Sustainability and the New Economics: Synthesising Ecological Economics and Modern Monetary Theory

Description

This multidisciplinary book provides new insights and hope for sustainable prosperity given recent developments in economics – but only if swift and strong actions consistent with Earth’s biophysical limits and principles of justice are universally taken.   It is one thing to put limits on resource throughput and waste generation to conform with the ecosphere’s biocapacity. It is another thing to efficiently allocate a sustainable rate of resource throughput and ensure it is equitably distributed in the form of final goods and services. While the separate but interdependent decisions regarding throughput, distribution, and allocation are the essence of ecological economics, dealing with them in a world that needs to cure its growth addiction requires a realistic understanding of macroeconomics and the fiscal capacity of currency-issuing central governments. Sustainable prosperity demands that we harness this understanding to carefully regulate the rate of resource throughput and manipulate macroeconomic outcomes to facilitate human flourishing.   The book begins by outlining humanity’s current predicament of gross ecological overshoot and laments the half-century of missed opportunities since The Limits to Growth (1972). What was once economic growth has become, in many high-income countries, uneconomic growth (additional costs exceeding additional benefits), which is no longer advancing wellbeing. Meanwhile, low-income nations need a dose of efficient and equitable growth to escape poverty while protecting their environments and the global commons.   The book argues for a synthesis of our increasing knowledge of the ecosphere’s limited carrying capacity and the power of governments to harness, transform, and distribute resources for the common good. Central to this synthesis must be a correct understanding of the difference between financial constraints and real resource constraints. While the latter apply to everyone, the former do not apply to currency-issuing central governments, which have much more capacity for corrective action than mainstream thinking perceives.   The book joins the growing chorus of authoritative voices calling for a complete overhaul of the dominant economic system. We conclude with policy recommendations based on a new economics that, if implemented, would come close to guaranteeing a sustainable and prosperous future.   Upon reading this book, at least one thing should be crystal clear: business as usual is not a viable option. Preface Contents Chapter 1: Introduction References Part I: The Current Mess Chapter 2: The Earth System, the Great Acceleration and the Anthropocene 2.1 What Is the Earth System? 2.2 The Great Acceleration 2.3 The Anthropocene 2.4 Climate Change 2.5 Planetary Boundaries 2.6 Future Trajectories of the Earth System References Chapter 3: Australia’s Natural Environment: A Warning for the World 3.1 Introduction 3.2 Australia: An Historical Perspective 3.3 Australia: Current Perspective 3.4 Drivers of Environmental Change 3.5 Human Overpopulation 3.6 Terrestrial Environments 3.7 Freshwater and Marine Environments 3.8 Ecological Sustainability – Is It Possible? 3.9 Conclusions References Chapter 4: Climate Change and Human Health 4.1 Introduction 4.2 Climate Change, the Anthropocene, and Human Development 4.3 Coal, Air Pollution and Health in Australia 4.4 Climate Change and Health 4.4.1 Classifying the Health Effects of Climate Change, Including Mental Health 4.5 Conclusion References Chapter 5: How Sustainable Are the UN Sustainable Development Goals? 5.1 Introduction 5.2 Development Based on Growth and Debt, 1980–2015 5.3 SDGs Retain the Growth Strategy 5.4 SDG2: ‘Safe, Nutritious and Sufficient Food’ 5.5 SDG11, SDG9: Urban Development, Infrastructure and Industry 5.6 SDG12: Sustainable Production and Consumption 5.7 SDG8: ‘Sustainable Economic Growth’? 5.8 Problems of Population and Affluence 5.9 Conclusion References Part II: How We Got Here Chapter 6: The Evolution of Neoliberalism 6.1 Introduction 6.2 What is Neoliberalism? 6.3 The Rise of Neoliberalism in the 1970s 6.4 Hard Neoliberalism 6.5 Soft Neoliberalism 6.6 The Crises of the Twenty-First Century 6.7 Political Implications 6.8 Concluding Comments: The Way Forward References Chapter 7: Population Growth 7.1 Introduction 7.2 Expanding the Resource Base 7.3 Early Environmental Concerns 7.4 The Global Problem 7.5 Population or Consumption? 7.6 Climate Change as ‘The Great Educator’? 7.7 Australian Environmental Organisations 7.8 The Harsh Reality of 2020 Meets Delusions of Limitless Futures References Chapter 8: A Brief History of The Limits to Growth Debate 8.1 Introduction 8.2 The Club of Rome and The Limits to Growth 8.3 Reactions from Economics and Science 8.4 Attack from Activist Economists 8.5 New Approaches to Limits 8.6 Assessments of The Limits to Growth vs. Real World Outcomes 8.7 Conclusion References Chapter 9: The Role of the Fossil Fuel Industry 9.1 Fossil Fuels: The Foundation of Exponential Population and Economic Growth 9.2 Global Fossil Fuel Evolution 9.3 Australian Fossil Fuel Evolution 9.4 Power and Political Influence 9.5 The Climate Change Nemesis 9.6 Corrupting the Market 9.7 The Australian Response: Ratcheting Climate Ambition Ever Downwards 9.8 From Hard to Soft Denial 9.9 Conclusion: Facing the Climate Emergency References Chapter 10: Economic Failures of the IPCC Process 10.1 Introduction 10.2 Nobel Oblige 10.3 The Scientific Assessment 10.3.1 Reading Catastrophe and Seeing Utopia 10.3.2 Drowning Scientists with Economists 10.3.3 Equating Climate with Weather 10.3.4 Equating Time with Space 10.3.5 Trivial Estimates of Serious Damages 10.4 The Failure of Peer Review 10.5 Conclusion References Part III: Designing a Safe and Prosperous Future Chapter 11: An Introduction to Ecological Economics: Principles, Indicators, and Policy 11.1 Introduction 11.2 Principles of Ecological Economics 11.3 Principles in More Detail 11.3.1 The Economy is Embedded in Society, and Society is Embedded in the Biophysical World 11.3.2 The Purpose of the Economy is to Maximise Collective Wellbeing 11.3.3 Other Aspects of Wellbeing 11.3.3.1 Natural Capital (Natural Wealth) 11.3.3.2 Population Size 11.3.3.3 Health and Education 11.3.3.4 Human-Made Capital (Human-Made Wealth) 11.3.3.5 Trophic Diversity 11.3.3.6 Law and Governance 11.3.3.7 Shuffling Financial Assets (Virtual Wealth) Does Not Equate to Generating Real Wealth 11.3.3.8 International Relations 11.3.4 Sustainability, Distribution, and Allocation 11.3.5 Nations Should Strive for Maximum Self-Sufficiency 11.3.6 Internationalisation and Globalisation 11.3.7 Thermodynamics, Biocapacity and Throughput 11.3.8 Global Resource Throughput Should be Less Than the Planet’s Biophysical Capacity 11.3.9 Continuous Absolute Decoupling is a Dangerous Myth 11.3.10 The Optimal Size of an Economy is Where Net Benefits are Maximised 11.3.11 Some Countries Will Need to Implement Degrowth Policies 11.3.12 Population Size Matters 11.3.13 Humankind Needs to Respect the Ecological Limits of the Planet or Face Collapse 11.4 Conclusion References Chapter 12: Energy Systems for Sustainable Prosperity 12.1 Introduction 12.2 Global Strategy for Cutting GHG Emissions from Energy 12.3 Energy Efficiency and Conservation 12.3.1 Distinguishing Conservation from Efficiency 12.3.2 Energy Conversion Efficiency 12.3.3 Rebound 12.4 Renewable Energy: Current Status 12.5 Real Barriers and Myths 12.5.1 Vested Interests Are Resisting the Transition 12.5.2 The Base-Load Myth 12.5.3 The EROI Myth 12.5.4 Consumption—The Real Problem 12.6 Discussion and Conclusion References Chapter 13: Climate Change Litigation and Human Rights 13.1 Introduction 13.2 Climate Change Litigation 13.2.1 Obstacles 13.2.2 Climate Change Litigation in Australia: The Rocky Hill Decision 13.3 International Law, Human Rights and Public Decision-Making 13.3.1 International Law and Climate Change 13.3.2 The Influence of International Law on Domestic Decision-Making 13.3.3 International Law in Australian Litigation 13.4 Corporations and Climate Change: Holding Emitters Accountable 13.4.1 Tortious Actions 13.4.2 Corporations Law: Financial Disclosure 13.4.3 Corporations Law: Directors’ Duties 13.5 Conclusion Chapter 14: Paying for a Green New Deal: An Introduction to Modern Monetary Theory 14.1 Introduction 14.2 Mainstream Macroeconomics in a Nutshell 14.3 The MMT Paradigm Shift 14.4 The Role of Private Banks 14.5 The National Government’s Budget 14.6 Government Deficits and Debt 14.7 What a Prudent Monetary-Sovereign Government Should Do 14.8 A Government Job Guarantee Scheme 14.9 Paying for a Green New Deal References Chapter 15: Conclusion and Policy Options 15.1 Herman Daly’s Policies 15.2 United Nations Environment Programme (UNEP) 15.3 Alliance of World Scientists 15.4 Other Policy Priorities Worth Considering 15.4.1 General 15.4.2 Agriculture-Forestry 15.4.3 Corporations 15.4.4 Education 15.4.5 Energy 15.4.6 Governance 15.4.7 Mining 15.4.8 Trade References Appendices Appendix 1: Timeline of Key Events from the Big Bang Appendix 2: Glossary of Financial Terms Appendix 3: Glossary of General Economic Terms Appendix 4