Tuesday, 26 August 2014
Wealth comes from not spending, but saving
British MP Chris Huhne put in an interesting article last week in The Guardian: 'Don't fear Growth, it's no longer the enemy of the planet...' (link here).
Among the take home points were:
"For centuries, the rise of GDP has gone hand-in-hand with the burning of fossil fuels. But technology has now broken that link" ...
"For the first time in history, we are growing richer while using less energy."
"...This is why so many green thinkers have rightly been suspicious of economic growth: the curve of rising living standards has been tracked by the curve of rising energy use from coal, oil and gas. The simple answer was green puritanism: change our lifestyle. Don the hair-shirt..."
"Businesses are bound to be early adopters of energy-saving technologies, because retailers and distribution firms can spend a fortune on energy. They are used to assessing investment and returns, whereas householders are often put off by the higher initial cost, and poorer households simply cannot afford the switch of energy efficient products even though they pay back quickly. Poorer householders simply cannot afford the up-front cost. That is why it is so crucial for government to encourage household energy saving.
It is also why one of the most short-sighted decisions of this government was to halve the amount of support for energy saving through the Eco subsidy, and just this summer to end the cashback scheme for the energy-saving green deal because it was too successful. The £120m budget allocated until next spring was exhausted in six weeks."
None of this is news to yours truly: having worked in an engineering firm supplying energy-efficient systems for lighting and air conditioning, and for several years in Renewable Energy, one of the key selling points of our services was that the cost-return equation could be highly advantageous for the adopter, though this often depended on the existence of other benefits to the client, including tax breaks and subsidies.
An important feature of the decision-making process for businesses was confidence - many clients were suspicious of the technology and highly risk-averse about the processes and potential returns, not least the banks who ended up lending the money for the work to be done. Not a problem which exists in several EU countries, or among large institutional energy users, but particularly prevalent at smaller scales and where the returns were more marginal or more dependent on 'pure' subsidies.
For me, the important message is these figures demonstrate that reducing energy use is NOT harmful to Economies and NOT a threat to a way of life in itself - in fact, the truth is quite the reverse. This means that there is no credence to be given to ideas that living/ doing business more effectively somehow commits us to the 'hair shirt, greeny, degrowthy' future that seems to scare some people so much.
But, whilst Huhne's article makes its points well and emphasises an important feature of the relation between economy and energy, it doesn't address some deeper issues such as sustainability, pollution, trade equity (TBF, it isn't meant to). There is the ongoing presumption that 'growth is good', difficult to argue against for the whole globe, but problematic.
If economic growth can be achieved while using fewer resources and making less waste and pollution, without putting the planet and future generations in resource-debt, then it looks attractive. In a sense, it is inevitable, as population rises, that markets will grow naturally. The argument for energy efficiency also applies to resource efficiency, hence the popularity of schemes like Ellen MacArthur's Circular Economy, which focuses on the whole product life cycle and the resource life cycle, rather than the 'Stuff' approach, where resources are inputted, processed, sold, used, then trashed.
But it is important not to be naive about the problems of Consumerism and Markets. The products of large corporates such as P&G, Unilever and Nestle (the 'big three') are not always amenable to recycling - soaps, oil-based products, luxury foods, etc - these can have potentially toxic outputs on large scales (constituent chemicals sent into the water supply, packaging...). The social impacts are sometimes significant, for employees in some countries, for outcomes such as obesity and landfill.
It is important to see that the world does not need to be overthrown by bloody revolution in order to move in a better direction for society and the environment, and useful to recognise that our fortunes are not tied to energy in the way some have suggested, but the other bottom line that should be pushed here is that, in the real world, we make and buy a whole lot of crap - genuinely useless, unhealthy, unnecessary 'stuff' - and for individuals, getting past the efforts of marketing to convince us that we 'must have' this stuff for our own well-being, is still important. The example from the larger economy should inform our personal economies; more judicious use of our resources (earnings), less profligacy and a bit of prudence, these qualities will make our income 'grow', give us more resources to put aside, or use to create our own capital, and, as a result, make us 'happier', wealthier people with cleaner consciences.
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The population issue is very important, but seems to get glossed over. It's also important to note there's a huge amount of resources wasted in mindless wars. However, this is a topic which seems to be unfashionable.
ReplyDeleteIt is very important to take different discussions in context. If we want to make progress on Climate policy, for example, one can either focus on a specific or particular case, or look more broadly at things to make sense of why some things are important to address, and how some decisions might have unexpected consequences.
ReplyDeleteRisks to present and future vulnerable populations are at the core of calls for mitigation and adaptation policies (without specifying what these will be). But is is reasonably clear that the human elements of risk - war, poor governance, corruption, absence of Law, inequity, poverty and repression, these are more important right now than climate in terms of the immediate impact they have on people. There is some evidence that climate changes are already acting as harm multipliers, and this is likely to be more obvious and more damaging in the future.
Like you, I have deep worries about the wars, persecutions and fights ongoing around the world. Where I worry is that the means to conduct these wars is supported via the global arms trade. This is an under-reported issue; in real terms, if the weapons aren't available, there is arguably a better prospect of security. This runs contrary to the argument we normally see, that proper defence of society is only possible through an active military. This is a matter which needs deep thought, not possible at a superficial level.
I get worried when I read that close to 50% of the USA Federal Budget is spent on their military capability. I get worried when I read that there are an estimated 150 million AK47s circulating around the African continent, and perhaps 250 millions small arms circulating in private hands in the USA, for example.
For security reasons which may be quite legitimate, governments are reluctant to reveal too much detail about defence spending because it is potentially sensitive. This means that the trail of supply, distribution and manufacture is very hard to determine, which in turn means that there are few controls over governments selling weapons and weapon systems to anyone they want to.
Defence and arms manufacture are huge industries with much less oversight and weaker controls than any other industry. The employment of millions of people are dependent on them around the world. Much important innovation and technical development occurs in response to needs in defence.
We have tried (and largely failed) to regulate and gain oversight over global banking practices. We have tried (with some success) to make transnational corporates more accountable for their supply chains. I believe we have reached a point where we need to increase pressure to make the Global small arms trade more visible and accountable.
Fergus, the wars I´m concerned about are mostly carried out, or triggered and aided by big powers, the USA being the main culprit at this time. If you want to get into that maybe you should explain where you live, and whether you are familiar with say the Kosovo incident in 1999. If you think you are, tell me what you think about it, and it´s likely I will be able to open your eyes about that particular incident because I had an intelligence job at the time, and I could resource information most people can´t see.
ReplyDeleteYes, the USA is involved all around the world, but this is not the same as claiming it is responsible for the events or the causes. Recently, it has engaged in an interventionist policy, which makes it active in several theatres.
DeleteI live in the UK. I did not experience Kosovo or the connected war directly, but I had an acquaintance who was in the front line as a UN observer, and may have had other roles, too. I saw the bruises from the pistol whipping.
I can confidently say that, though I try to make sense of what is happening in the World, I have absolutely no idea about the true motivations of governments which engage in wars; such matters can be very complicated. If I had the time and interest I would spend some months studying the matters and try to understand the factors. At no time would I rely on the Media to tell me the truth about what is happening or the reasons behind it. Sometimes, some output might be correct or accurate, but my default assumption is always 'what are the facts, what is the angle?'
I know politics is a passion for you, so forgive me if I don't take the bait - it is just too much for me at this time. I am studying Maths, Economics, Climate Science as well as working as a consultant and researching new energy.
So which new energy forms are you researching? I ask because I have a friend working on biofuels research.
DeleteI'm going to bypass the above and bloviate more on topic, though with my own bias. I recently wrote the following (edited slightly) in response to an article about plastic garbage in the ocean, reported here http://www.nytimes.com/2014/08/26/opinion/choking-the-oceans-with-plastic.html
ReplyDelete(NYTimes limits free access to 10 articles per month.) While ocean plastic waste is one of many observations that contribute to my growing concern about the way we heedlessly ignore the consequences of wasteful consumption, I am trying to absorb all the time, and reflect on news as it accumulates and changes, and have come to understand that it's not as simple as either rejecting concerns about overusing our planet with a growing population, or imagining a return to a "simpler" time (which was dam' difficult, I'm addicted to hot and cold running water, switches that turn on lights, modern medicine, and a good few other mod cons.
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Over the years, we have ceded autonomy to marketers. With every "free" option or "convenient" new product we encourage advertisers to set the terms of the minutes and days or our lives. Our whole model for living is based on consumption, and with all-pervasive media we are ceding our minds to exploitation of our planetary home.
"in the end, the real challenge is to combat an economic model that thrives on wasteful products and packaging" is part of the truth, but this is just one aspect of a bigger problem. We separate the way we live from the hard reality that we live on a finite planet. This kind of pollution is terrible, but so are all the others. It doesn't matter which problem is worse, what matters is that we, the family of humankind, have abdicated the freedom to know and to think in favor of things and entertainment.
We use our atmosphere, our land, and our water as a dump, and have a habit of apathy about the evidence of the shame of waste while accepting instruction about how to live in ways that are increasingly two-dimensional and passive. This is not freedom, it is slavery.
I don't think most of us meant any harm by it, but we have let marketing become the engine that drives the machinery of living without noticing that our integrity and vitality are taking body blows. Time is not on our side any more. The life of the mind provides wealth beyond imagining, unlike the things we've been persuaded we want.
That problem isn´t really caused by marketing, it´s caused by the low cost of creating and then disposing of garbage in the ocean. My analysis shows "the economic system" used in say the USA is just fine. It only needs tweaks to have costs allocated.
ReplyDeleteOnce again you ignore the part of what I said that doesn't fit with your ideas. I find in general that you apply a more critical standard to others and to material you don't want to explore than to your own opinions. You may be convinced you are right, but your discussions are not discussions, since your opinions seem to come from a closed circle. You can do better. Try to consider whether 200 years of science and almost all the top expertise is in agreement about the basic physics, and take a look at the various evaluations of the material you hold so close that you won't look past it to see if you might have got the wrong end of things. Science in our world has more integrity than almost any other field. Consider the possibility that there might be something there for you.
DeleteBut in fact, this article is about our relationship to our things, and the way quantity has taken over and is rubbishing our planet with great speed. It's not that we want to go to a more primitive state, just that sharing in a sustainable way requires pulling back from a standard promoted by a busy marketing entity that has taken on a life of its own.
I extracted from the ocean article to make a point about how people have come to accept a busy, two-dimensional world. Marketing is indeed a big part of that.