In 2014, I wrote that international policy on climate change fails on two major fronts: it does not address the issue from a systems-based perspective and it lacks a deeply human perspective. In a nutshell, climate change policy misses the point. Climate change is a symptom, not a problem. It’s the top of the iceberg – no pun intended – not the bottom.
My meanderings were on critical hub infrastructure lock-in and fragility from diminishing marginal returns on increasing complexity in socio-economic systems leading us to the cusp of collapse. (Yes, read that three times!) These meanderings meant two things: I was shortlisted for the NZ Youth Delegation (NZYD) to COP20 in Lima, Peru, but I didn’t make the cut for the final delegation – possibly, I mused, because I had said what I had really thought and felt in the interview. Life is too short, I figured, to not be real.
Below, I reproduce the two essays that I wrote back then, examining why the ETS is a hopeless pursuit from an (systems-based) economic perspective and also from an environmental justice perspective, and I essentially propose permaculture, localisation, regenerative design as potential solutions – including permaculture of the socio-sphere, which addresses many concerns of the second essay.
Entire re-haul is needed – not just in the field of energy, but also in all related fields (that is to say, all fields) since development does not really exist in isolation: only co-development in interconnected systems. Yet our hub infrastructures – banking, finance, water, waste, IT, telecommunications etc – are apparently ‘too big to [let] fail’. While I don’t think JUST reshaping the economic system entirely is the answer – a host of social and ecological actions must accompany that – I have been extremely fascinated by different economic models over the years, from freeconomy and RBEs, collaborative consumption, time banking, local currencies to – most recently – doughnut economics.
I would also highlight that most climate change policy such as ETS embodies the finite game, by entrenching the ‘patrix’ via the idea that ‘people won’t value it unless they pay for it’ through essentially monetising carbon (and hence further entrenches the idea that humans are self-interested utility maximisers that act rationally and individualistically). On the human front, the entire process of international negotiations – despite the sensationalisation by media – is detached, dispassionate and divorced from vulnerability. Real climate change work to me begins and ends with deep ecology, an acknowledgement of our deepest feelings such as grief over planetary pain and the honouring of uncertainty in the face of complex phenomena – perhaps, as Brené Brown writes, embodied through the phrase ‘I am making up the story that…’ Perhaps then, our international negotiators will be able to separate fact from fiction, observation from judgment and data from assumption.
A second evolution to the below essays is that I think that a post-carbon solution is NOT in fact aiming for a ‘zero-carbon Aotearoa’ as Generation Zero, NZ’s largest youth action group of 25,000+ members on climate change proposes, or a ‘low-carbon Auckland’ as proposed by Auckland Council’s Environmental Services Department. Both of these organisations are doing admirable work and have great staff and volunteers – I can say that with absolute confidence, because I have met and worked with many of them. Rather, I believe the conversation needs to shift from ‘zero net emissions’ to ‘negative net emissions,’ drawdown, the long descent, or – in other words – ‘ambitious and positive net sequestration.’ Our aim isn’t merely to ‘reduce emissions to zero’ – given we surpassed the golden 350 parts per million CO2 in the atmosphere long ago and are well into tipping point, the aim ought to be to get that shit out of the atmosphere as fast as we humanly can. So not ‘zero carbon’ but ‘negative carbon.’ So sure, reduce consumption, reduce demand for fossil fuels and so on. But also – plant a helluva lot more trees and convert pastures to multi-strata, multi-species food forests.
Lastly, I also think that the sheer amount of fanfare and hoo ha that goes into the COP and related events – in terms of resources, time, energy, funds, people power and so on – would be a thousand times more effective if applied directly on a local or bioregional scale.
I thank Gary Marshall from Resilio / Auckland Permaculture Workshop for the introduction to the work of David Korowicz, which greatly influenced the first essay (alongside introducing me to Dmitry Orlov, Donella Meadows and Jane Jacobs), and thank Brad Coombes of UoA’s Geography Department for the introduction to David Schlosberg, whose writing on diversity I think should be taught in all schools. Big thanks to Prof. Anthony Endres, for even allowing me to write about pluralism in economics and permaculture in the first instance! – as well as letting me go miles over the word limit. I also thank Generation Zero for switching me on to climate change in a big way in the first place, and thank them for their sass, humour and badassery in videos like this.
Here goes, two of the most badass pieces I have written – badass not because of what they say or how they say it, but because of the profound shifts I underwent whilst writing them.
PARADIGM SHIFTS: CLIMATE CHANGE. THE FALLACY OF POLICY AND A NEW LANGUAGE FOR ECONOMICS
Climate change is a symptom, not a problem. Therefore, we cannot address climate change by singularly focusing on climate change causes, impacts, or solutions. This essay seeks to examine international and national policy approaches to climate change from a complex systems perspective, and therefore will draw from work in various fields of systems thinking, biology, and social justice in addition to underlying lens of economics. Given the depth of each of these fields, analysis and therefore policy recommendation will by no means be complete: however, provocation into lateral thinking, acknowledgment of interrelatedness and the underlying human limitations into modeling and managing such an issue is the essence here. First, we will consider the international policy dimension from a standard economics and social justice perspective, then from a complex systems perspective. National policy will thereafter use New Zealand as a focal country, outlining briefly the current situation and standard alternatives in the economic policy ‘toolbox,’ and further proposing key policy recommendations to alleviate the economic impacts of climate change.
International Policy Recommendations
The fallacy of global policy
International policy for addressing climate change has been insufficient, untimely and will prove ultimately impractical. Despite twenty years of negotiations, latest figures from the Intergovernmental Panel on Climate Change (IPCC, 2013) indicate levels of CO2 in the atmosphere are at 400 parts per million (ppm), which has so far resulted in a temperature rise of 0.85oC and that a temperature increase of 2oC is almost inevitable, leading to large fluctuations in environmental conditions, and higher ocean acidity, sea level rise, chance of storms, floods, fires and hurricanes. Damages from such environmental changes are currently only placed at 1-2% world GDP (Aldy et al., 2010); however, this is likely to be a gross underestimate for a number of reasons. Firstly, IPCC methodology is highly conservative and must account for cascading uncertainties from future business, consumption and population growth scenarios, to uncertainties in greenhouse gas emissions (GHG), climate sensitivity from surface albedo effects, other aerosols and various feedbacks including permafrost (Foss, 2014), hence the variation in predictions for temperature rises is large. For example, MIT (Sokolov et al., 2009) suggests a median 5.2oC increase by 2100 under business-as-usual (BAU) scenarios, resulting in a dramatically different climate from the ‘safe’ level of 2oC, although, given that IPCC (2013) still does not adequately address the issue of tipping points, such thresholds may well be crossed sooner than expected. Further discrepancy in marginal damages as a proportion of world GDP arises due to discounting differences in economic analysis, with Stern (2007) advocating low discount factors, Nordhaus’ (2010) use of higher discount rates and Weitzman’s (2009) critique of Nordhaus’ slow ramp recommendation for emissions reductions. Ethical arguments on the justice of intergenerational discounting aside, Weitzman’s (2009) argument remain valid: damages at higher temperature levels are likely to have multiplicative, not additive, effects; probability density functions of future temperatures are likely to be fat-tailed, not thin-tailed; Integrated Assessment Models (IAMs) do not take into account irreversibility of GHG emissions an impacts, and expected discount factors – as opposed to merely discount rates – should be employed in analysis instead. Such lower discount rates suggest higher initial prices and faster emissions reductions pathways to minimise losses (Aldy et al., 2010). The overall conclusion we might draw from such a discussion is this: due to uncertainty, irreversibility and positive feedbacks, damages from climate change are likely to be higher than widely perceived, and addressing such damage necessitates rapid, concerted and stringent action on a global scale.
However, such action will not be possible. Given the World Energy Outlook’s 2012 report, perhaps such action is conceivable from a technological perspective (although this will be challenged later in this essay), but not from a political perspective, given the recent past and current state of affairs in global politics. A detailed examination of specific economic policy strategies of command-and-control (standards), emissions trading (property rights), taxes and incentives and subsidies (R&D investment, and so on) may be found in the Appendix. Yet the purpose of this section is not to debate which policies will work best globally; we will assume momentarily that carbon taxes and emissions trading can be equivalent in theory (Aldy et al., 2010) and any further differences are covered in the Appendix. The purpose here is to highlight the key issues surrounding globally binding international policy to action climate change. Firstly, we note that globally binding policy is likely to apply to mitigation rather than adaptation, although both are necessary. Given the current situation, adaptation will be unavoidable even with the most stringent mitigation methods, yet without mitigation, the magnitude of climate change impacts may be so high that adaptation will become impossible for most natural systems and will require extremely high social and economic costs (IPCC, 2013). Adaptation almost by definition must be local as it will depend on local impacts of climate change, which vary according to geography (exposure – biophysical measures) and to vulnerability (sensitivity – contextual factors) (O’Brien & Wolf, 2012). Hence while international mitigation policies might provide funds for national adaptation, it is unlikely adaptation can be addressed internationally due to the uncertainty of future impacts and in risk assessment of various populations and regions. Secondly: the issue of time preference and perceived inequity. Governments repeatedly prioritise short-term national goals over long-term international goals, which in part explains the unwillingness of countries such as China, Russia, Brazil, Mexico and USA to come into Kyoto Protocol (Aldy et al., 2010), and the failure of New Zealand to enter into the second phase of the scheme under the present government. Additionally, there are issues of inequity perceived by developing countries that they, who have least caused the problem, now bear the most burden for it both in terms of adaptation and mitigation, as poorer economies are affected more by climate change impacts (Branstetter & Pizer, 2012). Furthermore, it appears unfair that those countries who require fossil fuels most in the present in order to develop their economies are allocated credits only to have them purchased immediately by more developed countries (MDCs) and be forced to purchase them back at some point in the future when prices are higher – a kind of ‘carbon colonialism’ (Page 2012; Walker 2009). This is in part tied to the issue of free-riders and leakage: firstly, those countries that do not wish to curb emissions at present may choose to leave other nations to make deep emissions cuts and free-ride on any resultant environmental benefits (clearly fallacy if such thinking is pursued by the largest or fastest emitters, yet this has disappointingly been the case for much of the past twenty years), and secondly, countries making appreciable emissions reductions may see corporations re-locate jobs in energy-intensive manufacturing overseas where no such climate regulations are in place (Branstetter & Pizer, 2012). On the other hand, perhaps emerging market economies such as China may, by the same token, recognise many cost-effective opportunities for mitigation encouraging them to undertake emissions reductions in any case, although perhaps not through entry into a global agreement. Thirdly, while a portfolio approach to global climate policy may seem appealing from a systems-perspective (more below), such an approach may prove too complex, difficult, time-consuming and costly to formulate and implement, leading to obvious issues in program design and potential for further environmental degradation (Sovacool, 2011).
The last major issue with globally binding agreements is their potential to create environmental injustices through lack of adequate recognition of diversity of discourses and inadequate participation (Schlosberg, 1999). For example, diverse social, cultural, political and institutional world views, values, and attitudes to climate change exist, yet the sole mechanism for valuation is monetary – a single valuation language can hardly provide for such pluralism. Additionally, institutionalised biases extending past class to include gender, age, (dis)ability and other areas widen the scope for solutions such as emissions trading to create environmental injustices, as those often most affected by policies are women, children, the elderly, sick, disabled, poor, indigenous peoples and immigrants, as well as people of colour (Hollifield, Porter & Walker 2009; Schlosberg 1999; Walker 2009). For example, women do not comprise equal share of participants at international climate negotiations for carbon ETS, nor do they necessarily have a strong voice to articulate needs at the ‘bottom up’ level in Less-Developed-Countries (LDCs), when their participation may be crucial to the implementation of policy (Schlosberg 1999; Wamukonya & Skutcsh 2001). Nor are indigenous peoples’ priorities and worldviews adequately considered at the table even when these are some of the most affected parties of global emissions trading schemes (IWGIA 2014). The purpose of this discussion is not to veer into issues of morality or justice necessarily: only to point out that without recognition of such fundamental diversity, economics as a language will fail to convey the message through purely quantitative terms, and therefore the resistance of various countries to globally binding agreements is not only plausible but to be expected. Spaces of misrecognition matter – sometimes more so than spaces of mere maldistribution, which is what inequity in climate change negotiation often reduces to – and much is lost from a purely biophysical and economic perspective (Schlosberg, 2013). For example, it is not enough to simply quantify the number of houses damaged, the number of individuals displaced or the cost of reparation when considering environmental damages – social and cultural damages can often run deeper, are largely unquantifiable and can have multiplier effects on economic impacts. Moreover, it may not be the neoliberalisation of nature (Corbera, 2012) per se that is at fault, but rather the silencing of other discourses (Schlosberg, 2013), the lack of attention to assumptions that may not hold (for example, assumptions of rational, utility-maximising individuals, symmetric information, perfect competition, free entry and exit) and lack of space for other meta-narratives beyond scientific and economic absolutism (Dempsey & Roberston, 2012; O’Brien & Wolf, 2010). Hence international policies will not be realistic nor realized in the near future with regards to arresting, decelerating or reversing climate change if economic arguments preclude other arguments and hence result in the self-exclusion of countries from plans like the Kyoto Protocol. Ultimately, the matter is this: what climate change does (biophysical impact) or costs (economic) is less important, in many ways, than what climate change means (values) for those affected and the failure to recognize that values are not solely economically quantifiable will stall negotiations, resulting in a cascade of greater economic damages with climate change impacts in time. Unfortunately, I do not believe that international negotiations can take place at the current time with greater diversity of language: partly due to the obvious and inherent inefficiencies of such an enormously democratic process (in the process, worsening climate change), and partly because vested interests in the status quo are unlikely to permit such dialogue to ensue, but by tokenistic means (Latin, 2012).
Complex systems approaches
The fundamental problem with policy analysis for climate change is the following: it misses the point. The problem is not climate change: climate change is a symptom. Hence the above analysis is greatly limited in its ability to provide deep and lasting change for the longer term, and the digression into environmental injustice issues serves well to highlight a possible drawback. Yet the issue runs deeper than merely economic language as failing to provide an adequate space for discourse and participation in ways that are not purely market-based: the issue is in attempting to solve a complex problem through a reductionist, and grossly oversimplified viewpoint. The global economy is a complex adaptive system and exhibits self-organisation, growth-dependent dynamics, growth in complexity, in co-dependence and in integration but also has bounded resilience (Korowicz, 2010). System behavior matters and systems are more than just a linear sum of their parts; systems may exhibit adaptive, reinforcing, stabilising and even evolutionary behaviour (Meadows, 2008). In many ways, the global economy may be viewed as a single system or as a system of systems and appears to be highly sensitive to small changes in GDP growth, as witnessed in the recent Global Financial Crisis (Korowicz, 2010). Korowicz (2010) further argues that economic growth has been coupled with increasing complexity, but an important distinction could also be made between development and expansion. Development, according to Jane Jacobs (2000), is more properly termed co-development: differentiation arising from generality and giving rise to further generality from which further differentiation may arise, a nearly similar definition to that given by evolutionary biologists for adaptation. This is termed co-development as all systems are mutually interdependent, hence development is impossible in a vacuum – note also that this is a qualitative definition and one which may point to the visible, tangible changes in structures such as technological innovations or be less physical, such as changes in social and economic organisation. Expansion, on the other hand, is quantitatively defined: it is the sheer increase in size, numbers, species – or, in the case of modern economies and climate change, the sheer increase in GDP, energy and waste. Out of all stocks and flows, energy is considered the essential flow here: the more ways that a system can capture, store, use, re-use, re-capture and transmit energy, the larger the multiplicative consequences of that energy hence the larger the expansion (Jacobs, 2000), although a modern economist may also argue that ‘more ways’ refers not to energy itself but to technology, with information being the key flow. When humans are confronted with a complex (natural) environment with multiple challenges, our solutions are framed in light of system constraints, which might consist of the operational fabric of the system (in the modern world, such constraints may include supply chains, ICT infrastructure, health services, and socio-political stability), or also be limitations of knowledge, culture, energy, material and economic resources (Korowicz, 2010; Meadows, 2008) – some of which are more commonly termed limitations of land, labour and capital. A system may exhibit dynamic stability, whose self-correction mechanisms are generally negative and positive feedbacks, bifurcations and emergency adaptations (Jacobs, 2000), with feedbacks being a key information flow that may reinforce patterns or behaviours (positive feedbacks) or equilibrate system elements (negative feedbacks), bifurcations as alternative pathways, perhaps even alternate stable states in the case of hysteresis (emergency bifurcations), and other emergency adaptations emerging in times of crisis (Meadows, 2008).
The global economy has been on a self-reinforcing cycle (positive feedbacks) of increasing economic growth for since the Industrial Era and is largely experiencing negative feedbacks in the form of climate change impacts currently. Yet this growth in complexity is not immune to diminishing marginal returns – part of the cost is witnessed through externalities of resource and habitat destruction, biodiversity loss, but the major cost is more obvious: the inefficiency costs of complexity itself (Korowicz, 2010). Not only that, but the scale of the system has become a barrier to the diversity of alternative systems that can actually be realised. This is because our efficiency gains (in diversification of products, services, firms and so on) have been enabled through lowering common transaction costs such as that of electricity grids, information and transport networks, financial systems and water systems by sharing common hub infrastructure. Such hub infrastructure exhibits economics of scale, hence makes upfront costs of alternatives high, but also results in lock-in, resulting in little substitutability (Holmgren, 2013; Korowicz, 2010). In the absence of viable redundancies and with high costs for each additional layer of infrastructural complexity, elements of hub infrastructure force one another as well as other system elements to become deeply co-dependent with one another – hence if any one element of the system crashes (for example, IT or energy), then all will (Holmgren, 2013; Meadows, 2008). This is not immediately intuitive, and depends both on level of scale we consider resilience at, how resilience is defined and if opportunities for redundancies exist. Perhaps a reasonable analogy might be Townsend, Begon and Harper’s (2008) description of ecosystems of polar regions (Arctic and Antarctica, for example) compared to ecosystems of the tropics (such as the Amazon). In many ways, we view the complex ecosystem of the Amazon as highly diverse, integrated, and resilient due to its sheer complexity, in contrast to the species-poor areas of the poles. But complexity and resilience at what scale? Individual species at the pole have adapted to large fluctuations in external conditions (‘operational fabric’) and in that sense are highly resilient in the face of dramatic changes in light, temperature, rainfall and so on – these are generalist species. Accordingly, perhaps these species’ conditions might be a better analogy to future unstable climactic conditions, which will require generalisation (at the level of individual ‘species’: individual humans, localities and regions) over specialisation. This is in contrast to the Amazon which, whilst being extremely diverse, has species which survive within an extremely narrow band of climactic and environmental extremes, generally requiring high light and rainfall (this is the lock-in of ‘common hub infrastructure,’ as it were, of energy (sunlight) and rainfall – perhaps hinting at ‘bounded resilience’). No one species, if removed, will make a particularly large difference to the overall functioning of the Amazonian ecosystem – in this sense, the Amazon is resilient. No one species, if removed, could survive in a vastly different environment due to its high degree of specialisation and co-dependencies – hence resulting in decreased (internal) complexity and resilience at the level of individuals. (Interestingly, high sensitivity to small fluctuations in environmental conditions for these flora and fauna may be considered akin to current economies’ high sensitivity to small changes in GDP growth.) High energy inputs in the Amazon have assisted this growth in diversity and complexity, much in the same way high energy inputs such as fossil fuels have assisted the highly diverse, integrated global economy to emerge. Both have enabled specialisation, efficiency and productivity gains, and deeper system-wide interconnectedness. However, there is a fundamental difference: the Amazonian rainforest is a steady-state system where negative feedbacks of resource and energy limits sufficiently counteract positive feedbacks of further expansion. The global economy, rather, is a growth-system ignoring positive feedbacks which, one might argue, has already overshot planetary capacity and is operating at 1.5 Earths (Global Footprint Network, 2010).
Collapse, contraction or downshift is ahead. Diverse literature exists countering economists’ obvious solution to the issue of climate change: the idea that technological advancement can facilitate continued growth (whether that be business-as-usual or ‘green’ growth) through allowing humanity to continue to ‘do more with less,’ or at least seeing us through the uncertain crucible of climate change. However, there are some issues with such overly simplistic thinking. Firstly, this is likely an embedded assumption in economics from Solow’s steady-state and growth economy models, the latter of which is enabled through the technological progress and in turn enables rising output (or income) and consumption per worker over time (Mankiw, 2005). Even Mankiw (2005) concedes that drivers of technological progress are not well understood. Moreover, Solow’s model is hardly a complex systems approach, involving few inputs, ignoring social and environmental externalities, basing definitions of ‘output’ on purely what is quantifiable in economic terms, and largely ignoring the problem of waste. For example, a corollary of Moore’s law of exponential gains in technology is the often-overlooked exponential production of e-waste that accompanies it. Interestingly, when we incorporate waste into another, very simple economic model containing capital (C), production (P) and resources (R), we find steady state economies arise when new capital from production (C(p)) just equals waste from current production and capital (W(p) + W(c)), and expansion is enabled when C(p) exceeds the latter sum. This is an anabolic cycle when self- reinforcing and in the direction of growth, but can be catabolic when C(p) is continually less than W(p) + W(c). (Greer, 2005). The Solow model also assumes income is a reasonable proxy for utility, that energy need not be considered a factor of production (indeed, it may sometimes even be considered non-essential and perfectly substitutable with capital), and that one technological advance can always supersede the former technology through direct substitution. None of these are strictly true. Green tech will not substitute for brown tech (fossil fuels), and the problem is not current cost-ineffectiveness, replacement of high quality energy sources with lower quality sources, limited ramp-up potential, competition with other priorities such as poverty or development, or event the recent global credit crunch. The problem, according to Korowicz (2010), is that energy adaptation through large technological changes is constrained through the rigidity of current operational fabric, and hence it is extremely difficult to drastically change one component of critical hub infrastructure without also affecting all other components. This process can, if left unchecked, lead to positive feedbacks of decline as collapse in certain segments reinforces collapse in others via contagion – particularly concerning if critical thresholds are passed and the system passes over a catastrophic bifurcation into an alternate stable state (Korowicz, 2010, 2012; Meadows, 2008). The most complex elements of the system are first to go: these may be complex products, flows or services with limited substitutability and high operational costs, or, at a more macroscopic level, this could mean the financial and monetary systems are first to collapse, much in the same way that low-energy ecosystems lose top predators first (Foss, 2014). So it may not even be climate change or peak oil that instigates catabolic collapse, but rather economic systems themselves. Features of this process would include loss of coordination, integration, resilience, adaptive capacity, social stratification, specialization, information flows, trade and organizational levels (Greer, 2005; Korowicz, 2010), and some argue that the recent financial crisis is a precursor to a larger tipping point (Foss, 2014; Holmgren, 2013; Morgan, 2013).
However, even if the operational fabric is not a barrier to climate change recovery via technology, limits of technology certainly are. Technology has only allowed the apparent decoupling of energy from GDP growth because of mismatches in energy accounting practices but such decoupling has not actually occurred (Foss, 2013; Morgan, 2013; Odum, 1973). Odum’s (1973) concepts of emergy, net emergy and empower illuminate this, and are as relevant today as when first conceived, allowing for consideration of energy quality as well as quantity in energy accounting – the idea that a unit of solar energy (measured seJ (solar emjoules)) is not equivalent in quality to, say, a unit of electricity. Emergy accounting builds up from lifecycle assessment, which in turn builds from embodied energy analysis, building from exergy analysis (Logan, 2013) and signifies energy memory. Clearly, improper energy accounting can lead to poor decision- making if purely marginal returns are considered – not only is EROEI (Energy Returns on Energy Invested) important, but also Emergy Yield Ratios (Logan, 2013) – Odum’s argument that higher energy flows are often used to subsidise lower quality energy flows in order to maximize total power comes as no surprise, much in the way specialist species less able to obtain residual energies in forest ecosystems receive ‘subsidies’ from other species (Logan, 2013), fossil fuels ‘subsidise’ renewables and alternative nonrenewable sources such as shale oil, natural gas, lignite and deep-sea oil through facilitating their discovery, development, manufacture or transport (Foss, 2014; Holmgren, 2013; Korowicz, 2010; Logan, 2013). For example, emergy accounting indicates that solar emergy for an electric car is higher than for an internal combustion engine when all hidden factors are considered, such as electricity, critical infrastructure, batteries and so on – solving the problems of decreasing returns on complexity with yet more complexity is counter- intuitive. Interestingly, under the illusion of saving on energy or funds in one area (say, through installation of energy efficient lightbulbs), consumption of energy can remain stable or even increase as consumers simply justify using more energy precisely because devices are energy efficient, hence undermining the reason for substituting in the first place – a phenomenon termed Jevron’s paradox (Holmgren, 2013) with net emergy conditions potentially worsened. Note also that technology is not energy – technology is a way of getting energy in greater quantities, quality, at greater speed and convenience, but technology by itself can achieve nothing in the absence of energy. But environmental technology can be a handicap rather than an aid in the long-term: technology duplicating the naturally subsidised work of the environment can create yet more energy demands on the global ecological system (Odum, 1973). A solar photovoltaic will never be as efficient as a plant’s chloroplast, and attempting to mimic one through misguided application of Jacobs’ (2000) biomimicry proposal will only add more complexity to the system with low emergetic return. Nor are biofuels an answer, due to the obvious fossil-fuel intensive nature of biofuel production and transport, as well as ruinous ecosystem effects in perpetuating a cycle of monocultures and input- and waste-intensive agriculture, notwithstanding competition with land for other uses. Indeed, some suggest that emergy valuation for goods and services may be the next step in the evolution of economics as a language so that the true costs can be better accounted for (Logan, 2013).
In light of the above discussion, it appears a steady-state economy may be an answer, but collapse is a likely precursor. Complex systems are characterized by unpredictability (Jacobs, 2000) and self-organisation and all models will fall short of describing the global reality (Meadows, 2008), so in that sense, I do not present the above models of the global economy as the full picture: only challenge the current simplification with a broader and deeper characterisation that draws from multiple viewpoints. Acutely aware of the dangers of being ‘fooled by randomness’ (Taleb, 2005), a black swan event in the form of catabolic collapse would be, by definition, unpredictably unpredictable – an unknown unknown – but, unlike most students of economics and science, I do not therefore dismiss the possibility of it entirely, simply ignoring catastrophic events in policymaking. Rather, I intend this discussion to make plausible how such a collapse may be possible, highlight certain fragilities of the current global system under BAU, and point out that policymaking in a vacuum or using an oversimplified model of reality is a futile task. There is little point to addressing climate change if the deeper systemic failures are not properly understood; most are aware of multiple impacts of climate change on a number of systems – social, ecological and economic (and their effects, in turn, on climate change) – but that is largely where the extent of interdisciplinary thinking ends. Nor do I intend for ‘stability,’ resilience, or a steady-state economy to signal stagnation – rather, what is meant is dynamic stability (Meadows, 2008) or pulsing (Odum & Odum, 2001), a kind of cyclic fluctuation of a climax community (Greer, 2005), or, as Taleb (2005) indicates, the practice of taking small losses to avoid larger ones. Indeed, even Donella Meadows and Jorgen Randers – original co-authors of Limits to Growth – highlight the ineffectiveness of current system interventions to address climate change. In his most recent forecast for 2052, Randers (2012) provides a bleak picture of the future of climate stability, with climate projections based on current national policies (rather than IPCC (2013) scenarios) indicating 4.1oC increases by 2100, with impacts almost as devastating as IPCC’s (2013) worst case scenario. Meadows (2008), meanwhile, acknowledges that in order of most to least effectiveness for systemic intervention, places are: 1. transcending paradigms, 2. paradigms (mindset out of which the system arises, including goals, rules, delays, parameters), 3. goals, 4. self-organisation, 5. rules (incentives, punishments, constraints), 6. information flows and access, 7. reinforcing feedback loops, 8. balancing feedback loops, 9. delays (lengths of time relative to the rates of system changes), 10. stock and flow structures, 11. buffers and 12. numbers (constraints and parameters such as subsidies, taxes and standards) and yet the vast majority of climate change efforts at international (and national) level focus on the last and least effective of these.
National policy: New Zealand
New Zealand presents many opportunities and challenges for policymaking insofar as climate change is concerned. It would be ironic to begin with a discussion “green growth,” “enhancing NZ’s prosperity or GDP,” “making New Zealand more competitive in the world economy” and so on given the discussion on complex systems above: the issue runs far deeper than shallow economic fixes for environmental externalities or making environment compatible with economic growth and so on. However, there is plenty of literature – not all from a systems-perspective – that suggests ‘greener’ policy and approaches to economic organisation are in order. Business-focused works include the plethora of green growth reports and recommendations by the Green Growth Advisory Group (2011), Pure Advantage (2011), The University of Auckland Vivid Economics and Energy Centre (2012), the Royal Society of New Zealand (2014), Sustainable Business Network, and even Greenpeace New Zealand. New Zealand makes small contributions to the worldwide emissions due to the small size of its economy, although per capita emissions are extremely high (Atkinson & Harre, 2007), so some restructuring of the national economy for reducing the per capita carbon footprint is in order, although the overall effect for worldwide mitigation may be small. However, NZ will also be fairly buffered from impacts of climate change physically as compared with other regions across the globe and, rather than outright adaptation to extreme weather conditions, may require more subtle adaptation to an influx of migrants who view NZ as a safer place to live. These may be constituted initially of neighbouring Pacific island nations as ‘climate refugees,’ or may conceivably come from elsewhere as economic and social impacts of climate change become more pronounced. Nonetheless, some insight is necessary for how NZ will cope with an additional influx of migrants than predicted, considering its current gross inefficiencies in transport, urban and building design and agriculture (Harre & Atkinson, 2007).
For mitigation, a brief analysis of the economist’s toolbox of potential policies is provided in the Appendix, and covers standards, taxes, emissions trading, and investment or subsidies in R&D. These have been compared across a number of criteria including effectiveness, efficiency, cost- effectiveness, equity, incentives for technological improvements, enforceability and general morality issues as well as time, scope and scale in implementation, although I concede this is largely a standard analysis in economic terms which hardly allows for other valuation languages. I recommend three steps for further analysis: first, that all such options be calculated and compared using specific and current figures for NZ; second, that units of measurement should comprise emdollars (see Odum & Odum, 2001) or a similar unit that incorporates energy memory and a more holistic approach to valuation, and thirdly, that we recognise that debating the relative merits and drawbacks of such approaches in NZ will waste time that could rather be spent on creatively and daringly re-designing our systems to cope with (a) direct and indirect impacts of climate change and (b) the likely trajectory of the global economy, accounting for issues of complexity uncertainty, irreversibility, path-dependency and scale. If worldwide catabolic collapse or downshift is ahead – at whatever probability – then having parallel systems in NZ that address core issues of food, fuel, fibre and shelter would be of advantage, enabling self-reliance. Such parallel systems would, when valued appropriately, yield positive net emergy, respect ecological constraints, and vastly improve efficiency, equity and environmental benefit in any case. Many, such as obvious improvements to urban transport infrastructure, make intuitive sense even from current methods of valuation but are simply not pursued for political reasons. For those proposals that seem uneconomic from current valuation methods, the obvious answer is that a change the valuation language is required, and alternatives to GDP as a measure of national wellbeing are already being recommended (e.g. Royal Society of New Zealand, 2014).
Policy that favours obvious mitigation strategy: transport.
Key leverage points in any system must be identified for policymaking and here I focus on the sectoral leverage area of transport. Road transport is part of the operational fabric of the system as it promotes connectivity of nodes yet the situation in NZ is dismal. Road transport produces 45% of greenhouse gas emissions in NZ, is 20% higher than the OECD average and NZ also has a high number of vehicles per capita, with inefficiencies in large centres including low occupancy and short trips (Atkinson & Harre, 2007; Royal Society of New Zealand, 2014). Indeed, in Auckland alone, one third of all car trips are less than five kilometres (Atkinson & Harre, 2007). The issue cannot simply be countered through fuel substitutability with renewables, superior urban design (at best) or yet more roads (at worst): decreases in consumption are required and localised economies can help facilitate this – more on this is in the next section. The issue also runs far beyond climate change, of course, as high road transport use is also associated with health issues, motor vehicle accidents, productivity losses due to congestion and declining air, water and land quality (Atkinson & Harre, 2007), hence focusing on marginal benefits and damages through a narrow lens of climate change will inevitably lead to under-prioritisation of transport goals and under-funded programs. Accounting for all the net external damages of motor vehicles, in the 2007 reader, Carbon Neutral by 2020: How New Zealanders can Tackle Climate Change (Atkinson & Harre, 2007), Julie Anne Genter argued for carbon-emissions fuel taxes, road pricing and parking levies, mandatory pay-as-you-drive insurance, fuel efficiency standards, and government supported alternatives to car ownership such as car-sharing schemes in order to factor in the real cost of travel into transport choice and to fund sustainable transport initiatives from revenues, with an ultimate vision for car-free towns and cities. Two things are important, here: firstly, while straightforward, a tax system such as that proposed by Genter is likely to have little public support as it imposes high costs on the public and may be inequitable, so implementation may be so small in scope and ramp-up rates so as to make its effect negligible to motor vehicle use. Secondly, if obtaining revenues is the issue for funding sustainable transport infrastructure, then it may simply be diverted from current, highly uneconomic or carbon-unfriendly proposals by the government (such as fossil fuel subsidies and yet more motorways (‘roads of national significance’) that do not solve the root problem of urban congestion and design) into alternative streams. Other creative ideas from the text include providing builders with bonuses for any new developments within a kilometer of major transport nodes, incentivizing land use changes of car parks, making existing parking areas permeable, and revising mandates around minimum number of parks needed per unit office- and residential-space (Atkinson & Harre, 2007; Field & Field, 2009).
There is no shortage of groups advocating transport changes in New Zealand. For example, Generation Zero (2013), New Zealand’s largest youth climate action group has been petititoning for congestion-free networks in Auckland and Wellington, separated cycleways and city-wide car- sharing systems; the fossil fuel divestment campaigns of 350.org Aotearoa (2013) and Greenpeace (2013) have been running for over a year and initiated Dunedin to be the first city in NZ to divest from fossil fuels; Coal Action NZ (2014) has been campaigning against Denniston Plateau coal mining and lignite, and Royal Society NZ (2014) propose electric vehicles, fuel-efficient eco-driving and switching transport modes. The University of Auckland’s Vivid Economics and Energy Centre (2012) also supports smart transport and vehicle emissions standards, further asserting that deployment of electric vehicles should be assisted through related infrastructural advancements, although their recommendation into considering large-scale biofuel options in NZ for building local energy security is limited from a long-term and complex-systems perspective. Nothing is surprisingly new in any of these proposals: taxes, subsidies, fees, incentives, re-allocation of central and local government budgets and the Green Investment Bank (Green Party, 2014) seem to be the major economic policy tools for behavioural change, and all may be justified on economic grounds under current valuation language. I have already indicated the dangers of such accounting insofar as renewable alternatives are concerned, and there is evidence to suggest that electric vehicles (proposed even in the Post-Carbon Reader (Heinberg & Lerch, 2010)) may not be particularly efficient under emergy accounting (Odum & Odum, 2001). I also doubt that effective policy plans will stem from central government; increasingly, local governments have been instigating change in New Zealand for sustainability. However, even economically viable policies for cycleways and superior rail networks will fail if local councils do not have the support of the government, suggesting a multiscalar approach to policy is necessary in a layered economy. The technology for smarter transport is already present (certainly, the bicycle has been present for at least 200 years), hence R&D in transport is in some ways a lesser priority than actually and effectively implementing such policy. Note also that not only is this effective mitigation policy but that it aids adaptation also – if New Zealand will be seen as a safe haven for climate refugees (or a collapsing global economy), then superior transport will aid in adaptation to increasing population also.
Policy for holistic design: beyond the conventional. Agriculture, life-place design and economics.
We cannot solve climate change by focusing on climate change. Hence policy addressing economic impacts of climate change in New Zealand will fail if decelerating climate change is the only desired outcome. It will neither achieve its intended goal nor get to the root of the issue. Ideas for policy initiatives on single sectoral issues like transport are prolific but are generally an easier approach than creating deep shifts in paradigms. Becoming progressively larger in scope, revolutionary approaches to agriculture, life-place design and economics will be considered in this section.
Almost all of earth’s arable land has been employed in agriculture (Heinberg & Lerch, 2010). Any area that could be converted has been converted into farms, fields and orchards for the purposes of human food production. Much of this has resulted in the loss of vast areas of ecosystems – in New Zealand, two-thirds of native forest has been cleared and almost all wetlands have been drained for farmland (Department of Conservation, 2011), resulting in large historic losses of carbon sequestration capacity for carbon-intensive agricultural practices. This process continues in much of the world, yet in New Zealand is bound mainly by land constraints as much of the remaining terrain is in state ownership and national parks. As a result, agriculture has intensified, mainly through the aid of fossil fuels, subsidies to those fuels and subsidies to farming itself (Odum & Odum, 2001). Fossil fuel use for pesticide and herbicide production and application, cropping, harvest, transport, irrigation, fertilisation and so on has resulted in high inputs to the agricultural systems. (Atkinson & Harre 2007; Heinberg & Lerch, 2010). However, these are systems which often themselves produce high emissions in return – owing to falling carbon prices, conversion from forestry to pastoral farming has only served to lead to an increase in methane emissions from cattle. Agriculture comprises almost half of New Zealand’s GHG emissions and it is easy to see why: simplified monocultures are no longer closed-loop ecosystems and lack multiple generalist and specialist species to perform ecosystem functions of nitrogen fixation, soil formation, carbon sequestration, hydrological cycling and so on, hence require high inputs to facilitate these processes, and also generate waste including emissions, effluent and otherwise (Atkinson & Harre, 2007). Astonishingly, between seven and ten calories of fossil fuels are used to create each calorie of food, implying much of what is ‘on the plate’ is fossil fuels (Heinberg & Lerch, 2010). As competitiveness falls and demand from China begins to subside, NZ farmers move increasingly to increasing intensity (efficiency) in farming, resulting in a further deteriorating ecosystem (Odum & Odum, 2001). From a systems perspective, this dramatic reduction in natural complexity also results in a kind of lock-in – a process that requires high energy inputs, packaging, transport infrastructure, and other global hub infrastructure to function – hence resulting in extremely low natural resilience. Disappointingly, most green growth proposals to New Zealand government seem to be proposing for yet more technological intensity in farming (e.g. Vivid Economics & Energy Centre, 2011).
New Zealand can move out of grossly simplified monocultures and into systems ecology for agriculture to truly revolutionise its approach. Systems ecology agriculture, also termed ‘permaculture,’ is a holistic design philosophy that creates and maintains diverse, resilient and dynamically stable landscapes akin to natural ecosystems, and is characterized by closed-loop cycles (little inputs required, little waste), strategically managed polycultures (Holmgren, 2013), bioregional specificity (Magnuson, 2013), and complex, self-regulating forests with high carrying capacity and productivity (Odum & Odum, 2001). Self-regulation occurs because landscape design mimics natural processes and systems (Jacobs, 2000), hence little material and energetic inputs are required; only intensive design thinking. In a sense, this is not dissimilar from mainstream economics’ proposal, loosely stated as ‘technology will save us’ if we can extend the definition of technology to include know-how and design that is millennia old and created by nature. Moving from industrial agriculture to deep organics can enable higher carbon sequestration and optimal productivity, lower carbon inputs and healthier ecosystems with multiple spillover benefits (Atkinson & Harre, 2007). Carbon mitigation is aided by default – we move from energy-intensive pastoral farming to predominantly forest-and-bird farming with livestock providing ecosystem services where required, but not, by any means, as the main focus – a vision also echoed in New Zealand Eco-nation by 2020 (Strange & Strange, 2002). Policy for such holistic design systems will take time, receive much opposition from traditional farmers and be difficult. However, it need not resort to direct change but rather facilitate the transition of farms, cooperatives and orchards already on the journey through provision of subsidies, tax breaks and other incentives. Ultimately, I envision that if New Zealand were on track to become fully complex-systems in its agricultural approach by 2050, part of the transition period would be difficult: exports may decline, especially when coupled with the high New Zealand dollar, economic contraction worldwide, and potential of system-wide collapse. However, two things must be noted here. Firstly, the traditional innovator’s argument: New Zealand can transition from being a predominantly primary producer to a hi-tech exporter, and such hi-tech exports (with properly accounted emergy values, of course) could facilitate the decline in export revenues in the short run. In the medium run, our exported know-how in best practice in agriculture could be potentially large. Meanwhile, in the longer run, promotion of parallel farming systems would promote resilience and self-reliance in the face of global change, fragile just-in-time food supply chains and potential for catabolic collapse. Even if such shocks do not occur, such policy is still an effective climate change mitigation strategy that enhances biodiversity, water health and a number of other ecosystem functions additionally.
Policy promoting localisation in NZ can provide a deeper impetus for holistic urban and rural design, including transport and agriculture, as well as building design, community systems, waste, health, education and, of course, clean energy usage. Holmgren (2013) and Foss (2014) indicate that the rapidly collapsing ‘brown tech’ future seems less likely for New Zealand than other countries as here much renewable infrastructure is already in place and a ‘green tech’ slow decline is possible instead. Some overall principles would be worth mentioning at this stage: localisation, and steady-state economics. Localisation is not the mere opposite of globalisation and ‘small is [not] beautiful’ necessarily (Young & Princen, 2012; Magnuson, 2013). Localisation is about the economics of place as opposed to the economies of scale (Jacobs, 2000) and is already easily witnessed through the strategic location of new international business offices in all major hubs of the world. Localisation concerns decreasing centralization of power and authority, lowering waste, shifting to more sustainable resource use and self-reliance (Young & Princen, 2012). Note that self- reliance does not mean self-sufficiency, for those economists who see the movement as regress to agrarian society – self-reliance and localisation are about increasing complexity at the scale of individuals, communities and regions: global specialisation would give way to local specialisation, to deep organics that are bio-regionally specific, to greater diversification of local communities, technology at a human scale and leading to higher resilience overall (Young & Princen, 2012). Of course, such a system invariably necessitates some isolation from the global economy to function appropriately (although the connection could be maintained through virtual means) and, given how deeply reliant NZ is on its exports, competitiveness and integration with the global economy for overall functioning, I do not envision this would occur in the near-future to any appreciable degree. However, parallel systems of collaborative consumption and locality-specific economics are already emergent in microcosms in NZ, and such systems include time-banking, local money, permaculture eco-villages, transition towns, community food systems, zero-carbon and zero-waste movements, resource-based economy trials, cradle-to-cradle groups and more (Atkinson & Harre, 2007). Local living economies can be especially competitive in their own manner, as they are particularly attuned to local needs, culture and practices and trans-localisation dynamics are growing in neighbouring areas such as Australia (Holmgren, 2013). I also note that localisation requires higher generalisation on one level and yet specialisation at a different scale with a different kind of efficiency: one that is not characterized by little spare capacity, operational lock-in and little adaptive capacity (Foss, 2014). Despite all its benefits, such movement faces some opposition already with local business inequities in subsidies, regulations, laws and economic development practices (Heinberg & Lerch, 2010) and policymaking in New Zealand is no exception. If policies wish to truly address the climate change and complexity issues in NZ, they must be – at the very least – tolerant and accepting of such parallel systems as opposed to creating unnecessary difficulties though targeted policy against decentralisation. For example, residents wishing to build zero-energy houses in NZ should not be subject to overly complex and futile review processes, nor should they be made to comply with obsolete regulation such as the requirement to have two car parking spaces per garage if the aim is to minimise space wastage and cycle for transport. Nor should alternative business models such as social enterprise based on principles of quasi-equity be actively discouraged, when it is precisely such diversity of economic systems that can enable development during times of crisis: differentiation arising from generality (adaptation). Policy that enables a more holistic formulation of life-place and economic organization will serve New Zealand well in the longer term, tackling the issue of climate change, the complexity of the global economy and population influxes from climate crises elsewhere simultaneously. It will be, by no means, a perfect solution, but some creativity, ‘adaptive muddling,’ and daring in using New Zealand as a place for policy experimentation is in order.
This essay has taken a largely complex-systems approach to policy design for carbon mitigation and adaptation in New Zealand and the international economy. I suggest that the operational lock- in of common hub infrastructure is so tight that large-scale change at international level is not possible without catabolic collapse, and that the level of waste generation from such a system will predicate the collapse in any case. Hence international policy for climate change is unlikely to be successful. New Zealand, however, will be largely buffered from climactic impacts and faces a greater problem of adapting to population increases as a result of its appeal and relative climate safety while also the problem of coping with a fragile international economy that undergoes downshift. Holistic policies in this regard can aid adaptation and mitigation simultaneously, while having multiple spillover effects for other arenas, although require, at the very least, tolerance of such experimentation and, at the most, some daring by our policymakers. Paradigm shifts are necessary – the deepest one involving shifting to systems-thinking itself. Perhaps this will lead to a steady-state kind of economics, if successful; perhaps it will be half-heartedly pursued for the rest of this century. To close, it would be well worth noting another example from biological sciences: ecosystems proceed through seral stages during succession, where r-selected species (fast reproduction, high growth rate, wasteful resource use, generalist) are replaced by predominantly K- selected species (slower reproduction and growth rate, closed loop cycles) at the climax community. Humans are K-selected species, biologically. (Greer, 2005). Humans can be K-type species economically also, and, rather than viewing energetic downshift as regress, it may be worth noting that the kind of (steady state) economy that will arise will be a climax community, of sorts. Perhaps by rewriting the language of economics, more economists and policymakers will see this also.
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EMISSIONS TRADING AND ENVIRONMENTAL JUSTICE – THE THIRD PHASE
Hailed as a seemingly cost-effective solution to environmental problems, emissions trading is by no means perfect and bears the capacity to create environmental injustices. Emission trading is a market-based approach to harmful emissions reduction through creating property rights or ‘licenses to emit’, setting maximum emissions targets, distributing these appropriately and enabling transferability through trade. Actors (for example, firms) can then emit up to the maximum of their emissions allowances, selling any extra, unused allowances or purchasing additional allowances as required. In theory, this system is designed to achieve the desired environmental outcome by internalising the negative externality and doing so at least cost, equalised at the margin across all firms. Notable global examples include in SO2, NOX and CO2 reduction schemes. However, while elegant and economically rational at first glance, emissions trading schemes (ETS) are hardly exemplars of ‘just sustainability’. This essay argues that not only do they fail in the social dimension, but also on the environmental and economic dimensions, leading to a cascade of injustices. This cascade will be considered from the point of view of the ‘third wave’ in environmental justice literature, firstly, from a pluralist perspective, secondly, considering values and valuation more specifically and lastly examining the capabilities approach to environmental justice.
Environmental justice, firstly, is defined broadly as the right to be protected from environmental pollution, to enjoy environmental benefits and to be meaningfully involved in the “development, implementation and enforcement of environmental laws, regulations, policies and the equitable distribution of environmental benefits” (Commonwealth of Massachusetts 2002: 2). Environmental injustice, meanwhile, has traditionally been viewed in Cartesian space and concerned inequitable outcomes (distributive inequities), namely, the simple proximal association of environmental bads such as emissions in certain kinds of communities such as those of colour or of low-income (e.g. Burtraw et al. 2005; Lejano & Hirose 2005). Much earlier work on the inequitable distribution of outcomes only considered proximity to emission point sources and considered the divide between average or total emissions reductions and local emissions reductions, highlighting how some communities may see emissions increases (in ‘hotspots’) even under schemes that decrease emissions for a region as a whole (e.g. Fowlie, Holland & Mansur 2012; Lejano & Hirose 2005). However, other disproportionate impacts could include timing, scope, scale, price and price volatility, the latter two of which often impact strongly on low-income households with inelastic demand curves and low substitutability of necessities, as in the case of energy and carbon ETS (Burtraw et al. 2005).
Further work in the field sought to address the cause of such impacts rather than focus on assessing and addressing impacts alone, although the ‘space’ that those concepts of justice were bounded in was largely that of race (Hollifield, Porter & Walker 2009; Schlosberg 2013). For example, governments and business aiming to minimize cost of development and industrialization inasmuch as possible could target communities of colour or low income, who have least power, resources, legitimacy and capability to oppose such action (Roberts & Parks 2007). Hence ETS could result in the siting of emissions-releasing facilities in such areas because of overt acts of racism. This is often viewed as procedural injustice as these demographic subsets are considered to be purposefully excluded from dialogue in planning and implementation. Yet even this view is incomplete, in that it narrowly defines the ‘spaces’ of environment and justice and attributes direct and overt causation where none may be evident.
Meanwhile, the ‘third wave’ of thought on environmental injustice encompasses not only distributive inequity and procedural injustice (as intentionally discrimination), but also the concept of recognition: in effect, that unequal or inequitable distributive outcomes result due to a failure to recognise the diversity of localized, contextual, cultural, ethical, social and political attitudes, beliefs, practices and institutions, and the different manifestations of ‘justice’ acting at different scales, networks and systems. Such examination may appear to focus attention on causes over effects, but ultimately asserts that both redistribution and recognition are necessary for the environmental injustices of ETS to be meaningfully addressed in the short- and long-term, and that this is mediated through public participation or procedural equity (Schlosberg 1999). I note also that the literature examining emissions trading from the third perspective of environmental injustice is sparse and the following analysis aims to bring these two literatures into discussion.
Diversity and pluralism: spaces and procedure
Undoubtedly, environmental injustice is manifest differently depending on context in emissions trading and this view demands a more pluralistic approach to the examination of injustice. Such context may be a mere nuance in existing institutionalism of beliefs and attitudes, or it may be more obvious, in the form of geographic locality and the differential politics prevalent there (Hollifield, Porter & Walker 2009). Recognition of institutionalised biases extending past class to include gender, age, (dis)ability and other areas widens the scope for emissions trading to create environmental injustices, as those often most affected by policies are women, children, the elderly, sick, disabled, poor, indigenous peoples and immigrants, as well as people of colour (Hollifield, Porter & Walker 2009; Schlosberg 1999; Walker 2009). For example, women do not comprise equal share of participants at international climate negotiations for carbon ETS, nor do they necessarily have a strong voice to articulate needs at the ‘bottom up’ level in Less-Developed- Countries (LDCs), when their participation may be crucial to the implementation of policy (Schlosberg 1999; Wamukonya & Skutcsh 2001). Nor are indigenous peoples’ priorities and worldviews adequately considered at the table even when these are some of the most affected parties of global emissions trading schemes (IWGIA 2014). However, it must be noted that classification of diversity (including through categorization of motivations for emissions trading) can be counter-productive to its recognition as it almost always excludes some facets of multiplicity while centering on others (Schlosberg 1999).
Beyond spaces of ‘justice to whom’ (who is affected), spaces of misrecognition can also include differential geographies of responsibility: distributional inequities from emissions trading can arise due to historic injustices across countries and already marginalized groups can become even more marginalized by ETS. For example, poorer countries often raise the argument that they are least responsible for greenhouse gas (GHG) emissions but bear disproportionate costs of cleanup and adaptation (Roberts & Parks 2007). Moreover, those countries which have already emitted the most also unfairly have the most capacity to emit now, as they may simply purchase credits from poorer nations who, by contrast, require fossil fuels the most to aid development and will be forced to re-purchase credits at a later date when prices are higher – a manner of ‘carbon colonialism’ (Page 2012; Walker 2009). In a sense, this can be seen as emissions trading resulting in unjust spaces of responsibility.
Clearly, misrecognition is not necessarily in the form of obvious insult, disrespect, denigration or stigmatization of certain groups as the mere omission of the space for certain discourses (for example, through a neoliberal approach discussed below) can lead to silencing of various groups. The misrecognition of places is an even more subtle demonstration of institutionalized racialization and, in the case of ETS, can lead to a subtle re-shifting of priorities and emissions as already stigmatized places are degraded further and the vertical expansion of environmental justice definition takes this beyond national borders (Schlosberg 2013). Hence these multiple spatialities of environmental injustice recognize that there are many ways for groups to become marginalized or to self-exclude from planning and decision-making. Interestingly, such a recognition of ‘spaces’ requires an extension of the definition of ‘space’ beyond Cartesian space (or ‘nature’) to spaces which are socially constructed (social natures, or social ecosystems) – which, arguably, almost all spaces are to some degree. In the context of emissions trading, such broad definition could mean almost anything – injustices in spaces of economy, spaces of society, spaces of procedure, democracy, access, power, ideation, responsibility and so on (Bickerstaff, Bulkeley & Painter 2009) – yet such definition is necessarily vague and plural to properly recognize diversity (Schlosberg 1999).
Pluralism has important implications for not only recognition of difference in ETS but also participation and procedural equity in ETS. Of course, spaces of fair process require democracy, inclusiveness, openness, equitable power and access (Walker, 2009), but also for this to be agonistic in respect and intersubjective in understanding (Schlosberg 1999), no characteristics of which are (nor can be) perfectly met in global ETS schemes. For example, international climate negotiations for carbon ETS may recognize diversity at different levels but approach it as with ‘tolerance’ at best and ‘ignorance/omission’ or outright rejection at worst. The former is insufficiently open and critical to foster any real recognition or comprehension of diversity hence can create injustices under the facade of addressing them. Furthermore, attempts to bring together difference under a united whole fail on practical, philosophical and psychological grounds – difference is real, as it is differential experiences of reality that matter, ultimately, not whether there is a ‘general/universal’ reality per se (Schlosberg 1999). Hence it may be argued that there is no such thing as (general) climate change: there are only differential, partial and situated experiences of it at scales from the individual to the nation and beyond. Furthermore, any scheme aiming to address an ‘ultimate’ (or scientific) reality will by default fail to recognize diversity in experience of space hence fail to meaningfully involve participants. Some argue that common practice of tolerance is tokenistic, one-way and is merely ‘allowing otherness’; only reciprocal agonistic respect is just. The latter is exemplified through critical recognition of and genuine care and curiosity for others, as well as through the acceptance of ambiguity and the changing nature of values. Intersubjective interaction can further aid this process through not only recognizing and comprehending others, but also enabling communication across lines of difference symmetrically via internalization of others’ thought process (Schlosberg 1999), which most emissions trading negotiations only tokenistically attempt, if at all. Hence emissions trading creates environmental injustice not only in obvious aspects of procedural injustice such as unequal power relations, but also in more fundamental aspects such as failure to agonistically respect and intersubjectively engage with all participants in planning and implementation of trading schemes.
Legitimacy, neoliberalism and values
Additionally, emissions trading – if viewed as an institution (or system) of governance for emission- related activities – has questionable legitimacy. In the case of climate change, carbon ETS could be considered legitimate from an end-goal perspective (necessitating environmental benefit maximization and cost minimization); however, input-focussed legitimacy is considered here. The focus of this section is to explore how ETS do not meet three integral criteria of legitimacy from the causal perspective, and how these criteria are bound in the neoliberalism of ETS. These criteria are: participation, accountability and transparency (Page 2012). In ETS, participation is largely denied to those affected by emissions trading policies ‘indirectly,’ such as households and civil groups, and, even for those who ‘participate,’ participation is often in the form of the market. However, in international climate change negotiations at least, such participation is difficult as players do not often have the capacity to fully, fairly and meaningfully engage in the market creation and governance through lack of adequate resources, funding, time and incentive and domination by large players in discourse (Roberts & Parks 2007). Under the guise of ‘liberal pluralism,’ ETS schemes only further deepen injustices by assuming different groups of interest can actually be properly defined, that interests are represented through money and are not internally heterogenous (Schlosberg, 1999). In that sense, neoliberal responses to environmental issues such as emissions are at danger of being absolutist in that they often demand ‘one size fits all’ and define environmental action in purely economic language only. Furthermore, in areas of ETS that are intended to represent more democratic participation, many countries are further unable to voice their (diverse) interests, lacking expertise in negotiating technicalities, administration and finance in comparison to More Developed Countries (MDCs) (Roberts & Parks 2007). Once established, not only do ETS preclude direct democratic participation as they are then driven by the ‘hand of the market’, but such markets are also not perfectly accountable to actors and regulators due to their diffuseness, complexity and uncertainty (Page 2012). Page (2012: 9) also writes that in emissions trading, “democratic forms of accountability [are replaced with] market accountability…emissions markets are not themselves accountable to anyone,” also highlighting a shift from means to ends through restricting participation. Thirdly, emissions markets may be considered unjust because they are not transparent. Accurate information is not always readily available to participants at low cost, nor is such information necessarily comprehendible by all players or open to critique and review in a timely manner. Top-down ‘cap’ aspects of ETS often can and do meet the transparency criteria; however, subsequent ‘trade’ is often hidden even to those involved deeply in the markets themselves (Page, 2012). As emissions trading is questionably legitimate, it is evident that it can be considered unjust from both the institutional perspective (emissions trading as an institution of governance) and the procedural perspective (emissions trading as a procedure for governance).
Furthermore, emissions trading neoliberalises nature and hence creates environmental injustices through excluding or resulting in the self-exclusion of groups, communities and even countries who are unwilling or unable to engage in predominantly scientific and economic languages of valuation (Bickerstaff et al. 2009; Corbera 2012). While ETS design is conceivably as much political as it is economic – such as subjective value judgments on discount factors for net present value analysis, or the initial distribution of credits – other discourses can nonetheless be silenced as economic notions of value take precedence over other notions of value. Economic ideas of value are not, however, necessarily centered on static monetary worth alone; they can include ideas of relative worth or fair return on exchanges (O’Brien & Wolf 2010), and, depending on the prior assumptions, methods and theories, can yield widely divergent results for appropriate costs and benefits respectively (Dempsey & Roberston 2012). However, the issue remains: ETS relies on the privatization and commodification of what may be deemed ‘public’ goods (or bads), hence over- simplifying nature through the segregation of services (such as climate regulation, as in the case of carbon markets), through lack of proper consideration to uncertainty, interconnectedness, feedbacks and complexity of ecological systems in modeling (Corbera 2012), standardisation in both the object of value and the method of value articulation (Farrell 2007), and through shifting the imperative for emissions reductions from moral or ethical arguments such as intergenerational justice (Page, 2006) to utilitarian and economic arguments, where only useful elements of nature are conserved or enhanced and all others ignored or considered to be substitutable (Corbera 2012; Spangenberg & Setelle 2010). In effect, ETS shift notions of responsibility from being non- consequentialist to being consequentialist – no longer do entities reduce emissions because that is the moral imperative but that they are paid for doing so, and can additionally trade these ‘licenses to kill’ (Page 2012: 946).
ETS is barely adequate in the social sense as it tends to marginalize discourse of values beyond the economic and scientific. Firstly, as already mentioned in the context of responsibility, ETS promotes environmentally-friendly behavior by incentivizing emissions reductions but through this can also potentially subvert intrinsic reasons for such behavior as individuals or firms begin implicitly assuming that they will only care if they are paid to care (Corbera 2012). Secondly, assumptions of rational, profit- or utility-maximising individual actors are a far cry from modern psychological and sociological theories, which recognize concepts of bounded rationality and even irrationality as core drivers (O’Brien & Wolf 2010). Thirdly, in the sphere of climate change, adaptation literature has shifted from outcomes-based (biophysical, economic) approaches to context-based approaches, recognizing that underlying social, political, institutional, economic and cultural conditions determine degrees of exposure and vulnerability and that differences in vulnerability are due to a total comprehension of context rather than biophysical factors alone. However, a third approach, which is values-based, takes this deeper and asks not only what factors make different groups differentially vulnerable, but what climate change impacts actually mean for those affected. Such meaning is subjective, individually and socially constructed, and based on deeper notions of worldviews and beliefs which underpin the contextual spaces of economy, society, culture and institutions. (O’Brien & Wolf 2010). Mitigation in the form of ETS, by contrast, is mostly centered on an outcomes-approach – biophysical calculations are prioritized (Farber et al. 2006), economic languages universalize discourse at the expense of excluding all other discourses, and even social equity is considered predominantly in a distributive, geospatial sense and analysed in empirical and quantitative terms (O’Brien & Wolf 2010). Where is the recognition of other languages of discourse and valuation, such as those that are intrinsic, spiritual, cultural, religious and qualitatively expressible in international ETS schemes such as those for climate change? Where is the diversity of actors, values, languages, interests, world views and spaces recognized in outcome (e.g. carbon ETS design) and procedure? If economics and science are merely ‘metaphors,’ then why must they be universal and exclusive, rather than merely one of many kinds of metaphors? Lastly, must all global schemes for urgent emissions issues necessarily exclude social flexibility hence result in deep injustice? Schlosberg (1999) argues that the notion of ‘radical empiricism’ can enable an understanding of embodied objectivity and knowledge as being situated, partial, and multiplicite and that the failure to recognize knowledge but through a monist position – as most ETS do – can result in environmental injustices for all other positions sidelined. However, other authors question if participatory democracy is necessarily the answer if it impedes decision-making on urgent environmental issues (Holden 2002) – certainly important considerations, when weighing the magnitude of ETS injustices against the cost of emission damages.
Moving beyond human, and the capabilities approach
The above discussion focuses on how emissions trading creates or perpetuates environmental injustice as a manifestation of diverse social injustices. However, this understanding can be inverted considering that the environment provides the capacity for social justice to occur in the first place – in effect, that environmental justice is applied to the ‘space’ of the biosphere itself, recognizing that social justice – or any of society, for that matter – would not exist without the natural matrix from which it has emerged (Schlosberg 2013). Emissions are obviously an injustice to the environment (both social and natural), and one which affects other species and ecosystems which bear no responsibility for the harm. Emissions trading, however, can also be an injustice to the environment if it does not properly correct the underlying externality while giving the half-assuring facade of doing so. Even economic literature widely acknowledges the failure of the global emissions trading scheme for carbon (e.g. Aldy et al. 2010; Branstetter & Pizer 2012).
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