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Posts Tagged ‘sustainable

Does the Inclusive Wealth framework have the firepower to replace the doddering, myopic GDP?

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Not every country or citizen has benefited from overall higher levels of economic welfare. The gap between the lowest and highest income countries remains large, with many countries in Africa, Latin America and Asia still below the global average. In addition, many countries experience significant domestic income inequalities between rich and poor. In new and rising economic powers such as China and India, millions have been lifted out of poverty, but often at a high environmental cost. “The economic growth of recent decades has been accomplished mainly through drawing down natural resources, without allowing stocks to regenerate, and through allowing widespread ecosystem degradation and loss” (UNEP 2011).

The Inclusive Wealth Report 2012 has been launched at the Rio+20 Conference in Brazil. The report presents a framework that offers a long-term perspective on human well-being and sustainability, “based on a comprehensive analysis of nations´ productive base and their link to economic development”.

Developed by the International Human Dimensions Programme on Global Environmental Change (IHDP), the IWR 2012 was developed on the notion that current economic production indicators such as gross domestic product (GDP) and the Human Development Index (HDI) are insufficient, as they fail to reflect the state of natural resources or ecological conditions, and focus exclusively on the short term, without indicating whether national policies are sustainable.

The IWR 2012 features an index that measures the wealth of nations by looking into a country’s capital assets, including manufactured, human and natural capital, and its corresponding values: the Inclusive Wealth Index (IWI). Results show changes in inclusive wealth from 1990 to 2008, and include a long-term comparison to GDP for an initial group of 20 countries worldwide, which represent 72% of the world GDP and 56% of the global population.

Key findings:

* 70 percent of countries assessed in the 2012 Inclusive Wealth Report present a positive Inclusive Wealth Index (IWI) per capita growth, indicating sustainability.
* High population growth with respect to IWI growth rates caused 25 percent of countries assessed to become unsustainable.
* While 19 out of the 20 countries experienced a decline in natural capital, six of them also saw a decline in their inclusive wealth, thus following an unsustainable track.
* Human capital has increased in every country, being the prime capital form that offsets the decline in natural capital in most economies.
* There are clear signs of trade-off effects among different forms of capital (manufactured, human, and natural capital) as witnessed by increases and declines of capital stocks for 20 countries over 19 years.
* Technological innovation and/or oil capital gains outweigh declines in natural capital and damages from climate change, moving a number of countries from an unsustainable to a sustainable trajectory.
* 25 percent of assessed countries, which showed a positive trend when measured by GDP per capita and the HDI, were found to have a negative IWI.
* The primary driver of the difference in performance was the decline in natural capital.
* Estimates of inclusive wealth can be improved significantly with better data on the stocks of natural, human, and social capital and their values for human well-being.

What is the inclusive wealth framework? It is based on social welfare theory “to consider the multiple issues that sustainable development attempts to address”. First, according to IWR 2012, the inclusive wealth framework “moves away from the arbitrary notion of needs” (about time too, not that the rank-and-file economists are going to be listening) and “redefines the objective of sustainable development as a discounted flow of utility” – this is not good, and does not in any way appeal to readers and practitioners who do not see organic development as automatically linked to some form of economic measurement – which, in this case, is consumption. Does this mean consumption (or not) is the central idea that underlies inclusive wealth? Let’s see. “The framework is flexible enough to allow consumption to include not just material goods, but also elements such as leisure, spiritual aspirations, social relations, and environmental security, among others”. Interesting and curious – spiritual aspiration as a consumption good? Family and clan or tribe ties as consumption?

How useful is the IWR 2012 shaping up to be? There is an “equivalence theorem whereby the framework allows the move from the constituents of well-being to their determinants”. Sounds profound. What does it mean? It refers to the various capital assets a country is able to accumulate – note they’re talking about country, not household, not social network. “This asset base is called the productive base of the nation. The productive base forms the basis for sustainable development and provides a tangible measure for governments to use and track over time”. Again, this is not so good – we want to see inclusive wealth as being easily understood by households (let’s say rural households) and by local administrations (like panchayats in India).

The IWR 2012 goes on to say that “more importantly, the framework provides information for policy-makers – particularly planning authorities – on which forms of capital investment should be made for ensuring the sustainability of the productive base of an economy”. Again not good, because the IWR 2012 has mentioned spirituality and social ties ande environmental security – so why return like a lost child to “the productive base” when ‘productive’ can continue to mean what it does today? A closer reading will no doubt provide answers.

The IWR 2012 has said, predictably and quite justified, that traditional indicators such as gross domestic product (GDP) per capita and the Human Development Index (HDI) have been the main determinants used to measure the progress of nations. “GDP per capita was developed just after World War II by economist Simon Kuznets. It was constructed by Kuznets to measure the level of economic production and to provide guidance to policy-makers on which sectors of the economy are growing and which are slowing, and the throughput that is used by the economy” – a concise definition of GDP worth keeping in mind to see why it has so needed replacing for at least the last generation.

GDP was always meant to be used strictly as an indicator for economic production. Somewhere along the line, GDP came to be used by policy-makers to measure the overall progress and performance of a nation (they were lazy, to begin with, and the gradual realisation of environmental costs from the pursuit of progress made alternatives politically inconvenient to adopt, especially when these implied the well-being of citizens). “This caused some fundamental problems, not with the indicator itself, but with the way it has been used. Increases in total economic production do not translate into improvements in well-being. They might increase employment and might increase the income of individuals, but all these are just possible outcomes and not automatic consequences of economic growth.” That is a truth well worth repeating at every available forum. From a very cursory reading, the IWR 2012 is a very well-conceived beginning to find a Grand Indicator that will once and for all consign GDP to the corner in which it belongs.

Written by makanaka

June 18, 2012 at 11:55

The Blue Planet warning, and prescription

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Painting by Shraddha Satish Shenoy of St Columba School, Mumbai, India

This February in London, Britain, a group of the world’s leading scientists and experts in sustainable development called for urgent changes to policies and institutions to enable humanity to tackle environmental crises and improve human well-being. They had gathered to finalise a paper launched at the UN Environment Programme’s Governing Council meeting in Nairobi, Kenya, on 20-22 February.

Now available, the paper emphasises transformational solutions to key environment and development challenges. It highlights the policies, technologies and behaviour changes required to protect the local, regional and global environment, stimulate the economy and enhance the livelihoods of the poor. Called ‘Environmental and Development Challenges: The imperative to act’, this group wrote the paper as a prelude to the Rio+20 conference in Brazil in June, which marks the 20th anniversary of the historic UN Conference on Environment and Development (Rio Earth Summit).

The paper’s authors are all past winners of the Blue Planet Prize, an award presented to individuals or organisations worldwide in recognition of outstanding achievements in scientific research and its application that have helped provide solutions to global environmental problems.

“The challenges facing the world today need to be addressed immediately if we are to solve the problem of climate change, loss of biodiversity and poverty,” said Bob Watson, who is the Chief Scientific Adviser to the UK government’s Department for Environment, Food and Rural Affairs (Defra), a Blue Planet Prize winner in 2010 and a co-author of the new paper.

Here are the salient messages from their paper:

There is an urgent need to break the link between production and consumption on the one hand and environmental destruction on the other. This can allow risking material living standards for a period that would allow us to overcome world poverty. Indefinite material growth on a planet with finite and often fragile natural resources will however, eventually be unsustainable. Unsustainable growth is promoted by environmentally-damaging subsidies in areas such as energy, transportation and agriculture and should be eliminated; external environmental and social costs should be internalized; and the market and non-market values of ecosystem goods and services should be taken into account in decision-making.

Painting by Siddhi Sudhakar Ghadi of St Agnes High School, Mumbai, India

The immense environmental, social and economic risks we face as a world from our current path will be much harder to manage if we are unable to measure key aspects of the problem. For example, governments should recognise the serious limitations of GDP as a measure of economic activity and complement it with measures of the five forms of capital, built, financial, natural, human and social capital, i.e., a measure of wealth that integrates economic, environmental and social dimensions.

Green taxes and the elimination of subsidies should ensure that the natural resources needed to directly protect poor people are available rather than via subsidies that often only benefit the better off.

The present energy system, which is heavily dependent on fossil fuels, underlies many of the problems we face today: exhaustion of easily accessible physical resources, security of access to fuels, and degradation of health and environmental conditions. Universal access to clean energy services is vital for the poor, and a transition to a low carbon economy will require rapid technological evolution in the efficiency of energy use, environmentally sound low-carbon renewable energy sources and carbon capture and storage. The longer we wait to transition to a low carbon economy the more we are locked into a high carbon energy system with consequent environmental damage to ecological and socio-economic systems, including infrastructure.

Painting by Sanchana Laxman Jadhav of St Agnes High School, Mumbai, India

Emissions of GHG emissions are one of the greatest threats to our future prosperity. World emissions (flows) are currently around 50 billion tonnes of carbon dioxide-equivalent (COe) per annum and are growing rapidly. As the terrestrial and oceanic ecosystems are unable to absorb all of the world’s annual emissions, concentrations (stocks) of GHG emissions in the atmosphere have increased, to around 445ppm of CO2e today and increasing at a rate of around 2.5 ppm per year.

Thus we have a flow-stock problem. Without strong action to reduce emissions, over the course of this century we would likely add at least 300 ppm COe, taking concentrations to around 750 ppm COe or higher at the end of the century or early in the next. The world’s current commitments to reduce emissions are consistent with at least a 3 C rise (50-50 chance) in temperature: a temperature not seen on the planet for around 3 million years, with serious risks of 5 C rise: a temperature not seen on the planet for around 30 million years. Given there are some uncertainties present in all steps of the scientific chain (flows to stocks to temperatures to climate change and impacts), this is a problem of risk management and public action on a great scale.

There are serious short-comings in the decision making systems at local, national and global levels on which we rely in government, business and society. The rules and institutions for decision making are influenced by vested interests, with each interest having very different access over how decisions are made. Effective change in governance demands action at many levels to establish transparent means for holding those in power to account. At the local level public hearings and social audits can bring the voices of marginalized groups into the forefront. At national level, parliamentary and press oversight are key.

Globally, we must find better means to agree and implement measures to achieve collective goals. Governance failures also occur because decisions are being made in sectoral compartments, with environmental, social and economic dimensions addressed by separate, competing structures.

Painting by Pooja Badhe of Udaychal High School, Mumbai, India

The Blue Planet laureates who gathered in London to work on the paper are:

Professor Sir Bob Watson, Chief Scientific Adviser of the UK Department for Environment, Food and Rural Affairs (Defra); Lord (Robert) May of Oxford, former Chief Scientific Adviser to the UK Government and President of Royal Society of London; Professor Paul Ehrlich, Stanford University; Professor Harold Mooney, Stanford University; Dr. Gordon Hisashi Sato, President, Manzanar Project Corporation; Professor José Goldemberg, secretary for the environment of the State of São Paulo, Brazil and Brazil’s interim Secretary of Environment during the Rio Earth Summit in 1992; Dr Emil Salim, former Environment Minister of the Republic of Indonesia; Dr Camilla Toulmin, Director of the International Institute for Environment and Development; Bunker Roy, Founder of Barefoot College; Dr Syukuro Manabe, Senior Scientist, Princeton University; Julia Marton-Lefevre, Director-General of the International Union for the Conservation of Nature; Dr Simon Stuart, Chair of the Species Survival Commission of the International Union for the Conservation of Nature; Dr Will Turner, Vice President of Conservation Priorities and Outreach, Conservation International; Dr Karl-Henrik Robert, Founder of The Natural Step, Sweden.

The Rights of Nature, a Rio reminder from Bolivia

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The so-called ‘Zero Draft of the Outcome Document for the Earth Summit 2012’, an unwieldy name for any collaborative document, has been commented upon and responded to by a very large group of NGOs and voluntary organisations. That’s good, because the UN Secretariat, insofar as it can make a contribution, has provided some synthesis of the conversations till date.

'The Rights of Nature', condensed into a word cloud

But, and this is a big ‘but’, the Zero Draft is not urgent, it is woefully unambitious, it has next to no detail and its tone is about as attractive as a dentist’s chair. Not good for what is to be a grand 20th anniversary meeting which will be watched and heard by tens of thousands of interested parties worldwide.

There’s precious little on the mess that is our socio-economic systems, there’s far too little honesty about what’s wrong. There’s a worrying tendency of repeating the words ‘sustainable’ and ‘development’ and overusing word pairs like ‘green economy’ and overusing ideas like ‘earth systems governance’.

But – there is an alternative. Hard-hitting and truly visionary, this alternative is called ‘The Rights of Nature’. It was submitted to the UNCSD (UN Commission on Sus Dev, which is the host of the Rio+20 meeting). “The proposals developed by the Plurinational State of Bolivia bring together and build upon the progress made in the World Charter for Nature (1982), the Rio Declaration (1992), the Earth Charter (2000), and the World People’s Conference on Climate Change and the Rights of Mother Earth (2010),” explains the Bolivian proposal at the outset, a calling to history which regrettably is left out of the Zero Draft.

You can re-read the stirring ‘The Law of Mother Earth’, and here is a little more from ‘The Rights of Nature’:

1. In this century, the central challenges of sustainable development are: on the one hand, to overcome poverty and the tremendous inequalities that exist and, on the other hand, reestablish the equilibrium of the Earth system. Both objectives are intrinsically linked and one cannot be reached independently of the other.

2. It is essential to recognize and affirm that growth has limits. The pursuit of unending development on a finite planet is unsustainable and impossible. The limit to development is defined by the regenerative capacity of the Earth’s vital cycles. When growth begins to break that balance, as we see with global warming, we can no longer speak of it as development, but rather, the deterioration and destruction of our home. A certain level of growth and industrialization is needed to satisfy basic needs and guarantee the human rights of a population, but this level of “necessary development” is not about permanent growth, but rather, balance among humans and with nature.

3. New technologies will not allow unending economic growth. Scientific advances, under some circumstances, can contribute to resolve certain problems of development but can’t ignore the natural limits of the Earth system.

You can download a pdf of ‘The Rights of Nature’ from here, the source being the World People’s Conference on Climate Change and the Rights of Mother Earth.

Monsanto, get out of India!

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On 9th August 2011, which is 69 years since the Quit India movement was launched in India as part of the freedom struggle, marches will be held in major Indian cities to throw out GM crops, industrial agriculture, corporate land grabs, and the multinational companies who are profiting at the expense of millions of small farming families.

India’s kisan swaraj movement – farmers’ independent self-reliance – has said that the question of who controls our agriculture – our crores of farmers or a few big corporations – has deep ramifications for the whole society.

“We all have a big stake in whether unsafe genetically modified foods will be thrust on us, whether unsafe agri-chemicals would further damage our water, soil and health, whether 10 crore (100 million) farmer families will lose their livelihoods, whether our rural and urban areas will be sustainable and whether we would have safe, diverse and nutritious food to eat.”

The 9th of August 2011 is to be a day of action which aims to strengthen the broader struggle against corporate domination of agriculture by focusing on its most potent symbol. From Mumbai, Hyderabad, Bangalore, Chennai and other towns and cities in India, a strong signal will be sent that citizens will not tolerate corporate domination of our food and farming systems.

This call is being put out by Alliance for Sustainable and Holistic Agriculture (ASHA), an all-India network of about 400 organisations of farmers, agricultural workers, consumers, social activists and academics, working to promote ecologically sustainable agriculture and secure livelihoods for farmers, and stop corporate domination of our agriculture and food system.

Monsanto’s Misdeeds and Growing Threat in India – A few indications about the dangers of Monsanto and the extent of its control [get the English pamphlet here / get the Hindi pamphlet here]:
1. Mahyco-Monsanto used its Bt cotton seed monopoly to set exorbitant prices. The Andhra Pradesh government had to use the MRTP Commission,  Essential Commodities Act and then a special Act to finally push its price from Rs.1800 per packet to Rs.750.
2. Monsanto actually sued Andhra Pradesh and Gujarat state governments that they have no right to control seed prices – with Congress leader Abhishek Singhvi as its lawyer! How can individual farmers protect themselves from its legal machine?
3. Monsanto entered into licensing agreements with most seed companies so that out of 225 lakh acres of GM cotton, 210 lakh acres is planted with its Bollgard. During 2002-2006, Monsanto earned Rs.1600 crores just in the form of royalties.
4. Monsanto is on the Board of US-India Knowledge Initiative in Agriculture, under which bio-safety regime for GM crops was sought to be weakened; repeating its US strategy where its lawyers practically wrote the policies on GM seeds and patents.
5. Monsanto entered into hushed-up agreements with several states  (Rajasthan, Orissa, Gujarat, Himachal Pradesh, Jammu and Kashmir) under which the states spend hundreds of crores of public funds every year to purchase Hybrid Maize seeds from Monsanto and distributing them free of cost to farmers, creating a ready market.
6. Monsanto is pushing the sales of its herbicide glyphosate which is known to cause reproductive problems. Approval for its herbicide-tolerant GM crops would skyrocket the use of this hazardous chemical in our fields.
7. Recently, gross violations were exposed in its GM maize field trials in Karnataka.

Written by makanaka

August 8, 2011 at 20:23

When humans use up the planet – why we need to do less with a lot less

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By 2050, humanity could devour an estimated 140 billion tons of minerals, ores, fossil fuels and biomass per year – three times its current appetite – unless the economic growth rate is “decoupled” from the rate of natural resource consumption. This is the central recommendation of a major new study by the UN Environment Programme (UNEP), ‘Decoupling: natural resource use and environmental impacts from economic growth’.

Developed countries citizens consume an average of 16 tons of those four key resources per capita (ranging up to 40 or more tons per person in some developed countries). By comparison, the average person in India today consumes four tons per year.

With the growth of both population and prosperity, especially in developing countries, the prospect of much higher resource consumption levels is “far beyond what is likely sustainable” if realized at all given finite world resources, warns this report by UNEP’s International Resource Panel. Already the world is running out of cheap and high quality sources of some essential materials such as oil, copper and gold, the supplies of which, in turn, require ever-rising volumes of fossil fuels and freshwater to produce. Improving the rate of resource productivity (“doing more with less”) faster than the economic growth rate is the notion behind “decoupling,” the panel says.

That goal, however, demands an urgent rethink of the links between resource use and economic prosperity, buttressed by a massive investment in technological, financial and social innovation, to at least freeze per capita consumption in wealthy countries and help developing nations follow a more sustainable path.

Humanity is pressing up against the limits of a finite planet to provide resources like water, oil, metals and food, said a news report by IPS on the UNEP study.

[The ‘Decoupling’ report in full, a summary, factsheet and slides can be found here.]

During the 20th century, the rate of resource use has increased twice as fast as the increase in global population. Now, resources are being consumed at an even greater rate and are on pace to triple by 2050, the report calculates. Except there simply aren’t enough resources left on the planet to manage that – the average person in Canada or the United States currently consumes 25 tonnes of key resources every year.

Industrialised countries need to reduce their consumption by making significant reductions in waste and major improvements in the efficiency with which they use resources. At the same time, developing countries need to create new low-carbon, super-efficient resource use pathways for their economic development. Developing countries have to change their idea of what development means in a resource-scarce world. They need to forge a new resource- efficient, low carbon development path, said Mark Swilling of the Sustainability Institute at the University of Stellenbosch in South Africa.

There is a pressing need for sanitation in much of Africa, but instead of building expensive Western-style water treatment infrastructure, countries can use their wetlands and natural vegetation to provide the same service, Swilling, a co-author of the report, told IPS. “We will miss out on these kinds of opportunities if we follow Western development patterns,” he said.

Public infrastructure is the biggest determinant of future energy and resource use, said Marina Fischer-Kowalski of the Institute of Social Ecology in Vienna. North America’s infrastructure, including transportation, sanitation, food production and so on, are all high-energy, high-material-use systems, said report co-author Fischer-Kowalski. They were designed with the assumption of never-ending access to cheap and plentiful energy and resources. Efficiency improvements can be made but it is more expensive and limits to what can be done.

WTO, trade, markets, agribiz research-the meeting of agriculture ministers in Berlin

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Thou Market, southern Sudan. Across the Sahel, women generate income from balanites seeds, which are about half oil and a third protein. After processing at home, they can be turned into many tasty items, including roasted snacks and a spread not unlike peanut butter. They also supply a vegetable oil that is a prized ingredient in foods as well as in local cosmetics. (From 'Lost Crops of Africa: Volume III: Fruits', The National Academies Press. Photo: Caroline Gullick)

Thou Market, southern Sudan. Across the Sahel, women generate income from balanites seeds, which are about half oil and a third protein. After processing at home, they can be turned into many tasty items, including roasted snacks and a spread not unlike peanut butter. They also supply a vegetable oil that is a prized ingredient in foods as well as in local cosmetics. (From 'Lost Crops of Africa: Volume III: Fruits', The National Academies Press. Photo: Caroline Gullick)

Forty-eight ministers of agriculture from countries large and small, poor and rich, met in Berlin to talk about food and about how people in their countries put two meals on the table. They ought to have got to grips with the prices question, they ought to have called for justice and equity, they ought to have represented what the poorest and most vulnerable in their countries want.

They didn’t. Instead, they have released one of the sorriest, weakest, most unfocused and pointless statements I have seen in recent years on the subject.

This piece of diplomatic puffery is called ‘Final Communiqué of the 3rd Berlin Agriculture Ministers’ Summit 2011 in Berlin on January 22nd 2011’.

It explains: “At the ‘3rd Berlin Agriculture Ministers’ Summit’, agriculture ministers from 48 countries came together to exchange experiences and ideas on how trade at local, regional and global level could contribute towards food security. They are convinced that sustainable and regional production and an integrated, rules-based trading system, are prerequisites for making food security and the right to food a practical reality’.

And there you have it. Trade is the most important ingredient, as far as these ministers can see, for food security. The integration of trade is what is needed, and a trading system (conveniently, such as the one they refer to several times in the following text) is the ultimate answer. The paragraphs of their mercantile output have been added to the agriculture page. When you read it:

Note the heavy-handed propaganda techniques employed in this communiqué. “Economic growth” appears early, in the second para, and is found to be “inextricably linked” with the provision of sufficient and nutritious food.
Note that private investment appears in the third para and the ministers emphasise that it must increase. Of course R&D is all done privately now, and national agricultural research systems must be arm-twisted to turn over their best and brightest to the agribiz giants.
Note that “climate change”, some muddy notion of “responsibility” and an equally muddy notion of “sustainable” comes early in the communiqué. This is done so that the environmentalists cannot fault the ministers for ignoring ground realities, but is not explained by any operational directives arising out of this meeting.
Note that the term “integrated” is used early. I’ll explain the significance below.
Note that “markets” makes its first appearance in the text in para eight, and here “integration” is immediately linked to this term in the following para. This is sought to be justified by invoking ideas of food security and “global economic development”.
Note that “value creation” comes next as a keyword, and is attached to the idea of “producers” (who I am sure are not meant to be smallholder farmers) and the familiar tautology of “fair competition”.
Note that “smallholder” does in fact turn up in the following para (ten) but only as a recipient of “due regard” and only provided they “integrate” themselves with markets.
Note that “trade” is the glue which, in this view of the agricultural world, binds everything together.
Note that “markets” and a “trading system” are important enough to be in a puff para together.
Note that developing countries must be “supported” in the primary quest to remove “technical” and “institutional” “obstacles” to – what else? – trade.
Note that the Doha Development Round (which collapsed unceremoniously) is resurrected in para 14 as the new champion of this global agricultural vision.
Note that in para 15 the Doha Development Round is further held up as being a signal contributor to “global food security” and that this is vital to “the poorest countries”, a precondition of which the World Trade Organization chief negotiators are strongly urged to recognise.
Note that “markets”, “price” and “free and transparent” all appear in the same para (16).
Note that “price volatility” follows immediately thereafter, as being evident throughout the world (now just how did all that happen?) and therefore “risk-protection” measures are required (such as markets, of course).
Note that the statement ends with a hurried hodge-podge of a conclusion and a fireworks of “market” and “price”.

If you have the stomach for such vacuous declaiming, the original statement is here.