Size Does Matter

Sustainability is quite the buzzword nowadays. What is sustainability anyway? It would appear at face value to have a simple, easily understood meaning. On the contrary, almost everything labeled “sustainable” is not, creating ambiguity in the meaning of the concept. It has become more of a marketing tool than an actual process. Being sustainable is quite different from what is typically called sustainable in our culture currently.

Something is sustainable if it can maintain balance with the system supporting it, and can do so indefinitely. A sustainable process takes only the amount of resources that can be regenerated by its supporting system between each processing cycle. Waste generated by a sustainable process can be absorbed by the surrounding system at the same rate it is created. Sound familiar? On a large scale, that’s the steady state economy.

Sustainable Economy

The largest division between ecological economics and neoclassical economics (the steady state economy and the growth economy) is the differing view of the appropriate scope or scale of the economy. The neoclassical (mainstream) model sees the economy as the whole system, and everything else is a component – people, planet, resources, elephants, et cetera. The steady state economy sees the Earth as a whole system, with the economy existing as a component (as well as the people, resources, and the elephants).

The economy is a machine driven by and for us, taking in resources and spitting out waste. This machine sits on the surface of the Earth. The Earth provides all the resources and takes all the waste. Therefore, it is preposterous to assume the economy can be larger than the Earth. The economy is a subsystem of the planet, not the other way around.

The idea of sustainability is at the core of the ecological economics; the facet of the steady state economy that applies the principles of sustainability is referred to as Sustainable Scale. We cannot continue to grow an economy that operates within a finite system – there is a limit to our growth. A sustainable economy works at or below this limit, finding the proper scale to support its processes indefinitely.

In his Scientific American article, “Economics in a Full World” Herman Daly describes the type of limits we must identify and deal with in order to reach a sustainable economy. He uses an example of fisheries:

“Weak sustainability [the neoclassical model] would suggest that the lack of fish can be dealt with by building more fishing boats. Strong sustainability [the ecological economics model] recognizes that more fishing boats are useless if there are too few fish in the oceans and insists that catches must be limited to ensure maintenance of adequate fish populations for tomorrow’s fishers.”

While the majority of our fishing practices worldwide are not sustainable, and many fisheries have seen large decreases in stock due to over-fishing, there is hope in some corners of the globe. Off the coast of New England a snapper fishery has been the center of a case study highlighting its marine reserve. The concept of creating a reserve, similar to those we have created on land, for the marine habitat has shown to increase the annual catch in a fishery by as much as 40 percent. (Brown, Plan B 3.0)

Identifying and understanding ecological limits is not as hard as you might think; preventing people from overreaching those limits has proved to be the hard part for humanity. Largely to blame for our inability to respect limits is an economic model that fails to recognize the existence of any.

Policies for Sustainable Scale

The Center for the Advancement of the Steady State Economy has outlined some basic policies that when enacted will help create a sustainable scale for our economy. I will attempt to expand upon these policies in another post soon. Until then, dwell on these simple, logical steps that can move us from destructive, growth-addicted economic system to a sustainable, steady economic system:

• Monetary policies that tighten the money supply.
• Tax reforms that tax “bads” (e.g., pollution) rather than “goods” (e.g., value added by labor and capital).
• Taxes that provide incentives to limit throughput (e.g., carbon taxes).
• Policies that favor energy conservation (e.g., vehicle mileage and exhaust standards).
• Zoning policies that limit sprawl and promote energy conservation.
• Incentives for limiting population growth.
• Tradable permits with quotas for limiting pollution.
• Individual transferable quotas for extraction of natural resources.

Also consider the insight of others who are pushing for this change and studying the policies needed for a sustainable economy:

• Bill McKibben’s Deep Economy is an engaging book and a great starting point for learning more about how to build a sustainable economy.
• Herman Daly has outlined policies for a sustainable economy in his paper written for the UK Sustainable Development Commission.
• David Korten, co-founder and contributor to Yes! Magazine, has a great article and a new book on transitioning to a new economy.
• James Gustave Speth’s book The Bridge at the End of the World proposes policies to make a sustainable world.
• Lester R Brown’s book Plan B 3.0 contains all sorts of proof of our many problems, as well as ways we might solve them.
• Brian Czech outlines in his book Shoveling Fuel for a Runaway Train the many downfalls of our current model and how we might make a better one.

Related posts (automatically generated):

1. Sustainable Scale Policies
2. Natural vs Man-Made Capital
3. Steady State Economy: An Overview
4. Sustainable Economics Blogs
5. Development vs Growth