should be applied globally, based on the ability of each nation to produce goods and services in a sustainable manner.  In other words, if Germany’s total GDP is X amount, and its ecological damage as a result of producing X is Y, then Y/X= tariff level on all goods that Germany exports. 

If let us say, initially 100 countries reject this tariff regime, they should be evaluated collectively, and all exports to the countries that did sign on, should be slapped with the corresponding tariff, giving countries that would score better but did not sign on, a reason to do so, gradually leaving the rest more and more isolated and disadvantaged.  Now this would work, unlike the idealistic, “people power, we can do it unilaterally based on voluntary good will, on a local scale” stuff we rely on currently.

            People power is still needed to get things moving of course.  We need people power to get the message out.  We need people power to get political will to at least get the countries on board that would benefit from no longer being undercut by irresponsible actors.  Then people power can take a back seat, and allow economic power and influence to do its job.  It is amazing what the right incentive mechanism can do to automatically convince people of the right path forward.  I know how unglamorous it may seem to idealists, but this can work, while idealism does not.

What would the new world look like?

            At first, there would be difficulties in adjusting to having to compete in sustainability, in order to improve one’s tariff rating.  A stubborn resistance to this would make things even more difficult, because the world would end up being divided in two camps, facing off in a trade war.  There is no guarantee that we would win.

            The benefits however would be great indeed.  The value added economy would flourish, because producing durable products, of higher value would be the best way to avoid having a higher environmental footprint.  Cars, furniture, shoes, appliances would all become more durable, which many may consider to be a boring situation, because people are now accustomed to changing their consumer items more often.  I think we can all agree to suffer a bit of consumer boredom, in favor of being able to provide consumer needs to a wider global population.  The work week would eventually have to be cut, because in the absence of our race to produce and sell more and more, less time will be spent on doing it.  This is a good thing, because since women entered the workforce, the average family provides more labor than it did a century ago, despite the roughly 10 fold productivity per unit of labor increase we had during this period[ii].  I should note that in my book, I proposed a component of the tariff to be concentrated on basic human rights, which is necessary to make sure that some countries don’t shift from environmental abuse in order to provide a cheap place to do business, to human abuse as a substitute.  This should help towards pushing things towards a better path.  Maybe the gains in technology will finally translate in more leisure time being consumed, instead of more and more disposable goods.

            This could be the first step away from the consumer based economy, which we cannot sustain anymore. Trying to maintain this system can cause a great deal of suffering to an increasing number of the members of the “global village” in the process of trying to prop up a broken economic model.  New, creative ideas would be needed to move forward and transition smoothly.  But it is precisely new ideas that we need, in a world where we stagnated culturally, and in the process our economy is stagnating as well.

What if change will not happen?

            Our economic problems are now far greater than what the set of tools we currently have to deal with these difficulties can handle.  The western world is collapsing, because both austerity and spending to stimulate the economy have been tried, and neither works as a permanent solution.  These measures are all we have, courtesy of current ideologies that dominate society, so we cannot do any better than move back and forth between two directions which already failed us.

            It is quite obvious now what will happen in the absence of significant and smart changes to the way we do things.  The timing is uncertain, but the outcome is not.  The financial economy will collapse, paralyzing us.  This paralysis will have consequences that are far worse than the consequences of our unsustainable.  The unsustainable path is in fact the problem, while we try to cure the symptoms.  The unprecedented global increase in commodity prices such as food, oil and other crucial resources, which we have been witnessing for over a decade now, tells us that we reached the limits of what we can do with the current mode of organizing our lives, and there is only one way to go from here, which is down.

We are like a town, which for the first time realizes that it cannot continue to grow and prosper without being able to build certain infrastructures, such as sidewalks, sewage drainage, or night lights for the dark streets.  Few can be persuaded to voluntarily pay for the infrastructure, so a mechanism is needed to decide what needs to be done, and how to get everyone to contribute.  If the town succeeds in applying the right mechanism, they can move forward, if they fail, so will the town.  It is this simple, yet we are finding it so hard to deal with it.

[ii] I made this rough estimate based on data on US productivity since 1983, which on average grew by about 2% per year.


  1. Good summary of the situation and attempt at a solution...

    "Few can be persuaded to voluntarily pay for the infrastructure, so a mechanism is needed to decide what needs to be done, and how to get everyone to contribute."

    The 21st century will overturn many of our previously-held assumptions about civilization. The challenges and opportunities land development stakeholders now face – to fulfill the needs of society and achieve a favorable return on investment without harming the environment – have vast implications on the sustainability of our communities around the world.

    How do we develop a sustainable civilization? - By delivering the "holy grail of sustainable decision making" - a universal geometrical algorithm that balances the needs of people, planet and profit - The SLDI Code™

    The World’s First Sustainable Development Decision Model is symbolized as a geometrical algorithm that balances and integrates the triple-bottom line needs of people, planet and profit into a holistic, fractal model that becomes increasingly detailed, guiding effective decisions throughout the community planning, financing, design, regulating, construction and maintenance processes while always enabling project context to drive specific decisions.

    1. Thanks for the comment, and the link. It is an interesting concept. I fear however that it does not solve one of the most basic problems that stand in the way of sustainability. We are just not ready culturally to adopt and aply such an advanced concept, regardless of how great the potential benefits. That is something I thought about a great deal. That is why I formulated my solution to fit the actuall narrower interests of the developed nations, which have an automatic interest in adopting the strategy, in order to even the playing field against the developing market competition. As Jared Diamond correctly pointed out, the pursuit of narrow interests will always stand in the way of the greater good. I basically tried to harmonize the two, and use the energy and drive of those who pursue the narrow interests. I think that it is obvious by now that it is imposible for people to abandon them.