Promises and Perils of Modernity

Introduction

This blog is based on a guest lecture I did at UNSW on the same topic. What I was attempting to do here was to look at the issue of how, based on the dominant cultural view that has emerged in the west, we attempt to control the environment. That is, since the Enlightenment, the dominant cultural view of our relationship between society and the environment is one of ‘control’: that scientific and rational decision-making can harness the power of the environment and overcome any challenges we face.

The truth is, that in the western world modernity has, until know, met many of these promises. We have used the resources of the world to a great deal of success: we have powered the industrial and post-industrial revolutions, and now have a consumerist lifestyle that even 30 years ago seemed unimaginable. We have relied on science to overcome the limitations we have faced: an exploding world population was met with a green revolution that increased food output; pollutants that have been harmful to the environment such as CFCs have been replaced; and we are finding more efficient ways to use energy. We are living longer and wealthier than we have ever been.

The problem is, I am going to argue, is that the very reasons for our success and wealth are also leading to the potential of humanities downfall. The very consumerist lifestyles that have driven our wealth are leading to potential devastation. It is for this reason that we have called this lecture the ‘promises and perils’: and I want to focus on the perils.

I will be looking at three authors: Jared Diamond, Ronald Wright and Ulrich Beck


Jared Diamond’s Collapse

Jared Diamond’s most famous work is Collapse: How Societies Choose to Fail or Succeed. The focus of the book:

How societal collapses may not only involve an environmental component, but also contributions of climate change, hostile neighbours, and trade partners, and societal responses.

In writing the book Diamond intended that its readers should learn from history. Diamond's approach differs from traditional historians by focusing on environmental issues rather than cultural questions.

I do not have time to cover Diamond’s thesis in this lecture and we will return to it later in the semester. What is key here is that Diamond lists some key factors that have led to various societies collapsing. These are lists eight factors that have historically contributed to the collapse of past societies.

Importantly, he notes that key here is environmental abuse (including habitat destruction; soil problems; water; effects of introduced species on native species; and overpopulation). However, he also states that: "it would be absurd to claim that environmental damage must be a major factor in all collapses: the collapse of the Soviet Union is a modern counter-example, and the destruction of Carthage by Rome in 146 BC is an ancient one. It's obviously true that military or economic factors alone may suffice" (p. 15).

Diamond says Easter Island provides the best historical example of a societal collapse in isolation.

Let’s imagine what the last Easter Islander was thinking when he was cutting down the last tree:

• A scientist will come along to find a substitute;
• I am sure that the problem has been over-exaggerated;
• I am sure that there will be more trees over there somewhere; or
• It is this that made us wealthy, so why should we stop now!

It is this final point that I want to turn to: what are people thinking, and what are they willing to do. Diamond finds that societies most able to avoid collapse are the ones that are most agile; they are able to adopt practices favourable to their own survival and avoid unfavourable ones.

It is this point that ends Diamond’s thesis: the real problem is that the modern world remains in the sway of a dangerously illusory cultural myth – that most governments and international agencies seem to believe that the human enterprise is somehow 'decoupling' from the environment, and so is poised for unlimited expansion.

To emphasise the point, Diamond draws a distinction between social and biological survival (because too often we blur the two). The fact is, though, that we can be law-abiding and peace-loving and tolerant and inventive and committed to freedom and true to our own values and still behave in ways that are biologically suicidal.

In the end, Diamond raises some cultural issues dealing directly with our promises of modernity and science:

• So we should take problems seriously – as well as the difficulty in finding solutions;
• Societies may reach a cognitive impasse having mental fixations that prevent their later problems from being recognized;
• Societies make choices: both good and bad ones – which ones are we making
• Role of the elite… they did not insulate themselves from the consequences of their actions. Is our contemporary society different? Just look at the gated community – which you can get away with it for only short time. It is not viable to have a two tier society
• Importance to reappraise our core values – often painful. Blueprint for trouble is when we cannot do this – especially when these core values are the source of our strength. For example, consumerism (resource consumption) and isolationism


The problem is progress – Ronald Wright

Ronald Wright argues that our modern predicament is as old as civilization itself: a 10,000 year-old experiment we have participated in but seldom controlled.

Wright examines the meaning of progress and its implications for civilizations past and present: The twentieth century was a time of runaway growth in human population, consumption, and technology that placed an unsustainable burden on all natural systems. History has shown us that each of the societies coming before us fail – and the 20th century represents our last opportunity to succeed where our forefathers almost without exception have not.

Wright's concerns reflect that of Diamond’s:

“Our civilization, which subsumes most of its predecessors, is a great ship steaming at speed into the future. It travels faster, further, and more laden than any before. We may not be able to foresee every reef and hazard, but by reading her compass bearing and headway, by understanding her design, her safety record, and the abilities of her crew, we can, I think, plot a wise course between the narrows and the bergs looming ahead… (we must act)...without delay, because there are too many shipwrecks behind us. The vessel we are now aboard is not merely the biggest of all time; it is also the only one left. The future of everything we have accomplished since our intelligence evolved will depend on the wisdom of our actions over the next few years. Like all creatures, humans have made their way in the world so far by trial and error; unlike other creatures, we have a presence so colossal that error is a luxury we can no longer afford. The world has grown too small to forgive us any big mistakes.”

He sees societies self-destruct from a combination of lack of foresight and poor choices that lead to overpopulation and irreparable environmental damage.

So returning to the guy from Easter Island – according to Ronald Wright, he was not even thinking!

He asks: "Why, if civilizations so often destroy themselves, has the overall experiment of civilization done so well?" For the answer, he says, we must look to natural regeneration and human migration.

Again, covering everything that Wright argues is not possible, but key for us are "progress traps" throughout the book — including even the invention of agriculture itself. Wright labels such cultural beliefs and interests that act against sustainability — and hence civilizational survivability as a whole — the very worst kind of "ideological pathology":

We still have differing cultures and political systems, but at the economic level there is now only one big civilization, feeding on the whole planet’s natural capital. We’re logging everywhere, building everywhere, and no corner of the biosphere escapes our haemorrhage of waste. The twentyfold growth in world trade since the 1970s has meant that hardly anywhere is self-sufficient. Every Eldorado has been looted, every Shangri-La equipped with a Holiday Inn. Joseph Tainter notes this interdependence, warning that "collapse, if and when it comes again, will this time be global. ... World civilization will disintegrate as a whole. P.124–5

Ecological markers now indicate that human civilization has surpassed (since the 1980s) nature's capacity for regeneration. Humans in 2006 used more than 125% of nature's yearly output annually: "If civilization is to survive, it must live on the interest, not the capital of nature" (p. 129).

Wright concludes that "our present behaviour is typical of failed societies at the zenith of their greed and arrogance" (p. 129). "It is a suicide machine" and "Things are moving so fast that inaction itself is one of the biggest mistakes. The 10,000-year experiment of the settled life will stand or fall by what we do, and don’t do, now". We must therefore "transition from short-term to long-term thinking", "from recklessness and excess to moderation and the precautionary principle" (p. 131).

The problem is, however, that we our culture is simply focused on progress and expansion, and changing this around seems impossible.


Risk society – Ulrich Beck

The third perspective is Ulrich Beck’s "risk society": a term that highlights how our very practices create risks and increasingly becomes organized in response to these risk. The thinking is that this is a consequence of its links to trends in thinking about wider modernity, and also to its links to popular discourse, in particular the growing environmental concerns during the period.

In contrast, to the positions above, society is increasingly preoccupied with the future (and also with safety), which generates the notion of risk, Society must organise in a systematic way of dealing with hazards and insecurities induced and introduced by modernization itself.

So the guys on Easter Island are still chopping down the trees, but thinking about how they can make money from it and who will wear the consequences.

The risk society is a phenomenon firmly from the perspective of modernity: which is seen as a shorthand term for modern society or industrial civilization – it is vastly more dynamic than any previous type of social order. It is a society... which unlike any preceding culture lives in the future rather than the past.

Beck argues that it is possible for societies to assess the level of risk that is being produced, or that is about to be produced. The problem is that disasters such as Chernobyl means that public faith in the modern project has declined leaving public distrust in industry, government and experts.

Beck contends that widespread risks contain a 'boomerang effect', in that individuals producing risks will also be exposed to them. This argument suggests that wealthy individuals whose capital is largely responsible for creating pollution will also have to suffer when, for example, the contaminants seep into the water supply.

So, modernity creates risks that are worn, initially unevenly, and the boomerang to everyone. While this is happening, many are making money from it, and hence this is unlikely to change quickly.


Conclusion


Modernity has made many promises – and has fulfilled these. The problem is, now that it is failing us, how do we walk away from its processes.

Environmental Economics

Introduction

One of the things that seems to perplex most activists, academics and activist academics is ‘economics’: what it means, what it aims to do and how we should respond to those who put forward economic arguments to social and environmental problems and policy.


I want to start a new series of blogs on ‘economics’. This one introduces economics and how it is applied to environmental issues. It was prompted by a lecture I did at University of NSW – and I am hoping to expand on these concepts in the coming months.


While I am no fan of those who uncritically apply economics to environmental challenges, it should be recognised that environmental economics is a field that attempts to bring together one of the fundamental premises of our society (on going economic growth) with concerns that this growth is having detrimental impacts on our environment.


As you will no doubt note, I am sceptical about this field of research, but what is important here is that it is an attempt to break through the ‘progress trap’ of ongoing economic growth. As I discuss this area of economics, please weight up in your own thoughts and reflect on the following question: is environmental economics an attempt to green the economy, or part of an ongoing process of turning the environment into a commodity traded for profit rather than sustained for our livelihoods.


Economics – some brief background

While there are many definitions of economics, for us it is the study of how people make choices about what they buy, what they produce, and how our system of exchange works. Our economy, like most around the world, operates on a market system.


There are two fundamental concepts that all economists attempt to confront no matter what system they operate in.


The first is scarcity: that is, in a society where our demands, needs and wants are ongoing and seem ever growing, we live in a world that only has limited resources. (Note that many economists argue that our desires are infinite and soon as we fill one desire another emerges, I do not agree and think that is a pretty bleak vision of human nature, but do not have the space to discuss that here). Regardless, there is a mismatch between material desires and available resources.


This concept of scarcity is one of the most important concepts in economics: it is an attempt to study and assist the many decisions on how to use those resources in the face of expanding desires.


The second concept is opportunity cost: as there is a mismatch between desires and the resources to fulfil them, there is a need to choose one desire to fulfil over another. The ‘opportunity cost’ of any decision is what you are giving up to get what you want. Consequently, if you want a holiday or a new stereo and you decide on the holiday, the opportunity cost is the stereo you are giving up. You may choose to come to class or go for coffee with someone: you have to give up one to do the other. We can think of many such examples, and in each one, you make a choice and have to sacrifice another.


No matter what decision we make, there is an opportunity cost: and it is not necessarily a monetary one.


There are also four basic questions that every economy must answer:


o What should be produced?

o How many should be produced?

o What methods should be used?

o How should the goods and services be distributed?


In a market economy, the ‘marketplace’ decides how to answer these by allowing each producer to answer these questions themselves. The success of each of these decisions is, however, determined by the marketplace. So while a producer may decide what product to sell to make money, we (the consumers) determine whether to buy or not.


Note: in most textbooks you are told that there are two types of economies: a command economy (where a government makes all the decisions) or a market economy (where we are ‘free’ to choose through the market). The truth is, however, that most (if not all) economies are a mixture of the two. Even in a market economy like Australia’s, the government involves itself in the market by offering incentives (through taxes and subsidies) to guide the market. For example, there are billions of dollars of subsidies to the coal industry (including building roads and ports to assist in the production of coal) while offering very few incentives to renewable energy sources.


Economics in environmental policy

Environmental Economics… undertakes theoretical or empirical studies of the economic effects of national or local environmental policies around the world... Particular issues include the costs and benefits of alternative environmental policies to deal with air pollution, water quality, toxic substances, solid waste, and global warming.

National Bureau of Economic Research Environmental Economics (http://www.nber.org/)


The rise of environmental economics as a discipline and a field of policy follow the growing recognition that that the environment is a scarce resource and its use requires important decisions about opportunity cost. That is, in much of modern history, the environmental was seen as boundless: being a free resource that we could use forever. For example, much pollution was dumped with minimal controls because the earth was seen as both there to be used for free, and able to handle anything we throw at it.


As economics is a field aimed at dealing with scarce resources, it is a mechanism that has been seen as being useful when dealing with environmental problems.


The fundamental principle that drives environmental economics is that the environment is costed: given a price. That is, we can put a price on the value of different aspects of the environment: be it clean air, clean water, the Great Barrier Reef or a single tree – environmental economics relies on the principle that it is possible to estimate their worth.


Once this is done, it is believed that we can make decisions about use of the environmental by weighing up the financial costs and the benefits. Hence, it is possible to estimate the opportunity cost: so the cost of protecting a river because of the ‘value’ it offers as a tourist destination, can be measured against the benefits of attracting people to the areas.


Environmental economists acknowledge the difficulty in estimate such costs and benefits; it is better to estimate them than to come to the conclusion that it is too hard. The argument also goes that using the tools available through market-based instruments, environmental and economic goals can be reached efficiently.



Are these contradictory?

In fact, as the sphere of economics has become a growing part of our lives for various reasons, the public continuously demands that this is done before decisions concerning the environment are made.


Many argue, however, that there are inbuilt contradictions in the twin objectives of economics (which focuses on growth) and environmental protection (which tends to have a conservation focus). Consequently, it is believed that a choice must be made between one and the other and that both cannot be achieved concurrently.


I will not discuss this here, but will return to it in another blog.



Market failure


Central to environmental economics is the concept of market failure. This simply means that the market mechanism has essentially failed to efficiently allocate resources:

A market failure occurs when the market does not allocate scarce resources to generate the greatest social welfare. A wedge exists between what a private person does given market prices and what society might want him or her to do to protect the environment. Such a wedge implies wastefulness or economic inefficiency; resources can be reallocated to make at least one person better off without making anyone else worse off.
Hanley, Shogren, and White (2007)

Common forms of market failure include externalities, common property (or non-exclusion) and public goods.


Externalities

The basic idea is that an externality exists when someone makes a choice that has affects on other people but is not accounted for in the price set by the market. The most basic example is when a company pollutes it does not take into account the true costs that this pollution imposes on others. Consequently, the firm’s choice has a negative impact on the broader population. The result is that a less than efficient result is achieved: in this case, the resource of a clean environment is not allocated in the most efficient way.


In economic terminology, externalities are examples of market failures, in which the market does not lead to an efficient outcome.


So what environmental economics aims to do is cost these externalities: put a price on them to either act as a disincentive to stop the polluters, or charge a tax so people can be compensated for their environment being polluted.


Common property

A second focus of environmental economics revolves finding solutions to a lack of property rights that emerge when it is too expensive to exclude others from accessing a resource. When this occurs, it is said that the market allocation is inefficient.


This was highlighted by Garret Hardin's (1968) concept of the tragedy of the commons (which we will discuss in a future lecture). "Commons" refer to the environmental assets that allow collectively owned.


The basic problem is that if people ignore the scarcity value of the commons, then they can be over harvested as a resource: fisheries are one of many examples. Hardin argues that in such cases resources will be abused: and hence recommends the emergence of exclusive rights.


Note: this has been disproved including the work of Ostrom (1990) who showed how people have worked to establish self-governing rules to reduce the risk of the tragedy of the commons.


Public goods:

Public goods are a third type of market failure. This emerges when the market price does not capture the social benefits of its provision. For example, protection from the risks of climate change is a public good since its provision is both non-rival and non-excludable. That is, climate protection provided to one country does not reduce the level of protection to another country; non-excludable means it is too costly to exclude any one from receiving climate protection. A country's incentive to invest in carbon abatement is reduced because it can "free ride" off the efforts of other countries.


Public goods are a market failure because the market fails to provide them because people tend to hide their preferences (and hence refuse to pay) for the good while still enjoy the benefits.



Valuation

I want now to return to the concept of valuation: that is, estimating the value of the environment (or a piece of the environment).


There are a number of problems that exist in trying to value the environment. Central here is the concept of ‘intrinsic value’: that the environment (both as a whole and in parts) has a value that we derive from it simply by existing. For example, just the idea that the Great Barrier Reef or Amazon forest are there is important regardless of any benefits that we may gain from it. We may never see it, but just knowing that it is there is important.


But let us not just think about something with such obvious environmental and ecological importance, but just general use of environment resources: How do we value the parkland at the end of our stress or a place like Coogee Beach?


One way that has been suggested is to ask people how much they would pay to observe and recreate in the environment (willingness to pay) or their willingness to accept (WTA) compensation for the destruction of the environmental good.


Note: I want you to think about a place that you really value for personal and emotional reasons:

o What you would be willing to pay to enter this place?

o How much would you need to be compensated if it was to be turned into a car park?


If I were an environmental economist, to calculate the value of one of these places I would simply aggregate what everyone is willing to pay and come up with a figure. This would allow us to estimate its value and calculate the cost-benefit of the area.


Solutions

The second dimension of environmental economics that is important is the solutions offered. Let’s look at some of the solutions that are offered.


Environmental regulations:

Here, the idea is that a regulator estimates the economic and environment impacts - usually undertaking a cost-benefit analysis. While some mat argue that this is a non-market mechanism and outside the realm of environmental economics, there is still the need for the regulator to calculate the value of any regulation (both the cost of implementing the scheme as well as the cost of doing something) and compare it to the cost of doing nothing.


Quotas on pollution:

Another method for pollution reductions is through tradeable emissions permits: this allows the owners of the permits to freely trade the right to pollute. It is argued that this creates reductions in pollution at least cost. In theory, if such tradeable quotas are allowed, then a firm would reduce its own pollution load only if doing so would cost less than paying someone else to make the same reduction.


Taxes on pollution:

Increasing the costs of polluting will discourage polluting, and will provide a "dynamic incentive" to ensure pollution levels fall. A pollution tax that reduces pollution to the socially "optimal" level would be set at such a level that pollution occurs only if the benefits to society (for example, in form of greater production) exceeds the costs.


Removal of subsidies

That is, remove any hidden subsidies to dirty industries.


Better property rights:

One of the key theories in environmental economics is that the assignment of defined property rights will lead to optimal solutions – regardless of who receives them. For example, if people living near a factory had a right to clean air and water, or the factory had the right to pollute, then either the factory could pay those affected by the pollution or the people could pay the factory not to pollute. Or, citizens could take action themselves as they would if other property rights were violated.


This allows markets for "pollution rights" to emerge – and is known as emissions trading (the focus of current debates in Australia).



Do not confuse environmental and ecological economics

It is important to note that environmental economists apply the tools of economics to address environmental problems or market failure. That is, applying economics solutions to where market economics has proven unreliable.


Ecological economists take a different approach – focusing their work on the impacts of humans and their economic activity on ecological systems. Ecological economics sees economics is a strict sub-field of ecology: the economy should only expand to the size that negatively impacts on the environment.


Ecological economics is seen to take a more pluralistic approach to environmental problems, focusing on the long-term environmental sustainability and issues of scale (that is, what is the right scale for human activity).


Environmental and ecological economics have fundamentally different philosophical underpinnings.


Conclusions

There are many limitations to environmental economics. Many have rejected this field, saying that it does not go far enough in attempting to deal with the environmental challenges facing us.


Many ‘green economists’ reject this field as simply an extension of traditional forms of economics and there should be a greater focus on a new political economy that gives a greater emphasis to the interaction of the human economy and the natural environment.


For us, we should consider whether environmental economics is simply extending current practices or offering solutions…





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Hanley, N., Shogren, J. and White, B. (2007) Environmental
Economics: In Theory & Practice, Palgrave Macmillan, 2nd ed


Hardin, G. (1968) "The Tragedy of the Commons", Science, 162, pp. 1243-1248.


Ostrom, E. (1990) Governing the Commons: The Evolution of Institutions for Collective Action. Cambridge University Press.