From a Failed Growth Economy to a Steady-State Economy
A steady-state economy is incompatible with continuous growth—either positive or negative growth. The goal of a steady state is to sustain a constant, sufficient stock of real wealth and people for a long time. A downward spiral of negative growth, a depression such as we are entering now, is a failed growth economy, not a steady-state economy. Halting an accelerating downward spiral is necessary, but is not the same thing as resuming continuous positive growth. The growth economy now fails in two ways: (1) positive growth becomes uneconomic in our full-world economy; (2) negative growth, resulting from the bursting of financial bubbles inflated beyond physical limits, though temporarily necessary, soon becomes self-destructive. That leaves a non-growing or steady-state economy as the only long run alternative. The level of physical wealth that the biosphere can sustain in a steady state may well be below the present level. The fact that recent efforts at growth have resulted mainly in bubbles suggests that this is so. Nevertheless, current policies all aim for the full re-establishment of the growth economy. No one denies that our problems would be easier to solve if we were richer. The question is, does growth any longer make us richer, or is it now making us poorer?
(a) Some economists in fact think of nature as the set of extractive subsectors of the economy (forests, fisheries, mines, wells, pastures, and even agriculture….). The economy, not the ecosystem or biosphere, is seen as the whole; nature is a collection of parts. If the economy is the whole then it is not a part of any larger thing or system that might restrain its expansion. If some extractive natural subsector gets scarce we will just substitute other sectors for it and growth of the whole economy will continue, not into any restraining biospheric envelope, but into sidereal space presumably full of resource-bearing asteroids and friendly highly-evolved aliens eager to teach us how to grow forever into their territory. Sources and sinks are considered infinite.
TheOil Drum
I'd like to begin this thread with some positive news about sustainability in Asia and Europe.
China bank wins sustainability award
A Chinese bank that has pioneered lending for energy conservation, emissions reduction and other green projects was named Asia's sustainable bank of the year last night at the 2009 FT Sustainable Banking Awards in London.
Industrial Bank of China, a medium-sized lender, is the first Chinese institution to have committed itself to international sustainability standards such as the Equator Principles for project finance.
With the government in Beijing promising tough action to mitigate the environmental impact of the country's rapid economic growth, IBC's lead in incorporating environmental standards in its lending policies is being followed by other banks such as Industrial and Commercial Bank of China.
The overall winner of the 2009 awards was Triodos Bank of the Netherlands, created in 1980 to lend to businesses, organisations and projects with a social, environmental or cultural benefit. The bank has continued to grow despite the financial crisis, investing in like-minded institutions in emerging markets and managing funds of €3.7bn ($5.2bn, £3.2bn).
FT