Max Koch, Lund University Capitalism, Sustainability and Social Policy

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Max Koch, Lund University Capitalism,
Sustainability and Social Policy

• 1. Is green capitalism possible?
• 2. Is environmental sustainability compatible
• with economic and social sustainability?
• 3. What kind of transformation is required to
  
• make society environmentally sustainable?

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Ad 1 Theoretical approaches

• Neoclassical economists see economy as cycle
  linking money and commodities with households and
  companies. Return of capital original capital,
  plus a surplus, comes back to the owner. In focus
  is the frowth of monetary value, while the roles
  of energy and natural resources are sidelined or
  not mentioned at all
• Physiocrats, Smith, Ricardo, Mill and Keynes did
  not regard economics as largely synonymous with a
  science of prices and growth of monetary value
• Thermodynamic economists stress the role of
  matter and energy in production and consumption

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Marx Distinction of use value and exchange
value as the pivot on which a clear
comprehension of political economy (and ecology!)
turns

• Exchange value Reduces concrete works and matter
  and energy to repositories of abstract labour
  regards land, raw materials, fuels as free
  gifts from nature and sources of rents tends
  towards an infinite expansion of scale to produce
  more exchange value / capital
• Use value Bound up with rearranging
  matter/energy expansion of scale translates into
  increasing throughput of finite raw materials,
  auxiliaries etc accompanied by degradation of
  environment and increase in greenhouse gas
  emissions
• These structural tensions take different shapes
  in different institutional accumulation regimes
  (Fordism, finance-driven capitalism) and
  correspond with energy regimes and modes of
  environmental governance (e.g. Pigouvian taxes
  vs. carbon markets)
• Theoretically, a capitalist growth economy based
  on solar and renewable fuels is imaginable

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Empirical answer No socially just scenario of
continually growing incomes for 9 billion peope
and the UN climate targets to meet (Jackson)

• With 0.7 population growth and 1.4 income
  growth the average carbon content of economic
  output would need to improve 21-fold by 2050,
  relative to 2007
• If 9 billion people are to have an income of EU
  citizens today, the world economy would need to
  grow 6 times by 2050. Achieving the IPCC targets
  by 2050 would mean pushing down the global carbon
  intensity of economic output by 9 every year
• Empirically, let alone in the very short time
  frames climate scientists mention, there is no
  indication for a green capitalism to arise

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Ad 2) Green growth vs nogrowth Welfare regimes
and sustainability

• Gough and Meadowcroft see social-democratic
  welfare states as better placed to manage the
  intersection of social and environmental policies
  than liberal welfare regimes (ecological
  modernisation discourse, green growth)
• Socio-economic and ecological values are seen as
  mutually reinforcing synergy hypothesis
• Theoretical alternative is to regard the green
  dimension of the state in competition and
  conflict with its welfare dimension

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Operationalising the welfare and ecology
dimensions for 28 European countries (1995 and
2010)

• Welfare Decommodification Overall expenditure
  for social protection as of GDP
  stratification Income Inequality, GINI Index
• Ecology PerformanceElectricity generated from
  renewable sources as of gross electricity
  consumption CO2 emissions per capita, National
  Ecological Footprints Regulation Environmental
  taxes as of GDP, public expenditures for
  environmental protection as of GDP
• Sources EUROSTAT, OECD, Worldbank, Global
  Footprint Network

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Koch, M Fritz, M, Building the Eco-Social
State Do Welfare Regimes Matter? Forthcoming in
Journal of Social Policy 43 (4)
Correspondence analysis Positional Changes of
Countries in the Eco-social Field
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State environmental performance compared
  Relatively good environmental performance in 2010 Medium environmental performance in 2010 Relatively bad environmental performance in 2010
Progressive development since 1995 Portugal, Spain, Austria, Slowak Republic Denmark, Germany, Poland, Hungary, Estland Belgium
Stagnation Sweden, Switzerland, Romania Norway, Italy, UK, Finland, Ireland Netherlands, Luxembourg, Czech Rep.
Regressive development since 1995 Turkey, Latvia France, Slowenia, Lithuania, Bulgaria, Greece -
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Results

• No quasi-automatic development of the green state
  on top of already existing welfare institutions
  representatives of social-democratic welfare
  regimes are spread across established, emerging,
  failing and deadlocked eco-states
• This does not exclude that social-democratic and
  market coordinating institutions indeed
  facilitate the building of the green state. In
  this case, this potential would need to be
  actualised much more
• Social welfare and sustainability has nowhere
  been sufficiently decoupled from GDP growth
• Dialectics of welfare state to enable the
  masses to lead ecologically harmful lifestyles

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Ad 3 De-prioritising GDP growth in policy
makingTowards a stable state economy (SSE)

• An SSE aims at the lowest feasible matter and
  energy throughput in production and consumption
  and a relatively stable population (Daly)
• Growth would not be abandoned in all sectors of
  the economy but viewed as a process that is
  consciously and politically monitored and
  regulated (Barry)
• Nogrowth scenarios are backed up by other
  disciplines that are in need of theoretical
  integration happiness research, sociology of
  consumption, psychology of well-being as well as
  economic and philosophical approaches of the
  living standard and capabilities

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Challenges for research and policy making

• Eco-social policies are necessary to bring
  about a radically different environmental/welfare
  policy regime and a redistribution of carbon,
  work/time and income/wealth (Gough) at
  international (where a new global deal not
  unlikely the Bretton Woods agreements would be
  necessary including a new mix of property forms),
  national and local/individual levels
• Research should identify conflicts and the
  potential for synergy between economic, social
  and environmental policies in areas such as
  wealth and income, working time, taxation,
  housing, transport and community development as
  well as policies encountering shifts in producer
  and consumer behaviour

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Developing eco-social policies (at national and
European levels)
                             
Environmental goals and policies
Distributional dilemmas
Countervailing social policies
 
ECO-SOCIAL POLICIES

• Examples for (as yet) fragmented countervailing
  social policies
• identification of minimum and maximum income
  limits
• carbon rationing including personal allowances
  and trading schemes
• alternative uses of revenues from mitigation
  policies
• state education strategies to limit conspicuous
  consumption

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Conclusions and discussion

• Empirical evidence for a green capitalism is
  very weak
• Policy priorities would need to shift from
  maximising GDP (or exchange value) towards
  physical parameters such as material throughput
  and resource use (or use value). The role of
  markets in economic governance would need to
  shrink in a new mix of property forms
• More interdisciplinary research is needed to
  understand welfare in sustainable terms and on
  the as yet not integrated policy tools en route
  to a SSE