Building an Eco-Economy

Recall Brown's four goals.

1. stabilize climate, mostly by managing carbon emissions
2. stabilize population
3. eradicate poverty
4. restoring nature's carrying capacity

Premise: western economic model cannot be sustained. Spreading it to regions with surging population can't work.

Get this clear: Brown is not stating that overpopulation is the primary cause of unsustainability. He looks to consumption. He is on to something here. This needs discussion in class.

Physical growth remains problematic, not development, which is another event. Nor is austerity required -- if we can get sustainability right.

The Social Ecology recommended here includes the eco-economic component but transcends this into a liberation of humanity based on ethics and leisure (potentially very sustainable). Education, for example, is developmental but can be done sustainably and Ramapo College is making real progress. The point of development is the actualization of latent potential.

Food relative to population threatens civilization as failing states spread.

Brown, the agronomist, remains concerned about grain supplies. However, soybean and protein production is up for many. He cites two trends: the geopolitics of food scarcity, such as land grabs in Africa by richer countries; and the spread of failing states. (Terrorism does not figure in Brown's world.)

World sustainability opens up a historical investment opportunity.

Analogous to the impact of the automobile and the computer. Envisioned appropriately, sustainability provides a long-term thrust for interlocking capital formation. Some major financial institutions have caught on, but not so the World Bank, IMF, and WTO. Remember my remarks about the economist Joseph Schumpeter about innovation and markets.

Defining an eco-economy: markets would tell the ecological truth.

Brown supports the concept of markets and recognizes their centrality but he indicates its deficiencies. He introduces the idea of a green tax, offset with income tax reductions. Let's expand on that concept.

Green Taxes have been enacted in Western Europe on carbon emissions, garbage, cars in cities. See examples in Germany and Sweden.

Brown reports on successes in Green Taxes shifted from income taxes: tax the bads, not the goods. Sensible and gathering support even from proponents of economic globalization, as reported by Brown. But controversial and potentially regressive if not carefully designed. Potentially, very effective outcomes can be achieved.

Fossil fuel tax can be adjusted to stabilize price and promote alternative fuels.

Used in Germany. Tax will vary with market price to maintain a steady price to end user. This policy absorbs economic shocks and promotes alternative biofuels and other alternatives.

Tradable permits. Carbon emissions trading may be on the way, but perhaps the public supports a carbon tax.

Some success noted by Brown, who clearly prefers Green Tax. Lots of disagreements. Good discussion in Peter Montague in Schroyer and Golodik anthology. EU price per ton is over 40 Euros. In U.S., carbon emissions trading coming in West and Northeast, with pressure to cover entire nation. Allowances decrease periodically. Can work in tandem with Green Tax.

A (de facto) coal moratorium is strategic to Brown's climate plan.

The construction of new coal plants has been in effect stymied in the USA, demonstrated by Brown in this chapter. Plants are risky and expensive, seemingly unattractive to investors, especially when cap-and-trade is under policy discussion. The provides an opening for the surge in wind energy to produce electricity. Watch and see.

Cease such perverse subsidies as overpumping aquifers, burning fossil fuels, clearcutting forests, and overfishing?

Why subsidize unsustainable practices. These subsidies cost taxpayers $700 billion each year. Target coal. The subsidy to such industries amounts to a hidden industrial policy for obsolete industries to do the wrong thing. End these perverse policies and dedicate the savings to promote sustainability.

Brown presents a carbon plan based on reduction and sequestration.

Anticipating a coal moratorium and a shift to renewables, especially wind, Brown presents a table to guide a shift away from fossil fuels. He argues for ending net deforestation and planting lots of trees to sequester carbon the old fashioned way.

Industrial Ecology closes the loop of the material production cycle and transforms production.

The emerging field of Industrial Ecology transforms production. See Cradle to Cradle by William McDonough & Michael Braungart. Note the example of modular carpeting invented by Ray Anderson of Interface Carpeting. See a history of Industrial Ecology. MBA students in my Business and the Environment design innovative and sustainable business models.

Ecolabeling enables consumers to promote sustainability.

Labeling is a common practice that can be used wisely to promote sustainability: appliances, energy, investing, forest products. Brown provides a host of examples. The choice is ours.

Kevin Lyons of Rutgers has explained to us how purchasing promotes sustainability.

Mr. Lyons provided the keynote that kicked off Earth Month at Ramapo. His program at Rutgers challenges us here at Ramapo College.

Enact the Tobin Tax on international currency transactions, devoted to ecological restoration and to human needs.

Taming speculative Hot Money and promoting stable investment is promoted by small tax suggested by economist James Tobin: "Tobin Taxes are excise taxes on cross-border currency transactions. They can be enacted by national legislatures, followed by multilateral cooperation for effective enforcement. The revenue should go to global priorities: basic environmental and human needs. Such taxes will help tame currency market volatility and restore national economic sovereignty. (The name Tobin Tax and the original concept derives from James Tobin, a Ph.D. Nobel-laureate economist at Yale University.)" View the US initiative.

Henry George advocated a single tax: the Land Tax and his disciples have not gone away.

The progressive social reformer Henry George promoted a tax on land and not on improvements, which has profound distributional and efficiency impacts. The implications are subtle but quite real.

Apply the precautionary principle to risk assessment.

The Wikipedia entry starts"precautionary principle is a moral and political principle which states that if an action or policy might cause severe or irreversible harm to the public, in the absence of a scientific consensus that harm would not ensue, the burden of proof falls on those who would advocate taking the action. The precautionary principle is most often applied in the context of the impact of human actions on the environment and human health, as both involve complex systems where the consequences of actions may be unpredictable."

The synergy of all these policies, practices, and innovations offers a path toward a Sustainable Epoch.

Thus Creating World Sustainability is a path that we can choose. This potentially transforms the material and energy economies along to conform to ecological principles. How do you fit in? Discussion please.

Brown sees three paths to the future.

1. Pearl Harbor: catastrophy drives mobilization as in WWII
2. The fall of the Berlin Wall, unexpected result of historical surprises
3. Push up from the grass roots to influence an enlightened global (mostly USA) political and economic elite.

The last is obviously preferred and is most compatible with democratic participation. This defines a pivotal role for civil society organizations. Does Brown neglect generational change?