Fernanda Tomaselli

What I will cover now is more of the

evidence of what are some of the effects

of or correlations of economic growth

with environmental and social

indicators. But Jordan is going to cover

the policy aspect afterwards. Okay? And

we don't have so much time. So I will go

over my slides a bit quickly. However,

if you have any questions or I'm

speaking too fast or something is not

clear, don't hesitate in, you know,

raising your hand and asking me any

questions. Okay, great. So as you have

seen in some way or maybe you know the

current economic model and political

model that we have is mainly centered in

economic growth. Okay, the idea that we

can keep growing the economy year after

year and there's no end in sight. But

what is economic growth? So Andre

covered part of that. It's basically the

market value of the of all the final

goods and services that are produced in

an economy. So it's everything that is

counted in the market and it's measured

in a dollar value or a monetary value

and you probably know that economic

growth has a major role in government

policy. So many governments are elected

under the pro the promise of more

growth. They also promise jobs and other

things but growth is really something

very central in how we elect our

governments and they are assessed you

know in how is the economy doing is it

growing is not growing and growth as we

saw I think in the debate also it is

seen as a pro as this holy grail to

solve many of our complex problems so it

is seen to solve you know poverty if we

have more inequality then we may need

more growth it's seen as the solution

for unemployment and creation of of is

the way in which the government raises

taxes. And these are just some examples

of um the promise that lies be behind

economic growth. And according to this

historian um McNeel, he says the

overarching priority of economic growth

was easily the most important idea of

the 20th century. Okay. And it is still

a very important concept in the 21st

century. But what is the rate of growth?

So the global average of uh economic

growth in in all economies is about

3.5%. And this is considered to be

moderate. You know it's not a it's not

very high. So but you have different

countries that grow at different rates.

So we have China and India for instance

that grow grow at 5%. Whereas the US is

now expected to grow at 2.9%. Yes. Is

this yearly? This is every year. Yes. So

this is what we expect the economies to

grow every year year after year. Okay.

And uh the US is expected to grow at

2.9%. And according for example to the

international monetary fund this is a

modest uh rate of growth. So it's not

really high. For instance in 2013 when

Canada grew at 1.7% that's considered

very mediocre you know it's like very

tiny rate of growth. But the question is

is this really so tiny like what is the

nature of economic growth? So economic

growth is exponential growth and I guess

many of you here know this. So this is

just a chessboard and I'm just going to

illustrate very quickly in some way how

does exponential growth works. So

imagine that we are putting a grain of

rice in the first uh square and we

duplicate this grain of rice the amount

of grains of rice every square. So then

we have two grains of rice four we have

now eight 16 32 then we will have 64 and

if we could duplicating we will have 128

by the eighth square. How many grains of

rice do you think we would have by the

16th square? Any guess? A million.

Okay. So maybe not so much. 30,000 and

by the 24th the

square about 8 million and by the 40th

squared we will already have trillion

grains and we don't even want to imagine

what we will have by the 64th square. So

this is the idea of exponential growth.

Numbers become very big very quickly.

And something that is really interesting

according to this uh physical scientist

uh Albert he said the greatest

shortcoming of the human race is our

inability to understand the exponential

function. So really it seems our brains

are not wired to really understand this

like even know that I me like I've seen

it and I I really really don't grasp it.

It's it's it's a it's a complex thing.

So expon e economic growth as I said is

a type of exponential growth. So imagine

this is the human economy in 1960s it

grows at 3% a year which doesn't sound a

lot but if an economy grows at 3% a year

it duplicates every 20 years 23 years.

So by the 1980s we will have already a

double size of the economy and then if

it grows maybe a bit higher 5% 7% it

will duplicate every 10 years. So by the

90s we have one doubling and then 2000s

we have another doubling and the

question is how many times more can this

physical material economy expand in a

finite planet and the question here and

the issue here is that the economy is

not expanding in a voice it's not

expanding into empty space it is

expanding into something else and as

Andre explained there are trade-offs and

we need to know what are those

trade-offs and are we really do we

really want to keep going are the

trade-offs

worth? So just to show you the

exponential function, this is a the US

real GDP growth. So it is adjusted to

inflation and you can see very clearly

this is an exponential line. Okay. And

it grew from in the 1800s. So this is

the past 200 years from less than you

know probably a couple billion dollars

to now 16 trillion dollars. And

something that is really interesting,

this graph is only the last 200 years. I

want to show you how is this graph if

you take a broader perspective of a few

thousand years. So this is a graph from

basically the last 2,000 years. And you

can see that growth has been quite

pretty steady. Maybe until the 1500s,

1600s it start picking up a bit. And

then it's really until the 1850 the

1900s that it really spikes and

something that is really important and I

think this is the take home message in

general is like we take growth for

granted. We think that it's the most

normal thing and if we stop growing we

will die. But the reality is that growth

is an anomaly in human history. This

type of growth we have never experienced

it before. Okay. So it's not a

normality, it's rather an anomaly that

we are experiencing

now. And it's very important to see what

are other exponential trends that have

grown with economic growth. So here you

have in this graph like it's very

general but is loss of rainforest. We

have exploitation of fisheries, water

use, um carbon dioxide emissions. So you

have a lot of other trends that have

grown exponentially as

well. And the question is how are we

doing? So are we at a in a sustainable

path? Are we

unsustainable? So according to many

scientists, humans are on an

unsustainable path. We have been in

ecological overshot since the 1980s. But

what does ecological overshot means? It

basically means that we are using more

that can actually be regenerated in the

planet. Okay. And according to the

ecological footprint, the ecological

footprint is a very good measure I think

of our demand on the planet. Okay. And

it basically measures what is the amount

of productive land that we will need to

maintain our consumption. So the

ecological footprint will tell me okay

you consume this amount of crops let's

say one hectare per year. Oh you consume

this amount of meat. So you will need

0.3 hectares of of uh cattle to sustain

your consumption. It also calculates how

much forest for example I will need to

plant to capture all of my carbon

emissions. So it basically tells me in a

unit of land how much land do I need

every year to sustain my current

consumption. Okay. And the great thing

of the ecological footprint is that you

can calculate it on an individual level,

country level or planetary level. So in

the world we know that each person in

the planet in average uses 2.7 hectares

per person but the average bio capacity

which means the capacity to provide good

and services is only 1.8 hectares per

person. So there is this deficit of 0.9

hectares. But how is it possible that we

are consuming more than what we have? So

the idea is that if you see here we are

consuming one and a half planets. So I

will make the uh comparison with a bank

account rather than living off the

income of natural capital and letting

the natural capital regenerate so that

we can live off that income. We are

basically consuming our capital. So it's

like having a bank account rather than

living off the income of your bank

account. You are using the capital. So

yes, we can have amazing lives and they

are great and we have so many things but

eventually that capital is going to run

dry and that is exactly what we are

doing with the planet. We are overusing

the resources not allowing them to

regenerate and we are crossing our

fingers that we will maybe find other

moons, other planets where we can keep

finding resources because we're

depleting the resources that we have

here. And just to give you an idea,

Canada's ecological footprint is seven

hectares per person, which means that if

every person in the planet would consume

like Canadians, we would need four

planets. So

yeah, another very important research is

the research of planetary boundaries. So

what these scientists are trying to see

is what is the safe operating space for

humanity to keep the earth system in the

current uh in the current uh um state it

is now. So humans have been able to

thrive in the past 10,000 years mainly

because we are in the olosene and it has

been a great era for humanity to to

thrive and what they are trying to see

is like what changes if we do what

changes we do to the earth system that

may put us at a greater risk of moving

into a different state of the earth and

a state that is unknown for humans.

Okay. and they have selected nine very

important dimensions and what they are

showing is that we have already crossed

four very important boundaries. So one

of the boundary is climate change. Here

you can see that we are in the yellow.

It means like we are at a risk of really

changing the planet to a state that we

haven't seen before. The other one is

related to genetic diversity which is

biodiversity loss. The other one is a

change in land system which is related

to the forestation and loss of forests

and also altering the biochemical flows

specifically related to phosphorus and

nitrogen. The most important of these uh

of all of these are climate change and

biosphere integrity because many of the

other pro processes depend on having the

climate and the biodiversity that we

have now. So these results are really

dire like they're like not so positive

but it's a warning in some way that we

something needs to change and we need to

figure out what should we change. Okay.

So

yeah and the question is are we in

denial as a

species? Yeah. And I think that's a very

uh typical response that I

get. Okay.

Okay. So then the next question is now

that we have had so much economic

expansion and we have you know so many

of these things are we better off. So

GDP as an indicator of economic growth

has many limitations. So basically it

doesn't differentiate because between

cost and benefits. So if you have a

probably most of you know this if you

have an oil spill and we pay for cleanup

that is accounted in GDP and is

accounted as growth although our

well-being hasn't really in increased.

Non-monetary aspects are not accounted

for. So if we have very healthy people

that don't need to go to the hospital

that is not accounted in GDP. Whereas if

we have a lot of sick people that needs

to pay for hospitals or doctors that is

accounted in GDP. So it really doesn't

make this difference between what is

really a benefit and what is really a

cost. Also it doesn't account for

distribution of wealth. You know we are

becoming richer but how is that wealth

being

distributed? Uh one of the key questions

in ecological economics is are the cost

greater than the benefits and ecological

economies differentiate between having

economic versus uneconomic growth. Has

anybody here heard the concept or the

idea of uneconomic growth? Yeah. For me,

I was like, can you have growth that is

like not economic? Well, yes, you can.

So, aneconomic growth is the idea of

having growth that has more costs than

benefits. How is this possible? This is

possible because in our accounts, we are

not accounting for the costs. We are

only accounting for the benefits. So, we

don't really see those costs. And many

ecological economists would argue that

we are now in a period of aneconomic

growth where having more growth is

actually making us poorer rather than

richer in the short and in the long

term.

Okay. So the final question is also are

we confounding means with ends? Is

economic growth the end or is it a means

to something? And if it is the means to

something, are we really getting to that

something? Or maybe somewhere in the way

we got lost and we keep, you know,

confounding these means with the

ends. And the creator of the GDP said uh

almost 100 years ago, the welfare of a

nation can scarcely be inferred from a

measurement of national income. But it

seems that's exactly what we tend to do.

like we just equate growth with

wellbeing. The one of the important key

points also is the idea of diminishing

marginal returns to growth. So growth

does generate benefits and it increases

our satisfaction. So in this side you

have h happy life years. This is a

measure that accounts for um life

satisfaction and life expectancy and

here you have GDP per capita. So you and

each dot is a country. Okay. So you have

some countries that really have very low

GDP, you know, very low income and

really they're probably not happy

countries. But as soon as you have some

gains in income, you can see, wow,

happiness really increases with, you

know, minor increases in income. But

then there's some point maybe it is, you

know, $20,000, $30,000 a year when

really that lines basically, you know,

gets stagnant in some way. It doesn't

keep increasing with GDP. So what this

is showing us is that you get a greater

benefits of growth at the beginning. And

this is an example that you can have in

your daily lives. If you are really

really hungry, the first bite of pizza

or sandwich that you have is so

delicious. It's it generates so much

wellbeing. But if you keep having more

sandwiches or more pizzas, eventually

your wellbeing starts to diminish and

eventually you will really get you know

a decrease in utility and even you know

reduce your wellbeing. So this is

exactly with the idea of diminishing

marginal returns. The great thing about

this is that this is showing us that you

have companies that h can have very high

quality of life, happiness and wellbeing

without very high levels of high GDP. So

there is an optimal point where we can

maximize the benefits of economic growth

while we can minimize the costs and the

important thing is where is that point

and how do we get to that

point? So moving beyond GDP ecological

economies have worked in different

indicators the genine progress

indicator. Have anybody here heard of

the genine progress

indicator? Great. Okay. So GPI is a more

comprehensive measure than GDP. So it

tends to differentiate between cost and

benefits and it accounts for ecological

degradation for example and what they

are showing is that in the United States

while GDP has grown exponentially actual

genomic progress peaked in the 80s and

it's now even declining. So we are not

becoming better off. And in 2013 a study

this is globally they did the same thing

in the whole planet and they are showing

very similar results. GDP per capita

keeps growing exponentially. However

genuine progress isn't really growing

and it already picked. So this is really

food for thought to to see if we need to

use uh better indicators. So just very

briefly I'm going to introduce the idea

of the steady state economy. So the

steady state economy is one I would say

of the most important ideas maybe of

ecological economics and a specific

proposal of an economy that doesn't need

economic growth. So the idea is to have

a constant

stock okay a constant stock of build

material and a constant stock of people.

Okay, based on the flow of n of natural

income that we have from the natural

capital. Okay, so it's uh it really is

an economy that takes into account how

much nature do you need to sustain this

type of economy. Something really

important in the idea of the steady

state economy is that we are talking

here about material aspects,

non-material aspects, quality of life,

social connections, many other things

can grow indefinitely. So the fact of

having a stable production of goods and

services doesn't mean that our quality

of life is stagnant. We can become very

happy and maybe much happier than now if

we are not so focused in just you know

producing and consuming all the time.

And finally the idea of postro

economics. So moving beyond consumption

based indicators of well-being and this

is a big one focusing on qualitative

development rather than quantit

quantitative growth. So ecological

economies really differentiate between

becoming better rather than becoming

bigger. And what they would argue in the

current economy we are just becoming

bigger right we are just producing more

because we need to produce more and

that's how what we measure and that's

the most important thing they would say

like having more is not necessarily

becoming better so we need to be more

qual qualitative in some way rethinking

and redefining progress. So what is

progress? What do we value? Do we really

value having the latest car having more

stuff or the latest iPhone or do we

value something else?

We can generate thriving economies that

are aligned with nature and that don't

need growth. So an economy that doesn't

have growth doesn't mean that it has to

be a stagnant economy or that it has to

be a depression. You can have thriving

economies that don't need this continual

expansion. And also the question is is

this an inevitable future for economies?

If there are limits to grow, which it

seems there are because the planet is

showing some signs, do we we will have

to do this transition anyways. So the

question is are we going to wait and

maybe have a collapse and plan collapse

or are we going to really see the

evidence and make the decision of really

transitioning into something different.

So it's a choice that we have and as you

know as a species that can plan ahead

that's the hope that we will see these

signs and maybe decide to transition

into something different. Okay, that's

it. I'm so sorry.

[Applause]