For decades we have assumed that we could have economic growth and environmental sustainability. During the last decade, this hypothesis of green growth formed the basic policy of the European Union and United Nations, always based on the assumption that environmental pressures could be decoupled from growth in gross domestic product, without end.
Recently, however, an authoritative report by the European Environmental Board concluded: "It is both overwhelmingly clear and sobering: not only is there no empirical evidence supporting the existence of a decoupling of economic growth from environmental pressures on anywhere near the scale needed to deal with environmental breakdown, but also, and perhaps more importantly, such decoupling appears unlikely to appear in the future” (European Environmental Board 2019). In spite of the lack of empirical evidence for decoupling, theoretically, it is possible, although very unlikely, that decoupling occurs if resource productivity grows sufficiently faster than GDP, permanently and globally. Instead, resource productivity is facing numerous headwinds that point to limited improvement, as analyzed in the European Environmental Board study. Naturally, all the significant proposals for fighting climate change should be explored, such as increasing the geographical coverage of emission trading systems (Stiglitz 2017), using them in combination with the phasing out of fossil fuels (Schwanintz 2014), and directing investments into sustainable infrastructure (Guivarch 2011). Proper diversification of risks is essential, without omitting a necessary policy.
It is “urgent to chart the consequences of these findings in terms of policy-making and prudently move away from the continuous pursuit of economic growth in high-consumption countries. More precisely existing policy strategies aiming to increase efficiency have to be complemented by the pursuit of sufficiency, that is the direct downscaling of economic production in many sectors and parallel reduction of consumption that together will enable the good life within the planet’s ecological limits.” (European Environment Board 2019).
A famous Harvard Study of Adult Development found that the good life was promoted by having close relationships: “Close relationships, more than money or fame, are what keep people happy and healthy throughout their lives, the study revealed. Those ties protect people from life’s discontents, help to delay mental and physical decline, and are better predictors of long and happy lives than social class, IQ, or even genes.” (Mineo 2017).
Unfortunately, many of our leaders have forgotten what makes us well and happy. Indeed, they are mostly males, having been brought up on the warrior/hunter role model, and primarily concerned about showing others they are the best. They are driven, extremely hard-working, often with limited time for family and friends, and with multiple marriages. These leaders tend to isolate themselves in terms of neighborhoods and housing, keeping primarily with their ilk, limiting their contacts with the middle class. Also compared to females, they tend to resort to more drastic, even violent solutions in politics, given our recent history of military activity.
Regarding climate change, some are even 'strong enough' to pretend to ignore it. Others may think it is good business to be seen as green. Few are stepping up to take a leadership role in climate change. Are our current business leaders happy? I am not sure that they have time to be. If they took a more expansive, socially responsible role, they would help promote the needed transition and be happier in the process.
Starting with the concept of the capitalistic company, Milton Freedman argued that: “There is one and only one social responsibility of business – to use its resources and engage in activities designated to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception and fraud. He called on companies not just to stay within the law but to honor society’s more general ethical standards.” (Economist 2019). Saving the planet from ecological disaster could and should be included in society’s more general ethical standards; however, the problem is that increasing profits, as intended by Freedman, is incompatible with the new situation of sufficiency.
Therefore, unfortunately, it does not look like we can expect many companies to help in the pursuit of sufficiency. One might be inclined to observe that our self-aggrandizing "one percent" leaders are busy accumulating 40 percent of the nation’s wealth and are not interested. They have allowed and encouraged the fossil fuel industry to be non-competitive. Yes, real competition would have served, instead of the current state of the fossil fuel subsidies, which amount to 6.4 percent of world GNP in 2017 (IMF 2019). How can we argue that fossil fuel companies have acted in the public good when they are the very ones bringing us the climate catastrophe? Milton Freedman would roll over in his grave if he knew how much of our capitalism has gone amok. Of course, it is an error to associate all companies with this misbehavior. In the long term, it is a question of reciprocal trust between companies and consumer citizens. If trust breaks so do the markets.
Also, it is much easier for the political system to advocate green growth, based on decoupling, because it requires an acceptable redirection of economic policies, always promising and practicing increased GDP, along with some environmentally friendly measures, even though GHG emissions remain high instead of sharply declining as proposed.
Let us examine how could production and consumption be curtailed. Indeed, international organizations such as the UN will continue to play the crucial role of studying and formulating scientific and economic guidelines, and forging international agreements. On the other hand, it is hard to imagine the UN with much detailed information and control at the company level.
National governments certainly will have a role in setting guidelines over companies headquartered in their borders. For example, a government might decide to limit the production and consumption of automobiles; a trend that is to a certain extent already occurring with car sharing, car renting, carpooling, “Uber," and more improved public transport. How far governments will be able to exercise this power at a detailed level is open to question, but their support in setting the frameworks is essential. The problem is that in many democracies there has been such a strong influence of business on government that independent government control over such a sensitive aspect as sufficiency may become problematic.
We will require someone else to do the detailed work; somebody who knows the companies’ products thoroughly and could develop a power strong enough to influence their behavior. This actor is a union of consumers, possibly allied with labor.
How might it work? Utilizing the Internet and their extensive knowledge of the company and its products, the union of consumers could organize and use artificial intelligence to create a carbon footprint of major companies with their primary products and services. To a limited extent, the first environmental rating systems already exist. For example, ESG — environmental, social, and governance — refers to the three critical factors in evaluating the sustainability and associated potential financial performance of a company. What is required for the union of consumers is the carbon footprint for a similar number of companies, which can be updated and improved by artificial intelligence. This information system will require considerable investment. It would be sort of a Google information system in reverse, gathering information on companies instead of consumers.
Abnormal or harmful changes in footprints would be noted and discussed by the consumers' union. If the damaging environmental behavior persisted, the consumers themselves would be motived to buy less from that company. This is the enormous counter-power that informed and well-documented consumers’ union could exercise. No government committees or lengthy lawsuits are required. In the case of continuing and damaging change in a company’s carbon footprint, dissatisfied consumers would likely reduce their purchases of products from the given company. Naturally, it would work both ways; consumers' increased appreciation and purchases would reward companies reducing their carbon footprint.
Fortunately there is vital and active presence of consumers' unions worldwide; such as the historic Consumers Union in the US established in 1936, the European Consumer Organization, an umbrella consumers' group, founded in 1962 bringing together 45 European consumer organizations from 32 countries, and the Consumers International, formerly known as the International Organization of Consumers Unions, started in 1960 by a group of five consumer organizations from the US, Western Europe, and Australia.
Rather than propose a new super network of consumers' unions, the idea is to form a research group that using all available data and artificial intelligence would provide the service of estimating the carbon footprint of companies, for all the interested consumers' unions. As in the case of testing of consumer products, consumers' unions should independently fund this research unit, which will require substantial investment.
Note that most consumers are also workers, and this could be an effective symbiosis, particularly in the present crisis of governance of automation and inequality. A recent study by Brookings Institution argues that the decline in private-sector unions is an important reason for the stagnation of wages and the rise of economic inequality, in the US (Nunn 2019). In the absence of a clear separation of government and business, a new center of power, a consumer and labor union, more responsive to environmental needs, is required for sufficiency.
Labor and student organizations are essential to start on the path of green new deals. The recent worldwide success of Fridays For Future and the labor union strikes in the US hopefully will bring about change in policy. The idea of creating incentives for better-paid jobs in the new economy by using removed subsidies in the fossil fuel sector is worthy of consideration; it would help unite workers to climate enhancement and improve income inequality. The consumer unions are necessary to monitor the individual companies' situations continually and inform the consumer.
These empowered unions of consumers and labor are not necessarily antagonistic to anyone. For example, workers' unions sit on the board of many German companies and have shown noteworthy results, particularly in times of crisis, when the company did not fire anyone and instead lowered the hours worked (and yes with a cut in salaries). We have such an enormous task before us that we should place a maximum priority on open, scientifically based discussion and minimize our differences. It is a challenge to unite in the fight against climate damage.
“Given the historical correlation of GDP and environmental pressure as well as the required technological improvements needed for a sufficiently large and fast reduction in resource use and environmental degradation, relying on decoupling alone to solve environmental problems appears to be an extremely risky and irresponsible bet.” (European Environmental Board 2019).
Now is the time to encourage social-economic fantasy and innovation. We need to listen to youth like Greta Thunberg, to expand our ideas on a sharing economy and more localized production. In the last decades, we have seen the birth of transition towns, associations for happy de-growth, eco-villages, slow cities, and re-vitalized local democracies. Political imagination is required.
More is not always better, and the choice of sufficiency is not one of sacrifice, unemployment, rising inequality; but one rich in relationships, within a fair economy and the carrying capacity of the biosphere. Anyone for empowered consumer and labor unions?
Economist 2019, The Economist, August 24-30 2019, page 17.
European Environmental Board 2019, Decoupling – Debunked, July 2019.
(Guivarch 2011) Gulvarch, C., Hallengate, S., 2011, Existing Infrastructure and the 2 percent target. Climate C 109, 801-805.
Nunn 2019, Nunn R., O’Donnell J., Shambaugh J., The Shift in Private Sector Union Participation: Explanation and Effects, The Hamilton Project, the Brookings Institution, and the George Washington University, August 2019.
Mineo, Liz (2017), Good genes are nice, but joy is better, The Harvard Gazette, April 11, 2017.
(Stiglitz 2017) Stiglitz, J.E., et al., 2017, Report of the High-Level Commission on Carbon Prices, Carbon Pricing Leadership Coalition.
(Schwanintz 2014) Schwanitz, V.J., Piontek, F., Bertram, C., Luderer, G., 2014, Long-term climate policy implications of phasing out fossil fuel subsidies, Energy Policy 67, 882-894.