Technology cannot tackle climate change

Calvin Jones says Wales can lead the way in replacing economic growth with the notion of useful work

Last week I attended a conference on sustainable development for the Severn Estuary. The vision, assuming the Hafren proposal is dead in the, ahem, water is tidal lagoons. They are envisaged at Swansea, off the Vale of Glamorgan, and off Hinkley Point. Their aim is to capture the tidal stream close to the shore, and maybe wave technology further out. The huge offshore wind Atlantic Array is even further out. Most of the audience seemed cheered by the economic opportunity and the possibility of mitigating the effects of climate change. I was terrified.

Worthy attempts to develop replacement technologies – in energy generation and storage, in weight saving, in bio-engineering and so on, ad infinitum – are born from a belief that technology and increased resource efficiency can ‘solve’ our ecological and climate problems. This is Walter Mitty land. It is populated by well-meaning, intelligent people to be sure, but a fantasy none the less. On ‘current trends’ we can expect three billion more people in the global middle class by 2030, at the same time as the West gets richer, albeit perhaps more slowly. To enable this, we require a mere doubling of world electricity production.

Let me say this slowly. This. Will. Not. Happen. There is not enough stuff in the world for material consumption to effectively double on a global basis. There is not enough water for the dishwashers, or indeed to drink. There is not enough aluminium for the Audis, and not enough kerosene for the short-haul holidays to Hong Kong. There are certainly not enough prawns for the cocktails.

Any efforts at resource efficiency and technical transformation to enable this growth have to contend with the fact that firstly, companies like Tata (nee British Steel) have, over the last 60 years, already taken out the vast majority of possible energy costs. Secondly, as any economist knows, we use up the easy stuff first.

Just think of this in the context of oil. Saudi crude came out of the ground at $10 to $12 a barrel in the old days. In Texas, you threw a pickaxe in the air in 1940 and if it came down point first, you had a 30-year gusher. Contrast that with tar sands or tight and shale oil – maybe a minimum price of  $80 (at ‘wellhead’).

Faced with this predicament, we don’t need to take weight out of cars: we need to take out cars. We need to deal with economic growth, the elephant in the room. Insofar as it relates to the increased material throughput of an economy (and believe me, it really always does) growth is not only undesirable (for the West at least) but in the medium term impossible.

Yet this fact (and I use that word advisedly) is completely un-discussed in any mainstream policy context, particularly now in our repeat recessions. We assume that an increased level of economic activity is required to protect jobs and ‘prosperity’. Let’s be clear: increases in growth (achieved most recently by offshoring production to cheap Asian locations, and by flat-out-lying about the value of our financial wizardry) reward not labour but the owners of capital. Median middle class disposable incomes, adjusted for inflation, peaked in the 1970s. That is in contrast with the best-off, and for the owners of land and other capital.

Economic growth is actually necessary so there is enough wealth to distribute to those who are not (and excuse me for sounding somewhat Marxist) actually working for it. Land owners, and others in the rentier class. These are workers who are non-productive in any welfare adding sense. They include those living off a complex bureaucracy, the retired (retirement is wholly an invention of the fossil fuel age), the unemployed, and the sick and disabled.

As we age in the West this fact will become only too obvious. By 2050 there will be around only two workers per dependent in the UK, down from four now. Another decade or two of stock market growth like the last and these people (i.e. me) will have no pensions. Think about that.

Faced with these issues it is easy to withdraw into either a belief in an economic growth fairy, or into passive, nihilistic depression. But this is not necessary. Many societies historically have functioned perfectly well without ever-increasing levels of growth and complexity. Although arguably even more have chased complexity ever more desperately before crashing down the other side of a Seneca Curve. Especially empires.

But to follow any positive examples we have to first be honest with ourselves. The cognitive dissonance we feel, as GDP figures rise, and we feel ever more tired, stressed and scared, is real, and must be challenged.

Secondly we have to be brave. To identify, as Jared Diamond suggests, what ideals, structures and goods we really care about and will protect in a transformational period… hint: it’s not your iPad.

Thirdly, we have to re-define value and work in terms of what really adds to welfare and yes, in places we recognise. Then we should encourage this useful work, and spread it around all who want it, instead of maximising its commodified price and to hell with the rest.

It strikes me that Wales is a really, really good place to start all this.

Calvin Jones is Professor of Economics at Cardiff Business School.

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