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We need a Plan B for growth

One overarching theme of last weekend’s Plan B for Europe conferences in Madrid, the pursuit of growth, shows a basic unawareness of how the economic system depends on the biosphere.

Luis González Reyes
26 February 2016
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A soybean field in Argentina's fertile pampas region.

A soybean field in Argentina's fertile pampas region. Wikicommons/Alfonso. Some rights reserved.The pursuit of growth lies behind the first slogan of the conferences (“against austerity”). The motto refers to the unequal distribution of wealth and it would have been more appropriate to use that wording, since austerity is not only necessary, but in the times ahead of increasingly scarcer resources, it is also inevitable – naturally, a just austerity with distribution of wealth.  

During the conference we heard Costas Lapavitsas, a professor of economy and major figure of the Greek and European Left, saying that oil is no longer a problem for Europe because it is cheap. It is a matter for concern that a person of his standing did not flag up the vital importance oil has for the functioning of the economy and was unable to examine oil prices in a more comprehensive manner.

Nacho Álvarez, one of the economic minds of Podemos, advocated for growth and named Argentina as an example of success, thanks to its monetary expansion and high soy prices (among other factors). Nevertheless, he neglected to go one step further in his analysis. In Argentina soy is grown in transgenic monocultures, which are dependent on synthetic fertilisers and pesticides (incidentally, all owing to oil), and that will not hold out for long, considering the soil and aquifer depletion, as well as the low oil prices.

It is impossible to understand growth without understanding the material base underlying it (which does not mean this is the only condition).

The time of readily available resources is over

We are currently living through times of great economic recession and the terminal crisis of United States hegemony. It is also a time in which the distribution of wealth and power is at its most uneven. But the factors leading to an historical breakingpoint are the end of abundant, versatile and cheap energy; the growing difficulty in accessing many material resources; climate change; the breakdown of the foundations of social reproduction caused by the care crisis (neglecting basic elements which sustain life, such as a healthy foods, hygiene and emotional support) and the massive loss of biodiversity.

Why are we experiencing the end of abundant, versatile and cheap energy? Basically, because the high-yield fossil fuels that can be easily extracted are running out. We are already witnessing the beginning of the decline in the ability to extract ‘good’ oil (conventional oil) and, soon, all oil. The remaining sources will be of unconventional crude oil: the most expensive, demanding and low quality kind (extracted by fracking, from tar sands, ultra-deep water or from the Arctic). And the same will be true in coming years for gas, coal and uranium.

But is there not an alternative energy mix to equal fossil fuels? It is not by chance that the basic energy source is oil, accompanied by gas and coal. Oil is characterized (in some cases, was characterized) by: availability independent of natural cycles; easy storage; easy transportation; high energy density; availability in large quantities; versatility in use (fuels of different categories and a variety of non-energy products); high energy yield (a small amount of energy investment produces a high amount of power); and affordability.

Any source expected to replace oil must meet all these requirements. But it should also have a low environmental impact in order to be feasible in a heavily degraded environment. Neither renewable energies, nor nuclear, nor unconventional hydrocarbon, or the combination of all of the above, can replace fossil fuels.

The myth of growth

In a context of limited resources, the intention of restoring growth is based on several myths.

The first is that of efficiency. It suggests that increasing efficiency is part of the solution (or even that it is the solution) to energy and resource problems and that it can, therefore, support an expansionary phase of growth. However, it has insurmountable limitations and even negative side effects.

To begin with, a part of the supposed improvements in efficiency in the central regions are not that, but in fact a relocation of the more resource and energy consuming processes to peripheral areas. For example, the bulk of heavy industry is no longer in Europe, but in countries such as China and India.

In addition, if exponential growth continues to be pursued, measures based on efficiency have a short-term future. It is necessary to reduce the use of energy and materials by 90% in central regions in order to be within the boundaries of sustainability.  

To be able to achieve this goal through eco-efficiency measures it would require the materials and energy necessary per unit of GDP to decrease tenfold. But if the economy continues to grow by 2%, it would require a decrease by 27-fold, and if it grows by 3%, 45-fold. All the same, it becomes obvious that it is impossible to maintain continued efficiency over time.

On the other hand, efficiency does not always entail a decline in material and energy consumption. For example, despite the improvement of CO2 emissions by EU vehicles (Volkswagen and Renault), the reduction of emissions per kilometre travelled has soared by the remarkable increase of the car fleet and the kilometres travelled by car. The result is a rise in global oil consumption by European vehicles. This is the ‘rebound effect’. Efficiency without reduction is pointless.

This example is far from being the exception, because when devices are more efficient, they cost less (and, to the mind, appear to contaminate less), resulting in an increased use. To this we must add the building of new infrastructure, which, occasionally, entails technological improvements.

Moreover, one must not only consider the direct rebound effect, but the indirect as well. This consists in savings being channelled to other sectors, where consumption is then increased. The basic premise of the ‘rebound effect’ is that a rise in efficiency releases resources that would enable a rise in production and consumption. In truth, it is an inherent characteristic of capitalism and of its need for continuous growth.

The second myth is that of dematerialisation, which is to say, the belief that a capitalist economy can continue growing, while reducing its energy and material use. However, the consumption of energy and materials since the time of the Industrial Revolution follows an exponential curve, as does the GDP. And all the periods of decrease in material use were due to economic recession. What’s more, the correlation between GDP and world energy consumption over time is practically lineal.

The essence of the proposed dematerialisation is an economy based on services. But this type of activity is no less consuming of materials and energy: an equivalent amount of monetary wealth originating in the private services sector (including hotels, businesses and transport) would require practically the same energy intensity as the industrial sector, not to mention it would also rely on the latter in order to exist.

In fact, dematerialisation is physically impossible. Total recycling is not feasible due mainly to the Second Law of Thermodynamics, which states that the use of energy inevitably implies its degradation. Many of the basic elements are dispersed in its use: from the phosphorous employed for fertilization, to the zinc oxides in tires which scatter on the roads through wear. These might only be recyclable if they were biodegradable and the process were carried out by the ecosystem, through time and solar power, and even in that case the process would not be 100% efficient. The fallacy of the myth of dematerialization is exemplified by the representative device par excellence of virtual society, the computer, with high energy and material demands.

These two myths are, in fact, a product of the myth of science and technology, which maintains that our intellect is capable of overcoming any obstacle. However, the techno-scientific system has its limits.  The first of these is that all that is ‘easy’ to invent has been invented and current breakthroughs require increasingly higher expenditure of time, materials, energy, money and labour. Despite possible evidence to the contrary, the pace of real innovation is slowing. A further problem is that technology can be defined as a convergence of knowledge, materials and energy, and all three components are limited. What’s more, the general expectation is not of an overall progress, but that a breakthrough will be made at just the precise moment and immediately implemented worldwide. This is closer to the concept of ‘miracle’ than that of ‘breakthrough’.

We need a Plan B for growth

For all of the above, we need a Plan B for Europe that will be able to fight against the unequal distribution of wealth, seek a true democracy (incompatible with the EU) and understand that this cannot be achieved through more growth, but through a new socio-economic model that does not require growth.

Fortunately this was also present during the Plan B conferences. We were able to hear individuals such as Marga Mediavilla, Florent Marcellesi, Yayo Herrero or even Amaral argue in favour of a Plan B for people and the environment, understanding that the two are connected. A Plan B for growth.

What follows are some of the measures that might be a part of this Plan B for growth on a European level:

Economy:

  • - To encourage and make room for the development of an economic system that does not require continuous growth. Local currencies, which operate without interests, are vital here.
  • - To link the euro to a market basket of basic raw materials, to minerals or to the size of the population, so as to limit the human consuming power.
  • - To prevent banks from creating money over their available reserves and to eliminate debt securitization mechanisms.
  • - To implement a maximum-consumption ecological footprint per person, in the form of an ‘impact debit card’ or an ‘impacts per year declaration’.
  • - To reduce consumption incentives. An example would be the limitation and control of advertising. Another would be the ban of built-in obsolescence.
  • - To raise tariffs on imports and to abstain from signing new free trade agreements.

Energy:

Waste:

  • - Waste reduction policies. Including policies to reduce packaging by supporting measures of loose sales or a deposit-refund system for containers.
  • - A door-to-door selective collection of waste.
  • - A ban on the release of genetically modified organisms, the production of radioactive waste (from nuclear plants), of persistent organic pollutants (POP), etc. In other words, of everything which will linger in the environment over time and which we will not be able to control.
  • - Green chemistry and engineering. This type of production is made from natural resources and generates biodegradable products with low energy consumption, avoiding the use of toxic compounds in the process.
  • - Substitution of plastics for polymers of biological origin. This measure will also demand a significant reduction of these compounds; otherwise it would result in further impacts, such as the deforestation of large areas.

Agriculture:

  • - Large-scale introduction of organic farming.

Urban planning:

  • - ‘Slow cities’ movement practices.
  • - One of these is the reduction of the public space allotted to private cars, while increasing the space destined for public transport, bicycles and pedestrian areas.
  • - A moratorium on the building of major transport infrastructure (mainly airports, super-ports, highways and motorways, and high-speed railways).
  • - Integrated rehabilitation of the residential stock with a view to achieving a drastic reduction of energy use.
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How to cite:Reyes.L.G.(2016) «We need a Plan B for growth.», Open Democracy / ISA RC-47: Open Movements, 26 February. https://opendemocracy.net/luis-gonz-lez-reyes/we-need-plan-b-for-growth">

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