GEOS2121 Lecture Notes - Lecture 7: Regional Forest Agreement, Herman Daly, Kuznets Curve
23 May 2018
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Limits and Contradictions
Capitalism and the Environment: Contradictions and Limits to Growth
Introduction to the relationship between capitalism (our dominant economic system) and the
environment focuses on;
1. Concerns about the "limits to growth"? Has the debate been resolved?
Considering the biophysical limits of our economic system being a debate for 40 years.
2. The ecological contradictions of capitalism: a critique form political economy.
From an environmental management perspective, it is important to understand the way the
environment is affected by economic systems. For this it is then important to consider fundamentals
of economic theory and economic world view.
Examples in Australia;
• Policies on climate change - energy prices going up
Point is to emphasise the political centrality of the economy when it comes to environmental policy.
Thus political parties campaign and promote growth. The idea of growth-based economics and
growth-based capitalism is not recent.
• Kevin Rudd signed the Kyoto Protocol. There was a meeting at Copenhagen and this was the
time the GFC (Global Financial Crisis) arose. A financial disaster followed the GFC and so
issues like climate change (which are intangible issues) where left to a halt.
Economic Growth: A Multi-purpose Panacea?
Daly (2005)
Herman Daly is an economist but also a founder of a sub discipline known as ecological economics.
He promotes two ideas;
• presenting the way economics is readjusting its focus in accordance with biophysical limits.
• second is an insight into debates; a Marxist thinking of the environment.
However, Herman Daly sets up the article by talking about how economic growth is considered to be
multi-purpose panacea society. There is a link between economic growth and poverty reduction.
• Poverty; all we need to do is increase production and wait for wealth to trickle down
(because redistribution slows growth). Growth refers to economic growth in this context and
that basically means an increase in domestic product or gross national product. Increase of
jobs and goods so that people can buy these goods and money circulates throughout society
as long as there is reasonable distribution.
• Unemployment; Link to the previous point also is the relationship between growth and
employment, the ability to address unemployment. Increase demand for goods and services
by lowering interest rates on loans and stimulating investment, which leads to more jobs as
well as growth. This is an Australian point of view.
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In other countries there is jobless growth whereby growth takes place in capital intensive industries.
For example, in Australia the mining industry replaces human labour with robotics which increases
unemployment rates.
• Overpopulation; addressing overpopulation through economic growth. Countries with
highest GDP and fertility rate is often the ones that have smaller populations despite
growing over the years. Just push economic growth and rely on the resulting demographic
transition to reduce birth rates as it did in industrial nations during the 20th century.
• Environmental degradation: economic growth and development actually leads to
environmental improvements. More developed richer countries tend to have better
environmental management policies in place some of the worlds most polluted places are
underdeveloped countries. Trust in the environmental Kuznets curve, we need growth to
pay for environmental protection.
Economic Growth and Poverty Alleviation
A common argument in relation to economic growth in China. China has the worlds most incredible
poverty reduction, but this came along with economic growth. The argument put forward by
observers and policy makers in China is that the economy needs to grow by 8% per year to be able
to ensure poverty reduction and social stability. If the growth declines it will lead to large scale social
instability because then people aren't getting the improvements in their material wellbeing.
Key arguments to extract;
• "Redistriutig the pie does’t ake the pie ay igger"
• "You can't redistribute anything if the pie is shrinking"
It is important to recognise that the capitalist economic system has created many benefits over the
last two hundred years in terms of material wellbeing. Poverty reduction in most countries recently
and historically has been the result of economic growth due to the benefits of markets operating
and allocating resources.
Sustainable Development: What is the relationship between economy, society and the
environment?
Sustainable development; meeting our needs today without jeopardising the needs and standard of
living for future generations
The commission was a turning point in looking at the relationship between the economy and the
environment. On one hand it was a recognition that economic growth is associated with
development and that there may actually be some sort of trade-off between achieving that growth
and drawing down the resource base that it depends on.
Policy makers are now starting to think about the relationship between the society and the
environment and the economy.
• The paradox that economic development may address poverty, but that it also has impacts on
the environment.
• Environmental managers need to engage with this central paradox by better understanding
economics and economic policy.
find more resources at oneclass.com
find more resources at oneclass.com
E.g. regional forest agreement in Tasmania which is all about balancing out the needs of the
environment with the needs of jobs. Also debates in Marine protected areas such as the Great
Barrier Reef. Balancing the environmental needs with the economy and the need to create jobs.
Economy embedded into Society
Karl Polanyi introduced this idea of 'embeddedness' in 1940's which is the idea that economy is
ultimately embedded into society. Social processes improvising others with goods; this can be
achieved through market mechanisms through the economy but can also be achieved through
traditions, religious celebrations etc., things that we acknowledge to be part of a society and a set of
social values, they are not monetised and we wouldn't consider them part of the economy. The idea
o making an economic decision based on a set of social values. Our economic system is a sub system
of our social system. He also talked about this idea that overtime there was actually a process
disembodying taking place through capitalist development and this resulted in negative social
outcomes when people just become valued in terms of their labour input they become
disarticulated from society. he then introduced the double movement; at the response of our social
system to that disembodying for example the emergence of a social welfare system we have that in
Australia we have a minimum wage. It is a way of social society intervening in the economy because
we as a society recognise the economy is not all everything. This has taken place in may western
society.
Rockstrom et al's (2009) Planetary Boundaries and 'safe operating space for humanity'
The model and idea of planetary boundaries visualises the idea the economy being within a set of
planetary boundaries. This is important because it was one of the first attempts to quantify
provisioning systems on planet and try to work out how close we are in bumping up to these
physical limits in which we have already exceeded three limits. These planetary boundaries actually
draw on three different fields of science;
• Ecological Economics: the idea that the Earth does have a carrying capacity and that there are
certain biophysical constraints
• Researching into Earth's system science: thinking about the way the different ways these 9
systems operates globally, sometimes referred to as sustainability science
• Resilience theory: looking at how populations respond to different impacts. Looking at how
these 9 planetary systems might react to change and how big of an impact it will have i.e.
shifting of states for example the potential for climate change to impact upon the Gulf Stream
current and that will drag the planetary system to a new stage, it shows that it isn't resilient
enough to respond to impacts.
This idea of thinking about planetary boundaries is relatively new however the idea of limits to
growth is older and dates back to 40 years or so. The original report for 'Limits to Growth' was
published in 1972, this was a very key debate. It was based on modelling of different variables, such
as world populations, levels of industrialisation, economic growth, food depletion, food reduction
and resource depletion. Basically System Dynamics and computing modelling to present 3 scenarios
based on 5 variables: world population, industrialisation, pollution, food production and resource
depletion.
The Limits to Growth - is the prediction of 1972 going to happen?
• The whole point of macro-economics is based on the assumption that output is going to
continue to grow and living standards will continue to grow and so forth. But the economy
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Capitalism and the environment: contradictions and limits to growth. Considering the biophysical limits of our economic system being a debate for 40 years: the ecological contradictions of capitalism: a critique form political economy. From an environmental management perspective, it is important to understand the way the environment is affected by economic systems. For this it is then important to consider fundamentals of economic theory and economic world view. Examples in australia: policies on climate change - energy prices going up. Point is to emphasise the political centrality of the economy when it comes to environmental policy. The idea of growth-based economics and growth-based capitalism is not recent: kevin rudd signed the kyoto protocol. There was a meeting at copenhagen and this was the time the gfc (global financial crisis) arose. A financial disaster followed the gfc and so issues like climate change (which are intangible issues) where left to a halt.
