Category: Resources for a better future

Discounting

Photo: Duncan Rawlinson.

by Paul Robert Gilbert

When we borrow money, interest rates determine how much we will repay, over and above the amount we originally borrowed. Or, for those of us lucky enough to have savings, interest rates determine how much we will ‘earn’ on our deposits. A discount rate performs a similar task but in reverse. Like interest, discounting expresses the preference to have something sooner rather than later. Interest rates are used to estimate how much the value of a sum will be worth in the future, which a debtor would pay on a loan to compensate their creditor (and offset the risk of them defaulting on their loan), or what an investor expects to make on money they tie up in the market. Discount rates invert the calculation, and are used to determine the present value of possible future wealth.

Investors use discount rates to determine what a sum owed to them in the future might be worth today. The process of discounting makes it possible to value a diverse range of ‘things’ – from land to patents – in terms of the cash flows they will produce over their lifetime. The more uncertain you are that those cash flows will materialize, the more you ‘discount’ them, and the lower their worth (or ‘net present value’) is today. The more possibilities there are to ‘de-risk’ an investment through insurance or government guarantees, the higher the likelihood that the cash will arrive in the future – and the lower the discount rate and the higher the net present value.

Policymakers also practice discounting. Borrowing from financial decision-making strategies, cost-benefit analysis attempts to weigh the future benefits against the costs of a project (say, a dam, a nuclear power plant, or an emissions reduction project) before deciding to go ahead. In the process, they usually assign a discount factor that devalues future cash flows, and then see whether the sum of discounted costs and discounted benefits is positive or negative. The project goes ahead if the net present benefits outweigh the net present costs. The ‘social’ discount rate at work here denotes the importance that present generations give to costs and benefits in the future, i.e. to the ‘well-being’ of future generations (though well-being here is usually equated with consumption). If your social discount rate is zero, then you place an equal weight on the fate of future generations and those around today. If you use a positive discount rate, you are effectively placing a greater weight on impacts in the immediate term than those in the more distant future. A high positive discount rate effectively renders future considerations inconsequential. Conversely, a negative discount rate expresses long-term priorities.

There is, however, no consensus among economists on how to determine the social discount rate (or even what sign it should have). The broadest division is perhaps between those who believe the discount rate ought to be determined based on normative or ethical considerations (how much should we care about the future?), and those who believe it should be derived from existing patterns of economic behaviour. Clashes between adherents to these two broad approaches came to the fore in disputes about discounting that followed the publication of the Stern Review in 2006. The Stern Review, a report to the government of the UK in 2006, made the case that investing 1% of global GDP now was required to avoid an enormously costly impact from climate change in the future. Stern and his colleagues used fairly low discount rates (close to 1%), and this meant that impacts of climate change in the distant future registered as fairly ‘costly’ today, underpinning the argument that it was necessary to spend a significant amount today in order to mitigate future harms. Writing in Science in 2007, Yale economist William Nordhaus criticised Stern for being overly ‘prescriptive’ and deriving his discount rate (and hence his policy recommendations) from ethical commitments rather than ‘market data’. Nordhaus advocates more for what he terms a ‘descriptive’ approach, or for at least using discount rates that (seem to) reflect ‘standard returns to capital and savings rates’. We might wonder, of course, whether thinking like a private investor is appropriate to formulating macro-level policy decisions.

We might wonder, of course, whether thinking like a private investor is appropriate to formulating macro-level policy decisions

Advocates of descriptive approaches to discounting tend to treat market interest rates as ‘revealed preferences’ (i.e. the market interest rate is what people are willing to ‘tolerate’ as payment for forgoing consumption today). That is to say, the appropriate social discount rate can be read off market interest rates because this has already captured people’s ethical considerations about the future. This approach would involve arguing that ‘society’ should not invest in a ‘project’ like emissions reduction unless that project can deliver benefits equal to, or worth more than, the gains from investing a sum equivalent to that cost over the project’s proposed lifetime. 

Stern, in his 2007 response to Nordhaus, pushed back on this descriptive approach, and challenged the view that there is any ‘real economic market that reveals our ethical decisions on how we should act together on environmental issues in the very long term’. Given the events of recent decades, like the 2008-2009 financial crisis (the ‘Great Recession’), which brought to light the corruption and instability inherent to a highly financialized economy, it is absurd to suggest that public policy decisions should be premised on the supposed capacity of markets to accurately value preferences and ethical judgements. Rather, descriptive discount rates both reflect and sustain a highly unequal and myopic world. Even as a critic of the ‘market failures’ that he views as driving climate change, Stern’s report is still couched in cost-benefit logic. Stern and many others in the climate policy mainstream maintain that it is worth acting quickly to mitigate climate change and reduce emissions primarily because the monetary benefits will outweigh the costs. That said, even within a cost-benefit framework, defining social discount rates to reflect long-term priorities for a safe and equitable world is a radical departure from and challenge to hegemonic approaches. The neoclassical approach as epitomized by Nordhaus’s descriptive approach to climate policy is idealized as an apolitical and accurate representation of preferences, when in practice it only reflects the financial imperative for short-term profits – a priority just as normative as Stern’s prescriptive policymaking.

Even those committed to the cost-benefit approach to climate policy have criticized Nordhaus’s excessively high discount rate. Recall that any discount rate above zero essentially involves valuing the impacts of climate change on future populations less than the ‘costs’ of mitigation or abatement today. But why, as Adler and colleagues (2007) put it, should ‘harms and benefits to the members of later generations [be] downweighted by virtue of the ethically arbitrary fact that these individuals come into existence later in time’? Equally if not more concerning is the degree to which the ‘globally impartial decisionmaker’ assumed by most discounting models trades off impacts between different parts of the world, where existing inequalities are shaped by entrenched structural inequities in the global economy.

Underpinning contemporary models of the social cost of carbon are discounted measures of the costs and benefits of climate change impacts, which can be used to decide whether measures (like a carbon tax) are ‘worth it’. But how can the impacts of future and present consumption ‘loss’ be measured in an intensely unequal world? When applied uniformly, discounting privileges economies with higher GDPs – comprised of people with higher incomes and real estate with higher asset values – over the livelihoods and homes of the global poor. As ecological economists like Azar and Sterner (1996) have argued for some time, if discounting models are to be used, then the dollar costs of impacts and costs should be weighted higher when they impact upon poorer people in the countries of the Global South, rather than being treated as impacts borne by a ‘representative world consumer’. 

For those in the global North, discounting might be glossed over as a question of whether to ‘enjoy more now or pay for the future’. Yet asking policymakers in the Global South to front-load emissions reduction costs in order to ‘pay for the future’ will likely exacerbate existing international inequities. Financing development continues to place a burden on countries of the Global South, which are increasingly required to ‘de-risk’ private investments coming from the North, even as ‘capital flight’ from many parts of the South outstrips aid and debt inflows. Furthermore, focusing on the consumption choices and preferences of a stylized homo economicus as the basis for wellbeing – rather than, say, focusing on the provisioning of human life within a set of physical and social constraints – itself reflects an extraordinarily narrow set of neoclassical preoccupations, as feminist economists like Julie Nelson have long argued. 

Asking policymakers in the Global South to front-load emissions reduction costs in order to ‘pay for the future’ will likely exacerbate existing international inequities

Some ecological economists are critical of both Nordhaus and the self-identifying ‘normative’ opponents of Nordhaus who take issue with his excessively low choice of discount rate, precisely because both groups often share a neoclassical preoccupation with choice and substitutability. Nordhaus and many others assume that ‘natural capital’ (i.e. ecological systems that furnish commodifiable ‘resources’ and ‘services’) is substitutable for ‘economic capital’. That is, in Neumayer’s terms, the idea that ‘large-scale damage to natural capital caused by global warming can be compensated for by higher consumption levels’. This commitment to the idea that ‘natural capital’ and economic capital are substitutable is increasingly popular among policymakers and business leaders alike. As Stuart Kirsch notes, it is this notion of substitutability that underpins claims to ‘sustainable mining’ by corporations like BHP Billiton and Anglo American, who explicitly frame their contributions to economic capital and consumption as a partial offset to ecologically destructive extraction.

The extent to which discounting reflects the operation of power, entrenches existing inequalities, and relies on the notion that ‘natural capital’ depletion can be offset by increased (marketized) consumption levels is made particularly clear in Leah Temper and Joan Martinez-Alier’s analysis of a long-running dispute in India’s courts over compensation payments for the conversion of forest land. An expert committee tasked with determining the appropriate discount rate for calculating the ‘net present value’ of forests made its report to the courts in 2006, advocating for a discount rate of 5%. Some had, however, advocated a social discount rate of zero ‘so as to give equal weight to the consumption of all generations, including the unborn’ whereas industry representatives ‘employing a paper published by the Asian Development Bank, argued for a social discount rate in India of 12%.’ Through all this, as Temper and Martinez-Alier note, the ‘benefits’ of converting forest land were boosted by wealthy tourists’ willingness to pay for visits, while non-market relations with and uses of the forest disappeared altogether from their net present value. 

Ostensibly ‘value neutral’ tools like cost-benefit analysis and discounting in reality have definite normative implications.  Wedding decision-making tools like cost-benefit analysis to modes of valuation like discounting can privilege the wealthy today over the poor tomorrow, legitimizing decisions that take for granted structural inequalities as ‘natural’ features of a world made up of individuals with different ‘preferences’. Both cost-benefit analysis and discounting involve either implicitly or explicitly comparing outcomes that may not be comparable (what ecological economists flag as value incommensurability) and these outcomes themselves are subject to high levels of uncertainty inherently associated with the complexity of the earth and socioeconomic systems and their nexus.

The tools that we use to calculate value – and, in turn, to make things valuable – ultimately reshape the world in the process. Discounting models that posit representative world consumers, or even ‘globally impartial decision makers’ attentive to global inequalities, remain wedded to neoclassical understandings of economics that reduces human life to a matter of individual consumption choices, and reduces the nonhuman world to substitutable ‘natural capital’. Tethering discounting procedures to such cost-benefit analyses will inevitably steer policymakers towards decisions that reflect and intensify existing inequalities. 


Further resources

Collectif CSI. 2017. Capitalization: A Cultural Guide. Paris: Presses des Mines.
This volume presents a wide-ranging survey of the various arenas in which value has come to be understood in terms of future revenue streams – reliant in part on discounting models. The authors focus on the spread of this ‘cultural syndrome’ of valuation in relation to venture capital, forestry, business models and public budgeting. The book allows us to follow how discounting models have become key to valuation practices and decision-making in both finance and public policy, with a focus on how these models do not just measure, but shape, the world we live in. 

Hanke, Steve H. and Anwyll, James B. (1980) ‘On the discount rate controversy’ Public Policy 28 (2): 171-183.
If you want to go deeper into some of the public policy debates around discounting from the mid-twentieth century, Hankey and Anwyll’s paper analyses an earlier discounting dispute regarding water policy under President Carter. 

Kelleher, J. Paul. 2012. Energy policy and the social discount rate. Ethics, Policy and Environment 15: 45-50.
This is a very accessible and useful introduction to debates underpinning the choice of social discount rate (including the Stern/Nordhaus debates) and Kelleher’s blog is well worth a visit for more on this issue.

Temper, Leah & Martinez-Alier, Joan. 2013. The god of the mountain and Godavarman: Net Present Value, indigenous territorial rights and sacredness in a bauxite mining conflict in India. Ecological Economics 96: 79-87.
This paper by two of the political ecologists behind the Environmental Justice Atlas analyses the role played by disputes over discount rates in the context of forest peoples’ struggles with bauxite mining concerns in India.

Additional resources

Adler, M., Anthoff, D., Bosetti, V. et al. Priority for the worse-off and the social cost of carbon. Nature Clim Change 7, 443–449 (2017). 

Azar, C. and Sterner, T. (1996) Discounting and distributional considerations in the context of global warming. Ecological Economics, 19(2): 169-184.

Kirsch, S. (2010) Sustainable Mining. Dialectical Anthropology 34, 87–93

Neumayer, Eric (2007) A missed opportunity: the Stern review on climate change fails to tackle the issue of non-substitutable loss of natural capital. Global Environmental Change, 17 (3/4). [Available online]

Nordhaus, W. (2007) Critical assumptions in the Stern Review on Climate Change. Science 317 (5835): 201-202Stern, N. (2006) The Economics of Climate Change: The Stern Review [see https://www.lse.ac.uk/GranthamInstitute/publication/the-economics-of-climate-change-the-stern-review/]


Paul Robert Gilbert is a Senior Lecturer in International Development at the School of Global Studies, University of Sussex. His research focuses on environmental defenders, and on aid flows to for-profit development contractors.  

Development

A snapshot of growth-led development in Delhi-NCR, India. Photo by the author.

by Vandana

The term ‘development’ perhaps needs no introduction. To develop is to improve the conditions in which we live. But what should be the path of development? Can there be only one way to develop? What are the prevalent ways of thinking about development and what have they meant for the majority of people in the world? The dominant means of development have largely been counterproductive, wreaking ecological damage and social inequality in most parts of the world. To understand where to go from here, it is crucial to understand that development processes and the goals of prosperity are politically determined.

The dominant means of development have largely been counterproductive, wreaking ecological damage and social inequality in most parts of the world

The modern model of development grew out of the end of the colonial period, when colonial empires assumed the duty of developing the former colonies. Since then, colonial-era power relations have continued to play out under the guise of economic development. Institutions like the World Bank and the International Monetary Fund (IMF) formed in the 1940s with the promise of stabilizing the economy and rebuilding war-torn Europe. Their strategies centered Gross Domestic Product (GDP) as a key indicator of development. At the same time, with their deep-seated colonial ambitions, the triumphant Allied Forces—France, Great Britain, the United States, and the Soviet Union—came to define development. US President Harry Truman used the word ‘underdeveloped’ for the first time in his inaugural address in January 1949, dividing the world according to regional poverty and prosperity. High levels of poverty coincided with low levels of industrialization, bolstering the belief that Western-style development would be inevitable for these ‘underdeveloped’ countries. 

Countries like Britain, Belgium, France, Germany, and later on the US, saw an improvement in living conditions as a result of the Industrial Revolution. At the same time, a hierarchical relationship developed between business owners and workers. Within this new relationship, peasants lost their relationship to the land and became workers who sold their labour in return for a wage. Increased production set the stage for mass consumption, which signaled improved access to material goods for the workers themselves. But the perceived success of the Industrial Revolution was mainly due to the extractive colonial expeditions that boosted Western economies through the supply of enslaved people and the import of goods.  As this model of industrial production proved its ability to generate an abundance of profits and products, it came to serve as a paradigm for development around the globe. By the mid 20th century, many countries in Asia, Africa, and South America were finally liberated from colonial rule, but pursued this Western model of development due to its perceived success. 

In the 50s and 60s, dominant economic theory emphasized the need for countries to modernize by moving their labour force away from agriculture and towards sectors like manufacturing and services. This was called ‘structural transformation,’ and was made popular by the works of economists W. Arthur Lewis and Walt W. Rostow. So-called ‘primitive’ sectors like agriculture underwent a complete overhaul to improve productivity, efficiency, and incomes. This theory of development—which proposed that GDP growth would lead to the improvement of living conditions—faced a challenge in the 70s and 80s. The ‘Limits to Growth’ report, published in 1972, brought ecological concerns to the forefront, while environmental movements gained momentum all around the world. The report argued that unlimited material and population growth would not be possible because the planet’s resource pool is limited. By the end of the 1980s, the United Nations released ‘Our Common Future,’ a report that gave rise to the idea of sustainable development. The Sustainable Development Goals (SDGs), launched in 2015, are based on this report’s definition of sustainability. 

Another framework, called the capabilities approach, proposed by Amartya Sen and Martha Nussbaum, suggested expanding the scope of existing goals of poverty alleviation programs. By expanding the focus beyond income improvement alone, the capabilities approach proposed that an expansion in the opportunities and freedoms available to those experiencing poverty is essential for overall development. This approach eventually led to the conception of the Human Development Index—a measure of whether a country is capable of ensuring good health, education, and income for its residents. However, while the goals of development expanded, the mechanism for achieving them—GDP growth—largely continued unscathed.

Proponents of growth-centric economic development—namely world leaders and policymakers—argue that access to healthcare, education, and basic freedoms will grow once incomes begin to grow. They also assume that economic growth based on the principles of the free market—which had triumphed by the 1980s—will provide solutions to ecological degradation. The claim made in ‘Our Common Future’ that ‘poverty places unprecedented pressures on the planet’s land, water, forests, and other natural resources,’ brought the alleviation of poverty to the center of sustainability and human development discourse. 

In the past few decades, poverty alleviation programs have helped move millions of people out of extreme poverty, but they have not done much to increase the freedoms or opportunities afforded to them. This is due to several reasons. First, the threshold which determines extreme poverty is set very low, at an income of less than 2 dollars a day. Any movement above this level does not guarantee an improvement in people’s lives. Second, World Bank data confirms that the poverty reduction rate has slowed down recently, and that the absolute number of people living below the poverty line has barely declined since the 1990s despite the goals of these programs. The third, and most important problem lies in the relations of production that this path of development creates as it actualizes.

Growth-driven development triggers a process of dispossession. It plays out through the loss of access to land and resources and through the experience of the environment’s continuous degradation.

In the case of India, this path of development has led to a significant change in land use, from forestry and agriculture to industry and mining. It has also altered human-nature relations and power relations between the State, the market, and communities. This shift has triggered a process of dispossession that plays out in two ways: one, through the loss of access to land and resources (soil, water, forest, foliage, etc.), and second, through the experience of the environment’s continuous degradation. In response, people move out of rural agricultural areas and migrate to industrialized cities with the hope of earning higher incomes. However, the work they find does not necessarily ensure good health, access to education, or the ability to make savings. With neither the private sector nor the State investing in programs that provide decent living conditions, the majority of the population is left feeling betrayed and stranded. This dissatisfaction has given rise to numerous resistance movements. The Chipko movement (1973), Narmada Bachao Andolan (1985), Niyamgiri Suraksha Samiti (2003), and Chhattisgarh Bachao Andolan (2009) are a few examples of movements that have resisted the crucial features of the mainstream development model like the construction of big dams and mining projects. These struggles foreground the underlying violence of growth-driven development. 

It’s time to rethink the idea of development, and to create alternative relationships to production

These conflicts among communities and different agents of development—namely, the State, NGOs, and private industries—have deepened in the recent past, indicating the growing desperation among all stakeholders. The sharp increase in the level of inequality in the past three decades confirms that this development model only supports the interests of business owners and landowners at the expense of workers and the environment. It’s time to rethink the idea of development, and to create alternative relations of production. The future of development thought must focus on the creation of more meaningful and ecologically sensitive work. It should give more space to the knowledge and ideas of the subaltern groups in India—the Dalits, bahujans and adivasis—in defining the idea of sustainability. For development to truly deliver on its promise—the betterment of life for all—it must engage a multidimensional understanding of poverty. As we’ve learned, poverty manifests not only through financial hardship, but also through the loss of access to life-sustaining resources, the degradation of one’s environment, lack of healthcare, diminishing leisure time, and a scarcity of meaningful work for the majority of people in the world. A new approach to development must address the increasing precarity in the lives of people confronted with industrialization and conservation policies.  

Further resources

Philip Alson, Philip Alston Condemns Failed Global Poverty Eradication Efforts, July 2020.
A recent report and commentary by the United Nations Special Rapporteur on extreme poverty and human rights (2014-2020), on the false promise of the existing approach toward poverty alleviation.

Demaria, F., & Kothari, A. (2017). The Post-Development Dictionary agenda: paths to the pluriverse. Third World Quarterly, 38(12), 2588-2599.
A crucial resource for understanding the conceptualization of future development paths. 

Shiva, V. (2013). How economic growth has become anti-life. The Guardian, 1.
A critical overview of the growth-driven economic model that elucidates how growth-driven development impoverishes farmers. 

Escobar, A. (2011). Encountering development: The making and unmaking of the Third World (Vol. 1). Princeton University Press.
This book offers a political understanding of the process of development. It describes the ways in which expert-led knowledge originating in the West came to define poverty and development in the so-called developing world.    

Gerber, J. F., & Raina, R. S. (Eds.). (2018). Post-growth thinking in India: Towards sustainable egalitarian alternatives. Orient Blackswan.
This book discusses post-growth theories, from the perspective of a developing nation. It argues that moving beyond growth-led thinking is not a privilege of the Global North/developed world but also a requirement for the Global South/developing world. 

Goldman, M. (2005). Imperial nature: The World Bank and struggles for social justice in the age of globalization. Yale University Press. 
This book explains how the projects funded by the World Bank really work at the ground level and why community activists struggle against its brand of development.  

On resistance and alternative ideas of wellbeing:

Transformations – Wellbeing by Kalpavriksh Environment Action Group, September 2020.
The story of Korchi taluka, in the Gadchiroli district of Maharashtra State in India, on creating transformative alternatives to challenge mainstream ideas of development.   

A folk song sung by the subaltern resisting industrialization in India. Released on Youtube in 2018.
This song is inspired by a song by Bhagwan Majhi, leader of adivasi struggle against bauxite mining in Kashipur, Odisha.

A Ted Talk by Ashish Kothari held at FLAME University, Pune, Maharashtra. March 2019.
The founder of Kalpavriksh speaks on alternative theories of development.

Vandana is Lecturer at Jindal Global Business School, in Jindal Global University, Sonipat, India. She is about to finish her PhD at Indian Institute of Management Calcutta with specialization in Public Policy and Management. As a development professional working with an international NGO prior to her doctoral studies, she has extensive experience in working with government agencies, NGOs and Indigenous communities. Her current research works lie in the intersection of multiple fields of study like Political Ecology, Sustainable Development and Ecological Economics with a focus on food systems and tribal communities in India. Her Twitter is @Vanni_vandana.

Renewable energy

Photo: Flickr CC BY-NC 2.0

by Alf Hornborg

The concept of renewable energy is generally used for electric power that is not derived from finite sources such as stocks of fossil fuels or uranium. It includes the harnessing of flows such as direct sunlight, wind, and water. Harnessing such flows for electricity production requires technologies that are fundamentally different from the technologies used for deriving mechanical power from burning stocks of coal, oil, or gas. This applies to wind turbines and hydroelectric dams as much as it does to photovoltaic panels, but the focus here will be on solar power.

The rise of the fossil economy

The burning of fossil fuels as sources of mechanical power began with the steam engine in Britain in the 1760s. This innovation was essential to the Industrial Revolution. It marked a transition from relying on organic and flow-based energy sources propelled by current sunlight—such as human labour, draft animals, watermills, and windmills—to the combustion of subterranean mineral stocks. These mineral stocks—coal, oil, and gas—contain energy from ancient sunlight accumulated in organisms and deposited as sediments in the Earth’s crust.

The energy transition of the Industrial Revolution was not simply a discovery of how mineral energy could be converted into mechanical power. The harnessing of mineral energy required capital, that is purchasing power. As the wealthy core of the world’s greatest colonial empire, Britain was able to invest in steam technology. The expansion of steam technology in late eighteenth-century Britain was thus a process linked to the British appropriation of African slave labour and American plantation land. It saved Britain substantial quantities of labour time and agricultural land, but at the expense of great amounts of African labour and American land.

Energy technology – part nature, part society

The experience of the Industrial Revolution in Britain and other wealthy areas of the world was interpreted as a miraculous achievement of engineering. This is undeniable but does not tell the whole story. Technologies are not merely ingenious ideas or blueprints applied to nature. For them to materialize, engineers must have access to specific physical components—and at specific ratios of exchange (that is, prices). Engineering was certainly a necessary condition for the establishment of steam technology in early industrial Britain, but it was not a sufficient condition. The technology for harnessing the energy of coal was contingent on the market prices of raw cotton, African slaves, the labour of coal miners, Swedish iron, lubricants, and other inputs in relation to the market prices of exported cotton textiles. The physical existence of the machine, in other words, hinged not only on the revelation of nature, but also on social processes of exchange. However, this hybrid essence of technology—part nature, part society—has largely escaped the modern conception of engineering.

Across the political spectrum, there is a general faith in the capacity of modern society to shift to renewable, non-fossil energy sources without substantially reducing its levels of energy use

By the end of the twentieth century, natural scientists had recognized that the combustion of fossil fuels is a major source of greenhouse gas emissions contributing to climate change. There have also been concerns about the depletion of finite mineral energy stocks and the decreasing net energy return on energy expended on extraction, also referred to as ERO(e)I (Energy Return On energy Investment). Moreover, the huge global disparities in per capita energy use are no longer easily rationalized as uneven development but suggest structural and increasing gaps between wealthier and poorer parts of world society. Given the dominant understanding of energy technology, however, these problems have generally not informed mainstream visions of the prospects of an increasingly globalized modern society. In these visions, the growing per capita use of energy continues to be fundamental to social progress, regardless of energy source. The problems with fossil energy are viewed as challenges of engineering. Across the political spectrum, there is a general faith in the capacity of modern society to shift to renewable, non-fossil energy sources without substantially reducing its levels of energy use.

Will renewables replace fossil fuels?

The main candidates for replacing fossil with renewable energy are solar and wind power. Experts are divided regarding their potential to replace fossil fuels. Some see no technical or economic obstacles to such a transition. Skeptics have argued that renewable energy technologies applied at such a scale would require impractically huge amounts of materials, space, or energy. Some have emphasized that the production and maintenance of infrastructure for production of renewable energy is based on fossil energy to such an extent that the energy derived from it is very far from carbon-free. This is particularly obvious where the manufacture of solar panels is conducted in coal-powered factories, as in China. Given that the world economy is currently propelled by fossil energy to about 90%, some have concluded that economic investments in renewable energy represent a fossil energy subsidy of similar proportions. Also, given this reliance on fossil fuels, a rise in prices of fossil energy cannot simply be hailed in terms of an increasing competitiveness for solar, as it will translate into higher production costs for alternative technologies. More centrally, given the fact that the cheapening of solar panels in recent years to a significant extent is the result of shifting manufacture to China, we must ask ourselves whether European and American efforts to become sustainable should really be based on the global exploitation of low-wage labor and abused landscapes elsewhere. The global, societal conditions for energy technologies tend to be equally overlooked whether we are accounting for the eighteenth-century shift to fossil energy or deliberating about how to abandon it. Both steam engines and solar panels have relied on asymmetric global flows of biophysical resources such as embodied labor, land, energy, and materials.

A transition to renewable energy generally focuses on electricity production, but most of the total global energy use occurs in other contexts, such as non-electric transports. Electricity globally represents about 19% of total energy use. In the year 2017, only 0.7% of global energy use derived from solar power and 1.9% from wind, while over 85% relied on fossil fuels. In March 2018, Vaclav Smil estimated that as much as 90% of world energy use derives from fossil sources, and that the share is actually increasing. Solar power is not displacing fossil energy, only adding to it. The pace of expansion of renewable energy capacity has stalled—it was about the same in 2018 as in 2017. Meanwhile, the global combustion of fossil fuels continues to rise, as do global carbon emissions.

We have every reason to dismantle most of the global, fossil-fueled infrastructure for transporting people, groceries, and other commodities around the planet

Downscaling energy needs

How should we understand and transcend this impasse? To continue burning fossil fuels cannot be an option, but to believe that modern, high-energy society can be maintained based on renewable energy is similarly deluded. We shall certainly continue to need electricity, for example to run our hospitals and computers. But we have every reason to dismantle most of the global, fossil-fueled infrastructure for transporting people, groceries, and other commodities around the planet. This means making human subsistence independent from fossil energy and substantially reducing our mobility and consumption. Solar power will no doubt be an indispensable component of humanity’s future, but this will not happen as long as we allow the logic of the world market to make it profitable to transport essential goods halfway around the world. In order to provide the conditions for a sustainable technology, we must begin by establishing a sustainable economy. Crucially, also, we must modify our understanding of the very idea of technology. Contrary to our modern worldview since the Industrial Revolution, technology is not a neutral way of revealing and harnessing the forces of nature. A better way to define technology is to acknowledge that it is a global social phenomenon and a moral and political question rather than simply one of engineering. If we forget about this distributive aspect of technology, it will likely continue to save time and space for a global elite at the expense of human time and natural space appropriated elsewhere.

Further resources

Alf Hornborg. Nature, society, and justice in the Anthropocene: Unraveling the money-energy-technology complex. Cambridge: Cambridge University Press, 2019.
Argues that modern energy technologies, in exploiting global differences in the price of labor and resources, are based not only on politically neutral revelations of natural forces but crucially also on accumulation of the capital invested in harnessing them.

Dustin Mulvaney. Solar power: Innovation, sustainability, and environmental justice. Oakland, CA: University of California Press, 2019.
Discusses what changes would be required in the life cycle of photovoltaic solar power technology to make it just and sustainable.

Vaclav Smil. Power density: A key to understanding energy sources and uses. Cambridge, MA: MIT Press, 2015.
Compares different energy sources in terms of the amount of energy that can be derived from them per square meter of space.

Alf Hornborg is an anthropologist and Professor of Human Ecology at Lund University, Sweden. His research focuses on theorizing the cultural and political dimensions of human-environmental relations in different societies in space and time. His books include The Power of the Machine (2001), Global Ecology and Unequal Exchange (2011), Global Magic (2016), and Nature, Society, and Justice in the Anthropocene (2019).

Unequal exchange

by Rikard Warlenius

The global exchange of commodities and money through trade appear as balanced when we measure it in money, but this conceals very unequal exchanges of labour time, raw materials, and energy and an unequal distribution of Earth’s capacity to absorb environmental waste such as carbon dioxide. These uneven net flows of labour and natural resources and appropriation of sink capacities are what the notion of Ecologically unequal exchange (EUE) conceptualizes, and a common assumption is that they contribute to ecological and human exploitation in peripheral areas as well as to the maintaining of an unjust world order.

Unequal exchange: an academic theory with deep rootlets

The concept has deep rootlets in political economy and ecology. Unequal exchange—basically the notion that more labour is exchanged for less labour through international trade—was discussed by for instance the political economists David Ricardo and Karl Marx in the 19th century, and was later further developed by the Austro-Marxist Otto Bauer, the dependency theorist Arghiri Emmanuel, world system analyst Samir Amin, and neo-Marxist Ernest Mandel, to mention some of the more important contributors. Explanations for why unequal exchange happen vary, from viewing different levels of productivity or wages as the cause to associating unequal exchange with—in more Marxist phrasing—the organic composition of capital. This has to do with the distribution of capital, divided into two categories, in an economy: on the one hand constant capital—investments such as machinery and buildings—and on the other hand variable capital—mainly paid as wages for labour. In advanced, highly industrialized economies, the share of constant capital is normally higher than in ‘developing’ economies. Investments in machines, for instance, substitute for labour and thus less labour is needed to create a certain amount of value. In other words, if a lot of labour time goes into commodity production in one area, like Africa, and much less goes into production in another area, like Western Europe, an exchange of commodities from those two areas is likely give rise to unequal net flows of labour time. The commodity produced in Africa is likely to embody more labour time per unit of value (e.g. dollar) than the European.

Biophysical resources with high exergy (energy with high ability to perform work) are extracted in the peripheries of the world system and exported to the cores, where they are dissipated/consumed

Ecologically unequal exchange: theoretical developments and critical discussions

Starting in the 1980s, the concept of unequal exchange was further broadened to include not only unequal exchange of labour but also of natural resources—matter and energy. A pioneering study was Stephen Bunker’s (1985) Underdeveloping the Amazon, in which theories of unequal exchange were first applied to ecological extraction. Alf Hornborg (1998) coined the concept ecologically unequal exchange and in a series of articles and books gave it theoretical depth by combining world system analysis with thermodynamic concepts from physics. Biophysical resources with high exergy (energy with high ability to perform work) are extracted in the peripheries of the world system and exported to the cores, where they are dissipated/consumed either directly or as inputs to industrial products. From an economic point of view, these final products (cars, cell phones, washing machines …) are considered as more valuable than the input, but from a thermodynamic perspective they are actually of less value. The raw materials have high exergy, with great potentials, that becomes dissipated as it is turned into finished products. The deterioration will then continue as the product is used, worn and finally thrown away. What is more, the low exergy final products are often returned to the peripheries together with waste. According to Hornborg, industrial production is nothing but a displacement of labour, matter, and environmental loads: he regards technology as a mystification of appropriation. The world-economic cores extract labour and high-exergy matter from the peripheries, and spit back waste.

Hornborg has developed a way of assessing and measuring EUE: time-space appropriation (Hornborg 2006). To understand the industrial revolution in England, he quantified the unequal exchange of labour time and hectare yields in the trade exchange of raw cotton and manufactured garments between England and its former North-American slave colonies in the mid 19th century. The result strengthened the idea that England’s superiority was not mainly technological, but rather an effect of its ability to appropriate land and labour from its (former) colonies. Another study has used the same methodological approach to test the global-historical theory that the early modern world system was Sinocentric or polycentric, rather than Eurocentric, and the results seemed to confirm this (Warlenius 2016a). EUE has also been operationalized and applied on more recent statistical data, mainly by the American sociologists Andrew Jorgensen (e.g. 2009) and James Rice, strengthening hypotheses that unequal exchanges maintain a world divided in cores and peripheries.

More recently, attempts have been made to widen the concept to not only encompass the effects of international trade, but of the entire global social metabolism—that is, of societies’ use of natural resources and ecosystems as both source and sink—of which the latter is seldom formally traded. Warlenius (2016b) launched the concept of unequal sink appropriation as a part of the wider notion of EUE and measured how unequally the global carbon sinks, which should be regarded as a ‘common good’, have been distributed historically. In the same article, EUE is linked to another important concept used by the environmental justice movement: ecological debt. Net flows of e.g. natural resources and other commodities, as well as waste and sink appropriation, are referred to as ecologically unequal exchange, while the cumulative stock resulting from these flows are ecological debt. In a similar way, continuous carbon sink appropriation builds up climate debt.

The often quantitative and methodological focus of the concept—its emphasis on the practice of measuring flows of resources—has provoked a critique about EUE being under-theorized. Brolin (2007) advocates a stronger connection to Emmanuel’s theory on unequal exchange, Warlenius (2017) has suggested to employ the Marxist economic geographer David Harvey’s historical-geographical materialism and the concept of uneven development, while Holleman and Foster (2014) suggest a footing on the ecologist Howard Odum’s emergy approach (which basically means to translate all productive inputs—labour, matter and energy—into a unit used to measure energy (e.g. kWh), and use this total “emergy” as a measure of value of a product). Hornborg (2015) has, on the other hand, criticized this latter approach for mixing apples and pears in its attempt to define an objective measure of value: value is culturally produced—people hold different things to be valuable depending on their shared cultural believes—while emergy (as well as land or labour that are the foundation of other materialist theories of value) is physics.

Several of the demands of the environmental justice movements that are related to ecological or climate debt are also relevant to address ecologically unequal exchange

From academia to political movements

While it was the environmental/climate justice movement that developed the concepts of ecological debt and climate debt and these concepts have generated several policy proposals, the background of (ecologically) unequal exchange is academic and used for analysis rather than politics. Yet, linking these concepts together is also a way of building a bridge between environmental justice as academic tradition and as political praxis. Several of the demands of the environmental justice movements that are related to ecological or climate debt, such as the famous outcomes from the 2010 World People’s Conference on Climate Change and the Rights of Mother Earth, are also relevant to address EUE. These include ways of acknowledging the debt as well as repaying it: by reversing unequal net flows through radical emission cuts in high-emitting advanced economies; by compensating peripheral countries in the global South for adaptation costs; through sharing of technologies; and through reparations—concrete transfer of financial resources. Although such global redistribution would mainly be the result of changing balances of power, solid theories and data on past inequalities could encourage struggles for environmental justice.

Further resources

As previously discussed, central texts in the development of theories on ecologically unequal exchange include Bunker (1985), Hornborg (1998 & 2006), Holleman & Foster (2014), and Warlenius (2016b). Brolin (2007) is an encompassing history over the development of the concept unequal exchange, including EUE. Other—much briefer—introductions to the concept are Hornborg’s (2017) chapter in The Routledge handbook of ecological economics and an entry in the online EJOLT glossary. For the latest empirical support for EUE, see this article by Christian Dorninger and colleagues (2021).

Brolin, J (2007): The bias of the world. Theories of unequal exchange. Diss. Lund: Human Ecology Division. Online at: https://lup.lub.lu.se/search/ws/files/4378178/26725.pdf

Bunker, S (1985): Underdeveloping the Amazon: Extraction, unequal exchange, and the failure of the modern state. Chicago: University of Chicago Press.

Dorninger, C et al (2021): “Global patterns of ecologically unequal exchange: Implications for sustainability in the 21st century”. Ecological Economics 179 (pre-print).

Holleman, H & Foster, J (2014): “The theory of unequal ecological exchange: a Marx-Odum dialectic”. Journal of Peasant Studies 41(2) 199-233.

Hornborg, A (1998): “Towards an ecological theory of unequal exchange: articulating world system theory and ecological economics”. Ecological Economics 25(1) 127-136.

Hornborg, A (2006): “Footprints in the cotton fields: The industrial revolution as time-space appropriation and environmental load displacement”. Ecological Economics 59: 74-81.

Hornborg, A (2015): “Why economics needs to be distinguished from physics, and why economists need to talk to physicists: a response to Foster and Holleman”. Journal of Peasant Studies 42(1) 187-192.

Hornborg, A (2017): “Political ecology and unequal exchange”. Routledge handbook of ecological economics. Ed: CL Spash. Abingdon and New York: Routledge. 39-47.

Jorgensen, AK (2009) “The sociology of unequal exchange in ecological context: a panel study of lower‐income countries, 1975–2000”, Sociological Forum 24(1) 22-46.

Rice, J (2007): “Ecological unequal exchange: consumption, equity, and unsustainable structural relationships within the global economy”, International Journal of Comparative Sociology 48(1) 43-72.

Warlenius, R (2016a): “Core and periphery in the early modern world system: A time-space appropriation assessment”. In Jarrick, A, Myrdal, J, & Wallenberg Bondesson, M (eds.): Methods in world history: A critical approach. Lund: Nordic Academic Press.

Warlenius, R (2016b): “Linking ecological debt and ecologically unequal exchange: Stocks, flows, and unequal sink appropriation”. Journal of Political Ecology 23: 364-380

Warlenius, R (2017): Asymmetries. Conceptualizing environmental inequalities as ecological debt and ecologically unequal exchange. Diss. Lund: Human Ecology Divison. Online at: https://lup.lub.lu.se/search/ws/files/19721188/Asymmetries_Introductory_chapter.pdf

Rikard Warlenius is a senior lecturer in Human Ecology at the School of Global Studies, University of Gothenburg. His PhD dissertation (2017) focused on concepts such as Ecologically unequal exchange and Ecological debt. Currently, he is doing research on urban grassroots initiatives for climate transition in Gothenburg and Berlin.

Offsetting

by Danika Drury

Sometimes you really need to take a flight. Even though you are all-too aware of the toll that flying exerts on the environment. If only there were a way to make up for that damage, to get along in this economy without doing harm.

This dilemma between environmental and economic necessities is what environmental offsetting attempts to solve. The basic premise behind offsetting is intuitive and appealing: that you can counteract a loss with a gain. Environmental offsetting schemes have been widely adopted by governments and corporations over the last three decades, most commonly in the form of carbon or biodiversity offsets, which seek to counteract carbon emissions and habitat loss, respectively, by investing in environmentally beneficial projects. They operate in many different forms and at different scales, from the little check box that lets you offset the emissions of your flight, to multinational forestry projects funded by mining and oil companies.  Offsetting’s appeal is in its simplicity, allowing us to redress some of the harm done by our activity on the planet without throwing too big a wrench in the economy, but this same simplicity is also its downfall. While offsetting projects can include worthwhile environmental work, the very idea of like-for-like exchange is premised on a logic that falls short in the face of the unique ecosystems and meaningful places that make up the world we live in. This is a world that is much more complicated, dynamic, and alive than what is accounted for by offsetting schemes.  

Lost in translation

A key premise of offsetting is that a net gain can compensate for a local loss. Environmental offset schemes make no demand on corporations to limit their economic activity, instead hoping to balance it out through positive environmental contributions. Offsetting projects usually operate as part of a larger framework that sets a target for acceptable levels of carbon emissions or biodiversity; for instance, cap-and-trade systems, the Paris Agreement targets, or the No Net Loss biodiversity policies that dozens of countries have now adopted. When corporations continue to exceed these limits, offsetting projects provide a way to cancel out this excess. So, if the construction of a condo will result in the disruption of a wetland, the property developer can compensate for this by investing in the improvement or protection of another wetland deemed to be equivalent. If a company’s shipping will result in some 13 million metric tonnes of carbon being emitted, they can invest in forestry or renewable energy projects that are accredited to save an equivalent amount. Companies such as airlines sometimes share this responsibility with individual consumers by providing an option – that familiar check box – to contribute to their offset projects. The idea is to incentivise environmental protection on the part of corporations by making it the route through which they are permitted to continue and even expand their operations. Offsetting is often lauded as a win-win between the economy and the environment. In reality, however, things have been a little more lopsided.

While there is important conservation work being carried out under the auspices of offsetting, the evidence thus far is that by and large these programs are not effective as offsets – that is, they do not cancel out the harmful actions of the companies behind them. Studies of biodiversity offset sites have found that they are not preventing the net loss of biodiversity. Up to 82% have a high probability of long term failure, and that even in cases where offset sites may succeed, time delays were far greater than what was being accounted for. In many cases, offset sites may support biodiversity, but not for the same combinations of species as in the site that was lost to development.

For example, one study of land reclamation under Australia’s No Net Loss policy found that attempting to offset the loss of forests cleared for farming by replanting other sections of the same farm led to some species, such as the eastern brown snake, doing well in the reclaimed sites, while many others such as the stone gecko and the common ringtail possum did not.  Tree-dwelling possums were actually negatively affected by new planting, as they rely on cavities in older trees for nesting sites. To add to the difficulty, researchers found that even reclamation projects where hollowed trees had been preserved could not provide the same homey landscape for the possums and small reptiles because subtle changes in factors like soil salinity and amount of woody debris shaped the development of the new forest. These minute differences changed the way possums, geckos, and their neighbours fed, sheltered, and reproduced. The result was landscapes that, though generally better for biodiversity than no reclamation at all, could not be considered a replacement or adequate compensation for what was lost.

The complex dynamics which are so difficult to control in biodiversity offsetting programs also underlie the carbon sequestration processes measured in many carbon offset programs, which show similar rates of failure. It is forests, rather than trees alone, that sequester carbon and forests are complicated biomes that take time to develop. The impact these sites do have is dependent on processes which take place over decades or even centuries, during which time the effects of the carbon already emitted and the habitat already lost are still felt.

The unexpected outcomes and time delays observed in offset sites demonstrate the difficulties of convincing ecosystems to go along with our plans. Offsetting programs attempt to account for these complexities by calculating a project’s value in the form of carbon and biodiversity credits, which quantify different attributes of a project: tonnes of carbon to be sequestered, the presence or absence of endangered species, and so on. These calculations necessarily simplify ecological processes in order to assign the kind of values that can be quantified, monetised, and transferred from one site to another. However, as the high failure rate of offsets attests, the ecological processes that underlie these values are difficult to control or predict. Ecosystems do not always develop in ways that are linear and uniform. Instead they are often patchy, proceeding in fits and starts and according to timelines well beyond human experience. While this doesn’t mean we can’t find ways to help our environment flourish, it does indicate that we cannot count on nature to behave in the precise ways we would like it to, which makes it extremely risky to trade an existent ecosystem for a hypothetical one.

A house is not a home

Not only are the services and attributes targeted by offsetting schemes difficult to maintain or recreate, they are an inadequate description of what is being lost. Environments are not just collections of species and things. They are places and homes, which are much harder to replace.

For example, the petroleum company Syncrude, operating in the Canadian tar sands, recently purchased $2.4 million in offset credits towards the protection of 1.4 million hectares of boreal forest – making this the largest protected boreal forest on the planet. This helped them secure permission to develop a new mine, a move vehemently opposed by local Chipewyan and Cree First Nations communities. The environmental footprint of the protected boreal forest is calculated to be larger than that of the mine in terms of carbon sequestration as well as conservation impact. As far as offsetting goes, this is considered a Net Positive, a fact that was used rhetorically by Syncrude to legitimise the expansion of their operations and silence critics.

Environments are not just collections of species and things. They are places and homes, which are much harder to replace.

However, the destruction wrought by Syncrude’s industrial activities goes beyond what can be quantified, it forever damages the relationships that both humans and non-humans have to land that has been their home for millennia. As Chipewyan Chief Adam Allan put it: “I remember as a kid, you could drink water from the Athabasca River, you could eat the fish. I remember those days. But now, today, you can’t do it.” Feeling at home is always entangled with a particular place, and the damage done to the Indigenous peoples of Athabasca’s sense of belonging cannot be repaired by protecting another swathe of land elsewhere.  The situation in the Canadian tar sands is not unique. From the Arctic to the South Pacific, Indigenous and other vulnerable communities are losing the landscapes that not only provide them with a means of subsistence but have informed unique cultures and ways of life.

Offsetting not only fails to curb the extractive industrial activity that continually puts communities at risk, it may actually exacerbate the unequal distribution of harm that results. Decisions about what should be saved and what must be sacrificed are often taken out of the hands of the communities most directly affected by them. Instead, agency is concentrated in the very entities putting the environment under threat, which has led to decisions that further entrench class inequalities as well as colonial power dynamics. This can put vulnerable communities at risk not only through the condoned destruction of their environment, but in the attempts to save it. In the global South, conservation offsets funded and managed by corporations and NGOs based in the North often exclude local human communities from the nature to be protected, resulting in evictions, bans, and the criminalisation of activities once considered an essential part of life and culture. While most offsetting programs do include some form of consultation with local communities, foregrounding the voices of those most vulnerable to harm would contradict the basic assumption of offsetting: that a net gain can outweigh a local loss.

From Here to Eternity

Even if we accept the claim that restoration projects could turn these losses into net gains, a quantitative win does not remedy the qualitative losses suffered by local communities—human and non-human—nor does it guarantee a better world to come. Determining what constitutes net gain, what sacrifices are worth making, and who gets a say in the discussion, shapes the kind of world that will be built out of those sacrifices.

By the logic of offsetting, that world need not be very different from the one we currently have. It promises that not only will environmental well-being not conflict with economic growth, but they can support each other to the benefit of all. However, economic growth, conventionally measured by GDP, has thus far not been for the benefit of all. It has come with a host of unequally distributed social and environmental costs and has not translated into overall well-being. Instead, those who live and work in their communities are increasingly put at risk by the costs, while extraordinary wealth and power are concentrated in the hands of a select few.

This is perhaps why offsetting has been such an easy sell to many of the world’s most powerful corporations: it allows them to continue being powerful. As long as the environment can be repaired and replenished, it can continue to be extracted from and profited off of, with no need for hard limits or radical restructuring. We could theoretically continue on like this indefinitely: infinite environmental gain supporting infinite economic growth.

The key word, however, is theoretically. In real life, as evidenced by the widespread failure of offsetting programs to deliver practical results, the environment as we know it cannot thrive indefinitely while at the same time having the energy, materials, and life needed to fuel increasing economic growth extracted from it. It will be, as it has been, damaged beyond what can be repaired in human lifetimes and more and more people will suffer because of that damage. Without significant structural change, the pursuit of net gain will continue to entrench the harm and inequality masked by that growth.

In reality, ecosystems are not made up of building blocks, which can be amalgamated or broken up and transferred at the convenience of those who would profit from it

Only by assuming a neutral, detached view of an environment-in-general does it make sense to speak of trading one ecosystem for another, like switching money between accounts. In reality, ecosystems are not made up of building blocks, which can be amalgamated or broken up and transferred at the convenience of those who would profit from it. Both ecologically and culturally, ecosystems are composed of relationships, between humans and non-humans, living beings and their abiotic surroundings, all rooted in a particular time and place. The loss of these places is not just a loss of services or attributes, it is a loss of the unique perspectives and ways of living that come from being a part of these environments. It is a loss of worlds. Taking seriously the reality of being embedded in these relationships means recognising that there are limits to the kinds of activity we can undertake without causing irreparable harm, no matter how we try to make up for it.

Turning the ship around

Offsetting allows us to imagine a world in which there are no limits. The economic paradigm of eternal growth requires such an environment, one which is always replenishable, never fully exhausted. Like some fabled ghost ship, it can float on forever so long as we keep patching it up. In a way, it is comforting to imagine that whatever harm we do can be repaired. In the face of such vast problems, it is at least something. As one offsetting advocate puts it: “Perfection can be the enemy of delivery. There are a whole bunch of problems with it. … What is the alternative?”

But we are not yet ghosts and we can turn this ship around. Offsetting may be better than nothing, but nothing is not the only alternative. The alternative to offsetting it is to accept that there are limits, and to learn how to flourish within them. This means not presuming that ecosystems will follow our plans. It also means listening first and foremost to the communities who have been pushed beyond their limits by the machinations of extractive capitalism. Learning to live without the myth that we can keep sailing forever may be daunting, but it’s the only way to keep from drowning. In the end, it may not be so bad to live in a world that is more than the sum of its parts.

Further resources

Apostolopoulou, Evangelia. & Adams, William. 2017 ‘Biodiversity offsetting and conservation: reframing nature to save it’, Oryx, 51(1), pp. 23–31.

Goldtooth, Tom. 2014. ‘Stopping the Privatization of Nature’ Bioneers Lecture.

Song, Lisa. 2019. ‘These 4 Arguments Can’t Overcome the Facts About Carbon Offsets for Forest Preservation’ ProPublica.

Robertson, Morgan M. 2006 ‘The Nature That Capital Can See: Science, State, and Market in the Commodification of Ecosystem Services.’ Environment and Planning D: Society and Space, 24, pp. 367-387.

Vyawahare, Malavika. 2020. ‘Raze here, save there: Do biodiversity offsets work for people or ecosystems?’ Mongabay.

Danika Drury is a writer and researcher currently working to combat food poverty in the UK. She’s a graduate of Birkbeck, University of London’s MSc program in Environment & Sustainability and previously studied Philosophy. You can talk to her about eels and sci-fi @DanikaJane.

Extractivism

by Diana Vela Almeida

La versión en español de este artículo está disponible aquí.

One could simply define extractivism as a productive process where natural resources are removed from the land or the underground and then put up for sale as commodities on the global market. But defining extractivism is not really this easy. Extractivism is related to existing geopolitical, economic and social relations produced throughout history. It is an economic model of development that transnational companies and states practice worldwide and that can be traced back more than 500 years all the way to the European colonial expansion. You can’t tell the history of the colonies without talking about the looting of minerals, metals, and other high-value resources in Latin America, Africa, and Asia—looting that first nourished demands for development from the European crowns and later from the United States, and more recently also from China.

Today this model of accumulation of wealth remains a key part of the structure of a globally dominant capitalistic system—a system where power is in the hands of those who control money and industry—that has extended the extractive frontier to the detriment of other forms of land and resource uses. Such exploitation has also appropriated human bodies in the form of slaves or, more recently, as labor-intensive precarious workers. Extractivism is entirely tied up with exploitation of people.

Today’s extractive industries such as gas, oil, and mining have an egregious reputation of violating human and environmental rights and supporting highly controversial political and economic reforms in poor countries.

Expanding the global frontiers of extraction

Since the mid-20th century, extractive frontiers have expanded around the planet as global demand for commodities has increased. Most non-industrialized countries (but also industrialized countries such as Norway, Canada, and the US) have activated their primary sectors of production to exploit landscapes that were previously inaccessible, such as in the case of fracking and tar sands extraction in the Artic or in the open sea.

Since the mid-20th century, extractive frontiers have expanded around the planet as global demand for commodities has increased

The central idea behind such state-sanctioned extractivism is that extractive projects are strategic ventures for national development in resource-rich countries that can thereby strengthen their comparative economic advantages—that is, their economic power relative to the economic power of other nations. In other words, poor nations can exploit their natural resources as a means for economic growth, a source of employment, and ultimately a tool for poverty reduction.

This idea has been ingrained for many years in developing countries, and yet these countries have historically been unable to convert resource wealth into so-called development. Indeed, in some places that are rich in natural resources—typically in African countries with large oil or mineral deposits—there is an inverse relationship between poverty reduction and economic performance. This means that a lot of extractive activity is coupled with high levels of poverty, economic dependency on capital flows from developed countries, and political instability. This phenomenon is known as the “resource curse.”

In the last 20 years, several governments in Latin America, Africa, and Asia have challenged the “resource curse” by asserting national control over new forms of primary-production extractive industries. These are oriented around intensive and large-scale projects that cover previously inconceivable environments (again, like off-shore mining or fracking), as well as new forms of economic exploitation such as the agroindustry, fisheries, timber extraction, tourism, animal husbandry, and energy megaprojects.

These endeavours require national policy reforms. In Asia and Africa, extractivist national policies adhere to what is called “resource nationalism” and include the total or partial nationalization of extractive industries, renegotiation of contracts with foreign investment, increased public shareholding, new or higher taxation to expand resource rent, and value-added processing of resources.

In Latin America, the commodity boom at the beginning of the 2000s, marked by the increase in commodity prices together with transnational investments, led to great economic growth in what is called “neoextractivism”. Neoextractivism is a relative of resource nationalism and its emergence coincided with the rise to power of several progressive governments in the region that also seized more state control over natural resources within their national boundaries.

Advocates of neoextractivism claimed that new extractive practices would be “environmentally friendly” and “socially responsible”, thereby minimizing the disastrous impacts of extractivism as it was practiced throughout colonial and neoliberal history. Despite this, extractive industries have expanded and continue to expand in new frontiers with the negative effects of dispossessing people from their land, subjugating communal values to the values of extraction-driven development, and disrupting social structures, territories, and alternative forms of life.

In the debate over extractivism, there is no consensus about how to solve the problems caused by this mode of development. Some people think that extractivism should be viewed positively because of the economic growth and increased public spending that was accomplished during the early 2000s in Latin America. Others emphasise that most of the wealth produced is siphoned out of the producer countries to transnational investors, while negative impacts remain locally or regionally. And from the perspective of those who are directly affected by extractive industries, it is clear that economic revenues are not translated into socially just well-being and that these revenues are generated through the destruction of their lives and their land.

Not a neutral economic model

To further understand the complexity of the problem with extractivism, let us look at three interrelated dimensions of what makes up the extractivist economic model—and then consider how to go beyond the economic considerations of extractivism.

First, for extractivism to work, any biophysical “nature” becomes exclusively framed as a natural resource. That is, nature is conceived as an input (e.g. a resource like oil, soil, or trees) for the production of a commodity (e.g. gas, food, or timber). This simplifies the multiplicity of socionature relations with which such an economic model is entangled.  

When thinking about the environmental impacts of extraction, we surely need to consider what will happen to other elements in nature that are interconnected with the extracted resource, including water, air, soil, plants, and human and non-human animals. A cascading effect of environmental change indeed often occurs in ecosystems that are impacted by extraction, and thus interrelated elements of nature become irreversibly altered.

Second, extractive projects are normally located in or close to marginal, poor, and racialized (i.e. conceived as non-white) populations. Extractivism arrives with promises of improved life conditions, more jobs, and infrastructure development. But large-scale extractive industries are by no means necessarily interested in forwarding local employment and improving the livelihood of people. Instead, experience tells us that they often serve to diminish alternative economic activities and disrupt existing community networks and social structures. Extractive industries have frequently dispossessed people of land rights with the result of cultural disruption and violence.

Demands for social and environmental justice revolve around claims that the social and environmental costs of extractivism are higher than any economic benefit

Marginal populations still bear the brunt of the social costs of extractivism and don’t necessarily reap any benefits. In response to this, demands for social and environmental justice revolve around claims that the social and environmental costs of extractivism are higher than any economic benefit but that these costs are not accounted for in the decisions.

New demands from feminist movements and women Indigenous defenders highlight the relation between extractivism and patriarchal and racial violence and how this disproportionately impacts women. Examples are the increase in prostitution and sexual violence in communities restructured by extractivism and the externalization the social costs—the transfer of responsibilities for caring that are pivotal for the functioning of any economy—to women. As women are primarily responsible for the reproduction of life, they are highly vulnerable to the rupture of community or loss of territory. Because of that, women organizations have become the frontline defenders of their territories in the resistance against extractivism.

Finally, extractivism is a highly political endeavour that maintains a model of capital accumulation and destruction. It has led to the increase of socio-environmental conflicts around the globe, involving measures by states and industry to control resistance and criminalize social protest.

So, in sum, one should define extractivism as far from neutral or apolitical; it is an economic model that reflects a specific political position that relies on a given, predefined understanding of growth-oriented development as the ultimate good. Extractivism thereby reinforces political-economic arrangements that are biased against marginalized people who are deprived of their power to influence political decisions.

From an extractivist political perspective, resistance against extractivism is naïve, obstinate NIMBYism (Not in My Backyard-ism), or ignorant of the economic needs of the countries that could be “developed” by extractive projects. In reality, actions of resistance are contestations that challenge the dominant extractivist worldview and the uneven power relations between actors who decide, actors who benefit, and actors who bear the negative consequences of extraction. Under these conditions, extractivism is in complete contradiction to social and environmental justice and care for nature and life itself.

All in all, extractivism as a single model of production remains one of the most expansionist global enterprises and it squashes any other ways of living with the land. The 500 years’ legacy of extractivism is part of ongoing imperialist interest from industrial powers in securing access and control over natural resources around the globe, even in today´s green energy transitions. As such, extractivism stands in sharp contrast to flourishing alternative forms of land use and livelihoods.

Opposition to extractivism does not mean that people can’t use a resource at all and by no means implies a binary choice between either extractivism or underdevelopment. Instead, anti-extractivism is about focusing on what type of life we want to achieve as a whole and how we build global systems of justice. We can nourish ourselves from several non-extractivist modes of production and reproduction that center on a dignified life for all.  

Further resources

Bond, P. (2017). Uneven development and resource extractivism in Africa. In Routledge Handbook of Ecological Economics (pp. 404-413). Routledge.
This article explains the expansion of neoliberal environmentalism in the extraction of non-renewable natural resources in Africa. The author argues that if accounting the social and environmental costs, African countries end up poorer than before extraction.

Burchardt, H. J., & Dietz, K. (2014). (Neo-) extractivism–a new challenge for development theory from Latin America. Third World Quarterly, 35(3), 468-486.
An overview of key debates of ‘Neo-extractivism’ and the role of the state in Latin America.

Engels, B., & Dietz, K. (Eds.). (2017). Contested extractivism, society and the state: Struggles over mining and land. Palgrave Macmillan.
A presentation of several case studies around the globe on the conflicts between extractivism and other land uses.

Galeano, E. (1997). Open veins of Latin America: Five centuries of the pillage of a continent. NYU Press.
A classic essay on the history of the looting of natural resources, colonialism and uneven development in Latin America from the 15th century to the 20th century.

Svampa, M. (2015). Commodities consensus: Neoextractivism and enclosure of the commons in Latin America. South Atlantic Quarterly, 114(1), 65-82.
A critical analysis of neo-extractivism, capital accumulation, environmental conflicts and development. It ends up discussing proposals around ideas of post-extractivism and transitions.

Diana Vela Almeida is a postdoctoral fellow at the Department of Geography at the Norwegian University of Science and Technology. Diana combines political ecology, ecological economics and feminist critical geography to study extractivism, neoliberal environmentalism and socio-environmental resistance. Contact: diana.velaalmeida[at]ntnu.no

Extractivismo

por Diana Vela Almeida

An English version of this article is available here.

Alguien podría fácilmente definir al extractivismo como un proceso productivo donde los recursos naturales se remueven del suelo o del subsuelo y luego son vendidos como commodities en el mercado global. Pero definir el extractivismo no es tarea tan fácil. El extractivismo está asociado a relaciones geopolíticas, económicas y sociales producidas a lo largo de la historia. Este es un modelo económico de desarrollo practicado por las empresas transnacionales y los estados en todo el mundo y que se remonta a más de 500 años atrás desde la expansión colonial europea. No se puede hablar de la historia de las colonias sin mencionar el saqueo de minerales, metales y otros recursos de alto valor en América Latina, África y Asia- saqueo que primero alimentó las demandas de desarrollo de las coronas europeas y luego también de los Estados Unidos, y más recientemente de China.

Hoy este modelo de acumulación de riqueza es una parte fundamental de la estructura dominante del sistema capitalista global, un sistema donde el poder está en manos de quienes controlan el dinero y la industria, y el cual ha extendido la frontera extractiva en detrimento de otras formas de uso de la tierra y los recursos naturales. Dicha explotación también se ha apropiado históricamente de los cuerpos en forma de esclavos o, más recientemente, como trabajadores precarios de mano de obra intensiva. El extractivismo está completamente ligado a la explotación de las personas.

Las industrias extractivas de hoy en día, como el gas, el petróleo y la minería, tienen una reputación notoria de violar los derechos humanos y ambientales y de apoyar reformas políticas y económicas muy controvertidas en los países pobres.

Expandiendo las fronteras globales de extracción

Desde mediados del siglo XX, las fronteras extractivas se han expandido alrededor del mundo a medida que la demanda global de commodities aumenta. La mayoría de los países no industrializados (pero también países industrializados como Noruega, Canadá y los Estados Unidos) han activado sus sectores primario- productivos para explotar paisajes que antes eran inaccesibles; este es el caso del fracking y de la extracción de arenas bituminosas en el Ártico o en el mar abierto.

Desde mediados del siglo XX, las fronteras extractivas se han expandido alrededor del mundo a medida que la demanda global de commodities aumenta.

La idea central detrás del extractivismo promovido por los estados es que los proyectos extractivos son núcleos estratégicos para el desarrollo nacional de países ricos en recursos naturales, y que pueden por lo tanto fortalecer sus ventajas comparativas, es decir, mejorar su poder económico en relación con el poder económico de otras naciones. En otras palabras, las naciones pobres pueden explotar sus recursos naturales como un medio para crecer económicamente, mantener una fuente de empleo y, en última instancia, como una herramienta para la reducción de la pobreza.

Esta idea ha estado arraigada durante muchos años en los países en desarrollo, y sin embargo, la historia muestra que estos países no han podido transformar la riqueza de sus recursos naturales en el tal llamado desarrollo. De hecho, en varios lugares ricos en recursos naturales, generalmente en países africanos con grandes yacimientos de petróleo o minerales, existe una relación inversa entre la reducción de la pobreza y el desempeño económico. Es decir, las actividades extractivas se combinan con altos niveles de pobreza, dependencia económica de los flujos de capital desde los países desarrollados e inestabilidad política. Este fenómeno se conoce como la “maldición de los recursos”.

En los últimos 20 años, varios gobiernos en América Latina, África y Asia han desafiado la “maldición de los recursos” al afirmar el control nacional sobre nuevas formas de industrias extractivas de producción primaria. Estas industrias están orientadas a promover proyectos intensivos y a gran escala que alcanzan ambientes previamente inconcebibles (nuevamente, como la minería a mar abierto o el fracking), así como también incluyen nuevas formas de explotación económica como la agroindustria, la pesca, la extracción de madera, el turismo, la cría industrial de animales, y los megaproyectos energéticos.

Estos esfuerzos requieren reformas de política nacional. En Asia y África, las políticas nacionales extractivistas se adhieren a lo que se conoce como el “nacionalismo de los recursos” e incluyen la nacionalización total o parcial de las industrias extractivas, la renegociación de los contratos de inversión extranjera, el aumento de la participación pública, impuestos nuevos o más altos para ampliar la renta extractiva, y generar valor agregado sobre los recursos extraídos.

En América Latina, el boom de las commodities a principios de la década de 2000, marcado por el aumento de los precios de estos productos junto con mayores inversiones transnacionales, condujo a un gran crecimiento económico en lo que se conoce como “neoextractivismo”. El neoextractivismo es un pariente del nacionalismo de los recursos y su surgimiento coincidió con el ascenso al poder de varios gobiernos progresistas en la región, que también tomaron mayor control estatal sobre los recursos naturales dentro de sus fronteras nacionales.

Los defensores del neoextractivismo afirman que las nuevas prácticas extractivas son “ambientalmente amigables” y “socialmente responsables”, minimizando así los efectos desastrosos del extractivismo practicado a lo largo de la historia colonial y neoliberal. A pesar de esto, la industria extractiva se ha expandido y continúa expandiéndose hacia nuevas fronteras y está causando grandes efectos negativos como el despojo de las tierras de los habitantes, la subyugación de los valores comunitarios por valores desarrollistas impulsados por la extracción y la disrrupción de las estructuras sociales, de los territorios, y de las formas alternativas de vida.

En el debate sobre el extractivismo no hay consenso sobre cómo resolver los problemas causados ​​por este modelo de desarrollo. Algunas personas piensan que el extractivismo debe ser visto positivamente debido al crecimiento económico que genera y al aumento del gasto público logrado a principios de la década del 2000 en Latinoamérica. Otros enfatizan que la mayor parte de la riqueza producida se fuga de los países productores hacia los inversores transnacionales, mientras que los impactos negativos permanecen local o regionalmente. Y desde la perspectiva de quienes están directamente afectados por las industrias extractivas, los ingresos económicos no se traducen en bienestar social, además que son ingresos generados a través de la destrucción de sus vidas y de sus tierras.

No existe un modelo económico neutral.

Para entender mejor la complejidad del problema del extractivismo, veamos tres dimensiones interrelacionadas de lo que constituye el modelo económico extractivista, y luego consideramos cómo ir más allá de las cuestiones económicas del extractivismo.

Primero, para que el extractivismo funcione, éste debe tomar cualquier “naturaleza” biofísica y transformarla exclusivamente en un recurso natural. Es decir, la naturaleza se concibe como un insumo (por ejemplo, se toma un recurso como el petróleo, la tierra o los árboles) para utilizarlo en la producción de una commodity (por ejemplo, gasolina, alimentos o madera). Este fenómeno simplifica la multiplicidad de relaciones sociales existentes con la naturaleza, de las cuales dicho modelo económico también se encuentra entrelazado.

Al pensar en los impactos ambientales de la extracción, ciertamente debemos considerar qué sucederá con otros elementos de la naturaleza que están interconectados con el recurso extraído, incluidos el agua, el aire, el suelo, las plantas y los animales humanos y no humanos. De hecho, a menudo se produce un efecto en cascada de cambio ambiental en los ecosistemas que se ven afectados por la extracción, por lo que los elementos de la naturaleza que están interrelacionados son alterados irreversiblemente.

Segundo, los proyectos extractivos normalmente se ubican cerca o dentro de poblaciones marginales, pobres y racializadas (es decir, concebidas como no blancas). El extractivismo llega con promesas de mejores condiciones de vida, más empleos y mejor desarrollo de infraestructura. Pero las industrias extractivas a gran escala no están necesariamente interesadas en fortalecer el empleo local y mejorar el sustento de las personas. Al contrario, la experiencia nos dice que éstas a menudo reducen las actividades económicas alternativas e interrumpen las redes comunitarias y las estructuras sociales existentes. Las industrias extractivas con frecuencia han vulnerado los derechos de las personas a la tierra, resultando en fuertes disrupciones culturales y violencia.

Las demandas de justicia social y ambiental giran en torno a las afirmaciones de que los costos sociales y ambientales del extractivismo son más altos que cualquier beneficio económico.

Las poblaciones marginales aún cargan la peor parte de los costos sociales del extractivismo y no necesariamente cosechan algún beneficio. En respuesta a esto, las demandas de justicia social y ambiental giran en torno a las afirmaciones de que los costos sociales y ambientales del extractivismo son más altos que cualquier beneficio económico, pero estos costos no se tienen en cuenta en las decisiones.

Las nuevas demandas de los movimientos feministas y las defensoras indígenas resaltan la relación entre el extractivismo y la violencia patriarcal y racial y cómo esto afecta desproporcionadamente a las mujeres. Algunos ejemplos son el aumento de la prostitución y la violencia sexual en las comunidades transformadas por el extractivismo y la externalización de los costos sociales (la transferencia de responsabilidades de cuidado que son fundamentales para el funcionamiento de cualquier economía) a las mujeres. Como las mujeres son las principales responsables de la reproducción de la vida, ellas son muy vulnerables a la ruptura de la comunidad o la pérdida del territorio. Por eso, las organizaciones de mujeres se han convertido en la primera línea de la defensa territorial y de la resistencia contra el extractivismo.

Finalmente, el extractivismo es un proyecto claramente político que mantiene un modelo de acumulación de capital y destrucción. Este modelo ha causado un aumento de conflictos socioambientales en todo el mundo, resultando en medidas por parte de los estados y la industria para controlar la resistencia y criminalizar la protesta social.

En resumen, deberíamos definir al extractivismo como algo lejos de lo neutral o apolítico; éste es un modelo económico que refleja una posición política concreta, basada en una comprensión clara y predefinida del desarrollo, el cual está orientado al crecimiento como objetivo final. El extractivismo por lo tanto refuerza los arreglos político-económicos necesarios en contra de las personas marginalizadas que se ven privadas de su poder para influir sobre las decisiones políticas.

Desde una perspectiva política extractivista, la resistencia contra el extractivismo es vista como ingenua, NIMBYsmo (es decir, “No en mi patio trasero”), oposición obstinada o ignorante de las necesidades económicas de los países que podrían “desarrollarse” gracias a los proyectos extractivos. En realidad, las acciones de resistencia representan cuestionamientos que desafían el paradigma extractivista dominante y las relaciones desiguales de poder entre los actores que deciden, los actores que se benefician y los actores que soportan las consecuencias negativas de la extracción. Bajo estas condiciones, el extractivismo está en clara contradicción con la justicia social y ambiental y el cuidado de la naturaleza y la vida misma.

Con todo lo dicho, el extractivismo como modelo de producción sigue siendo uno de los proyectos globales más expansionistas y que aplasta cualquier otra forma de vivir con la tierra. El legado de 500 años de extractivismo es parte del continuo interés imperialista de las potencias industriales por garantizar el acceso y control sobre los recursos naturales en todo el mundo, incluso hoy en día, a través de intereses relacionados con transiciones hacia las energías verdes. Como tal, esto contrasta abiertamente con las formas alternativas de uso de la tierra y los medios de vida prósperos.

La oposición al extractivismo no significa que las personas no puedan utilizar un recurso en absoluto y de ninguna manera implica una elección binaria entre extractivismo o subdesarrollo. Al contrario, el anti-extractivismo se trata de enfocarse en qué tipo de vida queremos lograr integralmente y cómo construimos sistemas globales de justicia. Ahí, podemos nutrirnos de los saberes de varios modos de producción y reproducción no extractivistas que se centran en una vida digna para todas y todos.

Recursos adicionales

Bond, P. (2017). Uneven development and resource extractivism in Africa. In Routledge Handbook of Ecological Economics (pp. 404-413). Routledge.
Explica la expansión del ambientalismo neoliberal en la extracción de recursos naturales no renovables en África. El autor argumenta que si se contabilizan los costos sociales y ambientales, los países africanos terminan siendo más pobres que antes de la extracción.

Burchardt, H. J., & Dietz, K. (2014). (Neo-) extractivism–a new challenge for development theory from Latin America. Third World Quarterly, 35(3), 468-486.
Proporciona una visión general de los debates clave sobre el “Neo-extractivismo” y el papel del estado en América Latina.

Engels, B., & Dietz, K. (Eds.). (2017). Contested extractivism, society and the state: Struggles over mining and land. Palgrave Macmillan.
Presenta varios estudios de caso alrededor del mundo sobre los conflictos entre extractivismo y otros usos de la tierra.

Galeano, E. (1979). Las venas abiertas de América Latina. Siglo xxi.
Un ensayo clásico sobre la historia del saqueo de los recursos naturales, el colonialismo y el desarrollo desigual en América Latina desde el siglo XV hasta el siglo XX.

Svampa, M. N. (2013). Consenso de los commodities y lenguajes de valoración en América Latina; Fundación Friedrich Ebert, Nueva Sociedad, 244; 4: 30-46
Proporciona un análisis crítico del neo-extractivismo, la acumulación de capital, los conflictos ambientales y el desarrollo en América Latina.

Diana Vela Almeida es una investigadora postdoctoral en el Departamento de Geografía de la Universidad Noruega de Ciencia y Tecnología. Diana combina ecología política, economía ecológica y geografía crítica feminista para estudiar el extractivismo, el ambientalismo neoliberal y la resistencia socio-ambiental. Contacto: diana.velaalmeida[at]ntnu.no

Jevons paradox

by Sam Bliss

The Jevons paradox is that efficiency enables growth. New technologies that can produce more goods from a given amount of resources allow the economy as a whole to produce more. More resources get used overall.

This is the magic of industrial capitalism and the secret of growth. Economists have known it for a long time. So why is it called a paradox?

A question of scale

The paradox is that we tend to assume that the more efficiently we use a resource the less of it we will use.

This is the case in our personal lives. If you buy a more fuel-efficient car, you might drive a little bit more but overall you will likely burn less gasoline. Switching to a low-flow showerhead typically saves water at home.

This efficiency-for-conservation logic appears correct for most subsets of the economy. When a business switches to energy-efficient light bulbs, its electricity bills go down. Municipalities that require new buildings to meet energy efficiency standards might see energy use decrease within city limits. 

But at the level of the whole economy, the reverse is true. These efficiency gains contribute to increasing production and consumption, which increases the extraction of resources and the generation of wastes.

Energy-efficient technologies do not reduce carbon emissions

This suggests that energy-efficient technologies do not reduce carbon emissions, that fertilizer-saving precision farming techniques do not decrease fertilizer applications overall, and that increasing agricultural yields does not spare land for nature. Real-world evidence supports these claims.

Environmental policy focused on efficiency gains does not by itself benefit the environment. Economies grow by developing and deploying increasingly efficient technologies. 

How growth happens

Consider a hypothetical example. If the owner of a tea kettle factory installs a new machine that can make one kettle from less raw copper than before, he might continue to produce the same amount of kettles at a lower cost, or he might choose to make more kettles overall from the same amount of copper. 

Either way, profits will go up. The factory owner can buy more machines to make even more kettles from even more copper. Or he can invest those profits elsewhere, increasing production in another sector of the economy and thus increasing the use of copper and other materials. 

As more tea kettle factories adopt the copper-saving technology, they might start selling kettles at lower prices to compete for customers. As tea kettles get cheaper, people will be able to buy more of them. Since more kettles can be sold, factories will make more—using more copper. 

Copper’s price might increase as factories increase their demand for it. When the price goes up, more potential copper mining sites become profitable, which further raises supply.

Or, even if all tea kettle factories end up using less copper with the new, copper-saving machines, copper’s price will fall and other sectors will be able to afford more copper and therefore demand more. 

Cheaper copper could make all copper-containing things cheaper, not just tea kettles, leaving people with more money to spend. They can demand more of the products of all economic sectors, further increasing the use of many materials, including copper. 

Cheaper copper might increase industrial profits, too, which capitalists either reinvest to increase production or spend on luxury things. 

Even if the initial factory owner decides to give his workers a raise rather than keeping the profit or increasing production, then the workers will have more money to spend on tea kettles and everything else. Even if they decide to save all that additional income, the banking sector will direct it toward investing in more new machinery to produce more things from more materials.

No matter what, it seems, copper consumption rises in the end, because efficiency increases kickstart the growth machine.

The more efficiently society can use copper, the more of it will generally be used. Unless, that is, society intentionally limits its use of copper. 

The same goes for just about any resource.

150 years of more

English economist William Stanley Jevons gets credit for being the first to point all this out. In 1865, Jevons found that as each new steam engine design made the use of coal more efficient, Britain used more coal overall, not less. 

In 1865, Jevons found that as each new steam engine design made the use of coal more efficient, Britain used more coal overall, not less

These efficiency improvements made coal cheaper, because steam engines, including the ones used to pump water out of coal mines, required less coal to produce a given amount of useful energy. Yet increasingly efficient steam engines made coal more valuable too, since so much useful energy could be produced from a given amount of coal. 

That might be the real paradox: the ability to use a resource more efficiently makes it both cheaper and more valuable at the same time.

In Jevons’ time, more and more coal became profitable to extract as more and more uses of coal became profitable. Incomes increased as coal-fired industrial capitalism took off, and profits were continually invested to expand production further. 

A century and a half later, researchers from the Massachusetts Institute of Technology found that as industrial processes have gotten more efficient at using dozens of different materials and energy sources, the overall use of these materials and energy sources has grown in nearly every case. The few exceptions are almost all materials whose use has been limited or banned for reasons of toxicity, like asbestos and mercury. 

In an economy designed to grow, the Jevons paradox is all but inevitable. Some call it the Jevons phenomenon because of its ubiquity. Purposefully limiting ourselves might provide a way out.

Fighting growth with collective self-limitation

To prevent catastrophic climate change, humanity must rapidly reduce the combustion of fossil fuels. But despite decades of policy efforts and international negotiations, emissions continue to rise every year.

The focus on making energy use more efficient is paradoxically worsening the problem, as efficiency gains facilitate increasing, not decreasing, carbon burning. And renewable energy sources are adding to fossil fuels, not replacing them. Earth’s limited sources of coal, oil, and gas will not run out in time to save the stable climate.

But what if governments around the world treated coal like they do asbestos? What if petroleum extraction and uses were subject to strict limits like those of mercury?

To limit the use of fossil fuels, or anything else, society must impose limits on itself, preferably democratically

To limit the use of fossil fuels, or anything else, society must impose limits on itself, preferably democratically. We must set limits on our own activity.  

Once binding limits are in place, efficiency gains become one of several tools for staying within them. With a hard cap on the total amount of oil that can be burned, adopting increasingly fuel-efficient machinery cannot backfire and spark growth of oil-burning economic activity. Instead, fuel efficiency would allow more useful work to be done with the limited amount of oil that society permits itself to combust. 

Of course, we must also be skeptical of the maximizing mentality that considers efficiency and more to be good things as such. Collectively limiting ourselves offers not just an escape from capitalism’s endless loops of efficiency and growth; it also provides the constraints necessary to imagine and act out new ideas about what makes the good life, as well as revive and protect traditional lifeways. 

For many communities around the world, a global project to limit resource use could bring liberation from pollution, exploitation, and the one-way path toward Western-style development. To them, limits do not mean reductions or sacrifice but an opportunity to pursue goals other than growth.

Efficiency makes growth. But limits make creativity.

Once free from the efficiency mindset, we see that setting legal limits is not the only solution to the Jevons phenomenon. Society can also purposefully choose less-efficient production processes, setting the paradox in reverse by constraining the potential scale of the economy. If efficiency makes growth, maybe inefficiency makes degrowth.

Further resources

David Owen. “The Efficiency Dilemma.” The New Yorker, December 12, 2010. 
 This New Yorker piece captivatingly chronicles the history of the Jevons paradox as an idea and as a real material force.

Christopher L. Magee and Tessaleno C. Devezas, “A Simple Extension of Dematerialization Theory: Incorporation of Technical Progress and the Rebound Effect,” Technological Forecasting and Social Change 117, no. Supplement C (April 1, 2017): 196–205.
This is the article in which MIT researchers show that the Jevons paradox applies to pretty much every material, energy source, and industrial process for which data exists.

Salvador Pueyo. 2020. “Jevons’ Paradox and a Tax on Aviation to Prevent the next Pandemic.” Preprint. SocArXiv. https://doi.org/10.31235/osf.io/vb5q3.
The Jevons paradox holds that using a resource more efficiently leads to economic growth and thus more of that resource is used overall. In this article, Salvador Pueyo shows that, similarly, advances in disease control have enabled humans and livestock to live at higher densities, eventually bringing about more ferocious outbreaks. He argues that the aviation industry shifts costs onto society by spreading diseases around the world, and should thus be taxed.

Sam Bliss, “Why growth and the environment can’t coexist.” Grist. 
This video explains degrowth in 4 minutes, starting from a Jevons-inspired explanation of how increasing efficiency in orange juice production leads to more oranges consumed, not less.

Sam Bliss is a wildly inefficient researcher, writer, gardener, and warehouse manager of Food Not Bombs Burlington. He participates in and studies non-market food systems in Vermont.

Human nature

by Eleanor Finley

Note from the Uneven Earth editorial team: This entry is the first to be published within Uneven Earth’s new Resources for a better future series: ​a glossary of crucial concepts in political ecology, alternative economics, and environmental justice.​ We are calling on experts and activists to help us put out easy-to-read, clear, and opinionated explainers of some of the most important issues. Anyone can write an entry, and we will help with editing to make them readable to wide audiences. The time is now to put forward concise definitions of key concepts, to explain our political position firmly and clearly.

What is “human nature”? How can we make sense of human beings as creatures which are part of the natural world? What makes our species distinct from others? People have been asking ourselves these kinds of questions for millennia. Aristotle, the classic Greek philosopher and harbinger of modern biology, famously characterized human beings as zoon politikon, a political animal that can deliberate collectively upon what should be in the world. Since the Industrial Revolution, it has become popular to define human beings in economic terms. So-called “man the toolmaker” alters his physical environment to suit his purposes. Yet, as we shall see, Aristotle’s ancient idea still resonates with much of what the science says about the human species today.

There is no single “human nature” or blueprint for organizing human life

Anthropologists are scientists who study the human species from a holistic perspective, taking into account our biology, language, material culture (archaeology), social systems, and everyday life. Over the course of a century, anthropologists have amassed first-hand accounts of human societies from all over the world. We call this “ethnographic record”. The ethnographic record shows that within broad realms of “universals” like family and friendship, spirituality or religion, play and sports, politics, and production, the range of possibilities are endless. For this reason, anthropologists have long ceased trying to define “human nature” and instead focus on exploring the human potential. In other words, there is no single “human nature” or blueprint for organizing human life.

The idea of “human nature” nonetheless remains deeply lodged in our popular imagination about good and evil. Most often, people invoke the notion to justify an evil act or system of injustice. It is supposedly “human nature” to be greedy, for instance, or to exploit others. Although on the surface these expressions appear politically neutral, they are tautologies: “explanations” that merely repeat themselves. Why did men rape women, children, and other men? Why, because it was supposedly in their male nature to do so! Yet hardly explains why some men choose to rape and others don’t. It is equally in men’s capacity not to rape, so why bother blaming “nature” at all? Below the surface, statements about what is “natural” are really expressions about what we see as morally permissible. We invoke “human nature” as if to say, “These things will never change so don’t even try”.

We invoke “human nature” as if to say, “These things will never change so don’t even try”

The debate about “human nature” is really a veiled way of talking about good and evil. To question the good of humankind is to question whether it is ethical to respect others. If we decide humans are bad, then we don’t feel bad treating them badly.

Thankfully, serious observation of human behavior points to precisely the opposite conclusion. Things are always changing, so you might as well try! While most species have evolved elaborate, yet confining physical adaptations like wings, beaks, or claws, human beings adapt through creativity and invention. Like dogs, cats, rats, pigeons, and many of the other species which have accompanied us across the globe, we are generalists who thrive in diverse environments. Flexibility is our hallmark as a species.

Flexibility is our hallmark as a species

Despite our powerful plasticity, human beings remain primates with a distinctive set of physical features which shape our overall embodied experience and life cycle. As primates, our eyes situate themselves at the front of the skull, affording us an acute sense of sight and the ability to see at great distances. We possess opposable thumbs and long, agile fingers that allow us to tinker with fine and delicate objects. In distinction from all other primates, our posture is upright, a capacity gained through mind-bogglingly sophisticated skeletal adaptations in our feet, ankles, legs, and pelvis. These are just a few of the distinctive human features that anthropologist Julian Steward refers to as “the biological constant”.

Amid our many remarkable features, the human brain is exceptional. Each human possesses a highly-developed prefrontal cortex or “frontal lobe”, a highly flexible supercomputer overlaid by the patterns of symbols and associations we call “culture” (dolphins, porpoises, and other advanced mammals possess highly developed frontal lobes, however, without a common language, it is impossible to know in any detail what their culture might be like). The frontal lobe allows us to recognize, remember, reason, imagine, solve problems, and to project our mind’s eye into the past and future. For example, it is the frontal lobe which allows us to recognize the meaning of a traffic signal and predict what will happen if we do not stop. Most importantly, the prefrontal cortex allows us to alter what we’ve learned and invent new patterns. It is not only how we interpret the meaning of stories and metaphors, but also how we create new ones.

There is no human nature, only a human potential

The uniqueness of the prefrontal cortex is significant to any discussion of “human nature” because it means there is no recognizable human life beyond the reach of culture. Human infants literally cannot survive without years of sustained stimulation, love, and affection from caretakers. There is no human “nature” that can be separated from the society in which we live. In 1961 Marxist historian Erich Fromm writes that for Marx, man is characterized by a “principle of movement”. Under the influence of early anthropology, Marx understood that history is a dance between invention and determination. There is no human nature, only a human potential.

Aristotle approaches the same point, but from the other direction. By describing humans as “political animals”, Aristotle correctly implies that even the most seemingly abstract inventions like ethics, philosophy, and debate have an objective basis in the way our bodies are constructed. Our biology equips us to understand not only what is, but also what could and what should be. We are ethical creatures; we are nature debating, rationalizing, and thinking with itself.

Further resources

Stanford Encyclopedia of Philosophy. 2001 [2018]. Aristotle’s Ethics. https://plato.stanford.edu/entries/aristotle-ethics/

Marshall Sahlins. 2008. The Western Illusion of Human Nature. Chicago: Prickly Paradigm Press.

Nancy Holmstrom. 2017. “Chapter 28: Human Hature” in A Companion to Feminist Philosophy (edited by Alison M. Jaggar and Iris Marion Young). Blackwell Publishing Ltd. https://doi.org/10.1002/9781405164498.ch28

Jason Antrosio. 2011 [2018]. “Anthropology and Human Nature: Human Beings in Process” Living Anthropologically website, https://www.livinganthropologically.com/biological-anthropology/human-nature/

Erich Fromm. 1961. The Nature of Man. Marxists Internet Archives. https://www.marxists.org/archive/fromm/works/1961/man/ch04.htm

Leslie Stevenson, David L. Haberman, Peter Matthews Wright & Charlotte Witt. 2018 (7th edition). Thirteen Theories of Human Nature. Oxford: Oxford University Press.

Eleanor Finley is a writer, teacher, activist and social ecologist. She is also associate editor at ROAR Magazine and a PhD student in anthropology the University of Massachusetts, Amherst.