The Limits to Greta 3

australia fire bbc

Spectrum of Denial

“… 2019 was in many ways, for many of us, Year Zero. It was the year many of us stopped disassociating, woke up and realised the party is over.”

The postcard from Sydney is a reminder that you can have months of unprecedented bushfires and still reject global warming as a hoax : It’s not a climate emergency, it’s an an arson emergency!

Mind you, re-tweets by Donald Junior  seem to be for those who have missed the train.  Apparently climate change denial has moved on. Flat rejection of global warming has been melting with the ice and is a bit passé.

North

South

And in between

Rather than argue with a thermometer   “… the forces of denial are exploiting the lifestyle change movement to get their supporters to argue with each other,” argues  Michael Mann in the Guardian.It takes pressure off attempts to regulate the fossil fuel industry. This approach is a softer form of denial and in many ways it is more pernicious. … This is a deflection campaign and a lot of well-meaning people have been taken in by it.”

Trump Paris Joe Heller

And indeed, Trump Senior recently disowned his previous disbelief in the hoax.  He now takes the  “the environment” so seriously he plans to read a book about it. 

Will he be joining the Major Status Quo Incumbents’ Operation Greentalk?

Probably not. Even in Germany  climate change denial seems to invigorate the New Right trolls.  There is something straight and simple about “flat” denial. But the focus has definitely shifted from “It’s not happening” to “Maybe it’s happening but it’s not man made”.  From “There is no science” to “The science is iffy”. Still, you can easily spot those “forces of denial”. As a black friend told me about Enoch Powell at the time: “At least you know where you are with him…”

With “Operation Greentalk” you never know where you are. Are you in the investment or marketing department?   We are used to Big Oil greenwashing  its fossil stains. They’ve been doing that forever . But Amazon , Google , Siemens , Roger Federer and practically  everyone else ? Why ?

Just follow the money

Apparently  Greta is on the trail.

Ironically the money markets may find themselves left behind on the platform for dummies with Donald Jr. :  Not that I generally follow (ex) Centrfal Bankers’ advice  on current over-valuations. But check out Frik Els’ article on current under-valuations: “Mining’s unlikely heroines”

Following the money makes for a reality check. Denial is a spectrum. And we are all on it.

All the trendy talk of sustainability is largely just that. Talk. Meanwhile emissions are going up.  As the Economist put it: “The world is still struggling to implement meaningful climate policy.” Not least because “the world” tends to use mainstream economic modelling with its anachronistic “neutral money” mantra. There are 99 problems with “a green transformation”. “Paying for it” isn’t one of them.

As Servaas Storm puts it in “Are Economists Blocking Progress on Climate Change?” : “Climate economists, like economists in general, tend to forget that the policy conclusions drawn from their models are only as good, robust and realistic as the assumptions underlying the models they use. …. (They suffer from) “… self-deception when they believe their optimal control analyses of the costs and benefits of climate mitigation policies can inform climate policymaking in any meaningful manner.”

And Co2 is only the headline metric. We could reduce that tomorrow and the planet could still be dying. I am all for stopping denial and disassociation. But demonising the “dumb deniers” is not gonna do the trick. There is a  big problem with declaring “the party is over” when  most on the planet haven’t yet had a party.

I seem to have come full circle. The limits to Greta are the limits to Growth. Or rather the limits to limiting growth. What growth? Is “Decoupling” just the techno version of denial? Can quantitative “Degrowth” be qualitative Growth? 

Growth! What growth?

To be continued …

Meanwhile here is Christopher F. Jones with a short history lesson : The Delusion and Danger of Infinite Economic Growth – How economists came to ignore the natural world.

“Fairytales of eternal economic growth.” That’s how climate activist Greta Thunberg depicted the dominant mindset at the United Nations last week. “How dare you,” she said, admonishing them for “empty words” instead of concrete actions to preserve the planet.

She’s right. One of the reasons nations fail to address climate change is the belief that we can have infinite economic growth independent of ecosystem sustainability. Extreme weather events, melting arctic ice, and species extinction expose the lie that growth can forever be prioritized over planetary boundaries.

It wasn’t always this way. The fairytale of infinite growth—which so many today accept as unquestioned fact—is relatively recent. Economists have only begun to model never-ending growth over the last 75 years. Before that, they had ignored the topic for a century. And before that, they had believed in limits. If more people saw the idea of infinite growth as a departure from the history of economics rather than a timeless law of nature, perhaps they’d be readier to reimagine the links between the environment and the economy.

In 1950, the economics profession had surprisingly little to say about growth. That year, the American Economic Association (AEA) asked Moses Abramovitz to write a state-of-the-field essay on economic growth. He quickly discovered a problem: There was no field to review.

The founding fathers of economics shared a belief that growth was finite, and that the reason for limits lay in the natural world.

Yes, John Maynard Keynes had offered a theory of stagnation, demonstrating the need for government spending to stimulate an economy mired in recession, and Austrian political economist Joseph Schumpeter had studied creative destruction, highlighting the importance of entrepreneurs and innovation. Wesley Mitchell, founder of the National Bureau of Economic Research, had looked at business cycles and others had analyzed monetary forces. But no one had put it all together in a theory of growth. Modern work was “fragmentary” and had “remained on the periphery of economics,” Abramovitz explained to AEA members. Development economist W. Arthur Lewis agreed, noting in 1955 that “no comprehensive treatment of [economic growth] has been published for about a century.”

It was an interesting turn for a field originally quite interested in growth, but convinced it was bounded. The founding fathers of economics—luminaries including Adam Smith, David Ricardo, and John Stuart Mill—shared a belief that growth was finite, and that the reason for limits lay in the natural world. Writing in the eighteenth and nineteenth centuries, they based this conclusion on three observations. First, there was a limited supply of land. Second, all economic processes required at least some products of the land as raw materials. And third, the productivity of the land was subject to the law of diminishing marginal returns: each additional bit of labor and capital added to a plot of land will offer less and less benefit until no more gains are possible. Until the middle of the nineteenth century, leading economists recognized the interdependence of natural and economic systems.

While Adam Smith considered this inevitable slowing of growth to be “dull” and “melancholy,” others were optimistic. John Stuart Mill thought the stationary state would come when there was enough to satisfy human needs, and embraced its arrival, writing in 1848 that it “would be a very considerable improvement on our present condition [with] much room for improving the art of living” when humans could abandon the rat race of endlessly pursuing more. Whether good or bad, the end of growth was a matter of when, not if, for the classical economists.

So when did growth become infinite? If you had to pick a Hans Christen Anderson for the fairytale of eternal economic growth, American economist Robert Solow would be your man. Solow launched modern growth theory with a pair of pioneering articles written in 1956 and 1957. Still alive today, he has done more to shape growth theory than any other thinker.

Like Abramovitz and Lewis, Solow turned his attention to growth in the 1950s because the topic was “in the air.” Calculations of Gross National Product (GNP) had been pioneered during World War II and were spreading across the globe. Fueled by international competition and the reality of robust economic expansion in many nations, growth had quickly become the catchword of the day in economics departments and government bureaucracies.

Solow advanced these discussions with a new model of growth, one that sought to analyze the relative contributions of capital, labor, and technical progress. Whereas Smith, Ricardo, and Mill had taken for granted that land was one of the three factors of production with labor and capital, Solow assumed that land did not matter. To the extent that land or natural resources merited mention (and they rarely did), they could be seen as a sub-category of capital, interchangeable with money or machines.

Ignoring land meant cutting the natural world out of modern growth theory at its inception. Solow wrote that this seemed the “natural assumption” to make in a theory of growth, though he did not specify why. And since in the 1950s, abundant land and resources appeared available, few would have disagreed. Moreover, Solow was a modeler, and the chief virtue of a good model is that it simplifies. A map of a city that included every detail would be as large as the city itself, of course, and of no real use. With bottomless pools of oil in the Middle East, extensive minerals from developing nations, and swaths of farmland available, why clutter a model by including them?

With the rise of the environmental movement in the late 1960s, however, this assumption was called into question. And nowhere was the attack stronger than in the blockbuster 1972 report The Limits to Growth, in which an MIT team commissioned by the Club of Rome argued ecosystem collapse would be the inevitable result of exponential growth. Solow called the report “worthless as science” and “ignorance masquerading as knowledge.” Integrating natural resources into his growth model in 1974, he argued with complex mathematics that “the world can, in effect, get along without natural resources.”

“How dare you,” Thunberg might easily have scolded.

But while readers might imagine Solow to be a laissez-faire fundamentalist beholden to corporate interests, in reality, he was a left-of-center thinker committed to government intervention and planetary protection. He wrote about abating pollution and joined a Sierra Club board. And he scoffed at infinite models: The real world is so complex that to predict more than twenty years into the future is foolhardy, he once told a Congressional committee.

Solow was partly right to critique sloppy thinking among some environmentalists. Limits to Growth did not take account of the ways increased prices or technological advances make new resources available. Nor did such reports account for the fact that from the 1940s to the 1970s, most natural resources did not become demonstrably more scarce. Plus, Solow noted, a no-growth economy could still be highly wasteful. Pollution, not growth, should be the focus of environmentalists.

The specific blind spot in his model was climate change. When thinking about economic growth, he and other economists focused exclusively on inputs to the production process. Would we have enough coal, oil, iron, and minerals to make new goods? With price signals, substitution, and technological change, Solow and his colleagues were convinced we would.

But they did not consider outputs—waste and pollution—to be more than a nuisance. They did not imagine that greenhouse gas emissions could be so consequential as to threaten ecosystem integrity in ways that could affect growth.

Similarly, Solow didn’t consider how his ideas would be used by others. His footnotes and caveats showed he didn’t think it made sense to talk about infinite growth. But few people read footnotes and caveats, particularly busy politicians. The easy and convenient takeaway from his models has been that growth can proceed regardless of planetary conditions, and Solow did little throughout his career to correct this misinterpretation.

Perhaps the relative newness of the idea of eternal economic growth can give us hope. In demanding an accounting of growth better suited to today’s problems—one that takes planetary boundaries seriously—we do not need to overturn fixed or timeless laws of nature. As we grapple with the growing dangers of climate change, we can create fresh models and write different stories. That may mean returning to the field’s origins: a time when ideas of growth and the natural world were intertwined.”

 

More on “Growth! What Growth?”  here

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