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The Transition to a Sustainable Prosperity—A Stock-Flow-Consistent Ecological Macroeconomic Model for Canada

Sunset over Lake Ontario (CC.0) Lucas George Wendt / Unsplash

Summary

This paper presents a stock-flow consistent (SFC) macroeconomic simulation model for Canada. We use the model to generate three very different stories about the future of the Canadian economy, covering the half century from 2017 to 2067: a Base Case Scenario in which current trends and relationships are projected into the future, a Carbon Reduction Scenario in which measures are introduced specifically designed to reduce Canada’s carbon emissions, and a Sustainable Prosperity Scenario which incorporates additional measures to improve environmental, social and financial conditions across society. The performance of the economy is tracked using two composite indicators constructed especially for this study: an environmental burden index (EBI) which describes the environmental performance of the model; and a composite sustainable prosperity index (SPI) which is based on a weighted average of seven economic, social and environmental performance indicators. Contrary to the widely accepted view, the results suggest that ‘green growth’ (in the Carbon Reduction Scenario) may be slower than ‘brown growth’. More importantly, we show (in the Sustainable Prosperity Scenario) that improved environmental and social outcomes are possible even as the growth rate declines to zero.

1. Introduction

The defining feature of ecological economics is its rigorous attention to the question of ecological scale (Daly and Morgan, 2019). For this reason, perhaps, it has often found itself at worst ignored and at best in outright conflict with conventional economic narratives framed around the assumption of ‘eternal’ economic growth (Liebreich, 2018). The former British prime minister, Margaret Thatcher, once famously declared that ‘there is no alternative’ to growth…

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The Great Reset: BlackRock Is Fueling A $120 Trillion Transformation On Wall St.

The Great Reset: BlackRock Is Fueling A $120 Trillion Transformation On Wall St.

Big money is turning its back on companies that aren’t conforming to one simple idea…

Sustainability.

And it’s fueling one of the biggest transfers of capital the world has ever seen.

In fact, within a year, 77% of institutional investors will stop buying into companies that aren’t, in some way, sustainable.

And the new King of Wall Street is leading the charge.

BlackRock, with over $7 trillion in assets under management, says its clients will double their ESG investments in just five years…

Money managers on the Street are saying climate change is their top concern…

And a ‘leading criteria’ when determining where they put their money to work.

Sustainable assets already account for $17.1 trillion…

But there could be as much as $120 trillion up for grabs.

And that’s exactly why sustainable stocks are outperforming the market.

They are the new go-to investment but could be far better than gold. This sector is a safe haven in that the road to sustainability is long. AND it’s not just Big Money’s downside protection against ESG-related risks, many are money-makers.

While Big Money is busy scrambling for somewhere to park this $120 trillion that’s up for grabs, it could be looking for something like Facedrive (TSX.V:FDOTCMKTS:FDVRF) -a tech-driven, multi-vertical, next-gen company with an ESG-focused portfolio that just pulled off a major coup with the acquisition of Washington, DC-based Steer–a high-end EV subscription service that plans to get even more EVs on the road, and even to upend the way we think about car ownership altogether.

And this isn’t the only vertical that ties Facedrive into a multi-billion-dollar industry …

It’s tied to the $5-trillion global transportation industry, the $9 trillion healthcare industry, the $850-billion airline industry, the $600-billion major league sports industry and the $26-billion food delivery segment …

…click on the above link to read the rest of the article…

Make markets matter

A 1,200-year-old farming and fishing site known as the Horta or Huerta (garden) of Valencia has been recognised on the register of Globally Important Agricultural Heritage Systems (GIAHS), managed by the UN Food and Agriculture Organization (FAO).

This ancient and culturally rich, fertile area is made up of 6,000 small agricultural holdings and thousands of small farming plots of about a hectare each. Approximately 4,000 hectares are used to grow vegetables, especially onions, artichokes and pumpkins. Valencia oranges and tiger nuts are significant in the northern region whilst 2,000 hectares of centuries-old local rice varieties are cultivated in the southern area, which extends into the Albufera Natural Park. It’s no wonder, then, Spain’s Horta de Valencia wins recognition on the FAO’s global agricultural heritage list.

Growers employ sustainable, agricultural methods that preserve water and soil resources; and crop diversification, with heritage produce on smaller plots, bolsters resilience. The close proximity of the Horta to the city and surrounding areas, enables farmers to get access to a network of fresh food markets quickly. Consequently, the Horta sustains much of the Valencia region, as well as other parts of Spain and additionally exports to Europe.

Shopping at food markets is a way of life in Spain and throughout much of the Mediterranean. To extend the market experience and ensure the community as a whole has access to fresh food, the Central Market in Valencia launched an online shopping model to service some 56 neighbourhood areas, pre-COVID-19. Alongside face-to-face selling in the Market, there is also daily service to hospitality outlets and many online transactions. The market is clear on its role: underpinned by a strong community of traders enjoying resilient self-governance, it is a vital community space with a focus on quality, local produce with a short supply chain and a commitment to sustainability.

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Humans Left Sustainability Behind as Hunter-Gatherers

Humans Left Sustainability Behind as Hunter-Gatherers

Many people believe that humans can have a sustainable future by using solar panels and wind turbines. Unfortunately, the only truly sustainable course, in terms of moving in cycles with nature, is interacting with the environment in a manner similar to the approach used by chimpanzees and baboons. Even this approach will eventually lead to new and different species predominating. Over a long period, such as 10 million years, we can expect the vast majority of species will become extinct, regardless of how well these species fit in with nature’s plan.

The key to the relative success of animals such as chimpanzees and baboons is living within a truly circular economy. Sun falling on trees provides the food they need. Waste products of their economy come back to the forest ecosystem as fertilizer.

Pre-humans lost the circular economy when they learned to control fire over one million years ago, when they were still hunter-gatherers. With the controlled use of fire, cooked food became possible, making it easier to chew and digest food. The human body adapted to the use of cooked food by reducing the size of the jaw and digestive tract and increasing the size of the brain. This adaptation made pre-humans truly different from other animals.

With the use of fire, pre-humans had many powers. They spent less time chewing, so they could spend more time making tools. They could burn down entire forests, if they so chose, to provide a better environment for the desired types of wild plants to grow. They could use the heat from fire to move to colder environments than the one to which they were originally adapted, thus allowing a greater total population.

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Economics and the environment

Economics and the environment

This is the text, including slides, from a talk given on October 28 2020 during an online event organised by University College Cork’s Economics and Environmental Societies. (I didn’t follow the text word for word during the talk, but it covered the same ground)

Thank you very much, I’m delighted to be able to participate in this discussion.

My name is Caroline Whyte, I have a background in ecological economics and I do research and help with communications for a think tank called Feasta: the Foundation for the Economics of Sustainability.

Feasta, as some of you may know, is the Irish word for ‘in the future’. We have our administrative headquarters in at the ecovillage in Cloughjordan, and we’re in the Environmental Pillar of Irish environmental NGOs and in Stop Climate Chaos Ireland, but our focus is actually quite global and we have international membership. I’ll be explaining a bit more about Feasta later.

If I’m asked about the role economics plays in the environment and sustainability, my answer would be ‘what kind of economics are you talking about’ because there are a lot of different schools of thought within economics. You could be forgiven for not knowing that though, because there’s one particular school of thought that’s become quite dominant in university courses and in think tanks, political advisory groups, the media and so on – you could call it Neoclassical economics.

I find this approach to economies – particularly standard macroeconomic theory – quite problematic in many ways for the environment and for society and I’ll explain why in a minute. I’d argue that there needs to be a much broader range of economic thinking in universities, in the media, in advisory groups, all over really, if the economy is going to be able to adapt itself properly to our environment…

…click on the above link to read the rest of the article…

How Rethinking Affordable Homes Connects with the Climate Fight

How Rethinking Affordable Homes Connects with the Climate Fight

First in a five-part series exploring the case for a Green New Deal for Housing.

Earlier this year, Vancouver city council approved a new downtown condo tower pitched as one of the greenest skyscrapers on the planet. It “will quickly become a blueprint for future towers in cities around the world,” said the architecture firm behind 1075 Nelson, a 60-story development in the West End that will be built to Passive House standards.

“The planet is on fire,” Rick Gregory, vice-president at Henson Developments, said of using ultra-efficient windows, insulation and ventilation systems resulting in much less energy requirements than a typical tower. “You’re either part of the solution or part of the problem.”

Because 25 per cent of the building’s floorspace will be set aside for social housing, Vancouver mayor Kennedy Stewart also portrayed 1075 Nelson as a step towards addressing the city’s dire affordability needs.

“We’re in a housing crisis, and this is a building on private land with private financing, and we’re still getting 102 social housing units,” Stewart said.

Just down the road from 1075 Nelson is another skyscraper competing for eco-bragging rights in what aims to be the world’s “Greenest City.” The “Butterfly” tower being built by Westbank boasts of “sustainability goals exceeding LEED Gold.”

But when Samuel Stein looks at luxury towers with the latest green technology, he doesn’t necessarily see progress on climate change. “It makes the problem worse as it claims to make it better,” the New York-based housing policy analyst and author of Capital City told The Tyee.

…click on the above link to read the rest of the article…

The Quiet Resilience of Willowbrook Farm

Willowbrook Farm is a fifty-acre plot near Oxford on which the Radwan family grows vegetables and rears chickens, cows and sheep to produce ethical and sustainable Halal meat. Throughout the tumult of the pandemic, this farm’s small-scale model lent it incredible resilience; while much of the UK’s food system was disrupted, Willowbrook, the UK’s first Halal and Tayyib farm (meaning a farm where Muslims can be assured that their meat has been reared according to ethical principles & which has been slaughtered in accordance with Islamic scripture), sustained a steady supply of meat to its customers, thanks to its deep roots in an established local and faith-based network. As they closed the farm’s gates to its usual visitors at the start of the lockdown, the Radwans had time for deep reflection, and a chance to finish ongoing projects, without having to worry about massive income loss.

COVID-19 has raised significant questions about meat production, and Lutfi and Ruby Radwan have added their voices to the chorus of environmental campaigners, scientists and animal welfare advocates arguing that the pandemic is a direct result of industrial-scale meat production.

“Healthy animals can withstand environmental and health stressors; when their bodies and immune systems are functioning well, they are able to fight off a host of viruses and diseases,” Lufti said. It is only when the animal’s health is compromised, as happens in intensive meat production, that these illnesses are able to develop into a more dangerous form.

“The whole issue is actually an environmental issue,”’ he said. “You can’t separate the morals and the ethics, and you can’t keep seeking profit by stripping farming of any connection to sustainability and the land.”…

…click on the above link to read the rest of the article…

The “Great Reset” And The Risk Of Greater Interventionism

The “Great Reset” And The Risk Of Greater Interventionism

The “Great Reset” And The Risk Of Greater Interventionism

Global debt is expected to soar to a record $277 trillion by the end of the year, according to the Institute of International Finance. Developed markets’ total debt -government, corporate and households- jumped to 432% of GDP in the third quarter. Emerging market debt-to-GDP hit nearly 250% in the third quarter, with China reaching 335%, and for the year the ratio is expected to reach about 365% of global GDP. Most of this massive increase of $15 trillion in one year comes from government and corporates’ response to the pandemic. However, we must remember that the total debt figure already reached record-highs in 2019 before any pandemic and in a period of growth.

The main problem is that most of this debt is unproductive debt. Governments are using the unprecedented fiscal space to perpetuate bloated current spending, which generates no real economic return, so the likely outcome will be that debt will continue to rise after the pandemic crisis is ended and that the level of growth and productivity achieved will not be enough to reduce the financial burden on public accounts.

In this context, The World Economic Forum has presented a roadmap for what has been called “The Great Reset”. It is a plan that aims to take the current opportunity to “to shape an economic recovery and the future direction of global relations, economies, and priorities”. According to the World Economic Forum, the world must also adapt to the current reality by “directing the market to fairer results, ensure investments are aimed at mutual progress including accelerating ecologically friendly investments, and to start a fourth industrial revolution, creating digital economic and public infrastructure”. These objectives are obviously shared by all of us, and the reality shows that the private sector is already implementing these ideas, as we see technology, renewable investments and sustainability plans thriving all over the world.

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‘Sustainability is wishful thinking’: get ready for the energy downshift

Green promises: EV charging stations are appearing in suburban streets. But will the economics actually stack up?
SUPPLIED
Green promises: EV charging stations are appearing in suburban streets. But will the economics actually stack up?

The problem with “sustainability” is its implication that economic growth can still continue on blithely in a world of zero carbon and a green energy transition. But expect a rude shock. JOHN McCRONE reports.

When I arrive for the interview, Professor Susan Krumdieck is busy clearing out her office.

A mechanical engineer at the University of Canterbury for some 20 years, Krumdieck is upping sticks and heading off to run an energy transition project in Scotland’s Orkney Islands.

Covid permitting, of course. “They’re all still in lockdown over there,” she says.

My question seemed simple enough. Is New Zealand finally getting serious about sustainability?

There seem positive signs, I suggest.

After years of mucking about with emissions trading schemes and other half-hearted curbs on climate change, the Government now appears to be building a national energy transition strategy.

The vow to be carbon-neutral by 2050 has been cemented into legislation. Change is going to be enforced through new institutional mechanisms like the Climate Change Commission.

There are agreed sub-goals, such as the commitment to be 100 per cent renewable electricity by 2035.

It all sounds like a plan – a roadmap to a better future.

Krumdieck answers by hauling out a wad of old yellowing magazines from a packing box. Decades of saved articles warning humanity of impending environmental disaster and resource woes.

Already she intends to set me straight.

“Well I’m cleaning out and I’ve been finding roadmaps. Like piles of them,” she chuckles wryly.

University of Canterbury’s Susan Krumdieck: We need to head back to the 1950s in terms of our energy use.
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University of Canterbury’s Susan Krumdieck: We need to head back to the 1950s in terms of our energy use.

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Bringing disaster preparedness into resilience politics

Bringing disaster preparedness into resilience politics

Introduction

Most discussion of “sustainability” for the last 30 years has been about how to ensure that what we do today is not at the expense of future generations. This is supposed to be so that future generations are safe from the damage done when current generations over-exploit the planet and ruin their future.

That was the theory but the overuse of the planet’s resources happened anyway. Growth got priority and future generations will pay for the planet’s consumer class and the idiocy of its economic priesthood. Ecological footprint analysis tells us that humanity (or rather the rich part of the humanity) has been consuming natural resources as if there were 1.7 planets. This overshoot, the inappropriate growth promoted by mainstream economists may end up sending future generations into earlier graves. They have a right to be angry. Humans born now will inherit an exhausted planet with an increasing number and intensity of disasters. [1]

According to a recent UN report, damage has increased over the last 40 years:

“Between 1980 and 1999, 4,212 disasters were linked to natural hazards worldwide claiming approximately 1.19 million lives and affecting 3.25 billion people resulting in approximately US$1.63 trillion in economic losses.”

That was twenty years ago and it has got worse.

“In the period 2000 to 2019, there were 7,348 major recorded disaster events claiming 1.23 million lives, affecting 4.2 billion people (many on more than one occasion) resulting in approximately US$2.97 trillion in global economic losses. This is a sharp increase over the previous twenty years.” [2]

On current trends it will get worse again. We should not give up the campaigning against further overshoot but we now need to combine this fight with steps in communities to prepare for the disasters that are now baked in – because the growth fanatics cannot take in the dangers of rushing over planetary tipping points. We are facing climate crisis, biodiversity collapse, public health crises and economic turmoil that are already upon us.

…click on the above link to read the rest of the article…

A life on our planet – review

A life on our planet – review

I watched David Attenborough’s film A life on our planet the other evening. The first, and largest, part of the movie was very well made. Perhaps not much new, but very well presented and with excellent footage and narrative. Some images are very strong, even brutal, such as a lonely orangutan sitting on a tree trunk in a devastated landscape. I think most viewers got the message: this has to change! And let me underline that this is a film worth watching.

Because the film is so compelling and Attenborough such a sympathetic person, viewers may accept all of its statements and arguments. This would, however, be a mistake in my opinion.

I totally agree with Attenborough that human population needs to stabilize. And it is true that, as far as we know today, birth rates falls when countries get richer (or vice versa). The problem is that lower population growth in one country is associated with increasing total resource use rather than the opposite. At least in the short term and with current consumption patterns, there is no relief for nature from lower population growth.What I missed in the first part was a lack of analysis of the underlying drivers causing the threatening sixth mass extinction. This is also reflected in shortcomings of the much shorter and optimistic second part of the film. The processes and technologies he claims will save the wilderness and human civilization are renewable energy, intensive farming methods, diet transformation, rewilding and reduced population growth.

His claim that renewable energy will make energy everywhere more affordable (than now) is wishful thinking with no evidence in reality.

…click on the above link to read the rest of the article…

Analysis shows how the Greens have changed the language of economic debate in New Zealand

When Health Minister Chris Hipkins recently quipped that the Green Party is “to some extent the conscience of the Labour Party” he was not simply referring to polls suggesting Labour may need the Greens’ support to form a government.

Hipkins was also suggesting Green policies help keep Labour honest on environmental and social issues. So, what difference has the Green Party really made to New Zealand’s political debate?

Drawing on a study of 57 million words spoken in parliament between 2003 and 2016, our analysis shows the presence of a Green party has changed the political conversation on economics and environment.

In the recent Newshub leaders’ debate, both Jacinda Ardern and Judith Collins agreed that “growing the economy” was the best way to respond to the economic crisis driven by COVID-19.

Their responses varied only on traditional left-right lines. Ardern argued that raising incomes and investing in training would grow the economy. Collins suggested economic growth should be advanced by increasing consumer spending through temporary tax cuts.

By contrast, Green parties in New Zealand and elsewhere have long questioned the impact of relentless growth on the natural resources of a finite planet. Green thinking is informed by ecological economics, which aims to achieve more sustainable forms of collective prosperity that meet social needs within the planet’s limits.

man and woman shaking hands
‘Labour’s conscience’: Jacinda Ardern and James Shaw sign the confidence and supply agreement that brought the Greens into coalition in 2017. GettyImages

The language of economic growth

The impact of this radically different view can be observed in New Zealand parliamentary debates. When MPs from National and Labour used the word “economy” they commonly talked about it in the context of “growth” (“grow”/“growing”/“growth”).

On average, National MPs said “growth” once every four mentions of “economy”. Labour MPs said “growth” once every six mentions.

…click on the above link to read the rest of the article…

Fifth Of Countries Worldwide At-Risk Of “Environmental Shocks” Collapsing Ecosystem 

A new report via insurance firm Swiss Re warns that one-fifth of countries worldwide are at risk of their ecosystems collapsing because of a decline in biodiversity.

The reinsurer said more than half of global GDP, equal to about $41.7 trillion, is highly dependent on “high-functioning biodiversity and ecosystem services” and warns 20% of countries are nearing tipping points.

Swiss Re Institute’s new Biodiversity and Ecosystem Services Index (BES), built on ten critical ecosystem services (water security, timber provision, food provision, habitat intactness, pollination, soil fertility, water quality, regulation of air quality and local climate, erosion control and coastal protection), offers government officials and business leaders with a more enhanced view into their local ecosystems that are so critical to their economies. Reinsurers can use BES to develop insurance solutions that protect communities at risk from biodiversity loss.

Among G20 economies, South Africa, India, Turkey, Mexico, and Italy had the highest shares of fragile ecosystems within the BES index. Meanwhile, countries, including Germany, Canada, Indonesia, Brazil, and the United Kingdom, had very low percentages of their ecosystems in a fragile state.

Global BES Index Map

BES Index Ranking G20 Countries 

Christian Mumenthaler, Swiss Re’s Group Chief Executive Officer, said: “This important piece of work provides a data-driven foundation for understanding the economic risks of deteriorating biodiversity and ecosystems. In turn, we can inform governmental decision-making to help improve ecosystem restoration and preservation.”

“We can also support corporations and investors as they fortify themselves against environmental shocks. Armed with this information, we can also ensure the provision of stronger sustainable insurance services,” Mumenthaler said.

One example Swiss Re said is that certain developing and developed countries were at risk for water scarcity issues, which could damage manufacturing sectors, properties, and supply chains. The domino effect of biodiversity loss could have on economies is catastrophic if nothing is done.

…click on the above link to read the rest of the article…

Why People Harm the Environment Although They Try to Treat It Well: An Evolutionary-Cognitive Perspective on Climate Compensation

Why People Harm the Environment Although They Try to Treat It Well: An Evolutionary-Cognitive Perspective on Climate Compensation

Anthropogenic climate changes stress the importance of understanding why people harm the environment despite their attempts to behave in climate friendly ways. This paper argues that one reason behind why people do this is that people apply heuristics, originally shaped to handle social exchange, on the issues of environmental impact. Reciprocity and balance in social relations have been fundamental to social cooperation, and thus to survival, and therefore the human brain has become specialized by natural selection to compute and seek this balance. When the same reasoning is applied to environment-related behaviors, people tend to think in terms of a balance between “environmentally friendly” and “harmful” behaviors, and to morally account for the average of these components rather than the sum. This balancing heuristic leads to compensatory green beliefs and negative footprint illusions—the misconceptions that “green” choices can compensate for unsustainable ones. “Eco-guilt” from imbalance in the moral environmental account may promote pro-environmental acts, but also acts that are seemingly pro-environmental but in reality more harmful than doing nothing at all. Strategies for handling problems caused by this cognitive insufficiency are discussed.

Introduction

The environmental impact of one’s own behavior is difficult to grasp, partly because issues related to climate change are perceived as psychologically distant (cf. Spence et al., 2012). When people try to act in environmentally friendly ways, they often in fact do further harm to the environment. They might purchase some extra groceries because the groceries are “eco-labeled”; think that they can justify taking the airplane abroad for vacation because they have been taking the bicycle to work; and think that they can skip recycling their waste because they started having meat-free Mondays. Entire economic systems have been built on the same principle.

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Who is “we”?

Olduvai IV: Courage
In progress...

Olduvai II: Exodus
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