Category Archives: Economy

Save Lives—and Money! by Richard Grossman MD

Can you think of any state-funded program that can save seven dollars for every dollar spent? Voluntary family planning programs for teens and young women offer that wide a margin of benefit!

Indeed, family planning can do much more than just save money. It has the ability to change the prospects for people, especially young women. By postponing parenthood, people have the opportunity to mature emotionally, complete their education and improve job skills. An experiment, the Colorado Family Planning Initiative (subsidized by a generous grant) has shown the benefit of making effective contraception available to all women.

OK, I have to admit, women bear an unjust proportion of responsibility for family planning. That is the way it is now; I hope that the future will hold more in the way of birth control for men other than just condoms and vasectomy.

An anonymous donor (reported to be the Susan Thompson Buffet Foundation) gave money to fund contraception for women who otherwise couldn’t afford it. This program started in 2009 and finished this summer (2015). It paid about $5 million each year for more than 36,000 women to receive contraceptive information, services and supplies.

Fortunately, during this interval the need for funding decreased because the Affordable Care Act (Obamacare) picked up perhaps 25,000 Colorado women who didn’t have prior coverage. Unfortunately there are still many people who don’t have any insurance coverage and cannot afford contraception. They are especially unable to pay for Long-Acting Reversible Contraceptive (LARC) methods that are so effective, but have an initial cost of about $1,000. LARCs include four IntraUterine Devices (IUDs) and one hormonal implant.

How did this program save money? If they had gotten pregnant, many of these women would have been on Medicaid or other state-supported programs. Their children would also likely be on taxpayer-funded programs, including children of undocumented women who are citizens as soon as they are born in the USA. The estimate of the amount of money the grant saved just for obstetrical services is $79 million.

The most important savings is in the decrease in the teen pregnancy rate. It is true that all over the country fewer teens became pregnant during the past few years, so not all of the decrease in our state is due to the Initiative. However, Colorado’s teen pregnancy rate dropped an outstanding 40% from 2009 to 2013, largely because of this Initiative.

Colorado's Teen Birth Rate

No one is in favor of unintended pregnancies. This Initiative illustrates what we have known all along: the best way to prevent abortion is with good contraception—and this has been proven over the past 5 years. From 2009 to 2013 the abortion rate for Colorado teens fell 42%, and for women aged 20 to 24 it also dropped significantly.

Good things come to an end, and the Initiative’s grant ended in July. Don Coram, a Republican state representative from Montrose, tried to garner support to continue the program—but unfortunately failed. Fortunately, private foundations stepped in to assure that funding is available.

So far 12 foundations have collaborated to pay $2 million during the next year to continue the Initiative. It remains to be seen whether this will be enough to provide services to all who need them, but it is hoped that more funding will follow. Optimistically the State Legislature will see that this program is saving money and empowering young women to become healthier, more productive citizens and will finally fund this program. And maybe other states will then get on the bandwagon to follow Colorado’s lead by funding similar programs.

Dr. Eve Espey is chair of the department of OB-GYN in Albuquerque where I trained many years ago. Her paper “Feminism and the Moral Imperative for Contraception” documents the importance of contraception in the modern world. Not only does family planning provide social benefits to individuals and to their societies, but also it saves lives. Spacing the births of babies promotes healthier children and decreases infant deaths. “It is estimated that, in 2008,” she writes “44% (272,040) of maternal deaths were prevented in 172 developing countries owing to use of contraceptives….”

Not only does contraception save money; globally it saves a quarter million women’s lives yearly!

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Growing, Growing, Gone: Reaching the Limits – An interview with Dennis Meadows

growth_limitsThe Limits to Growth, released in 1972, has profoundly influenced environmental research and discourse over the past four decades. Allen White of the Tellus Institute talks with Dennis Meadows, one of its co-authors, about the genesis of the report and its lessons for understanding and managing our uncertain and perilous global future.

The Limits to Growth report [from the Club of Rome] focused on natural resource demands, pollution, and population growth, yet the Club of Rome’s initial focus was more on weapons, nuclear proliferation, and security. What prompted this shift? 

The shift stemmed from Jay Forrester’s insight that the issues about which we were talking then (and still talk about today)—hunger, poverty, oil depletion, climate change—are not in themselves problems; they are symptoms. The problem is continued material growth in a physically finite world.

Continual physical growth of population and economic activity eventually reaches the point where the globe simply cannot accommodate anymore. Biophysical systems press back, whether through disease, scarcity, climate, or other response mechanisms. These pressures are danger signals, indicating overshoot of some aspect of the planet’s physical limits.

It is very frustrating to me to hear people talking about starvation as a problem and then say that the way to solve it is by producing more food. The only way we are ever going to have adequate food is by stabilizing the population. Regardless of genetic modifications, food subsidies, or improved storage techniques, as long as population continues to grow, we will eventually overshoot our capacity to feed the world.

Upon publication in 1972, The Limits to Growth triggered intense discussion and debate in academic and policy circles. How would you characterize this spectrum of reactions?

First of all, one common misconception about our report was and is that we proved the existence of limits. Our model assumed the existence of limits [on a finite planet] and then traced out the implications. Available data, however, were sufficient to identify and roughly quantify such limits.

It is also important to understand the nature of the controversy surrounding the report. At the risk of oversimplification, there are two kinds of people: those who decide which salient facts they like and then try to trace their implications, and those who decide which implications they like and then look for salient facts to justify them. You see this distinction in full display in contemporary debates around climate change.

The economics profession is based on the assumption that continual growth is possible and desirable. Likewise, most politicians have a predisposition for growth because it makes the problems they address—unemployment, poverty, diminished tax bases—more tractable. Instead of having to divide a fixed pie, which gets you in trouble with some constituents, you can grow the pie so that nobody has to make a sacrifice or compromise. So there was—and is—a set of vested interests in the notion of growth.

Economists claimed that we were underestimating the power of the market or technological innovation, and some politicians argued that we were trying to block the development of the poor.

After four or five years, people lost interest in the debate, and public discourse returned to its traditional short-term, siloed form. In 1992, we came out with the second edition of The Limits to Growth, and there was again a brief, but now much smaller, effort to discredit the work.

In light of the early danger signals that had already appeared by then—ozone depletion, oil shortages, toxic loadings—why was the reaction so muted? 

The first edition was published in thirty-five foreign language editions; the second edition, in fifteen. The number of articles referencing or criticizing Limits in the 1970s was probably ten times what it was in the 1990s. The economists and politicians simply felt less threatened by our analysis the second time around. From their perspective, it was not worth their effort to challenge our findings. The time horizon of politicians and economists was shorter than ever, whereas our analysis focused on longer-term issues.

Were there any regional differences in reaction, e.g., between the US and Europe or between developed and developing countries?

Yes. Of course, when we talk about developing countries, we are dealing with a very diverse group. But, viewed together, the developing countries basically said, “You are the ones who caused the problems, and you have to solve them. Our goal is to develop. And don’t use this kind of analysis to block us from causing the same problems that you caused.”

The Europeans have always been more receptive to the type of analysis found in The Limits to Growth. For example, I get many more invitations to speak in Europe than I do in the U.S. The sales of the book were greater in several European countries than they were in the US. You also see this reflected in legislation. The precautionary principle has substantial standing in Europe, but it is typically dismissed in the United States.

A third edition appeared in 2004. What insights did it offer thirty years after the original?  

In the second and third editions, we revisited our findings, looked at how global trajectories were unfolding, and compared them with our forecasts. Generally speaking, our forecasts were borne out. Last year, Graham Turner of the Melbourne Sustainable Society Institute (and formerly of the Commonwealth Scientific and Research Organisation) analyzed the predictions in The Limits to Growth and found that our business-as-usual forecasts for population growth, economic growth, and environmental impacts have been fairly accurate.

Does the current work on planetary boundaries signal the prescience of The Limits to Growth?

I admire very much the research on ecological footprints and planetary boundaries by Matthis Wackernagel, Johan Rockström, and others. They are dealing with these issues at a level of detail that was not possible back in the 1970s.

Our interests, however, are somewhat different, and I would say that there has not been, to my knowledge, anyone who has focused on our core question, that is, the dynamics of growth in a finite world. Although a recent article on planetary boundaries traces out the future dynamic implications of limits, much of the work in that field focuses only on the limits themselves and our proximity to them.

Were we prescient? In the 1950s, Harrison Brown’s books dealt with the issue of limits without using a computer model. Two centuries ago, Thomas Malthus famously projected a clash between population growth and food provision, albeit in a simplistic way. The ancient literature, too, contains references to the limits to growth and consequences of violating them. Our insights were not unique or unprecedented, but our modeling was.

Regarding modeling and future scenarios: Do you see normative modeling or extrapolative modeling as more powerful for inspiring corrective action?

I think we are now in a situation where it doesn’t make much difference what we want to see happen fifty years from now.

White water rafting provides a useful analogy here. When you are going down the river, most of the time it is placid, but every once in a while, you hit the rapids. When it is placid, you can sit back and think where you want to be, how you should time your journey, where you want to stop for lunch, etc. When you are in the rapids, you focus on the moment, desperately trying to keep your boat upright until you return to quiet waters. During the placid moments, it is very useful to have a discussion about where you want to be tomorrow or the day after. When you are in the rapids, you don’t have the luxury of that kind of discussion. You are trying to survive. Our society has moved into the rapids phase.

Climate change is an example of this. There was a period where we had some possibility of influencing future climate by our decisions about the use of fossil fuels. I think that time has passed. Climate change is increasingly dominated by a set of feedback loops—like the methane cycle and the melting of Arctic ice sheets—which are beyond human control. They have come to be the drivers of the system. The dominant drivers of the system are not people sitting around trying to reach a consensus about which of several different possible outcomes they most prefer.

Any modeling exercise is rife with uncertainty. Under such circumstances, some lean toward optimism, others—like yourself—toward pessimism. What underlies this divergence? 

Our research and reports are neither optimistic nor pessimistic; they are realistic. In my professional life, I lay out our assumptions, support them with empirical data, and then use computer simulations to trace their implications for the future behavior of the system. When the simulations show that current trends cannot be continued, people with a vested interest in current trends may become pessimistic; I do not. In my personal life, I hope for the best and prepare for the worst.

In the next few decades, if we maintain our current trajectory, we are destined to overshoot multiple planetary limits. In the face of this reality, how do we move forward? 

Conventional oil production peaked around 2006. Unconventional oil production, e.g., fracking and tar sands, has continued some degree of growth, but it is a totally different matter. Conventional oil is inexpensive and yields a relatively high energy return on investment. Unconventionals don’t do that. They are expensive, and the net energy return on investment is quite low.

When you don’t have conventional energy sources like oil, you cannot sustain the kind of economic growth rates that we have seen in the past. As a practical matter, then, there is now very little real wealth generation. Most of the economic activity these days consists of those who have more power getting richer by taking away from those with less. This is why we see widening gaps between rich and poor.

Many of the futurists presume large-scale energy consumption of one kind or another. It is energy intensive to coordinate and motivate large assemblies of people and organizations. Absent abundant, cheap energy, this becomes more difficult. I expect that the trend towards global integration is going to stop and then start to recede.

In my own work, I have shifted from a preoccupation with sustainable development, which is somewhat of an oxymoron, toward the concept of resilience. I think that is the future: to understand how different scales—the household, the community, the school––can structure themselves in a way to become more resilient in the face of the shocks that are inevitable regardless what our goals might be.

You see the climate debate evolving this way. Talk about prevention is on the wane, giving way to talk of adaptation. Adaptation really means resilience. It is about designing actions for dealing with New York City the next time superstorms threaten to paralyze the city or for figuring out what California can do if the current drought continues for many more years, or even decades.

Aspirations and good fortune will get us only so far.  Human survival cannot risk reliance on them alone.

Dennis Meadows is Emeritus Professor at the University of New Hampshire, where he was Director of the Institute for Policy and Social Science Research. He co-authored the pioneering 1972 book The Limits to Growth, which analyzed the long-term consequences of unconstrained resource consumption driven by population and economic growth on a finite planet. Dr. Meadows co-founded The Balaton Group in 1982, an international network of researchers and practitioners in fields related to systems and sustainability, and co-authored updates to The Limits to Growth in 1992 and 2004. 

Source: Great Transition Initiative, June 2015.      <>

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Optimism abounds despite grim data on climate change, overpopulation, oil depletion, and economy by Charlie Smith

"I confess that I'm troubled by all the optimism I encounter from leading thinkers on inequality, climate change, overpopulation, and oil depletion." -Charlie Smith

“I confess that I’m troubled by all the optimism I encounter from leading thinkers on inequality, climate change, overpopulation, and oil depletion.” -Charlie Smith

It’s not cool to be pessimistic.

This is my conclusion after interviewing scores of thoughtful people who’ve wrapped their minds around the most vexing challenges facing humanity.

Economist Robert Reich, who focuses on growing inequality, says he remains optimistic even though the top one percent of income earners are enjoying 95 percent of the gains in the U.S since the last recession.

Author Alan Weisman, who has studied the world’s explosive population growth, says he’s optimistic while acknowledging there’s little prospect of another Green Revolution sharply increasing food production.

Scientist Tim Flannery, who has written extensively on climate disruption, has an optimistic view of how things might turn out for the world. This depends on Gaia protecting herself from the havoc being wreaked by her most intelligent species.

Similarly, environmentalist David Suzuki speaks bravely of humanity’s chance of survival in the face of rising greenhouse gas emissions. What is required is more sensible decisions about the use of fossil fuels. He’s also optimistic that the Fukushima nuclear disaster won’t cause serious health problems for people who eat fish from the Pacific Ocean.

Gwynne Dyer has written hopefully about geo-engineering rolling back the climate crisis. All it will require is seeding the skies in certain ways to reflect some of the sunlight back into outer space.

Conservationist Tzeporah Berman seems to think if we work with well-intentioned corporate executives and elect climate-friendly governments, there’s a chance of turning things around before some sort of environmental Armageddon.

Then there’s economist Jeff Rubin, who has chronicled the depletion of conventional oil supplies. He often expresses optimism about how people will make do in a world with slow-to-no economic growth for the foreseeable future. He also believes international trade will plummet as energy costs increase, but hey, we’ll adapt.

Meanwhile, media and entertainment executives maintain a cheery disposition even as they acknowledge how the Internet is eviscerating their businesses.

I spent a fair amount of my Saturday at a workshop with some brilliant young people seeking to enter the media. I’m guessing that they have taken on substantial debts to become educated in ways that I can only envy. Some spoke several foreign languages. I’m not optimistic about all of them ending up in their chosen field.

Later that day, I attended the Amnesty International Film Festival, which featured a movie about brave Mexican journalists killed covering the war on drugs. Mexico used to be such a peaceful country, but not any more. It’s hard to feel good about Mexico’s future in the face of all of this violence.

I confess that I’m troubled by all the optimism I encounter from leading thinkers on inequality, climate change, overpopulation, and oil depletion. Adding up all the variables, I’ve concluded that more global food shortages and increased famine are inevitable. Despite this, our Canadian Premier plans to build a new bridge to Delta that will result in the loss of some of Canada’s finest farmland.

Having a cheery disposition may make someone sound more pleasant in radio and television interviews. It might even enhance a person’s likelihood of obtaining book contracts, becoming a media or entertainment executive, or getting elected to high public office. But it has a way of sugar-coating problems, diminishing the sense of urgency that we should all be feeling about these crises.

I’m not falsely optimistic.


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Top 10 Policies for a Steady-State Economy by Herman Daly

A steady-state economy is one that develops qualitatively without growing quantitatively in physical dimensions.

A steady-state economy is one that develops qualitatively without growing quantitatively in physical dimensions.

Let’s get specific. Here are ten policies for ending un-economic growth and moving to a steady-state economy. A steady-state economy is one that develops qualitatively (by improvement in science, technology, art and ethics) without growing quantitatively in physical dimensions (getting bigger); it lives on a diet—a constant metabolic flow of resources from depletion to pollution (the entropic throughput) maintained at a level that is both sufficient for a good life and within the assimilative and regenerative capacities of the Earth’s ecosystem.

Ten is an arbitrary number—just a way to get specific and challenge others to suggest improvements. Although the whole package here discussed fits together in the sense that some policies supplement and balance others, most of them could be adopted singly and gradually.

1. Cap-auction-trade systems for basic resources.

Caps limit biophysical scale by quotas on depletion or pollution, whichever is more limiting. Auctioning the quotas captures scarcity rents for equitable redistribution. Trade allows efficient allocation to highest uses. This policy has the advantage of transparency. There is a limit to the amount and rate of depletion and pollution that the economy can be allowed to impose on the ecosystem. Caps are physical quotas, limits to the throughput of basic resources, especially fossil fuels. The quota usually should be applied at the input end because depletion is more spatially concentrated than pollution and hence easier to monitor. Also the higher price of basic resources will induce their more economical use at each upstream stage of production, as well as at the final stages of consumption and recycling. Ownership of the quotas is initially public—the government periodically auctions them to individuals and firms. There should be no “grandfathering” of quota rights to previous users, nor “offshoring” of quotas for new fossil fuel power plants in one place by credits from planting trees somewhere else. Reforestation is a good policy on its own. It is too late for self-canceling half measures—increased carbon sequestration and decreased emissions are both needed. The auction revenues go to the treasury and are used to replace regressive taxes, such as the payroll tax, and to reduce income tax on the lowest incomes. Once purchased at auction the quotas can be freely bought and sold by third parties, just as can the resources whose rate of depletion they limit. The cap serves the goal of sustainable scale; the auction serves the goal of fair distribution; and trading allows efficient allocation—three goals, three policy instruments. Although mainly applied to nonrenewable resources, the same logic works for limiting the off-take from renewable resources, such as fisheries and forests, with the quota level set to approximate a sustainable yield.

2. Ecological tax reform.

Shift the tax base from value added (labor and capital) to “that to which value is added,” namely the entropic throughput of resources extracted from nature (depletion), and returned to nature (pollution). Such a tax shift prices the scarce but previously un-priced contribution of nature. Value added to natural resources by labor and capital is something we want to encourage, so stop taxing it. Depletion and pollution are things we want to discourage, so tax them. Payment above necessary supply price is rent, unearned income, and most economists have long advocated taxing it, both for efficiency and equity reasons. Ecological tax reform can be an alternative or a supplement to cap-auction-trade systems.

3. Limit the range of inequality in income distribution with a minimum income and a maximum income.

Without aggregate growth poverty reduction requires redistribution. Unlimited inequality is unfair; complete equality is also unfair. Seek fair limits to the range of inequality. The civil service, the military, and the university manage with a range of inequality of a factor of 15 or 20. Corporate America has a range of 500 or more. Many industrial nations are below 25. Could we not limit the range to, say, 100, and see how it works? This might mean a minimum of 20 thousand dollars and a maximum of two million. Is that not more than enough to give incentive for hard work and compensate real differences? People who have reached the limit could either work for nothing at the margin if they enjoy their work, or devote their extra time to hobbies or public service. The demand left unmet by those at the top will be filled by those who are below the maximum. A sense of community, necessary for democracy, is hard to maintain across the vast income differences current in the United States. Rich and poor separated by a factor of 500 have few experiences or interests in common, and are increasingly likely to engage in violent conflict.

4. Free up the length of the working day, week, and year—allow greater option for part-time or personal work.

Full-time external employment for all is hard to provide without growth. Other industrial countries have much longer vacations and maternity leaves than the United States. For the classical economists the length of the working day was a key variable by which the worker (self-employed yeoman or artisan) balanced the marginal dis-utility of labor with the marginal utility of income and of leisure so as to maximize enjoyment of life. Under industrialism the length of the working day became a parameter rather than a variable (and for Karl Marx was the key determinant of the rate of exploitation). We need to make it more of a variable subject to choice by the worker. Milton Friedman wanted “freedom to choose.” OK, here is an important choice most of us are not allowed to make! And we should stop biasing the labor-leisure choice by advertising to stimulate more consumption and more labor to pay for it. At a minimum advertising should no longer be treated as a tax-deductible expense of production.

5. Re-regulate international commerce—move away from free trade, free capital mobility, and globalization.

Cap-auction-trade, ecological tax reform, and other national measures that internalize environmental costs will raise prices and put us at a competitive disadvantage in international trade with countries that do not internalize costs. We should adopt compensating tariffs to protect, not inefficient firms, but efficient national policies of cost internalization from standards-lowering competition with foreign firms that are not required to pay the social and environmental costs they inflict. This “new protectionism” is very different from the “old protectionism” that was designed to protect a truly inefficient domestic firm from a more efficient foreign firm. The first rule of efficiency is “count all the costs”—not “free trade,” which coupled with free capital mobility leads to a standards-lowering competition to count as few costs as possible. Tariffs are also a good source of public revenue. This will run afoul of the World Trade Organization/World Bank/International Monetary Fund, so….

6. Downgrade the WTO/WB/IMF.

Reform these organizations based on something like Keynes’s original plan for a multilateral payments clearing union, charging penalty rates on surplus as well as deficit balances with the union, and seek balance on current accounts, and thereby avoid large foreign debts and capital account transfers. For example, under Keynes’s plan the U.S. would pay a penalty charge to the clearing union for its large deficit with the rest of the world, and China would also pay a similar penalty for its surplus. Both sides of the imbalance would be pressured to balance their current accounts by financial penalties, and if need be by exchange rate adjustments relative to the clearing account unit, called the “bancor” by Keynes. The bancor would also serve as the world reserve currency, a privilege that should not be enjoyed by any national currency, including the U.S. dollar. Reserve currency status for the dollar is a benefit to the U.S.—rather like a truckload of free heroin is a benefit to an addict. The bancor would be like gold under the gold standard, only you would not have to tear up the Earth to dig it out. Alternatively a regime of freely fluctuating exchange rates is a viable possibility requiring less international cooperation.

7. Move away from fractional reserve banking toward a system of 100% reserve requirements.

This would put control of the money supply and seigniorage (profit made by the issuer of fiat money) in the hands of the government rather than private banks, which would no longer be able to live the alchemist’s dream by creating money out of nothing and lending it at interest. All quasi-bank financial institutions should be brought under this rule, regulated as commercial banks subject to 100% reserve requirements. Banks would earn their profit by financial intermediation only, lending savers’ money for them (charging a loan rate higher than the rate paid to savings or “time-account” depositors) and charging for checking, safekeeping, and other services. With 100% reserves every dollar loaned to a borrower would be a dollar previously saved by a depositor (and not available to him during the period of the loan), thereby re-establishing the classical balance between abstinence and investment. With credit limited by prior saving (abstinence from consumption) there will be less lending and borrowing and it will be done more carefully—no more easy credit to finance the massive purchase of “assets” that are nothing but bets on dodgy debts. To make up for the decline in bank-created, interest-bearing money the government can pay some of its expenses by issuing more non-interest-bearing fiat money. However, it can only do this up to a strict limit imposed by inflation. If the government issues more money than the public voluntarily wants to hold, the public will trade it for goods, driving the price level up. As soon as the price index begins to rise the government must print less and tax more. Thus a policy of maintaining a constant price index would govern the internal value of the dollar. The Treasury would replace the Fed, and the target policy variables would be the money supply and the price index, not the interest rate. The external value of the dollar could be left to freely fluctuating exchange rates (or preferably to the rate against the bancor in Keynes’s clearing union).

8. Stop treating the scarce as if it were free, and the free as if it were scarce.

Enclose the remaining open-access commons of rival natural capital (e.g., the atmosphere, the electromagnetic spectrum, and public lands) in public trusts, and price them by cap-auction-trade systems, or by taxes. At the same time, free from private enclosure and prices the non-rival commonwealth of knowledge and information. Knowledge, unlike the resource throughput, is not divided in the sharing, but multiplied. Once knowledge exists, the opportunity cost of sharing it is zero, and its allocative price should be zero. International development aid should more and more take the form of freely and actively shared knowledge, along with small grants, and less and less the form of large interest-bearing loans. Sharing knowledge costs little, does not create un-repayable debts, and increases the productivity of the truly rival and scarce factors of production. Patent monopolies (aka “intellectual property rights”) should be given for fewer “inventions,” and for fewer years. Costs of production of new knowledge should, more and more, be publicly financed and then the knowledge freely shared. Knowledge is a cumulative social product, and we have the discovery of the laws of thermodynamics, the double helix, polio vaccine, etc. without patent monopolies and royalties.

9. Stabilize population.

Work toward a balance in which births plus in-migrants equals deaths plus out-migrants. This is controversial and difficult, but as a start contraception should be made available for voluntary use everywhere. And while each nation can debate whether it should accept many or few immigrants, and who should get priority, such a debate is rendered moot if immigration laws are not enforced. We should support voluntary family planning and enforcement of reasonable immigration laws, democratically enacted.

10. Reform national accounts—separate GDP into a cost account and a benefits account.

Natural capital consumption and “regrettably necessary defensive expenditures” belong in the cost account. Compare costs and benefits of a growing throughput at the margin, and stop throughput growth when marginal costs equal marginal benefits. In addition to this objective approach, recognize the importance of the subjective studies that show that, beyond a threshold, further GDP growth does not increase self-evaluated happiness. Beyond a level already reached in many countries, GDP growth delivers no more happiness, but continues to generate depletion and pollution. At a minimum we must not just assume that GDP growth is economic growth, but prove that it is not uneconomic growth.

Currently these policies are beyond the pale politically. To the reader who has persevered this far, I thank you for your willing suspension of political disbelief. Only after a significant crash, a painful empirical demonstration of the failure of the growth economy, would this ten-fold program, or anything like it, stand a chance of being enacted.

To be sure, the conceptual change in vision from the norm of a growth economy to that of a steady-state economy is radical. Some of these proposals are rather technical and require more explanation and study. There is no escape from studying economics, even if, as Joan Robinson said, the main reason for it is to avoid being deceived by economists. Nevertheless, the policies required are far from revolutionary, and are subject to gradual application. For example, 100% reserve banking was advocated in the 1930s by the conservative Chicago School and can be approached gradually, the range of distributive inequality can be restricted gradually, caps can be adjusted gradually, etc. More importantly, these measures are based on the impeccably conservative institutions of private property and decentralized market allocation. The policies here advocated simply reaffirm forgotten pillars of those institutions, namely: (1) private property loses its legitimacy if too unequally distributed; (2) markets lose their legitimacy if prices do not tell the truth about opportunity costs; and as we have more recently learned (3) the macro-economy becomes an absurdity if its scale is required to grow beyond the biophysical limits of the Earth.

Well before reaching that radical biophysical limit, we are encountering the classical economic limit in which extra costs of growth become greater than the extra benefits, ushering in the era of uneconomic growth, whose very possibility is denied by the growthists.

The inequality of wealth distribution has canceled out the traditional virtues of private property by bestowing nearly all benefits of growth to the top 1%, while generously sharing the costs of growth with the poor. Gross inequality, plus monopolies, subsidies, tax loopholes, false accounting, cost-externalizing globalization, and financial fraud have made market prices nearly meaningless as measures of opportunity cost. For example, a policy of near zero interest rates (quantitative easing) to push growth and bail out big banks has eliminated the interest rate as a measure of the opportunity cost of capital, thereby crippling the efficiency of investment.

Trying to maintain the present growth-based Ponzi system is far more unrealistic than moving to a steady-state economy by something like the policies here outlined. It is probably too late to avoid unrealism’s inevitable consequences. But while we are hunkered down and unemployed, enduring the crash, we might think about the principles that should guide reconstruction.

Herman Daly is an American economist recognized as one of the founders of the field of ecological economics and as a critic of standard economic growth theory. Daly’s worked centers on the relationship of the economy and the environment, and the relationship of the economy to ethics. In his proposal for a steady state economy, he argues that policies are needed to guide society towards a constant population, a constant material standard of living, and a equitable distribution of wealth. 

From our friends at the Center for a Steady State Economy (CASSE) Source:

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Earth Day Every Day Message: Double the Native Forest Cover by Brent Blackwelder

When heading for the edge of a cliff, the solution may be as simple as turning around and going in a different direction.

When heading for the edge of a cliff, the solution may be as simple as turning around and going in a different direction.

Earth Day began 45 years ago on April 22, 1970. The first Earth Day mobilized huge numbers of people to become active in efforts to curtail pollution and protect important ecosystems like forests. As we approach Earth Day this year, the founder of the Rainforest Action Network, Randy Hayes, and other visionary leaders are calling for a doubling of the native forest canopy on the earth. They are circulating a petition calling on all people to work together to achieve this goal. (See petition below.)

A powerful reforestation initiative will help achieve the objectives of a steady state, sustainable, true cost economy. Meaningful employment can be increased by planting native trees, restoring natural habitats, and removing unneeded roads. Restoring the natural balance of greenhouse gases can foster a healthy society.

Here is the big economic connection: forests help regulate or moderate the global temperature, which is essential to prevent enormous losses in grain yields–losses that could spawn food riots and wars. Plant ecologists estimate that at high temperatures, every increase of one degree Celsius causes a 10% drop in grain yields. An urgent global effort is underway to hold the increase below two degrees Celsius. This cannot be achieved unless changes are made to save and restore forest cover.

In addition to the threats to grain production from global temperature increases, the dramatic loss of native forest cover is causing devastating harm to the life support systems of our planet. For instance, forest destruction is a major cause of loss of plant and animal species, water loss, desiccation of the land, soil erosion, and sedimentation of fishery habitat. The loss of forests exacerbates climate destabilization, leading to more severe and costly weather disasters now amounting to several hundred billion dollars per year. The destruction of forests is leading humanity away from a sustainable civilization and a prospering true cost economy.

Here are a few facts about what has been happening to forests this century. The World Resources Institute (WRI) estimates 12% of human-generated greenhouse gas emissions come from deforestation and degradation of forests. About 30% of the world’s forests have been cleared and another 20% degraded. Only about 15% remain in relatively healthy native condition. Global deforestation rates are severe, with 13 million hectares having been lost each year from 2000-2010.

Fortunately, there is hope because experts have identified a huge potential for restoring forest cover equivalent to an area twice the size of China (2 billion hectares). Even in severely degraded zones such as the Loess Plateau in China, some successful measures have curbed erosion and brought back a lush vegetative cover that has improved food security, biodiversity, and local income. Since Earth Day 1970, impressive efforts have been taken to set aside forest lands for parks, wilderness, wildlife, spiritual contemplation, and protection of water supplies. We can build on these.

Across the globe, there is hope because communities with legal rights to at least 513 million hectares of forest, making up one-eighth of the world’s forests, have succeeded in forest preservation. These community forests hold an estimated 38 billion tons of carbon. If these forests that act as carbon sinks were eliminated, there would be a huge increase of carbon released into the atmosphere. WRI calculates that this amounts to 29 times the annual carbon footprint of all passenger vehicles in the world.

One example of the success of forest communities can be seen in the Brazilian Amazon, the largest intact forest in the world. From 2000 to 2012, deforestation was 11 times lower in indigenous community forests that have strong legal recognition and government protection than in other parts of the Amazon.

We are at a crossroads. The courageous step called for in the petition below could help lead us to a future no longer driven by overconsumption of natural resources, technologies that needlessly damage the environment, overpopulation, and political economies that foster problematic consumption.


To live in harmony with the planet and each other we need the courage to act on a shared vision of a better world. And we need to act NOW.

We, the undersigned, put forth these collective thoughts and invite others to share their visions.

• We know forests are a fundamental expression of the natural world and are key to supporting all life on Earth.

• We have witnessed how the destruction of the world’s forests degrades the quality of human life and undermines the prospects for productive and vibrant economies.

• We know that carbon-rich natural habitats are critical to the restoration of natural climatic patterns.

• We believe we must reverse the frightening concentration of greenhouse gases–now at 400 PPM–and get back to pre-Industrial Revolution levels of 280 PPM.

• We believe that this dramatic mathematical U-turn is our only hope of preventing the blue sky from turning into a toxic furnace.

We, the undersigned, call for:

• A halt to all deforestation.

• A doubling of the native forest canopy in less than two decades.

Furthermore, we call for this with the intent to:

• Increase meaningful employment by planting native trees, restoring natural habitats, and removing unneeded roads.

• Help return the natural balance of greenhouse gases and foster a healthy society.

• Maintain natural functions to purify the air and water and support the web of life.

Finally, we call upon all people–our communities and our business and political leaders–to work together to achieve this goal.

Such a courageous step could help lead us to a future no longer driven by overconsumption of natural resources, technologies that needlessly damage the environment, overpopulation, and political economies that foster problematic consumption.

When heading for the edge of a cliff, the solution may be as simple as turning around and going in a different direction. Native forest protection and restoration is key to this sensible U-turn. A shift to a better world is within our grasp, but we must collectively envision and enact it.

This is the great U-turn we seek.


Randy Hayes, Executive Director, Foundation Earth

Eric Dinerstein, Director, Biodiversity & Wildlife Solutions RESOLVE

Don Weeden, Executive Director, Weeden Foundation

Andy Kimbrell, Executive Director, Center for Food Safety

Brent Blackwelder, President Emeritus, Friends of the Earth

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Who says a better world is impossible? By David Suzuki

This glass house eco home was designed at Stuttgart University so that it produces more energy than it uses, thus feeding into the national grid.

This glass house eco home was designed at Stuttgart University so that it produces more energy than it uses, thus feeding into the national grid. High tech sustainable solutions aren’t far off in the future–they’re available now.

Cars, air travel, space exploration, television, nuclear power, high-speed computers, telephones, organ transplants, prosthetic body parts… At various times these were all deemed impossible. I’ve been around long enough to have witnessed many technological feats that were once unimaginable. Even 10 or 20 years ago, I would never have guessed people would carry supercomputers in their pockets — your smart phone is more powerful than all the computers NASA used to put astronauts on the moon in 1969 combined!

Despite a long history of the impossible becoming possible, often very quickly, we hear the “can’t be done” refrain repeated over and over — especially in the only debate over global warming that matters: What can we do about it? Climate change deniers and fossil fuel industry apologists often argue that replacing oil, coal and gas with clean energy is beyond our reach. The claim is both facile and false.

Facile because the issue is complicated. It’s not simply a matter of substituting one for the other. To begin, conservation and efficiency are key. We must find ways to reduce the amount of energy we use — not a huge challenge considering how much people waste, especially in the developed world. False because rapid advances in clean energy and grid technologies continue to get us closer to necessary reductions in our use of polluting fossil fuels.

It’s ironic that anti-environmentalists and renewable energy opponents often accuse those of us seeking solutions of wanting to go back to the past, to living in caves, scrounging for roots and berries. They’re the ones intent on continuing to burn stuff to keep warm — to the detriment of the natural world and all it provides.

People have used wind and solar power for thousands of years. But recent rapid advances in generation, storage and transmission technologies have led to a fast-developing industry that’s outpacing fossil fuels in growth and job creation. Costs are coming down to the point where renewable energy is competitive with the heavily subsidized fossil fuel industry. According to the International Energy Agency, renewable energy for worldwide electricity generation grew to 22 per cent in 2013, a five per cent increase from 2012.

The problem is that much of the world still burns non-renewable resources for electricity and fuels, causing pollution and climate change and, subsequently, more human health problems, extreme weather events, water shortages and environmental devastation. In many cities in China, the air has become almost unbreathable, as seen in the shocking Chinese documentary film Under the Dome. In California, a prolonged drought is affecting food production. Extreme weather events are costing billions of dollars worldwide.

We simply must do more to shift away from fossil fuels and, despite what the naysayers claim, we can. We can even get partway there under our current systems. Market forces often lead to innovation in clean energy development. But in addressing the very serious long-term problems we’ve created, we may have to challenge another “impossibility”: changing our outmoded global economic system. As economist and Earth Institute director Jeffrey Sachs wrote in a recent Guardian article, “At this advanced stage of environmental threats to the planet, and in an era of unprecedented inequality of income and power, it’s no longer good enough to chase GDP. We need to keep our eye on three goals — prosperity, inclusion, and sustainability — not just on the money.”

Relying on market capitalism encourages hyper-consumption, planned obsolescence, wasteful production and endless growth. Cutting pollution and greenhouse gas emissions requires conserving energy as well as developing new energy technologies. Along with reducing our reliance on private automobiles and making buildings and homes more energy-efficient, that also means making goods that last longer and producing fewer disposable or useless items so less energy is consumed in production.

People have changed economic systems many times before, when they no longer suited shifting conditions or when they were found to be inhumane, as with slavery. And people continue to develop tools and technologies that were once thought impossible. Things are only impossible until they’re not. We can’t let those who are stuck in the past, unable to imagine a better future, hold us back from creating a safer, cleaner and more just world.

Written with contributions from David Suzuki Foundation Senior Editor Ian Hanington. Go to

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Must Growth Trump Climate Action? by Asher Miller and Rob Hopkins 

Climate stability is now a thing of the past.

Climate stability is now a thing of the past.

Why We Must Embrace Post-Growth Economics and Community Resilience NOW

The nearly ubiquitous belief of our elected officials is that addressing the climate crisis must come second to ensuring economic growth. This is wrongheaded—both because it underestimates the severity of the climate crisis, and because it presupposes that the old economic “normal” of robust growth can be revived. It can’t. In fact, we have entered an era of “new normals”—not only in our economy, but in our energy and climate systems, as well. The implications are profound.

The New Energy Normal

The era of cheap and easy fossil fuels is over, leading the industry to resort to extreme fossil fuel resources (tar sands, mountaintop removal coal mining, shale gas, tight oil, and deepwater oil) and fracking to meet demand. Unfortunately, these resources come with enormous environmental and economic costs, and in most instances provide far less net energy to the rest of society. They also require much higher prices to make production worthwhile, creating a drag effect on the economy. As a result, high energy prices and economic contraction are likely to continue a back-and-forth dance in the coming years.

The New Climate Normal

Climate stability is now a thing of the past. As extreme weather events grow in severity, communities are increasingly adopting strategies that build resilience against the effect of these and other climate shocks. At the same time, we must take dramatic steps if we hope to avoid raising global temperatures more than 2°C above pre-industrial levels. According to Kevin Anderson of the Tyndall Centre, this would require a 10% reduction in CO2 emissions per year, starting now—a rate so significant that it can only be achieved through dramatic reductions in energy use.

The New Economic Normal

We’ve reached the end of economic growth as we’ve known it in the U.S. Despite unprecedented interventions on the part of central banks and governments, the so-called economic recovery in the U.S. and Europe has failed to benefit the majority of citizens. The debate between stimulus and austerity is a distraction, as neither can fully address the factors that spell the end of economic growth—the end of the age of cheap oil, the vast mountains of debt that we have incurred, the diminishing economic impacts of new technologies, and the snowballing costs of climate change impacts.

About the Authors: Asher Miller is the Executive Director of Post Carbon Institute. Post Carbon Institute leads the transition to a more resilient, equitable, and sustainable world by providing individuals and communities with the resources needed to understand and respond to the interrelated economic, energy, and ecological crises of the 21st century. Its thirty Fellows are among the most well-respected sustainability experts in the world. Rob Hopkins is one of the UK’s most influential environmentalists. He is co-founder of Transition Network and a founder of the Transition movement, described by the BBC as “the biggest urban brainwave of the century.” Transition Network was set up in 2007 to promote and respond to the rapid spread of Transition initiatives around the world, which number more than 1,400 in 44 countries.

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