Why Downsizing Won't Work


Like many people, Brett Robertson believes that economic development is the culprit behind environmental degradation and climate change. It’s an accepted part of contemporary environmental debate: we need to downsize before the "affluenza" virus cripples both our lifestyle and the ecosystem.

But the view that modern capitalist society is too affluent is incorrect — and dangerous. Modern capitalism is poor. The key to a more sustainable future lies in more growth and more affluence, not de-development.

A quick look at Maslow’s ‘hierarchy of needs’ shows that people first satisfy their basic material needs for food, shelter, physical security and health, after which they satiate so called "higher needs" — including creative freedom, justice, opportunities for political expression and even environmental goods such as clean air, clean drinking water and certainty of their own and their children’s economic future.

What Maslow’s hierarchy shows us is that consumers do not view goods that satisfy higher needs, and goods that satisfy more basic needs, as substitutes for one another. In other words, if people value environmental goods they would not sacrifice these goods for the opportunity to consume a greater number of lower order consumables, such as plasma TVs. We can see this historically, where progress on conservation has been born out of relative affluence, prosperity and greater satisfaction of basic needs.

Early 19th century London, with a GDP per capita of less than one tenth of the present day United Kingdom, was characterised by the unbearable stench of human effluent and rampant air pollution from the smut and stink of coal firing. Even Sydney Harbour was dirtier at that time than it is now. In North America, that era saw the unapologetic destruction of natural resources and forests with an attitude of environmental "conquest".

At that time, although capitalism was in its infancy, production methods were highly inefficient compared to today, and human understanding of our relationship with the ecosystem was archaic.

The latter part of the 19th century saw a new level of environmental awareness in the west, arising from growing prosperity and a concern for the preservation of resources. The rise of conservation movements was in part spurred by a burgeoning middle class who had the time, political will and resources to satiate their higher needs with environmental goods. It was during this time that the first national parks were established, the Sierra Club — the forerunner of the Wilderness Society — was founded, and that the State began to play an important regulatory role in managing natural resources.

The conservation movements of the 1890s did not survive the turn of the century. Instead they developed in a wave-like manner, peaking at the end of the great economic expansions of the 1920s, 1950s and, arguably, today. These movements were not underwritten by a desire to slow down economic growth or downsize, but rather to ensure its survival and to improve our standard of living.

Nobel Prize-winning economist, Amartya Sen convincingly argues that economic growth has at its primary end the very higher needs mentioned above, namely: political freedom, social opportunities and transparency in public life. Sen’s analysis can be expanded to incorporate environmental sustainability. If consumers value environmental goods then this demands a radical alteration to the way we perceive ideas of material wealth and growth.

As Australia’s income grows, the methodology of calculating GDP needs to be revised to incorporate the higher goods that are now demanded by consumers. Current methods of calculating income only explain standards of living up to a certain level, after which they become redundant. If air pollution decreases our standard of living, pollution should be deducted from GDP estimates. Likewise, if reduced risk of catastrophic natural disasters creates a more favourable business outlook, then efforts to decrease the likelihood of adverse climate change should add to GDP. Such a revaluation of income measurements would mean that a transition to a sustainable future would present us with more opportunities for growth, rather than be a threat to our standard of living.

Policy that does not emphasise the growth opportunities of a more sustainable future, concentrating only on emission reduction, is dangerous. The term "emission targets" sends a pessimistic and alarmist message that bad times are coming. The public may react unfavourably to the realisation that more and greater costs will fall on them as a result of treaties which promise emissions cuts.

Growth-based climate politics should focus on informing the public of the benefits of a sustainable future. This would allow more risk taking by consumers and business, leading to the creation of new growth sectors. Government policy should set the right incentives and regulations for business to meet the growing demand for environmental goods. This means greater investment in new energy sources, sustainable technology and the skills and expertise required to undertake the massive urban planning of sustainable cities. New industries will thrive on these initiatives, creating more job opportunities and increasing our standard of living and wealth.

Growth-based solutions to climate change also present an opportunity to bridge the North-South divide in global multilateral discussions. Large developing economies such as China and India stand to win from tackling climate change early and investing now in renewable energy and sustainable industries. For Australia, these nations represent a market for technology and consulting on infrastructure development — not just the coal, uranium and iron ore of our old economy.

Economic growth is the key to a more sustainable future. Perhaps future economic historians will look on this era as a time of relative poverty — not affluence — from the point of view of their new economies.

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