A future threat has become a present reality and time is against us

Jamie Morgan

This short article is extracted from, and summarises, much of the author’s larger article in Real World Economic Review, issue 106, entitled “Against the clock: Economics 101 and the concept of time”.

“How can we construct an economics consistent with the biophysical limits to economic growth?’. As any ecological economist is aware, this is a foundational issue not an afterthought chapter tacked on to the end of a textbook or     delegated to a sub-disciplinary specialist who can ‘deal with that for us’. Doing either of those has been part of the problem. Mainstream economics takes as its primary focus the microeconomics of price signalling in systems of market exchange and assumes efficiencies in dynamic market processes are sufficient to ensure best use of resources and eventual development of alternative ways of achieving what we want and need (through a combination of behavioural change, investment and technology). At the same time, the macroeconomy is conceived through a circular flow of income, and targets continual economic growth. This implicitly equates health of an economic system (as a source of both progress and wealth) with continual economic growth (bigger is better rather than different can be good) and this growth is conflated with the possibility of solving problems created within the system, including environmental ones. Thus economic growth implicitly becomes the basis of solutions rather than merely source of the problems we see around us. This mirrors the basic socio-economic drivers of our dominant ways of living (i.e. the apex which others aspire to and which ‘development’ assumes is the way to go). Capital-accumulating industrialconsumption economies presuppose growth and, government stabiliser policies notwithstanding, if growth fails to occur this is deemed to be a signal of crisis (and this remains the case despite the proliferation of alternative indexes of human development and wellbeing).

“What is very obviously not foundational is the basic fact that an economy is a material-energy process on a finite planet involving metabolic flow and waste, and that a bigger global economy observably outstrips any ‘efficiency savings’ to the extent that the biosphere has been profoundly altered and polluted.

“Environmental economics has taken its cue from mainstream economics. Its main focus being relative scarcity rather than absolute scarcity, addressing market failures (taxes, subsidies and regulation to get the price right, altering behaviour while also working to induce market processes that promote technological transitions), and if there is no market, creating property rights and securitisable assets to essentially create synthetic markets (trading pollution and valuing nature for its preservation). All of this simply ignores the basic problem of socioeconomic drivers, implicitly assumes technology will mainly solve problems and underplays the need to rethink how society and economy are organised – around a concept of ‘a good life within planetary boundaries’ and a concept of ‘enough’ (a different concept of ‘abundance’). These are just not questions and issues either a mainstream economist or an environmental economist can meaningfully address within their skillset and framework of thinking (and this remains the case despite growing concern among world scientists regarding trends and despite some limited progress at the annual COP meetings – in which issues like financing, just transition and so on have become legitimate subjects of discussion).

“A future threat has become a present reality and ecological breakdown, climate change and erratic and extreme weather events are now all around us. We are only at 1.1-1.2°C of heating.

Worse is yet to come and an avalanche of statistics makes it very clear that rhetoric has not yet translated into action with sufficient urgency. We are on the clock and time is against us.”

Original paper: https://www.paecon.net/PAEReview/issue106/whole106.pdf   

Source:
Real World Econ Rev blogs, 31 Jan 2024 https://rwer.wordpress.com/2024/01/31/afuture-threat-has-become-a-present-realityand-time-is-against-us/

Prof Jamie Morgan is attached to Leeds Beckett University Business School, UK.