Éloi LAURENT (OFCE/Sciences-po)

eloi.laurent@sciences-po.fr

Université d’été “Le capitalisme en crises”Université de Montréal, 1er July 2010.

Is a sustainable capitalism possible? « Green growth », sustainability indicators, environmental justice

Outline The three ages of Ecology;

"Green Growth"? Green Jobs? "Green Economy"?

To Measure is to act: Beyond GDP, new indicators of sustainability;

The “new political ecology”;

Environmental justice and environmental inequalities;

The three ages of ecology

The terms "green growth" and "green jobs" have emerged in the global public debate with the publication by the United Nations Environment Program (UNEP) and the International Labour Office (ILO), in the fall of 2008 of the report “Green Jobs: Towards decent work in a of low carbon sustainable world ”. This report marks the entry of developed and emerging countries into the the third age of ecology, the economic age.

Environmental concerns have initially crystallized in a “mystical age” (publication of Nature in 1836 by the philosopher Ralph Waldo Emerson, John Muir's struggle, supported by President Theodore Roosevelt, for creating the first national parks in the United States as part of the "conservationist” movement). The second age of ecology, the “civic age”, also developed in the United States, from the publication of Silent Spring by Rachel Carson in 1962.

The advent of the “economic age” of ecology: early 1990s, when governments in developed countries realized that they should reduce their emissions of greenhouse gas to counter the threat of climate change.

This new age came to maturity in fall 2008 in the context of the global crisis, when UNEP launched the idea of its "Green New Deal" to help economies recover, but mostly to change.

The « Green new deal »

The idea of the “green new deal”: the global crisis provides an opportunity to accelerate the structural transition of economies towards a low carbon-intensive growth.

UNEP has called on States since September 2008 to invest in energy efficiency, develop renewable energies, implementing new modes of transportation (hybrid vehicles, high-speed train) or to promote sustainable agriculture .

UNEP has also engaged in a “green accounting” of fiscal stimulus, ranking developed and emerging countries.

Source : HSBC, PNUE.

The « Green New Deal »

The « Green new deal »?

Despite this apparently precise accounting and more generally the quality of materials produced by UNEP to characterize the "green economy", there is a doubt on what it is exactly;

UNEP itself has actually given different definitions of the scope of green growth, which raises a simple question: What is "green growth", as well as the related concept of "green jobs"?

Furthermore, how to engage not only in a new way of doing economic growth but also in a new conception of human development?

« Green growth »?

Different definitions, more or less extensible, of "green growth" and "green jobs" coexist today. According to the OECD, "green growth is the way to go from the current economy to a sustainable economy. It must promote growth and development while reducing pollution and emissions of greenhouse gas emissions, minimizing waste generation and waste of natural resources, preserving biodiversity and enhancing energy security. Green growth means ... to make environmental investment a new source of economic growth.” 

But for the French Ministry of Ecology, for example, "green growth" is a much broader concept. “uses less energy resource and nonrenewable raw materials and emits much less greenhouse gas emissions, which focuses on environmental technologies (all technologies whose use is less harmful to the environment than the use of standard techniques with similar needs) who practices responsible production and consumption, thinks in terms of production life cycle, which protects and restores the ecosystem services from water, soil, biodiversity, which puts men and women at the center of the business and social project; that promotes participation of everyone in the decision and enriched by the difference, that respects the cultures and heritages, which assesses the effects of decisions on future generations. "

« Green jobs »?

UNEP and ILO in 2008 have defined green jobs as jobs that reduce the impact on the environment, bringing it down to sustainable levels. "Green jobs" are jobs in agriculture, industry, services and administration that contribute to the preservation or restoration of the quality of the surround. The report states: "there are green jobs in many sectors of the economy, from energy supply to recycling and from agriculture to construction and transportation. They help reduce energy consumption, raw materials and water through strategies improving performance, reducing emissions of carbon, minimizing or completely avoiding all forms of waste and pollution and protecting and restoring ecosystems and biodiversity”; 

This definition is also adopted by Eurostat (2009) in its report on "environmental goods and services," defined as a heterogeneous ensemble of technologies, goods and services that prevent or reduce pollution and minimize the use of natural resources;

Environmental activities are grouped into two broad categories: environmental protection and management of natural resources. Green jobs, which are not explicitly defined by Eurostat, in this context would fall under one of these two sectors. “Green growth" would be the growth of these two “eco industries".

« Green jobs »?

We can see that the sometimes vague nature of “Green Growth” and “green jobs” come from their their dynamic aspect: new eco-industries must be developed, but greening the old ones is as important, including “de-carbonizing” growth.

Similarly, the scope of "green jobs" must take into account the effects of induced development of these sectors on the rest of the economy. GHK et al. (2007) estimate that total employment in eco-industries in the EU 27 reached 4.6 million in 2000, divided into 2.4 million direct jobs, 1.3 million indirect jobs, and 0.9 million induced jobs (depending on the resources invested in direct and indirect);

If we extend the definition of eco-industries, beyond the Eurostat definition, activities that depend on environmental resources (such as agriculture, forestry or eco-tourism), the total of green jobs reaches more than 10% of total employment in the EU-27 and even 17% if the indirect and induced jobs are added. Under this broad accounting, 1 job in 6 in Europe would be more or less "green".

Source : GHK, 2007.

« Green jobs »

Source : UNEP, ILO, 2008.

« Green jobs »

Source : UNEP, ILO, 2008.

« Green jobs »

Source : UNEP, ILO, 2008.

« Green jobs »

Towards a sustainable capitalism ?

But we can, and indeed we must, go further. We have more fundamentally to change the mode of development and not only boost growth in GDP and employment;

Therefore, the criteria of “green” should be extended to new requirements inspired by sustainable development, starting with the improvement of individual welfare and social justice. Under the broad definition of UNEP, a "Green Economy is an economy where the vital links between economy, society and environment are considered and in which the transformation of production processes and patterns of consumption and production, while helping to reduce the amount of waste produced per unit of pollution and use of resources, materials, energy and revitalize and diversify the economy creates new opportunities for decent work (access to employment, fair compensation, rights, means of expression and recognition, justice and gender equality) promoting sustainable trade, reducing poverty, improving equity and income distribution.”;

The Brundtland Report (1987) has indeed defined sustainable development as "development that meets the needs of the present generations without compromising the ability of future generations to meet their needs.”;

The social and environmental dimensions are interlinked in the concept of sustainable development.

Towards a sustainable capitalism ?

For the sake of clarity, we should distinguish between “green growth” and “sustainable development”.

The first objective means developing sectors of the economy, while creating employment and limit the impact of human activities on the environment (climate, ecosystems, biodiversity).

The second imperative, more ambitious, means redefining the notion of development with greater emphasis on its human dimension (environmental sustainability, equality, health, education) to go beyond mere economic dimension (growth of GDP per capita).

In the first perspective, we should put a price on carbon, promote the financing of innovation and research in new energy and environment technologies and invest in training for “green jobs”;

In the second perspective, we must develop new indicators of development for public policy, develop "social-ecological" policies that articulate the social and environmental dimensions and especially address the issue of environmental justice and inequalities.

New human development indicators

The Human Development Report of 1990 marked a renaissance in development thinking: "What we call human development is the process that expands the range of opportunities for individuals: living long and healthy life, being educated and having resources for a decent standard of living, are fundamental requirements, to which must be added political freedom, the enjoyment of human rights and self-respect.”

Inspired by the work of Sen, who summarizes this approach in a superb formula that defines development as “a process of expanding real freedoms enjoyed by the people”;

From these reflections were born three key indicators of "human development": the human development index (HDI, based on three dimensions: life expectancy, education and income per capita); Development Index linked to gender (which adds to the HDI inequalities between men and women), and finally the human poverty index (a measure of poverty not in monetary form, but according to the dimensions of the HDI);

But these indicators were initially constructed to measure the progress of developing countries, and remain, at least for the main one, the HDI, too correlated to GDP. New indicators should be built for developed countries;

The Stiglitz-Sen-Fitoussi Report (2009) points to three directions. One possibility is to modify the existing accounting framework to better take into account inequality, security, public services (health, education, etc..). But a number of phenomena that determine the well-being of individuals are not measured by our statistical system, mainly those relating to the environment (air quality, water, etc..), A second direction of research is thus to try to propose measures acceptable of those variables. Finally, we do not really have indicators of the quality of life, although many studies have tried it (happiness, "capabilities", leisure, freedom, participation in civic life, etc..).

These three lines of research intersect in many aspects and together define the research agenda for the coming decades in order to achieve a redefinition of the instruments of public action.

The Ethics of sustainability

Another lever of action towards this new mode of development is to redefine not only indicators but the philosophy of public policy.

The standard economic approach to environmental issues, which is logically focus on economic instruments (taxes, emission permits, regulation), reveals that the "science of efficiency," on which it rests (cost-benefit calculations), which wants to be autonomous, is in fact heavily dependent on ethical considerations.

For instance, the calculation of the social discount rate for simulation models of climate change is not neutral: it requires precise choice in matters of justice between generations and within them.

The « new political ecology »

The approach of the "new political ecology" (Fitoussi and Laurent, 2008) is precisely to make explicit the link between ecology and inequality, between social issues and environmental imperative, which is at the heart of the notion of sustainable development.

The link between social justice and ecology is in fact a simply worded: social inequalities are among the leading causes of contemporary environmental problems while contemporary environmental problems primarily affect the poorest in all human societies (Laurent , 2009).

The study of the relationship between democracy and sustainability, linkages between poverty and environmental degradation, the correlation between rising income inequality and the weakening of environmental policies must be deepened.

Two important issues: environmental justice and “environmental inequalities”.

What is environmental justice?

The notion of “environmental justice” was born in the United States at the end of the 1970s, in the context of racial progress and civic activism. It served to designate at once racial and ethnic inequalities in exposure to environmental risk (pollutions, toxic waste, flooding) and the exclusion of racial minorities, especially African-Americans, Hispanics and Native Americans, from the definition and implementation of environmental policies in the US.

The defining episode of the environmental justice movement happened in Warren County in 1982, when African-American residents of this North Carolina district opposed the building of a toxic waste landfill nearby;

With the Executive order 12898 of February 11 1994 on environmental justice (“Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations”), the Clinton administration has transformed a public concern into a federal obligation, with the section 1-101 demanding from all federal agencies that they integrate the new objective of environmental justice.

Environmental inequalities

Exposure and access inequalities: The unequal distribution of environmental quality between individuals and groups (defined in racial, ethnic or social terms), whether negatively (exposure to environmental risk and hazard) or positively (access to environmental amenities) ; in this category is included the issue of vulnerability to ecological disasters - the patent form of latent inequalities in terms of exposure and sensitivity - and the risk of multiple and cumulative impact of social and environmental inequalities;

Policy effect inequalities: The unequal effect of environmental policies, ie the unequal distribution not of environmental goods or bads but of the income effect for instance of regulatory or tax policies among individuals and groups;

Impact inequalities: The unequal environmental impact of the different individuals and groups with regards to their income and/or lifestyles ; some scholars point to the notion of “ecological inequalities” to characterize this type of inequalities (see Emelianoff, 2006);

Policy-making inequalities: The unequal access to environmental policy-making, ie the unequal involvement and empowerment of individuals and groups in decisions regarding their immediate environment.