Sustainability development and ecological economics by xps54377


									         Ecological Footprint:
first step towards a new paradigm
      for sustainable prosperity

             ETUI Conference
      Presentation by Willy De Backer
          Brussels, 29 June 2009
   1.   Background
   2.   The unsustainability trends
   3.   Beyond GDP: ecological footprint
   4.   From new indicators to new economy
   5.   Conclusions
My background

  • 25 years of experience in EU policies
  • Politics – journalism – energy and environment policies
  • A short-term pessimist, a mid-term realist and a long-
  term optimist
  •European Director of Global Footprint Network
The Hydra of Unsustainable Growth
                        crisis              Biodiversity
  Explosion                                                 Governance

Population explosion

Climate crisis
• The REAL inconvenient truths:
   – Despite Kyoto and the resource-intensive climate
     diplomacy circus, CO2 emissions have accelerated from 1.3
     per cent per year in the 1990s to 3.3% per year from 2000
     to 2006.
   – The conservative estimates of the IPCC have been proven
     seriously wrong by new scientific work. Tipping points are
     approaching much faster.
   – The EU’s 2 degrees target of warming is very unlikely to be
     achieved (IEA 2008).

Energy descent
• The age of cheap energy abundance is over
   – Geophysical peaks – date unimportant
   – Nationalisation of energy producers (Aramco, Petrobras,
   – EROEI: it takes energy to harvest energy sources which are
     increasingly difficult to find (+ lower quality)
• Peak oil, peak gas and maybe even peak coal are around the
• To prevent a real energy crunch in 2012, we need a fast
  energy transformation but investments are postponed
• Energy transformation takes normally many decades (Smil) –
  “rate-of-conversion” problem

Food crisis
• Between 2005 and summer 2008, international prices of
  wheat and maize tripled, price of rice grew fivefold (FAO).
• In same timespan the number of undernourished people
  increased from 848 to 923 million, largely because of the
  food-price crisis. Now over one billion
• Reason: rise of prices for raw materials and policies for
• Although recession has brought down prices, international
  agencies predict new price hikes when economic recovery
• Peak oil will lead to price and production pressure on
  fertilisers and pesticides

Water scarcity

• No global water scarcity as such but increasing number of
  regions face water shortages.
• By 2025, 1 800 million people will be living in countries or
  regions with absolute water scarcity, and two-thirds of the
  world population could be under stress conditions (UN data)
• Increasing conflicts over fresh water (Middle East)
• Climate impacts – tipping points (Himalaya – Ganga basin)


• Biologists warn that we are living in the age of the Seventh
  Extinction (6th killed the dinosaurs). Between 17000 to 100000
  species are becoming extinct every year.
• Biodiversity is essential for our global eco-systems (if the bees
  would disappear, our food systems would collapse)
• EU-commissioned study: “The economics of ecosystems and
  biodiversity” (2009) – Deutsche Bank economist Pavan
   – Economic loss of deforestation and degradation is between 2 and 5
     trillion dollar EACH year
   – Comparison: current bank crisis 1.5-3 trillion dollar.


• Is the current economic depression the beginning of a series
  of continuous economic shocks, each more serious than the
  other? (between deflation and inflation)
• Current economic depression is too much seen as result of
  greed or bad bankers, whereas real underlying reason might
  be more systemic and related to spiraling commodity prices.

Causes of the financial collapse in 2008
  • Subprime crisis, credit default swaps, greed?
  • No, systemic crisis caused in first place by rising commodity prices
  • There is a direct and underestimated link between current economic
  crisis and sustainability crisis

Governance failure
• We are tackling global 21st century problems with 20th century
  governance structures
• UN system is weak and needs serious reform
• Return of nationalistic tendencies and protectionism
• These and rising energy prices will stall globalisation
• Geo-political power shifts (China, re-emergence of Russia)
• Are our current democratic structures able to cope with the
  effects of the challenges? (long decision procedures, rise of
  populist parties, new extremism, new social conflicts etc.).
  Tom Friedman: “If only we could be China for one day”
• Tendencies to go back to old failed recipes (Keynesianism,
  hard regulation) instead of thinking “out-of-the-box”.

To summarise: Ecological limits to growth
        RESOURCE                          LIMITED
        SCARCITY                       BIOCAPACITY
                                      = supply of biologically
                                      = supply of biologically
                                     productive area & related
                                    productive area & related
 Various commodities: peaks
 Various commodities: peaks             ecosystem services
                                       ecosystem services
 of extraction reached or
 of extraction reached or
 about to be reached
 about to be reached                 Demand increases & per
                                    Demand increases & per
                                    capita availability declines
                                   capita availability declines
 Future decrease of extraction
 Future decrease of extraction
 & constricted availability        Overshoot & environmental
                                   Overshoot & environmental
 & constricted availability               degradation

 Peak oil is approaching,
 Peak oil is approaching,          Scarce biocapacity the limit
                                   Scarce biocapacity the limit
 about half the world’s reserves
 about half the world’s reserves        to future economic
                                       to future economic
 have already been used
 have already been used                     development

                                     Source: SERI Austria 2009
What do these trends mean for business and unions?
• Harder and more expensive access to raw materials
• More pressure for hard environmental legislation
• Competitive pressures
• More unemployment and pressure on wages
• Pressure on the middle classes
• Changing consumer market: quality versus quantity; durability
  of products instead of throwaway culture;
• Globalisation will stall - the world will get smaller – more
  regional and local focus – manufacturing will come back to
  Europe – agricultural sector of the economy will grow again.

What is needed? A Copernican Revolution
• The Industrial Age view                              • The Sustainability Age view


          Economy                                                           Society


      Society        Environment

                Source: Peter Senge: The Necessary Revolution, 2008, p.102:
                “businesses need to wake up to the simple fact that ‘the economy is the
                wholly owned subsidiary of nature, not the other way around ’”

New indicators for this Copernican Revolution
• GDP and most alternatives are expressed in monetary values;
• When the planet’s limits, its budget, becomes the defining
  factor for future prosperity, it is necessary to focus on
  measuring how big is this budget and how much we have
  used or are using up every year;
• The ecological footprint does exactly that;
• Ecological Footprint is currently the only accountancy tool
  which measures the new ecological limits to growth in an
  easily understandable way.

What is Ecological Footprint?
• An accounting system which measures the ecoservices,
  energy and materials the planet provides (the “offer”) and
  compares it with humanity’s consumption (the “demand”) of
  this natural capital for the production and use of our food,
  fibres, timber, transport, etc. and for the handling of the
  waste produced in the process.
• It is measured in terms of surface of the planet needed in
  order to provide these resources and expressed in “global
• End result: “If everyone on the planet lived like an American,
  we would need five planets” – we are living above our means.
Footprint Analysis world from 1960 to 2005
  • In 2005, our demand of resources was 30% higher than the offer (the
  Planet’s biocapacity (2.7 global hectares per person versus 2.1 gh
Nature cannot be bailed out
  • In 2050, we will need 2.5 planets.
Strengths and weaknesses of the ecological footprint

• Easy to understand metaphor to explain that our economy has
  an ecological basis;
• The only real indicator of pressure on the Planet’s “carrying
  capacity” – useful alarm bell
• Ecological footprint is only 13 years old and is still under
  development – its development is being led by a small non-
  profit based in the US (Global Footprint Network) and its
  partners – standards need to be developed and maintained
• EF leaves out a lot of dimensions of ecological sustainability
  (water consumption, soil erosion, toxicity, other greenhouse
  gases than CO2, does not take into account depletion of fossil
  fuels and minerals)
“Beyond GDP”: the right debate?
• Danger 1: debate about new indicators will overshadow the
  more fundamental debate about a new resource-constrained
• Danger 2: discuss until our statistical experts have found the
  right new indicator
• “if you jump out of an airplane you need a crude parachute
  more than an accurate altimeter. And if you also take an
  altimeter with you, at least don’t become so bemused in
  tracking your descent that you forget to pull the ripcord on
  your parachute. We should be thinking in terms of a
  parachute, however crude” (Herman Daly)
The real debate: “Prosperity without growth”
• What we need is a debate on creating “prosperity without
• UK’s Sustainable Development Commission (2009) is a good
What to do as trade unions?
• Unions and social-democratic parties have been too much lured by the
  free-market ideology of the consumer society – turning citizens into
  consumers and giving them more “stuff” is not progressive;
• Raising the boat for everyone (the neo-liberal religion) is an illusion which
  will turn into a nightmare when the boats will start going down;
• Respecting ecological limits to growth, redefining and redistribution of
  wealth inside and between our societies should be the name of the game
• Political and economic objectives should move from labour productivity to
  resource productivity;
• The left needs a new visionary project based on the one-planet economy
  idea. It will have to become radical again.

• The world of business and work is facing new huge challenges. We have
  started the transition from the Industrial Age of Abundancy to the new
  Sustainability Age of Limits, where we need to bring our economies back
  to its one-planet limits and therefore redefine growth, competitiveness
  and governance.
• Businesses that can adapt their business models, products and services to
  the one-planet economy challenges will have a strong competitive
  advantage and will be the winners of the 21st century.
• Unions should help drive businesses and citizens into that direction. It will
  need a lot of innovation and courage to leave behind the old dogmas and

Thanks for your attention

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