Thursday, May 2, 2013
The global development situation, as described by McMichael is, arguably, the biggest question confronting humanity in the 21st century. The challenges that are confronting humanity come from a combination of energy, climate and food crises. In confronting these issues, the policy makers still rely on the same model without taking cognizance of the challenges at hand. Most still rely and depend on the neoclassical and market driven models for development. In this paper, it is one’s intention to concur with McMichael’s view on this matter. This will be supported by various scholars who support these arguments. Apart from that, one would also attempt to analyse the potential of the policy founded on neoclassical economic principles and market based approaches which contribute to solving the global challenges. Having considered this, one would then consider whether the market-based and economic policy levers are sufficient to resolve the present situation. Before we proceed, it is crucial that we understand fully the term ‘ ecological debt’ before analyzing the issues at hand.
Ecological debt, has been defined as "the additional burden on the environment occasioned by surpassing the limits of the resilience of the natural system" (Navia, 1994, quoted in Ojo, 2001: 28); or as surpassing "the productive potential of the ecosystem" (World Commission on Environment and Development, 1987: 9). In order to appreciate fully the extent of the definition, one should reflect on its history.
A brief history of the concept
It was the institute of political ecology of Chile that, in the early 1990s, describing the skin cancers provoked by the thinning of the ozone layer, challenged the rich countries for their production of CFC gases, which are responsible for the hole in the ozone layer. The concept was mainly used in awareness-raising campaigns targeted at the general population.
In 1992, in Rio de Janeiro Brazil during the Earth Summit, groups of environmentalists adopted a "position paper" in which they linked the external debt due by the South to the North to the ecological debt, the debtors of which are the citizens and companies of the rich countries, and the creditors of which are the populations of the poor countries. In 1999, in Johannesburg in South Africa, an international campaign was launched for the recognition and claim of the ecological debt. One year later, in 2000, some NGOs from countries of the South met to form the Southern People Ecological Debt Creditors Alliance (SPEDCA). The objectives of the SPEDCA are threefold: first, it aims to obtain international recognition of the ecological debt, both historical and current. Then, it demands that external debt be recognized as illegitimate, "as made evident by ecological debt." (Paredis E. et al., 2004). Finally, it formulates a manifold of demands aiming at reparation for the historical ecological debt and preventing ecological debt from increasing in the future.
In its current conception, as used by South American activists, the ecological debt is a debt that is due by the industrialized countries of the North to the Third World countries, once colonies, as per the environmental impact entailed (still today) by the exploitation of their resources by the countries of the North, and as per "imported’ environmental impacts (waste dumped on their soil, etc.). The organization Acción Ecológica defines ecological debt as the responsibility of the industrialized countries for the "damage caused over time" of the planet by their "production and consumption patterns." (Paredis E et.al, 2004)
In a broader conception, it is an ecological debt caused by country A, through its production and consumption patterns, on other countries or on territories beyond their national jurisdiction. It could also refer to the exploitation or use of ecosystems by a country A, at the expense of the equitable rights to these ecosystems or ecosystem goods and services by other countries or other individuals. In all cases, the "cause" of the debt is country A (usually an industrialized country) and the victim (the creditor) is the planet. Following this conception, the ecological debt can take the form of a debt of the population of the whole world to future generations for their improper exploitation of resources, which leads to the appearance of global environmental threats. This is the concept that scholars like Professor McMichael subscribes to.
An example of an ecological debt between two countries is that accumulated through the extraction of natural wealth (oil, ore, forests, marine and genetic resources, etc.) in view of export, which has jeopardized the development possibilities of the peoples involved. This type of trade is ecologically unfair, given that the goods are exported without taking into account the social and environmental damage that their exploitation generates, imperiling the food and cultural sovereignty of the local and national communities.2 A specific example is given by the organization "Acción Ecológica" in Ecuador, where the Texaco oil company has extracted over the past 20 years more than a billion barrels of oil. During this period, it provoked the deforestation of a million hectares of tropical rainforest, provoked leakage of polluting crude oil and oil residues that ran into the Amazonian rivers, burned very large quantities of gas, and built more than 600 sites to bury toxic waste
In most cases, we find that mainstream economists take the natural world for granted. They assume that there are no limits to the carrying capacity of the earth or to its ability to absorb wastes from the human economy. This is the view propounded by the Neoclassical school. In effect, the neoclassical assumption implies that markets are good in all socio-economic and cultural settings. In effect the neo classical economic assumptions and economic principles are not based on empirical evidence or logical reasoning but based on ideological grounds and therefore it can be said the relationship between political and economic system is based on ideology than on analytical grounds.( Prit 2008, Business and Society)
One of the explanations for most economists’ blindspot is the limitation imposed by their analytical models which require that everything be quantifiable in monetary terms. Valuing everything, including human life, only in terms of market transactions leads to enormous distortions. Though they provide certainty and quantifiable, human aspect would also need to be considered in thew current situation.
In attempting to estimate the social costs of climate change Economists at the Centre for Social and Economic Research on the Global Environment (CSERGE) in the U.K. valued the life of someone living in a developing country at US$150,000 while saying that a life in the US or Europe was worth US$1,500,000. The different figures were calculated according to peoples’ ability to buy damage insurance. This outrageous attempt to value some human lives as being worth 10 times as much as others seemed irrational as how can human be valued this way similar to that of goods and cervices. No wonder it sparked an international protest campaign against "the Economics of Genocide". (Global Commons Institute, undated )
Attempts to estimate ecological debts must begin with different premises: the inestimable value of all life and recognition of the human economy as a subsystem within the wider ecosystem which itself has an immeasurable worth. This should be the way to proceed rather than what it is being done currently.
Unequal Terms of Trade
When goods are exported at prices that do not take into account the social and environmental costs of their extraction or production, the result is ecologically unequal terms of trade. For this, Joan Martinez Alier (1998) cites as an example Mexican oil sold to the US at a price that does not take into account the "massive environmental damages caused by oil drilling in the rainforests of Tabasco and Campeche." In Ecuador it is estimated that environmental damage resulting from oil extraction by Texaco is equivalent to approximately one dollar for each barrel of oil extracted. This estimate does not include the added global damage from greenhouse gases emitted when the fuel is burned. Given these examples, it is therefore evident that this inequality is not only prevalent in the quoted countries but may be present on others as well. The Neoclassical arguments can be thus challenged here.
Here one would need to consider whether the market-based and economic policy levers are sufficient to resolve the present situation. As we know, market-based economy is synonymous with capitalism and it is all about profit. The higher the profit is, the higher the growth rate will in theory be, which in turn leads to a higher rate of depletion of various recourses which ultimately leads to a higher rate of pollution (O’Connor, 1989: 11). From this we can see that at the end of capitalism there is environmental destruction and exploitation.It is not difficult for us to find such examples to support our arguments against market-based policy. An example on what kind of effects capitalism can have is the current financial crisis in the US motor industry. The motor car giants, such as GM, Ford and Chrysler, have for years in their race for short-sighted economic gains resisted and done everything in their powers to stop stronger compulsory MPG and CO2 emission standards. They have even denied climate change and their promises that they could cut their greenhouse gases voluntarily have all failed. As a result the average car sold in the US today is less efficient than the Model T Ford from 1908 (The Guardian, Tuesday 7 October 2008). Why? This is because as Henry Ford II once explained: “minicars make miniprofits”. And like John Z. DeLorean, former GM executive, have said:
“When we should have been planning switches to smaller, more fuel-efficient, lighter cars in the late 1960s in response to a growing demand in the marketplace, GM management refused because ‘we make more money on big cars’ “(quoted in Foster, 1999: 124).
And with help from the US government, Standard Oil and Firestone Tire these motor companies deliberately dismantled earlier mass transportation system in the US during the 1930s to the 1950s. During most of the twentieth century the US government decreased funding for public transportation while they wastefully poured money into highways in an effort to increase the corporate profits that comes with private motoring. While this was happening the auto companies bought up electric streetcar lines and converted them to busses. This is today known as “the Great American streetcar scandal”, “General Motors streetcar conspiracy” or “the National City Lines conspiracy” (Wikipedia.org). As a result, between 1936 and 1955 the number of electric streetcar lines had dropped from around 40,000 to 5,000 in the US. GM also used its nearly monopolistic control over the bus and locomotive market to make sure that public transportation kept loosing ground to private motoring. And so with devastating effects for the environment, but also in a technology sense, USA today have to rely on private motoring for 90% of all ground transportation of goods and people, which is more than any other country in the world. It is therefore not right to defend these actions by claiming that they did not know about the effects. To understand this better, it is important to refer to a US Senate committee report that stated “motor vehicle travel is possibly the most inefficient method of transportation devised by modern man” (Foster, 1999: 114-116, 124).
Market-driven economy do not just result in environmental destruction and resource depletion but it also divides people. This is the most detriment effect to ever happen to any society. A fine example of this is the memorandum from Lawrence Summers , the chief economist for the World Bank,who wrote an internal memo that was leaked to the British publication the Economist on February 8, 1992. In it he says that the World Bank should be “encouraging more migration of the dirty industries to the LDCs [Less Developed Countries]”, and that “the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable”. He also writes that “the demand for a clean environment for aesthetic and health reasons is likely to have very high income elasticity” (quoted in Foster, 2002: 60-61). In other words: Summers says that people in the Third World are worth less than people in the North, and thus they could be exploited more by the capitalistic world system. But it’s not just in the Third World that capitalism takes the form as environmental racism. This also occur in Los Angeles where over 70% of African Americans and 50% of Latinos live in areas with the highest amount of air pollution. This can be compared to the 34% of white people living in the same areas (Foster, 1999: 138).
To discuss market-driven economy without Karl Marxis like not looking at other opposite end of the argument. He came up with the term “metabolic rift” to explain the rift capitalism has created between social systems and natural systems. This rift, he claimed, led to ecological crisis and the exploitation of the environment. As people moved into cities they lost the contact with nature, and thus they became less likely to consider what the best for the environment was, and how their actions and decisions affected it (McMichael, 2008: 11 and Foster, 1999: 63-64). Marx also noted that as the income for the workers in the cities increased companies (capitalists) searched for cheaper workers outside of the city (Moore, 2000: 136-137). Today when half of the world’s people live in cities this is happening on a much larger and more global scale. In fact, it is true that more people than ever have lost the direct contact with nature (Satterthwaite, in the Guardian 2007). And worst of all, instead of companies and corporations looking for cheaper workers in the countryside within their country, they now look outside the nation’s borders, mainly in Third World countries.
When it comes to climate change McMichael says that the “only sound solution” is by basically reformulating the generally accepted perspective of development. But he warns that resistance, for what science says needs to be done to tackle the climate crisis, will come from “corporate interests”, “politicians with short-time horizons” but also from strong talks “of neo-liberalism that represents market solutions as commonsense” (McMichael, 2008: 14). He concludes that the “de-carbonization of the material economy will require substantial de-commodification to establish sustainable development, which in turn means the development subject would no longer be the high-mass consumer, but a politically-mobilized social and ecological steward”. And that this time the goal for the “North” is not just to supply and “secure” its home markets with valuable raw materials and other commodities. Now it’s also about supplying the Third World with “environmental repair or caretaker services” to be able to lessen the damages and problems that the system itself has created (McMichael, 2008: 16-17).
On the other hand, Immanuel Wallerstein says that he is “relentlessly pessimistic” on how sustainable development could be possible under capitalism (Hornborg, 2007: 22-23). He also says that we are “in the middle of a transition” away from capitalism to something else. But what that is and if it will be better or worse he does not know. “The outcome will be decided by the political activity of everyone now and in the next twenty-five to fifty years”, he writes (Wallerstein, 2007: 384-385).
One can therefore conclude that given the current scenario of globalization, the market-driven policy enjoy vast acceptance at the expense of humanity. Without strong resistance coming from the Third World activists, the situation would have worsen. However, taking McMichael’s views as reiterated earlier, the policy makers should review theirs before its too late.
1 Paredis E. et al., 2004, Elaboration of the Concept of Ecological Debt, VLIR-BVO project 2003, Final Report, Centre for Sustainable Development (CDO) - Ghent University, Belgium (search possibility on the Web site of Centre for Sustainable Development of Ghent University: http://cdonet.rug.ac.be
2 Bourinet S., 2004, "Faire reconnaître la dette écologique des pays du Nord envers les pays du Sud", text written for the summer university of the CRID, Angers, Belgium, July 10, 2004.
3 Our Common Responsibility to the Global Environment: The Europeans’ Ecological Debt by Yolanda ZIAKA retrieved from internet on 15 July 2010 http://www.carta-responsabilidades-humanas.net/spip.php?page=sommaire
A hybrid economy is any type of local, state, or national economic system that involves a more or less equal focus on two different types of economy. This hybrid or dual economy is a relatively common structure that has been utilized in many different settings over the history of mankind. Some examples of a hybrid economy may include a military-industrial based economy, a university-industry based economy, or hybrid economy based primarily on a mix of business and government. One could say that the communal lands of South Africa and Australia are also examples of hybrid economies. In the best of situations, a hybrid economy will draw on the strengths of each major component while also minimizing the weaknesses inherent in any single approach to an economy. For example, a hybrid economy that rested on a foundation of agrarian and manufacturing elements could achieve a balance that allowed persons living within the economy to enjoy ample fruits, vegetables, meats, and dairy products to consume and invest in. At the same time, this mixed or hybrid economy would also ensure that other goods could be produced at a cost efficient scale within the jurisdiction. Because of the nature of the mix, industrial waste could conceivably be minimized and productivity would be enhanced due to the balanced nutrition of the general populace.
However, not everyone is a fan of the hybrid economy. One common perspective is that the presence of a hybrid economy may inhibit research that is not directly related to one or both of the dual economies within the overall structure. This can lead to situations where the economy is ill suited to deal with shifts in technology, scientific discovery, or even political situations. Others site the potential for an increased desire or need to micromanage one or both major aspects of the economy, diverting resources that could be used to better advantage.
The hybrid economy model seems to function best when the balance between the two components is kept in balance, secondary economies are actively encouraged, and the focus on the hybrid blend does not consume all the resources available within the jurisdiction. This helps to minimize the chances for become closed to technological advances and other factors that could ultimately benefit persons living within the hybrid economy. In support of this dual economy, one can say that South Africa is a good example in the sense that it is a country of contrasts and inequality. It has modern cities but many of its cities outside Johannesburg and Cape Town are characterized by the rural poverty of an underdeveloped country. The economy of South Africa is in fact a dual economy, divided not only between urban industrial sector and a rural sector but also, the vast differences between income levels and living standards between the races. This is clearly the aspect of dual economy that is existing in the country and part of the main economy.
Concern about sustainability economics is almost as old as the dismal science itself, even though the word itself has come into fashion only in the past decade, In the past, Malthus was worried about how Britain’s apparently inexorable rise in population could be sustained from a finite land. This could be considered as one of the first concern shown on this subject
Today, sustainability economics has become a wide-ranging term. It can be applied to almost every facet of life, from local to a global scale and over various time periods. Examples of sustainable biological systems include long-lived and healthy wetlands and forests They are. Invisible chemical cycles redistribute water, oxygen, nitrogen and carbon through the world's living and non-living systems, and have sustained life for millions of years. As the earth’s population has increased, natural ecosystems have declined and a change in the balance of natural cycles has had a negative impact on both humans and other living systems. The overall driver of human impact on Earth systems is the destruction of biophysical resources, and especially, the Earth's ecosystems. The total environmental impact of a community or of humankind as a whole depends both on population and impact per person, which in turn depends in complex ways on what resources are being used, whether or not those resources are renewable, and the scale of the human activity relative to the carrying capacity of the ecosystems involved.
For sustainability economics to be located in a broader political and moral framework for it to be effective, one has to look closely at the present economic structure. If macroeconomic and microeconomic policies and institutions drive the growth process, other factors “enable” growth to move forward. The availability of it to be more effective, finance, of infrastructure, and of an educated and healthy workforce, for example, can influence the rate and direction of growth. However, they cannot by themselves cause growth to occur where the drivers are not in place. Work in these areas is important, but its impact is much reduced in a country with a poor macro- or microeconomic policy environment The greatest obstacles to growth stem not from nature, but from politics. Because almost every economic change creates losers as well as winners, identifying the correct economic prescription is rarely enough to ensure that it is adopted. This often means that one size does not fit all. The basic principles—macro stability, market-based competition, etc.— can be applied in different ways to suit different situations. Governments committed to reform have sometimes found new and surprising ways to apply these principles successfully to accelerate growth. It is here that sustainability economics can play a major that is by ensuring that the policies adopted incorporate elements of moral and political freedom. For the moral aspect, there must be a political will from the government to reduce
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