Recovery Strategies Preserving Growth

Lecture V:  Recovery Strategies Preserving Growth

Introduction

1. Economic production has ecological consequences.  In the last lecture, these consequences were expressed in a general principle referred to as the Entropy Principle of Economics.  What the principle says, quite simply, is that the production of a given amount of economic goods results in a corresponding amount of ecological degradation.  Ever growing magnitudes of economic production over the past century or so have resulted in global warming, ozone depletion, and other anomalies discussed in previous lectures. 
2. From this general principle it follows that further growth in economic production results in yet further damage to the biosphere.  Rather than continuing this pattern of abuse, commonsense tells us that further economic growth should be radically curtailed.
3. This sane advice is countered, however, by the dictum of mainstream economics that continued growth is essential for economic health.  In the mainstream view, there are other ways of countering further ecological damage that are compatible with continued growth.  The present lecture examines a few of these “growth friendly” alternatives.  In order, the expedients to be examined will be titled “environmental economics,” “technological remediation,” and “clean energy.”

Environmental and resource economics

1. Environmental economics, also referred to as environmental and resource economics (ERE), is a relatively new tributary of the mainstream.  As noted previously, neoclassical economists traditionally thought of environmental resources as limitless and hence not relevant to the price of goods produced from them.  To put it technically, environmental resources were treated as externalities.  ERE is characterized primarily by its intent to factor the value of environmental externalities into market calculations.
2. From the perspective of ERE, a situation in which these externalities are not taken into account in the pricing of goods constitutes a market failure.  This means that the market does not reflect the full social costs of the goods and services it provides.  Another way of characterizing ERE, accordingly, is that it advocates correction of market failures with regard to the social costs of environmental resources. 
3. We should note in passing that ERE is quite different from ecological economics (EE).  EE began to gain prominence about 20 years ago with the founding of the professional journal Ecological Economics (1989) by Robert Costanza and Herman Daly.  The dissident school of EE is strongly interdisciplinary, concerned with economic and ecological systems alike and focused primarily on their interaction.  Its characteristic theme is sustainable development, which calls for continued improvement in quality of economic services while restricting what Boulding called “throughput” to levels compatible with a health biosphere.
4. Kenneth Boulding’s distinction between “cowboy” and “spaceship” economies may be recalled from the first lecture of this series.  “Cowboy” economies operate on the assumption that environmental resources are unlimited and that the business of a thriving economy is to transform these resources into goods and services (the process of “throughput”).  “Spaceship” economies, on the other hand, aim at conserving our stock of natural resources while serving the needs of society on a sustainable basis.
5. The underlying distinction between ERE and EE can be expressed in terms of these metaphors.  Being a tributary of the mainstream, ERE is caught up in the flow of the “cowboy” tradition.  EE belongs instead to the “spaceship” tradition, tracing back through E.F. Schumaker (Small is Beautiful) and N. Georgescu-Roegen (The Entropy Law and the Economic Process) to Kenneth Boulding himself.  A more complete discussion of EE may be found in Ch. 12 of the text.
6. As far as ERE is concerned, its close connection with neoclassical economics makes it a dubious means for correcting ecological wrongs of the sort we have been considering.  One problem is that bringing environmental factors to bear in determining market prices requires measuring those factors in monetary terms.  Apart from arbitrary approximations, there is no way of assigning credible dollar values to an intact ozone layer or to an optimal level of CO2 in the atmosphere.  One might reasonably think that if realistic values were somehow assigned to these resources then free-market enterprise would price itself out of existence.
7. An accompanying problem is that bringing environmental costs into the pricing process probably is not enough to keep an economy from expanding to the point of overwhelming its ecological support system.  As a branch of the mainstream, ERE remains committed to the importance of continued growth.  If scarcity drives up prices in one resource sector (say oil), then there will be pressure to draw increasingly on other sectors (say biofuel) momentarily more plentiful.  As we shall see presently, there will also be pressure to develop new technologies to make use of existing resources economically more efficient.  Regardless of how resources are allotted as a result of pricing, however, a growing economy uses increasing amounts of energy and dumps increasing amounts of entropy into a vulnerable biosphere.

Technological Remediation

1. Another possible way out of our environmental predicament is to address particular problems piecemeal with particular technological fixes.  Most forms of ecological degradation we have been talking about are technological in origin.  Global warming comes largely from greenhouse gases emitted by power plants and automobiles, holes in the ozone layer result largely from synthetic chemicals like CFCs, and so forth.  Since these problems stem from technological applications initially, it is natural to think that they might be amenable to technological solutions.  Human ingenuity brought these problems about; maybe it can solve them as well.
2. We are initially encouraged in this approach by  various apparent successes.  One seeming success was the phasing out of CFCs (chlorofluorocarbons) for HCFCs (hydrochloroflourocarbons) as mandated by the Montreal Protocol of 1987.  Both refrigerants, of course, are synthetic in origin.  Although both contain chlorine, HCFCs are less damaging to the ozone layer.  Since HCFCs were already available, it made sense to use them in place of the more damaging CFCs.  Another example is the use of scrubbers to reduce emissions of SO2 from industrial smokestacks, a major source of acid rain.  This technology has been credited with significant reduction in acidic damage to lakes and forests, particularly in the northeastern U.S.
3. An especially instructive example of initial success is the use of genetic engineering to reduce the use of synthetic pesticides.  Not only can pesticides be harmful to the workers applying them, they also can poison birds and honey bees and other organisms vital to healthy ecosystems.  An initially promising way of cutting back on pesticides was the use of genetically modified (GM) plants containing genes that are fatal to certain insects that prey on naturally occurring plant strains.  GM corn is now available that resists common corn borers, and seed companies do a brisk business in GM cotton that fights off several varieties of budworm and bollworm.
4. Initial confidence in these various technologies, however, has been eroded by the fact that they have met with only partial success at best.  While smokestack scrubbers serve their intended purpose of removing SO2, scrubbers in a coal-burning power plant capable of supplying a city of 140,000, for instance, produce close to 4,000 tons of sludge per year that ends up in some local landfill.  This in addition to an annual production of some 10,000 tons of nitrogen oxide (another source of acid rain) and over 300 pounds of toxic materials like arsenic and mercury.
5. While there has been progress in curbing the release of ozone-depleting gases, moreover, recent developments are not wholly encouraging.  One problem is that the HCFCs that have been replacing CFCs are damaging to the ozone layer themselves.  Although only 5% as effective in capturing ozone as CFCs, their use in rapidly increasing amounts contributes to continued erosion of this protective barrier.  A previous estimate that the ozone layer would heal itself by 2050 was revised to 2065 a few years ago, and has more recently been extended to 2080.  Another drawback to HCFCs is that they are greenhouse gases, which means that this purported solution to one source of ecological damage exacerbates another that is comparably serious.
6. Even more dismal is the recent history of GM plants.  When first used in China a decade or so ago, GM cotton reduced pesticide use by more than 70%.  Due to the proliferation of other pests that replaced bollworms killed by the toxin, however, farmers growing GM cotton more recently have had to use pesticides at levels near those typical of conventional farmers.
7. Similar outcomes have been recorded for crops genetically modified for herbicide tolerance.  A standard example here is corn engineered to resist the herbicide “Round-up,” which then could be applied in reduced quantities to interfering weeds.  Although these crops tend to require less herbicides for a few years after initial application, however, the weeds targeted developed tolerance to the herbicide by natural selection.  According to a report released in 2004, farmers in the U.S. now use more herbicides per acre of GM crops than they do on conventional varieties.

Particular forms of degradation have multiple causes

1. One lesson to be drawn from cases like these is that technological solutions to environmental problems often have unintended side effects.  Replacement of CFCs by HCFCs adds impetus to global warming.  And smokestack scrubbers add substantial quantities of solid wastes.  Although both technologies contribute significantly to their intended purposes, these benefits exact costs in other environmentally critical sectors.
2. As in the case of GM corn, moreover, a given technology can actually impede the purpose intended.  Whereas GM products continue to earn profits for seed companies, they can actually result in greater use of pesticides. 
3. Just as particular technologies can have unintended consequences, so can the conditions they are intended to mitigate have multiple causes.  This means that even when the technology in question is effective as intended, the targeted condition might still persist.  Return to the case of global warming for example.  Burning fossil fuels is not the only source of CO2 in the atmosphere.  CO2 is also produced by the burning of living matter.  Consider forest fires set by lightning (a natural cause) as well as the burning of tropical rainforests (often a deliberate human action).
4. Nor is CO2 the only greenhouse gas.  Another major cause of global warming is methane generated in the guts of animals, whether raised for human use or living in the wild.  Methane is also produced by thawing of permafrost in lakes, contributing to a positive feedback process how under way as global warming intensifies.
5. Other relevant cases of multiple causation are those of acid rain and of ozone depletion.  The latter is caused not only by chlorine from coolants like Freon (a CFC) but also by bromide stemming from materials used in fire extinguishers and agricultural fumigants.  And acid rain results not only from SO2 emitted from smokestacks and in volcano eruptions but also from hydrogen chloride typically released by phytoplankton in the ocean.  By way of upshot, even if particular technologies aimed at controlling a given cause of these adverse phenomena turn out to be successful, the phenomena in question might still persist.

Functional failures not addressed by technological means

1. Let us look further at this approach to environmental problems, which addresses specific problems with specific technological fixes.  The basic shortcoming of this approach is not just that the technologies in question often have adverse side-effects, or that the ecological problems addressed have multiple causes.  The fundamental shortcoming is that these problems often consist of malfunctions on the part of complex ecological systems and that piecemeal remedies can not correct these functional failures.
2. A clear-cut example is the problems of desertification, which is the spread of deserts into areas once plentiful in water.  The standard technological countermeasure is the construction of desalination plants capable of converting sea water into water suitable for drinking and agriculture.  By the beginning of the century, more than 7,500 such plants were in operation worldwide, most of them located in the Middle East.  As a brief overview will make clear, however, this technology leaves the basic problem untouched.
3. Precipitation over a given land mass occurs as a result of a complex interactions involving evaporation from neighboring bodies of water, prevailing winds in the upper atmosphere, temperature differences set up by convection currents near the earth’s surface, and various other factors.  Dry spells result when one or more of these factors behave abnormally, such as an extended range of equatorial convection currents resulting from global warming.  Desertification occurs when such dry spells persist.
4. It is obvious that climatic abnormalities of this sort are not rectified by desalination plants supplying drinking water to specific locales.  The precipitation patterns that have been interrupted are components of complex systems of interacting climatic variables extending over vast areas of the earth’s surface.  Increasing local supplies of drinking water by technological  contrivance does nothing to bring these complex systems back into equilibrium.
5. In similar fashion, global warming is an abnormality associated with a dysfunctional system of variables governing the heat content of the lower atmosphere.  Curtailing emissions of CO2 from automobiles and power plants may help prevent further imbalance, but it will not restore the temperature-control mechanisms of the atmosphere to their preindustrial effectiveness.  And so forth and so on for the problems of acid rain, ozone depletion, and loss of species diversity.  Once natural systems of such magnitude have been thrown out of balance, they cannot be restored on a piecemeal basis by human technology.

Technology’s role in mainstream growth theory

1. Before leaving the topic of technological fixes, we should look parenthetically at the way technology figures in neoclassical growth theory.  The general idea is that natural resources, labor, and capital all contribute to economic output, and that when one factor runs short others can be substituted in its place.  Since technology is a form of capital in this view, technology can compensate for resources becoming increasingly scarce.  An example sometimes used to illustrate the point is the use of seismic vibrations to open up oil deposits that previously were inaccessible by less advanced technologies.
2. According to some versions of mainstream growth theory, continued technological progress can be relied on to make continued economic growth possible in the face of diminishing resources.  Questions of credibility aside, we should note that technology figures here as a way of furthering growth and not as a means of mitigating its harmful effects.  Mainstream growth theory does not rebut our general conclusion that ecological damage stemming form continued growth cannot be avoided by technology applied to specific problems.

Clean Energy

1. The remaining strategy for resolving our environmental crisis without sacrificing growth is a massive shift from fossil fuel to clean sources of energy.  For present purposes, clean energy may be understood as energy that can be harnessed and used without direct damage to the environment. Primary examples are solar energy, wind energy, and energy from moving water.  Nuclear energy is not included for many reasons, not least of which is the radioactive wastes it produces that have potential for catastrophic ecological damage.  Also not included is biofuel produced from corn, which relies on extensive use of pesticides and artificial fertilizers.
2. The immediate advantages of clean energy are that it is renewable and that it is mostly nonpolluting.  An energy source is renewable if it is inexhaustible (like sunlight) or is naturally replenished no less quickly than it is used (like water running past a mill site).  Clean energy is nonpolluting in the sense that no ecologically harmful by-products (like CO2 and SO2) stem from its production.  In initial appearance, at least, the replacement of fossil fuel by clean energy is a promising strategy.
3. Upon further reflection, however, we realize that the clean-energy alternative shows less promise of being able to resolve our environmental crisis than initially hoped.  Our consideration of why this is so will proceed under three separate headings.  First in line are various reasons for thinking that the crisis will continue regardless of a shift to clean energy.
4. Return to global warming once again for an example.  As noted previously, global warming stems from a buildup of greenhouse gases in the atmosphere.  Notable among such are CO2 and methane, each of which issues from both human and nonhuman sources.  Even if CO2 resulting from fossil fuels were completely eliminated, substantial amounts would still enter the atmosphere from the intentional burning of tropical rainforests as well as from forest fires set by lightning and other natural causes.  As far as methane is concerned, large amounts are contributed by the digestive tracts of animals and by the natural decomposition of organic materials.  None of these sources would be affected by substituting clean energy for fossil fuels. 
5. Another source of methane previously noted is the thawing of permafrost due to global warming.  As more methane from this source reaches the atmosphere, global warming intensifies, resulting in more methane released, and so on indefinitely.  This positive feedback process is already underway, and its unlikely to be dampened by any forthcoming reduction in use of fossil fuels.  The point to carry away here is that the breakdown of natural heat-regulating mechanisms that leads to global warming is unlikely to be remedied by a shift from fossil fuels to clean energy.  Further damage might be retarded, but existing damage will not be eliminated.

Use of clean energy still produces entropy

1. Another set of considerations trace back to the Second Law of Thermodynamics.  One practical consequence of this law is that the consumption of energy always produces low-grade heat.  In a healthy state, the biosphere is able to radiate most low-grade heat produced within it back into space.  Global warming results when substantial amounts of low-grade heat are retained within the atmosphere.  Given the current impairment of its heat-control mechanisms, the atmosphere will continue to accumulate waste heat regardless of the kind of energy-use that produces it.
2. To put it directly, use of energy from clean sources produces waste heat no less surely than does use of fossil energy.  As long as total energy use continues to increase, so will the amount of low-grade heat discharged into the biosphere.  And given its impaired condition, so will the amount of low-grade heat the biosphere is unable to expel.  This holds true regardless of the type of energy being consumed.  Even if clean energy were to replace fossil fuel entirely, increase in its use would result in greater amounts of waste heat accumulating in the atmosphere.  The only way of reversing this build-up is to cut back radically on amounts of energy consumed, quite independently of the kind of energy in question.

Producing and transmitting clean energy

1. The third set of considerations to look at in evaluating a major shirt from fossil fuel to clean energy has to do with problems characteristic of clean energy itself.  These problems pertain both to the siting of clean energy facilities and to the transmission of energy to places of consumption.  Take energy from solar collectors as a case in point. 
2. To set the stage, recall how ecosystems acquired most of their solar energy prior to the Industrial Revolution.  Before then, plants were the only “solar collectors” able to convert energy from the sun into forms usable for work by other creatures.  Ecosystems supporting omnivores like people developed only where there was adequate plant life to supply their energy needs.  A consequence is that human beings generally had adequate supplies of energy in their immediate vicinity.  In normal situations, there was neither need nor opportunity for earlier societies to import energy from distant sources.
3. Now return to our current situation by way of comparison.  As a simple matter of fact, technologies producing clean energy are capable of operating only under fairly restrictive geological conditions.  Solar collectors, or example, are impractical in areas with frequent cloud cover or low insolation.  This means that use of solar energy for most practical purposes would not be easy in much of Canada and northern Eurasia.  For similar reasons, siting of wind turbines is limited to areas where wind with suitable velocities is standard, and hydropower is readily at hand only in those areas where it is practical to convert moving water into electricity.
4. The upshot is that there are many parts of the globe where immediate supplies of clean energy would be severely limited.  For the economies of these regions to replace fossil fuel with clean energy would require their importing it from sources considerable distances away.  And as matters stand, the only practical way of transmitting large amounts of clean energy over long distances is via electric power lines.
5. Perhaps needless to say, electric power lines are environmentally problematic in their own right.  Not only are they unsightly – particularly in large concentrations – they are hazardous as well to various wildlife populations.  They also require extensive disruption of local habitats to construct and to maintain.  Imagine what it would be like to have massive networks of power lines crisscrossing the globe for the express purpose of providing clean energy to the world’s far-flung economies.  To envisage an energy future like this might be almost enough to make us long for the days of hunter-gatherer subsistence.
6. Here is yet another consideration.  Apart from the nightmare of an earth enmeshed in a giant spiderweb of power lines, the process of clean energy generation relies on machinery from start to finish.   Unlike solar conversion systems in the natural world, which basically keep themselves up and running, humanly fabricated machinery requires constant upkeep and replacement.  Manufacturers’ estimates indicate that wind turbines have a useful life of about 30 years, with an added decade or two for photovoltaic solar collectors.  Hydroelectric generators fare somewhat better, but they too eventually must be replaced.
7. Given an average 40 to 50 years operating-life of a typical clean-energy installation, the machinery providing our future supply of clean energy will require continuous maintenance and replacement.  Old equipment will have to be dismantled and carted to landfills, and replacements will be constantly under construction.  This adds up to a heavy industry of clean-energy technology, with all the attendant environmental consequences.

Summary and prognosis

1. Like the strategy of piecemeal fixes discussed earlier in this lecture, clean energy is reliant on extensive technology.  Because technology is a hot commodity in the open market, both strategies are favored by mainstream economists.  An added inducement from the free-market standpoint is that both strategies lend themselves to continued economic growth.  But continual growth, we now realize, is the primary cause of our ecological crisis.  Whatever their virtues in other respects, neither piecemeal fixes nor clean energy cancel out this basic fact.
2. By way of conclusion, it should be noted that the foregoing considerations do not add up to an argument against clean energy.  Attempts to replace fossil fuel with clean energy should proceed as quickly as possible.  What these considerations show is that clean energy is not a solution to our environmental crisis.  It is time to look more carefully at the only realistic solution.  In the next lecture we bite the bullet and take a serious look at the strategy of actually curtailing economic growth.