Despite the lack of policy progress on climate change and ecosystem degradation there is no shortage of solutions currently on offer. While the specifics may differ, those getting most attention share one characteristic—they focus on technological change. Whether it’s Pacala et al’s wedges, Jeffrey Sachs’ plan to reduce carbon emissions through plug in hybrids and carbon capture and storage, McKinsey’s cost abatement curve approach, or Jacobson and DeLucchi’s 100% renewables by 2030 plan, the emphasis is on technology. Most conspicuously lack a number of obvious changes that would reduce emissions and footprint.
In Plenitude: the new economics of true wealth, I argue against the techno-fix
approach. We also need deeper, systemic change that incorporates economic
structures, the rate and pattern of growth, as well as alterations in cultural and
social norms. But even more importantly, a wider array of changes is also a
desiderata for a transition to a truly sustainable economy. That’s because what was
efficient in an industrial economy is not what is efficient, optimal or profitable in an
Mainstream thinking on the shift to clean energy has a bias toward large-scale installations, such as nuclear power stations, big wind farms, concentrated solar, CCS and other capital intensive approaches which will be dominated by large energy providers. But is big and even bigger the right future as we transition out of the industrial era? There are good reasons to think small is finally becoming not only beautiful, but also efficient. The argument that the optimal scale of enterprise is falling relies in part on the role of information technology in undermining the need for the command and control functions of the modern corporation and making possible efficient, low-cost communication among distributed networks. Networkscan share certain functions, while competing on others. Indeed, the experience of the US economy over the last few decades suggests that it’s the small and medium firms who have provided the bulk of innovation and employment growth.
There are other reasons why leaving the sustainable future to large corporate entities is problematic: their excessive political power makes them capable of blocking needed policy reforms. Furthermore, resilience models suggest that highly centralized systems are vulnerable, a point hammered home by the financial meltdown of 2008. With climatic uncertainties predicted to increase, and financial crises occurring regularly, a shift to smaller enterprises, operating in a more de-centralized way is both prudent and likely to be more efficient.
A second area is the nexus of output growth, productivity and hours of work. There is now growing evidence that de-carbonization and de-materialization have been limited. Material flows per dollar of GDP have declined 1% a year for decades, however, increases in total production have lead to rising materials use. Since 1980, total materials use (including fossil fuels) climbed 45%. GHG emissions have also continued to rise, with a sharp acceleration since 2000. We haven’t yet cracked the nut of translating efficiency gains into lower emissions, nor are we likely to without addressing the rate of growth of output.
One approach, which is getting more attention in the last few years, is that the wealthy countries of the global North should reduce their growth rates in order to provide ecological space for the global South. But how to achieve such a feat? As I first argued in 1991 in World Development, and have elaborated in Plenitude, the key is to reduce average hours of work. The economy will continue to produce productivity increases. If they are not absorbed by rising output, then equilibrium needs to be restored through declines in hours. Shorter hours are associated with lower emissions and less ecological impact. Taken together a decline in enterprise size and a reduction in average hours of work can facilitate the growth of a low-impact sector of self-providing households, self-employment and small-scale businesses and coops. That’s because people will have more time away from their formal jobs and the competition from large enterprises will abate. Fostering such a sector will help individuals build skills and assets, reduce their personal footprints, and lay the groundwork for functioning local and regional economies. The web and digital technologies are central to this vision: because so much knowledge and skill can be readily transmitted digitally, it is far more feasible to have high productivity household and small-scale production.
Indeed, household production should no longer be seen as an antiquated pre-industrial paradigm. Rather, it’s one of the new possibilities that are available to us in the 21st century. In addition to its economic and ecological aspects, it can also be a highly desirable lifestyle, allowing people more creativity, freedom and flexibility.