Can Capitalism Be Green?
By Stephen Leahy*
say continuous economic growth, intrinsic to capitalism, is not
viable on a planet with increasingly scarce natural resources.
TORONTO, May 7 (IPS/IFEJ) - Capitalism has
proven to be environmentally and socially unsustainable, so future
prosperity will have to come from a new economic model, say some
experts. Just what this new model will look like is the subject
of intense debate.
One current states that continuous growth can be environmentally
compatible if clean and efficient technologies are adopted, and
if economies stop producing material goods and move towards services.
This is known as sustainable prosperity.
International agreements to fight global problems, like the thinning
of the atmosphere's ozone layer and climate change, used market
principles to achieve compliance by the private sector.
But the problem is, "We are consuming 25 percent more than the Earth
can give us each year," says William Rees, of the School of Community
and Regional Planning at the University of British Columbia.
Rees and other experts have calculated that annual human consumption
of natural resources exceeds the planet's ecological capacity to
regenerate them by 25 percent, a proportion that has been growing
since 1984, the first year the calculate that humanity crossed that
"Our planet needs natural capital (resources) like trees to provide
the ecosystem services of clean air and water that we all depend
on," said Rees in an interview. He was one of the inventors in 1992
of the concept of "ecological footprint", an indicator of how much
productive land a certain human population needs in order to supply
itself with resources and to absorb its waste.
Capitalism is all about accumulation of wealth based on the consumption
of natural resources, whose availability is strictly limited, he
said. We are also exceeding the maximum amounts of pollution or
waste products, such as carbon dioxide emissions -- the main contributor
to climate change --, that the planet can absorb and process without
Market economists call pollution and its impacts "externalities",
and rarely factor them into the economic models, he said.
Rees defines sustainable prosperity as the global use of resources
and generation of wastes that do not exceed the planet's capacity
to regenerate and absorb. Equally important, he says, is the social
dimension: true prosperity is possible only when income disparity
between the rich and poor is small.
"U.S. executives are paid 500 to 1,000 times more than their workers,
and this inequity continues to worsen," he said.
If everyone lived like the U.S. population, we would need five planets
to provide the necessary natural resources, says the World Wildlife
Fund's Living Planet Report 2006. China alone would use all the
world's current resources.
Cleaner and more efficient technology is not the solution either,
despite being widely touted as the path to sustainability, said
Rees. Modern industrialized societies already use resources more
efficiently than developing nations, but rich countries consume
far more material goods and end up using more of the planet's limited
In his opinion, the new mantras of "responsible consumption" --
buying organic or sustainably-made goods -- and dematerialization
of economies -- producing services rather than products -- do not
solve the problem. The only solution is to reduce pollution and
consumption of resources, he said.
"All this sustainability talk implies that we don't really want
to change what we are doing," he added.
Responsible shopping or corporate social responsibility won't make
much of a difference, agrees Brian Czech, president of the Center
for the Advancement of the Steady State Economy, a Washington, DC
economic think tank.
"We have to ratchet our economic growth downwards to stabilize at
a steady state," Czech, a former wildlife ecologist, said in an
interview for this report.
Most developing nations still need to grow economically, but rich
countries have to reduce their use of resources so that can happen,
The idea that growth can be sustainable by dematerialization is
"nonsense", in Czech's opinion. Producing services requires use
of natural resources like energy and the money generated will be
used to buy something.
"Neoclassical economists at the World Bank, USAID (U.S. Agency for
International Development) and elsewhere continue to believe there
are no limits to growth," Czech says.
Economic success needs to be redefined: instead of increasing wealth
it should be increasing well being, says Nic Marks, head of the
Centre for Well Being at the New Economics Foundation (NEF), in
The British government has recognized that the economy has to exist
within the reality that there is only one planet and we are living
well beyond its means, Marks said in an interview.
"However, it is politically unsustainable to say less economic growth
is the way forward," Marks noted.
Instead, greener, cleaner and dematerialized growth are seen as
solutions to "one-planet living". Marks says these are necessary
along with major reductions in resource use.
U.S. entrepreneur Peter Barnes says the way forward is for capitalism
to shift from exploiting natural resources like air and water to
protecting them as "common wealth trusts" of humanity. They would
belong to everyone on the planet and would have the power to limit
use of scarce resources, charge rent, and pay dividends to everyone,
Barnes writes in a new book "Capitalism 3.0".
Barnes envisions a large number of ecosystem trusts around the world,
administered by trustees who cannot act in their own self-interest.
They would be legally obligated to act solely on behalf of beneficiaries
-- all citizens and future generations equally.
"Neither government nor corporations represent the needs of future
generations, ecosystems, and nonhuman species. Commons trusts can
do this," he writes.
* This story is part of a series of features
on sustainable development by IPS and IFEJ -- the International
Federation of Environmental Journalists.