Saturday, May 25, 2013

Prosperity without Growth: Part 3 of 5

Continuing where we left off…
Paul suggests applying logical, linear thinking to clearly identify the problem at hand. You might react to this as I did… “I understand the problem, we are screwed. All we can do is hold on as the ship sinks and pray for a quick and painless death”. Thing is, Paul has hope that we (the people of Earth) can take action that will significantly reduce our speed before we hit the wall. He believes we will have a fighting chance if our ricochet is not so violent. Slowing down could result in saving millions of lives and lessening the time it will take for humanity to rebound. But humans have a track record of missing the key issues and actually worsening situations in our efforts to remedy. To ensure we take proper aim at tackling the problem while simultaneously avoiding ‘artificial hope’ Paul recommends using the Paul Ehrlich equation: [I = P x A x T]. For those BGI readers who recognize this formula but can not place it, most likely you are remembering the Ray Anderson (Interface) TedTalk we watched first quarter. In brevity, the environmental impact (I) of human activity is a product of population size (P) times the per person affluence (income) (A) multiplied by the technological intensity of each dollar spent (T). The Ehrlich equation is stating only population, affluence and technology drive environmental impact. These are the “three levers” we can pull to change environmental impact.

Paul addresses the Ehrlich equation as a primer to examine the most common questions around the problem.  “So the problem is population, isn't it? There are just too many people, so we should just fix that!” Paul states this question as one of the most frequent responses he fields in his public speaking. In a nutshell, population reduction will not solve the problem; although the impact would help. It does not solve the problem because the 2.5 percent economic growth on a per capita basis nullifies population as the fix. Simply, if the world did not grow in population from today’s figures we will still hit the limits at a devastating speed based on current production and consumption rates; we will over consume. The book states a 50% reduction in population growth rates, which would require an unprecedented, herculean effort, will have little impact on current trends. The only substantial impact would occur if we actually reduced the global population by significant percentage from today’s numbers. To clarify… reducing actual population, not the population growth rate is the only possibility of significant impact. While the notion is mathematically possible it is highly erroneous. Individual nations, most notably China, have effected their own populations but this came about through politically questionable practices… like drowning babies and other forms of extermination. What are the people in our communities willing to do? Stop having children and euthanize a select population??? Unlikely.

So population is a lever we can pull but its effects will not meet the change required. It is necessary, but not enough. What about technology? Doom and gloom scenarios have been fixed by technology in the past. Right? Technology is remarkable and limitless. Paul argues he is not a person “opposed to technology or to markets…the answer to the question of whether markets and technology can save us from the crisis… No, not this time.” His primary argument is that “even if technology could fix the underlying problem, it cannot prevent a major crisis from happening first.” However technology has the potential to significantly slow us down before we hit the wall. Well… if it were not for the Jevons Paradox: the more efficient we become the more we consume. As I mentioned in an earlier post, recent data around CO2 emissions and energy efficiency add weight to this argument. While we are ever more efficient due to technology advancements we are emitting CO2 and consuming energy at higher rates. This is the effects of our mental models around resources and growth. “We live and work in an economic system of annual targets, quarterly profits, and twenty-four-hour news cycles, the planet works in longer and more complex cycles.” This is the mental paradigm. Although some leaders are seeing it otherwise. U.S. senator Gaylord Nelson is quoted as saying, “the economy is a wholly owned subsidiary of the environment, not the other way around.” Paul does not go into mental models until later in the book… this is still Chapter 4, however; I feel it is worth mentioning at this point the potential for impact if we could combine a shift in mental models, ones that lead to a reduction in consumption, while gaining resource efficiency, we might make a significant impact. A cocktail of Leadership and Personal Development with Energy Management could be a potent serum. This is an example of the possibilities, be that extraordinary, it is what MUST be done. In summary, Paul argues it is not that technology is not crucial, it is. Rather, it is highly unlikely new technologies will manifest and be adopted fast enough to overcome the inertia for ecological change already in the system.

What about decoupling material and energy growth from economic growth? Paul cites this approach as the ‘holy grail of corporate sustainability experts’ and until the recent years had been an advocate. Examples of this approach, back to Ray Anderson and Interface, include leasing carpet in office buildings: tenants want nice carpet to decor their offices; they don’t necessarily want to own it and be responsible for its upkeep and maintenance. So, Interface rents the carpet. Now the onus is on Interface to ensure its durability, performance and life cycle costs. It makes a lot of sense for OEM’s to bear the responsibility of LCA (Life Cycle Analysis). Same goes for heating and cooling buildings: owners just want tenants to be comfortable not necessarily own complicated HVAC equipment. Paul argues this is a fantastic approach to incentivize efficiency. However; the math simply does not pencil. “given that decoupling is about every resource that feeds the modern economy and we’re operating at 140% of capacity now, there is no conceivable decoupling scenario involving economic growth that sees us bringing the situation under control in time to avoid a crisis.” The long term solution can only be achieved by confronting the structure of market economies. How do we create prosperity without growth??? 

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