Wednesday, April 19, 2017

The End of Growing the New American Economy

Jeffrey Sachs is probably the country’s predominant expert on sustainable development. He has written a number of bestselling books on the subject, and also was an adviser to Bernie Sanders in the 2016 presidential race.

Building the New American Economy (Columbia University Press, 2017) is a relatively brief (121 pages) primer for the lay reader on what Sachs thinks we all need to know about the economic problems facing the country, and where we need to go from here. The key idea is found in the introduction: “The keys to success in building the new America [sic] economy can be summarized in three words: smart, fair, and sustainable.”


A smart economy means deploying the best of cutting edge technology… A fair economy would start with Trump’s pledge to rebuild inner cities. Such a pledge would include affordable housing; decent urban public schools and public health facilities; efficient transport services for low-income communities … A sustainable economy means acknowledging and anticipating the dire environmental threats facing America’s cities and infrastructure.

The chapters cover each of the topic areas in (some) more depth. There are chapters on long-term investment (as opposed to Wall Street-driven profit-taking chicanery); decarbonizing the energy and transport sectors; addressing income inequality; the health care crisis; and the massively overgrown military budget.

Sachs bases his recommendations on the UN Sustainable Development Goals, which were signed unanimously in 2015. There are 17 goals, largely corresponding to the categories Sachs talks about.

Each chapter diagnoses the issues we face and suggests ways forward. Everything is quite sensible, and if Sanders had won, or even if Clinton had, we would probably be moving strongly in the direction that Sachs suggests. The problem, of course, is that they didn’t win, Donald Trump did, and while Sachs acknowledges that and writes the book as a recommendation to the new president and congress, a lot of the language is similar to this:

President Trump rejected climate science on the campaign trail and is surrounded by oil and gas interests. He seems intent, at the start of his administration, on turning the clock backward on climate policy…. The climate risks are so dire, the technological opportunities for energy transformation so positive, and the global urgency and consensus so clear, that any reversal of US policy would necessarily be short-lived, though deeply frustrating and costly.

In other words, President Trump seems inclined to do exactly the opposite of what needs to be done; I trust that circumstances will force him to his senses and eventually follow my recommendations. To which I say: Good luck with that.

Sachs’ book reads a little like an alternative history, like Looking Backward or something like that. There’s a healthy dose of whistling past the graveyard.

The problem is, of course, that Donald Trump has no intention of coming to his senses any time soon, and the next four or eight years of no meaningful action, or even regressing from the meager progress we’ve been able to make thus far, are going to put the world even closer to the precipice, particularly when it comes to the climate crisis.

Sachs recognizes that the current economic and political system is incapable of addressing these issues with anything like the seriousness they require. He points out, in the chapter “A New Kind of Politics,” that politics is completely subsumed by corporate lobbying and unlimited electoral money. The four greatest offenders are in precisely the areas Sachs says we have to address: Wall Street, the military-industrial complex, the healthcare sector, and the fossil fuel industry. His recommendations - that the process be opened up to greater transparency and that public policy be divorced from the electoral cycle - are, again, quite sensible, but how exactly to do that beyond exhorting the American public to demand it is left rather vague.

At the same time as I was reading Sachs’ book, I was finishing Richard Heinberg’s The End of Growth (New Society Publishers, 2011). Heinberg is the head of the Post-Carbon Institute and one of the foremost experts on “peak oil,” the idea that oil is becoming more expensive and less available, with negative implications for the world economy.

Actually, Heinberg goes further. Tracking the development of the current financial and economic system, he demonstrates that both governments and individuals are massively in debt, and shows how the current system demands endless economic growth in order to pay off the interest on all the previous debt. It’s like a giant Ponzi scheme. But there’s a limit to the amount of growth that’s possible: both the climate crisis and other environmental impacts serve, or will serve, as a boundary beyond which growth can’t go. Therefore our current economic system, and the ecosphere that sustains it, are on a collision course.

Sachs recognizes this too, but he is much more sanguine about the ability of our political system to address it, through political reform, advanced technology and economic planning (a dirty word, he points out, since Reagan) than Heinberg. To Heinberg, economic growth is over - full stop. Oil will not become more available; the price will continue to rise as available stocks become harder and more expensive to access; and when the price of oil goes up, the economy goes into recession. Fresh water and food supplies are similarly not going to be able to keep up with the massive increases in population that we’re seeing.

To Heinberg, innovation can’t address the issue because renewables won’t take as much of the current market as they need to to have the necessary effect on climate change; electricity consumption won’t fall due to increased efficiency; and advanced bio-diesel won’t be able replace fossil fuels for many transportation needs. (These are the kinds of measures Sachs prescribes.) I would add that carbon capture and storage (which Sachs promotes) has yet to be proven technologically feasible, and nuclear power (which Sachs also champions) has significant problems as well, including being astronomically expensive and oh by the way, we haven’t figured out what to do with the waste yet.

When I worked on climate and energy issues in the Kansas legislature, we always argued that we could replace our energy needs, and continue economic growth, through the aggressive use of energy efficiency and renewables. I don’t know if it was true then (Heinberg would say it wasn’t) but it’s sure not true now. Our economy and its energy needs are going to crash up against the boundaries of the earth’s capacity to provide us what we need -- in fact, they already are.

Our current system simply cannot deal with a crisis like this, that calls its own existence into question. We’ve known for a long time (since the oil crises of the 1970s) that we have to transition away from imported oil, and probably since the 80s, and certainly the early 90s, that fossil fuels are causing climate change. And for all that time, all that warning, what have we done about it? We’ve done some energy efficiency; we’ve moved a certain percentage of our power generation to renewables; and we’ve increased the fuel efficiency of cars a certain percentage. That’s not nothing, but it’s sure not enough. We also developed tar sands and fracking, which make the problem worse. No high-speed inter-city rail, negligible distributed generation (and what there is is fought tooth and nail by power utilities), no space age transmission, a 2 or 3% market share for hybrids and EVs, and a 30-year concerted effort by the fossil fuel industry and their bought-and-paid-for network of think tanks, political organizations and politicians to do nothing about the problem except to deny that it even exists.

So Sachs is right: if we had a political system that could actually address the problems we face, we could face those problems. But… we don’t. Maybe 10 or 20 years ago we could have done smart technology and the transition to clean energy and still kept our go-go American lifestyle - or maybe not, as Heinberg would say. But that time has passed. Now we will have no choice but to do as much damage control as we’re able to do. I don’t know how much that will be. But we’re into worst-case-scenario land now.

We can continue to pump cheapish energy and money into keeping the balloon of economic expansion inflated, and if Trump is anything to go on, that’s exactly what we will do. But that only postpones the day of reckoning. One way or another, we’re going to radically reduce both our consumption levels and our energy usage, and probably our population as well. We could have done it an easier way, but we didn’t; now -- or next year, or next decade, but soon -- we’ll do it the hard way.

And the sooner we figure this out, and figure out some way to measure our well-being other than by GDP, the better it will be, if not for us, then for our children and grandchildren.





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