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Keynote Address of Education Seminar, by Richard Douthwaite

Held on Wednesday 28th November 2001 at Tipperary Institute, Thurles, Co Tipperary

Introduction

Many of the natural and social systems upon which the human race relies for its existence and enjoyment are under excessive pressure and could break down. Unfortunately, the global economy has developed in such a way that governments dare not risk relieving some of those pressures for fear that it might make their countries uncompetitive. Richard Douthwaite's paper explores a way out of that situation.

Good morning ladies and gentlemen. I was flattered to be asked to make one of the keynote addresses at this event which is organised jointly by FEASTA, the Tipperary Institute and the Development Studies Centre, Kimmage Manor. Firstly, a little bit about myself. After school, I worked as a journalist, then went on to study economics. That took me to Jamaica where I set up and managed a boatyard on behalf of the island's fishing co-ops before spending two years as Government Economist in the British colony of Montserrat. In 1974, my wife and myself moved to Westport where we set up and ran a manufacturing and mail-order business for ten years. I then went back to journalism and writing, eventually becoming the author of 'The Growth Illusion', 'Short Circuit: Strengthening Local Economies in an Unstable World' and a number of other publications. So I would describe myself as a lapsed economist.

The origins of FEASTA

Let me start by introducing FEASTA, the Foundation for the Economics of Sustainability. As the name of the organisation, in English at least, indicates, FEASTA is all about sustainability. It is the Foundation for the Economics of Sustainability, but it's far more than that. Don't let the 'Economics' bit put you off. It was set up just over three years ago by six people who were brought together directly or indirectly by a small week-long private course on sustainability held in Glenbeigh in Kerry. I'd been invited to teach the course by somebody who had read one of my books because he hoped members of Kerry County Council would attend. He felt that Kerry, in common with the rest of Ireland, the rest of the world, was not moving towards greater sustainability, whatever that was. I felt that I couldn't give a week's course by myself, so I invited two friends to help me. The upshot was that a journalist who came to write about the course, the man who'd asked me to do it, my two friends and I, and another person brought in by the journalist went on to set up FEASTA. We've been going from strength to strength since. It's a bottom-up organisation, it's not official, we don't have a state grant, we don't have anybody on a full-time salary. It's a struggle to get money - things only happen within FEASTA because there is enthusiasm for them. There are a lot of things we could do, but only if people volunteer their time and effort does anything in fact take place.

Defining sustainability

After we launched ourselves, the first thing that we had to do was to come up with a definition of sustainability. There are many many definitions of sustainability and to some extent that profusion has been quite deliberate. Everyone can chose a definition which suits them quite safely because, so far, there's been very little risk that anyone else will say "that's an inadequate one". But saying that a lot of definitions are in fact inadequate is one of the things that FEASTA is about. Everyone gives lip service to sustainability but if it is ever to mean anything it's got to be turned into an actionable concept. That involves tightening up what it means. So FEASTA's founders reviewed a lot of definitions of sustainability - one 1992 book "The Blueprint for a Sustainable Economy" by David Pearce of University College London [and Edward Barbier] has an eight page appendix devoted to them, and many more definitions have been developed since - before they decided to come up with a definition of their own. We found that a sustainable system was easier to define than sustainability itself and so FEASTA defines a sustainable system as one which has the potential to be continued for hundreds of years into the future without having to be changed because it is undermining any of the factors on which it is based. In other words, a sustainable economic system does not undermine the environment, does not use up natural resources in an unsustainable way, and does not set up tensions in society that will prove insupportable and cause the system to change.

From crisis to crisis

You will see that under the FEASTA definition our current economic system is grossly unsustainable, a fact that conventional economists ignore (and that's why I say I'm a lapsed economist). Economists believe that the economic system doesn't have to be sustainable now, in this instant, because [if a sustainability crisis develops] we can move to another system, operate that system for a little while, and then move to another one. In other words, technology and human ingenuity will rescue us. But it can only rescue us if we have the resources required. In particular we need enough energy to be able to switch from one system to another.

If you look at what happened historically, you will see that whenever humanity came to a sustainability crisis we moved to a higher level of energy use. To give you a recent example - in the late 1960s and early 70s the US became concerned about the growing population in Asia and the likely food shortages there. The Americans were worried that if starvation increased in Asia it would provide fertile ground for communist ideas to develop and thus prove unhealthy for the survival of capitalism there. So they persuaded the Ford Foundation and the Rockefeller Foundation to set up institutes like the International Rice Research Institute which is based in the Philippines, and these foundations put money in which led to the development of 'miracle rice' and the Green Revolution. Miracle rice could respond to high levels of fertiliser application. Previously if you'd put nitrogenous fertiliser onto traditional rice varieties they just grew a very long stalk, fell over and lodged and were difficult to harvest and you didn't get very much more grain from them. But Norman Borlaug and his colleagues developed dwarf rice that put all the energy from the nitrogenous fertiliser into the rice grains and not the stalk. This enabled increased hunger to be avoided and the population of South East Asia has grown to such an extent that people are now talking about the need for another green revolution because the region is pushing up against the limits again. But the world doesn't have the energy left to work the miracle a second time, even if we could find the genetic material to do so.

So that was how energy and human ingenuity got humanity out of a sustainability problem in the past. But can this approach continue? Can we allow crises to develop before we respond, either by governmental action or through the markets because the price of something goes up so that people use less and substitutes are found. The latter is the way that conventional economists think that the system should continue to operate. Economists are of course against planning, because planning means that you have to intervene in the market, and for conventional neo-classical economists that is anathema, something you just shouldn't do. They want to see governments withdrawing as far from the market as possible.

Calling all disciplines

Progress towards sustainability means that we have to re-assess these ideas, and this is what FEASTA is doing. First of all we try to think about what a sustainable society would look like. An economy is only part of a society. If we can envisage what a sustainable future would look like, what characteristics it would have to have to be sustainable, and if we are fairly rigorous about defining those characteristics, then we can look at the characteristics of our society today and know what has to be changed. In my own work I have been concentrating on the economic aspects of sustainability, but as you will learn from what I'm going to say, and Séamus Puirséil was quite right in what he said, sustainability touches every discipline. You will see that in fact sustainability is far more than economics. Every discipline has to be involved in the process [of moving to a more sustainable future].

Indicators of sustainability

How do you know if you're heading towards sustainability or not? We're grossly unsustainable at the moment, because we all know that the system will have to be changed. To revert to the energy example - FEASTA held a conference last year [2000] at which we heard from Dr. Colin Campbell, one of the world's leading petroleum geologists. He was the man who convinced the International Energy Agency (part of the OECD) that world oil production from conventional sources would peak about the year 2005 or 2008. It will then decline in more or less a mirror image of the curve along which it rose, which means that by 2050 the world will be consuming roughly the same amount of oil as it was consuming in 1950. Yet there will be three or four times as many people on the planet needing that oil as there were a century earlier. In fact their dependency on oil could be even greater because of the way our systems have developed. We may not have the opportunity to convert, to use human ingenuity to move to another "sustainable" system, if we rely on market mechanisms to signal to us when to do so because the market's time horizon is very short indeed.

Four Capitals

If we can't use the market, how can we know if we are moving our system toward greater sustainability? The answer is through the use of indicators. A technique was advanced by Paul Ekins, one of the founders of the New Economics Foundation in London, in a book that he produced in 1992. He went to Washington [in 1992] and made a presentation to the World Bank and they adopted the technique that he advanced. This is one that FEASTA has adopted and is trying to popularise, and is termed the "Four Capitals" approach to sustainability. This approach sets out that the life that we live, the benefits that we enjoy, are as a result of our living on the income from four different types of capital.

Natural capital

The first, but you can't say the most important for reasons I'll explain, is natural capital, natural resource capital. A recent book "Natural Capitalism" [by Paul Hawken] is all about this area. We enjoy a stream of benefits from the natural world. It provides our food, raw materials, renewable and fossil energy. It provides sinks for our wastes so that it makes them harmless and they re-enter the system. There are also benefits from its biodiversity and its natural beauty. We couldn't possibly survive without the natural world. So that's one form of capital which generates an income that meets some of our needs. But we also get benefits from three other areas.

Social capital

The second is social capital. Again this is an idea which is becoming very popular at the moment. Social capital is the source of the stream of benefits that you receive from being a member of a family, from having neighbours, from being a member of a community, having a network of friends. And also belonging to a country, because one's national identity and the support you get from that is important to you. One of the things therefore that we need to provide indicators for is the strength of community bonds - are they being undermined? You could look at all sorts of things to gauge this. For example, there is a correlation between the amount of time somebody spends commuting to work and the amount of time that is consequently left in which the can interact with others. One of the figures I've seen is that a 10 minute increase in commuting time means that there is roughly a 10% reduction in the amount of time that people have to interact with their neighbours and other members of their community. Television has to some extent weakened community bonds. Are people joining clubs and societies and interacting in those ways? Are neighbours as supportive as they once were? So that's another form of capital, social capital.

Human capital

The third form of capital is human capital. And that's primarily our health and strength, our vitality. Are we fit, mentally and physically, or are we degenerating? And it's also our knowledge and skills and dexterity. Although you might say that Irish human capital is increasing because of institutions like this [Tipperary Institute], you also have to look at some areas where skills are being lost - for example traditional craft skills and knowledge. So in some areas we are gaining and in some we are losing. You have to be able to assess a balance between losses and gains. What you are really looking for are skills which would be of relevance in a sustainable world, in a world where you weren't using natural resource capital in an unsustainable way as we are at the moment.

Physical capital

Finally, you've got physical capital. This room, the chairs within it, the cars outside, the building itself, tools and equipment and so on, all represent physical capital. We are increasing our physical capital in this country each year. But again we have to ask the question, are we increasing the types of physical capital that would be relevant in a truly sustainable situation? The Government is spending many millions of pounds on developing a road network, yet if we are coming to a peak in oil are we going to be able to have the capital, the natural resource capital, to operate vehicles on the new road system in the future? Are we going to have the income to be able to operate those vehicles?

Money matters?

Now you will probably have noticed an omission at this point. I have not mentioned monetary capital at all. That doesn't matter. Money just gives the holder the power to acquire other forms of capital so it can be left out of this sort of analysis. The British Government's overseas development agency in fact uses the four capitals approach, but they also, and I think they are mistaken in this, want to preserve financial capital. Of course that's all about preserving the wealth of the people who hold it. It is not about [true] sustainability, it is about retaining the "sustainability" of one particular group and its set of interests. For us all [the human population as a whole] it is the other four capitals that matter. The other thing about money is that only in a very limited area can you measure the stocks of the four capitals in money terms. How do you set off a gain in one area, where one indicator, let's say the number of butterflies, is increasing against a decline in another area, let's say the health of people's teeth? It is a case of judgement - you can't do this by assigning monetary values. This puts the whole area of sustainability back into the political arena. It is for individuals to say "Look, we're gaining in this area, we've lost in that area, but overall, my personal judgement is that we're benefiting". There is no hard and fast way of coming to such a conclusion. But what each person can do is to say "I think we mustn't allow this particular form of capital to diminish beyond this particular point. No matter how big the gains we get in some other area, we must not allow this one to deteriorate any more." For example, you could say "We can't allow any more carbon dioxide to get into the atmosphere because of the risks that would present, or any more CFCs because of the effect they have on the ozone layer."

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