Climate Change and Ethics for Church Leaders Session 2: Economics

1
Climate Change and Ethics for Church
LeadersSession 2 Economics

• Dr Wayne Cartwright
• Sustainable Aotearoa New Zealand
• Presentation to Church Leaders Group, Hamilton
• 30 May 2009

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Major Global Drivers of Change

• Climate change and the role of mainstream
  economics the focus of this session must be
  considered in the context of all major drivers of
  global change.
• A complex sequence of global changes has already
  begun that will take human civilisation outside
  the range of prior experience in terms of
  magnitude, speed of arrival and simultaneity. All
  are subject to uncertainty about timing.
• These changes are structural, not cyclical, and
  will cause abrupt and radical shifts in human
  living, work and recreation.
• These statements should be interpreted as a
  challenge to become prepared and as an invitation
  to face the future with hope, resilience, and the
  required knowledge and skills.

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Major Global Drivers of Change (2)

• Rapidly accelerating global climate change, with
  associated extreme weather, with both direct
  impacts and the further effects of policies of
  mitigation and adaptation. Irreversible tipping
  points may occur.
• Degradation of global and local ecological
  systems caused by population growth and human
  economic activity, further reducing the already
  grossly overloaded capacity of these ecological
  systems to clean up pollution from human
  industry and consumption, and to continue to have
  the ability to contribute food, fibre, and
  energy.
• Radical upward trends in the prices of
  hydrocarbons (oil, coal, natural gas) and wider
  variations around the trend, caused by increasing
  costs of extraction, internalisation of carbon
  gas emission costs, and recognition of peak
  oil. Substitution of renewable energy will
  increase, but it will be insufficient to avert
  major economic and social disruption as whole
  sectors of global and local economies fail.
  (Similar depletion of several other raw
  materials.)

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Major Global Drivers of Change (3)

• Poor and declining regional supplies of water
  (volume and quality) with consequent negative
  impacts on human health and mortality,
  agricultural food production, and supplies to
  industry. Regional conflicts will arise.
• Critical global food supply deficit as population
  growth further outstrips the ability of both
  subsistence and commercial food production to
  feed humanity, resulting in widespread
  starvation.
• Atmospheric and water-borne toxins from
  industrial sources having much more direct
  serious affects on the health and mortality of
  humans and many other species.

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Major Global Drivers of Change (4)

• Geopolitical shifts and disruptions, as nations
  and blocs suffer adverse conditions, adjust to
  change, advance their ideologies, compete for
  critical resources, and attempt to exercise
  shifts in relative economic and military power.
• Wide swings in economic activity including
  widespread market failures as economic and
  financial institutions struggle (with declining
  success) to operate in a world that is shifting
  and changing beyond their ranges of competency.
• Advances in computers, information technology,
  global connectivity, robotics and other
  technologies. Some of these will assist in
  mitigating aspects of the changes listed above,
  but none will be a magic bullet.

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The Influence of Economics in Global Change

• The influence of economic activity - production,
  distribution, and consumption is profound in
  many of these global drivers of change
• Direct cause of degradation of ecological systems
• Direct major cause of climate change due to
  processes that release GHGs primarily through
  burning hydrocarbons
• Demand pressure on oil, coal and gas relative
  to supply lifts price trends (with a generally
  similar impact on many other raw materials)
• Demand for water of potable and industrial
  quality exceeds availability
• Produces atmospheric and water-borne toxins
• Associated with many geopolitical shifts and
  disruptions
• Generates wide swings in material wellbeing, and
  huge inequalities of income and wealth
• Sets investment criteria for technological
  development and innovation.

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Perverse Human Economic Decisions

• Most of these impacts of economic activity are
  apparently perverse.
• Through economic decisions governmental,
  corporate, household, and personal the current
  approach human civilisation is creating changes -
  global and local that are highly destructive to
  the wellbeing of humans, as well as to Nature
  (Life) as a whole.
• A model proposed by Ehrlich and Holdren provides
  opportunity to explore these impacts on Life of
  economic activity, in combination with other
  causes
• Human Impact on Life f(Population, Affluence,
  Technology, Ethics)
• What are the relationships between alternative
  models of economic activity and these variables?

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Triple Bottom Line Model
SOCIAL
ENVIRONMENTAL
ECONOMIC
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Mickey Mouse Version of Triple Bottom Line Model
(Business as Usual)
SOCIAL
ENVIRONMENTAL
ECONOMIC
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Strong Sustainability Model
BIOSPHERE
SOCIOSPHERE
ECONOSPHERE
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Standard (Growth) Economy Diagram (derived from
model by Daly)
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Steady State Economy Diagram (derived from model
by Daly)
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The Reason for these Perverse Outcomes the
Ethics and Beliefs that underpin BAU Economics

• The current mainstream capitalist mixed economy
  model (BAU) is based on neoclassical economics,
  the legal systems required to support it, and the
  political structures needed to support both.
• This model has its basis in the Utilitarian ethic
  and the Social Contract theory of property rights
  that goes with it.
• It has been widely accepted - essentially without
  question - in the Western tradition and - more
  recently - in most of the rest of the world as
  well.

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The Utilitarian Ethic

• This ethic holds that
• Happiness (utility) is related directly to
  material income and wealth
• Individual self interest (often referred to as
  rational economic man)
• Economic growth is the only way to achieve more
  utility
• Nature is valued only in terms of its
  contribution to generating utility for humans
• An action is right when its outcome produces
  maximum net utility (happiness minus pain) for
  humans, compared to other options.
• Comments
• This ethic can be used to justify immoral actions
• Some people believe that the stance concerning
  Nature is in accordance with Biblical scripture
• Other societal ethics and values exist - some
  from Churches - but they are dominated by the
  Utilitarian stance, often producing discord.

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How the Utilitarian Ethic Supports Perverse
Economic Decisions

• Perpetuation of economic growth is deemed to be
  intrinsically good indeed aspects of the money
  and credit system depend on perpetual growth for
  their integrity whereas this is actually
  impossible because the biosphere has finite
  limits.
• It is held that humans are separate from nature
  and are therefore free to exploit it, which is
  scientifically untrue.
• The market mechanism, which is based on buying
  and selling rights to goods and services
  (property), does not acknowledge the services of
  ecological systems. Thus, the assets and services
  in the commons that are essential to humans and
  their economy are not part of the economic
  system, which therefore has nothing useful to
  offer concerning their utilisation and results in
  their maintenance not being valued.
• It is held that individualistic human activity
  will bring best outcomes, whereas humans must
  actually respond interdependently to the
  ecosystems in which they are embedded.

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A Sustainable Future for Human Civilisation?

• If human civilisation aspires to a sustainable
  future it must shift urgently off the
  increasingly destructive path that is based on
  the BAU economic model and population growth.
• It would recognise that
• Strong sustainability is the prerequisite and
  foundation of any human development, whether
  social, economic or technological.
• Strong sustainability means the preservation of
  the integrity of all ecological systems in the
  biosphere.
• Ecological integrity means the ability of an
  ecosystem to recover from disturbance and
  re-establish its stability, diversity and
  resilience.
• A strongly sustainable human society lives and
  develops as an integral part of ecosystems that
  have ecological integrity.
• Ethics, values and world views must directly
  support strong sustainability because people know
  that they are integral with the ecological
  systems of the biosphere and they therefore
  desire the integrity of these systems.

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The Required Shift in Societal Ethics and Values

• A societal shift away from destruction and
  towards strong sustainability will require
  changes in the view of proper conduct and the
  life worth living.
• This includes clear views on what is acceptable
  and what is not in relationships between people
  and between people and the biosphere.
• It also establishes the relative worth that a
  society places on the quality of the lives of its
  people and its communities, which requires it to
  declare what it means by quality in this
  context.
• Compared to the present societal stance that
  accepts the Utilitarian ethic as dominant, a very
  different set of societal ethics and values is
  needed.

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The Required Set of Societal Ethics and Values

• These include
• Placing great importance on non-material sources
  of happiness.
• Removing the perceived linkage between economic
  growth, material possessions, and success.
• Affirming the deep interdependence of all people.
  The associated community values include a robust
  sense of mutual respect, fairness, cooperation,
  gratitude, compassion, forgiveness, humility,
  courage, mutual aid, charity, confidence, trust,
  courtesy, integrity, loyalty, and respectful use
  of resources.
• Affirming the value of local community, with
  associated benefits of reduced environmental
  footprints and increased cooperation between
  people.
• Valuing nature intrinsically through knowing that
  human society and its political economy is an
  integral and interdependent component of nature
  and the biosphere. Humans have reverence for
  nature and know that they are responsible for
  their impact on the integrity of all ecosystems
  in the biosphere.
• These ethics and values provide guidance for a
  new approach to economics, in the context of
  different ways of living.

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Conclusion A Challenge for Church Leaders?

• The comments that I have made will no doubt be
  subjected to critical scrutiny.
• To the extent that my case makes it through this
  process, church leaders may well face challenges
  such as
• Determining the role of the church in the
  required societal change processes. Specifically,
  are churches active agents of change?
• Handling rejection of Utilitarian ethics and
  economic principles when congregations contain
  many people who are attached strongly to them.
  What arguments can be used?
• Achieving internal consistency when some churches
  are themselves substantial participants in the
  current economic model as property owners and
  investors who expect levels of returns that are
  based on economic growth.
• I welcome your questions, comments and discussion.