Our Journey to a Sustainable Economic Development for 2010 and Beyond


(B) If every citizen, of every country on our planet, were to consume like an American citizen today, the world would need 5.4 Earths to sustain us! It takes today about 17 months for the Earth to regenerate what the world uses over 12 months! We are exploiting the Earth’s resources at a rate 44% faster than what the Earth can reabsorb and reproduce. Together the 6.8 billion people on the planet, that we are, require the resources it would take to one and a half Earths to sustainably reproduce, according to the Global Footprint Network! WE need to face this unconceivable economical imbalance between the Earth limited resource supply and the ever-increasing resource demand from our worldwide economies.

The Roman Empire, the Mayas, the Easter Islanders were some of the most advanced civilizations from the past. All of them still surprise us by their accomplishments in politics, laws, sciences, arts, architectures, and religions! And, it is critical today to understand why did they rise and fall. The growth of the Roman Empire is particularly impressive in its geographic expansion, spread over three continents. While the fall of the Easter Island is particularly obvious with its famous Moai on an island completely deforested.

In his book “Collapse”, Professor Jared Diamond has articulated seven driving forces that have historically contributed to the collapse of past civilizations. Namely, they are:

1. Habitat destruction and deforestation
2. Land erosion and fertility
3. Lack of water
4. Overhunting
5. Overfishing
6. Introduction of foreign species to the natural habitat
7. Increased per-capita impact of people.

Those seven factors are very much into the fabric of our present global civilization. We have two clear choices in front of us: either we continue our road to an unsustainable economic development or we start our journey to a sustainable economic development. Are we condemned like Sisyphus? Or can the world save itself from ourselves? Of course, the world can save itself from the climate change, the destruction of the earth ecosystems and resources, its rising world population and its ever-growing demands of goods and services. But we need to act soon and together. We are running out of time. And failure is not an option.

The Urgency to Develop and Spread Sustainable Technologies Like Viruses

The I PAT formula has captured, in a simple way, the impact of the human activity on the environment:

                    I = P x A x T,

where the human Impact (I) on the environment equals the product of the population (P), the affluence (A: consumption per capita) and, the technology (T: environmental impact per unit of consumption).

As the world becomes richer, with the developing world joining the developed world to enjoy higher incomes and living standards and, as the world’s population continues to grow rapidly (even if the proportional rate of population growth has declined), the product P x A will continue to grow. As proposed by Professor Jeffrey Sachs in his book “Common Wealth”, our only chance is to re-invent T in the equation to S = 1/T where S stands for emerging sustainable technology. Simply put, the growth of P x A must be compensated by the growth of S. Economic prosperity can ONLY be expanded if it is based on sustainable technologies. And, if we want to exclude an income reduction for both for the developed and developing worlds, we urgently need to develop and adopt sustainable technologies.

We all know that scientific discoveries and technological breakthroughs are the results of positive Gray Swans. So it goes without saying that the governments, the private sectors, and the academic institutions must come together to create the ecosystems to fund, nurture, develop and grow research and development in sustainable technologies that can spread themselves like computer viruses to the complete value chain of the economy: products and services, households and businesses, governments and non-profitable organizations.

There are so many sustainable technologies that are waiting to be developed: water desalinization, higher organic agricultural outputs with fewer lands available, environmentally friendly fish farming, solar, wind and nuclear energy, electric transportation, complete new environmental airplane engines, capture and storage of carbon dioxide…

At a minimum, we want to foster technologies, products, and services that can reduce, reuse and recycle. But ideally as suggested by William McDonough and Michael Braungart in their books “Cradle to Grave”, we want to spark technologies, products, and services that can restore, re-generate and rebuild the Earth’ ecosystems and resources. Easy said very difficult to accomplish. Yes, the challenges are not missing in front of us!

Not only do we need to create a new world of sustainable innovation that will seed new venture capital, new start-ups, new industries but we need to do it on a global basis and in such a way that it becomes ubiquitous.

Toward Global Governance: Global Policies, Global Innovations, Global Regulations, and Global Cooperation

The 2009 United Nations Climate Change Conference in Copenhagen did not result in any major new global policies for the world. The conference was supposed to debate over greenhouse gas emissions, development plans and funds for the adaptation and the transfer of clean technologies from the wealthier nations to the poorest ones, that are the most exposed to climate change. Every nation came to Copenhagen with its own self and competing interests. The small Pacific island nations, which will disappear under sea level rise and many European countries favored the reductions in greenhouse gas emission. But too many developing countries, which are dependent on fossil fuels for their new economic growths and the oil-producing nations, which reductions in greenhouse gas emissions are a threat to their economies opposed those reductions.

Developing countries have absolutely their rights to grow their economies but should limit planning traditional fossil fuels technologies to do so. And, developed nations, which contributed the most, since the industrial revolution, to climate change first should lead aggressively the efforts to limit greenhouse gas emissions and should move their economies toward green technologies. Second, developed nations have the obligation to help financially and technically the poorest countries that will be the most affected by climate change.

While climate change is certainly a major factor to unsustainable economic development, unsustainable economic development is fundamentally about “demand” versus “supply” of the world resources for the world population. Unsustainable development is borderless. Every population, society, and nation is affected in various and subtle ways. Lack of the Earth resources by one nation will affect itself as well as all other nations. Sustainable development is breaking a century of diplomatic games. Cultural, economic, and military self-interests and competitiveness are no-sense in the context of worldwide economic sustainability. Actions to block the consequences of unsustainable developments must be shared globally with the same determinism and anxiety across world nations. Sustainable development is the business of every nation. And of EVERYONE!

The first goal of every government shall be first to be committed and dedicated to sustainable economic development since there is no other alternative for any population.

The second goal of every government shall be to create a favorable environment between public and private research and development to plan, finance and engineer the switch over to green technologies. The Internet was created by the US Government and was developed beyond imagination by the private sector. Entrepreneurs and venture investing will not suffice. Worldwide governments must find a way to foster sustainable technology developments.

The third goal of every government shall be to create incentives and regulations for households and firms to adopt sustainable technologies and resources instead of unsustainable ones. The world was very successful in controlling the depletion of the ozone layer due to the use of chlorofluorocarbon (such as Dupont’s Freon for refrigerants). Let’s not expect that Wall Street, businesses, households and all of us will do their best to move to sustainable development without incentives and regulations. Change is not easy.

The fourth goal of every government shall be cooperation between nations. We have to move away from self and competing interests where each country will do the least and expect the other countries to do more. In particular, we cannot have the benefits of sustainable technology in high-income markets and not in low-income markets. We must redefine competitive profits in such a way that profits enable firms to develop more sustainable products but without establishing borders that limit the adoption of their sustainable products. A good illustration of that goal would be to duplicate the tier-pricing approach that was taken for drug patents to fight HIV/AIDS where drug companies agreed to sell products at a reduced profit in low-income markets while making patent-protected profits in high-income markets.

“Less is More” – Reinventing our Consumer Behaviors and our Economic Models

Every Westerner on the planet cannot continue consuming as he or she does today. And, the developing world should not aim to take the eccentric consuming behaviors of today’s developed world. How often do we need to change our smartphones? How many cars do we need to drive? How many houses do we need to live happily? Why are we wasting water when we are running out of it? Why can’t we stop eating large ocean fishes in order to give them some time to reproduce themselves? Why are we expanding our homes, factories, towns but not giving at the same time more space to the animal habitat even when we know that more than half of today mammals population is declining and a third is facing extinction (according to the International Union for Conservation of Nature).

Our foolish global consuming society needs to make finally the difference between “what we need” and “what we want”? We need to learn to limit our consumption of good and services that are not based on sustainable natural resources. And, we need to learn to live from the consumption of good and services that are based on sustainable natural resources.

If as consumers, we start to behave with sustainability in mind so will our suppliers of goods and services. Wall Street business model is based on ever-expanding economies where companies increase their profits by selling more to their customers, expanding their product lines, growing internationally and entering new markets. We have to realize that prosperity is limited by the Earth ecosystems and resources. We need to build new economic models based on “The Natural Capital”. Wall Street needs to start rethinking about rewarding the long-term value of companies conserving, protecting, regenerating, and re-building the Earth ecosystems and resources. Degradation, erosion, and destruction of “The Natural Capital” need to be taken into account in our economic forecasts and their externalities need to be taken into account in the pricing of products and services when using, abusing or misusing the Earth ecosystems and resources.

Containing The Growth of the Human Population

How many human beings can we be on the planet is a very controversial subject that was started forty years ago by Professor Paul and Anne Ehrlich in their book “The Population Bomb”? Of course, forecasting the right number is very challenging.

If instead of being 6.9 billion of human beings on our planet, we would be only 3.45 billion, just half of it, the fundamental questions of “why what and how” to pursue sustainable economic development would not be a priority for our present human civilization. As noted by Professor Paul and Anne Ehrlich in their second book “The Dominant Animal”, on top of other effects, human population size is the “elephant in the living room”. Shifting population sizes for any species on Earth has important consequences for the future of those populations. If we were half of our total population, we will have more water, more food, more space for other animal species, more resources, in a nutshell, we will have more of everything that we need and less emission of greenhouse gas and so no climate change. The Earth will be a paradise!

We will reach 6.9 billion in 2010 and 9.2 billion in 2050 according to the projections of the United Nations. Due to the present size of the younger population that will have new children soon, we will be adding, for sure, a billion people and will be reaching 8 billion. Growth in the world human population is coming mainly from Asia (in particular China and India) and Africa with the remaining from South America.

The two major drivers of human population growth are fertility rates and progress in health care. We all know that with higher standards of living and better education, fertility rates are rapidly dropping. And better health care changes the profile (shaped by size per age and per sex) of a population. In African countries, most of the size of the population is at a young age, sometimes up to 50% under the age of 15, and declining steadily as the age of the population augments while, in developing countries, the profile of the population size is most evenly distributed across ages.

The present worldwide fertility rate, or the number of children per woman, is 2.56 and expected to decrease to 2.02 in 2050. The fertility rate of most wealthy nations is around or below two which is considered as the replacement rate. Simply put, each woman, over her lifetime, would have two children, a son and a daughter, to ensure the continuation of the population (more precisely the replacement rate is 2.1 with 105 boys for 100 girls). In sub-Saharan and several Middle Eastern countries, the fertility rate is between 5 and 8.

We must adjust, balance and control our population growth to our resources. Reverend Thomas Malthus already established that evidence in the eighteen century. This is a difficult decision and not only an economic one but of course a cultural and religious one as well.

So by helping the poorest countries in particular in Africa, with adequate population policies and family planning, to reduce their fertility rates and, mortality rates in particular for the youngest, we can start and must start containing the rise of the human population. Unfortunately, containing the growth of the population in poor countries has a lower effect on the demand for worldwide resources than in wealthier countries (but containing the growth of the population in poor countries is imperative for those countries to achieve faster prosperity).

A Sustainable Worldwide Economic Development Must Eradicate Global Poverty

Compare the impact of the recent 7.0 Port-au-Prince earthquake and the recent 8.8 earthquake in Santiago. Poor countries cannot endure extreme suffering from natural disasters while richer countries can, if not overcome, at least survive and surely recover from them. The death toll of the Haiti earthquake is in the 250,000 range while the death toll of the earthquake in Chile, one of the most developed economies in South America, is less than a thousand.

Poor countries collapse through natural disasters and implode into the violence of national crisis. They propagate environmental disasters, diseases, insecurity, and human migrations. The present burning crisis of Haiti, Afghanistan, and Darfur demonstrates why and how extreme poverty pushes desperation, depletes natural resources and leads to political instability.

According to the Inter-American Development Bank, the reconstruction of Haiti could cost nearly $14 billion. The war in Afghanistan has cost to the US, only, around $300 billion dollars (add to that figure the contribution of other nations)! A US soldier costs one million dollars a year while $75 can purchase the required equipment to chlorinate enough water to provide to 1,330 people, 20 gallons of clean water per day for 7 days (according to Doctors without Borders)! The cost of helping a poor country to deal with a natural disaster or an internal crisis is by no means comparable to the cost of investing in that country to eliminate poverty.

And, a future worldwide economic development cannot be sustainable if it does not include economic development for all of us and therefore if it does not contribute eradicating global poverty.

“After the final no there comes a yes

And on that yes the future world depends.”

So wrote the poet Wallace Stevens and “so goes our generation’s challenge to turn the world from its unsustainable course” wrote Professor Jeffrey Sachs in the Power of One, the last chapter of his book “Common Wealth”.

Some French scientists have coined the term “Les strategies sans Regrets” to point out that the right actions for sustainable development are those of the present generation that will not be regretted by future generations. We have to choose if we want our children and our future generations to live in a sustainable or an unsustainable world. We have the option to act responsibly to maintain the Earth as a living planet and to respect the Earth ecosystems, animal and plant kingdoms that have the least reproductive and adaptive capacity but are so essential to the Earth and to human life.

So, let’s not carry our journey toward an unsustainable economic development for 2010 and beyond. As said by the US States Secretary of Energy, Steven Chu for the environment and before him by President John Kennedy in another context for the Cold War: “Our problems are man-made; therefore, they can be solved by man”.

I have used many over the last few months to start thinking about the content of this article but the following are the ones that have inspired me the most:
 Jeffrey Sachs, Common Wealth, Penguin Books
 Jared Diamond, Collapse, Penguin Books
 Paul and Anne Ehrlich, the Dominant Animal, Island Press
 Stephen Schneider, Science as a Contact Sport, National Geographic
 William McDonough and Michael Braungart, Cradle to Cradle, North Point Press 
 Joanna Yarrow, Ecological, Duncan Baird Publishers
 National Geographic, State of the Earth 2010, Collector’s Edition
 Le Monde Bilan Planete 2009, Les temps forts et les acteurs de l’annee
 Les economistes peuvent-ils sauver la planete? La decouverte, Novembre 2009

Note: The picture above is the sculpture “The Thinker” from Auguste Rodin.

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Categories: Economy, Sustainability