This document discusses sustainable development and issues with using GDP as the primary measure of economic performance and societal well-being. It notes that GDP does not account for environmental degradation and depletion of natural resources. Alternative measures like the Genuine Progress Indicator (GPI) and Index of Sustainable Economic Welfare (ISEW) attempt to value environmental and social factors not reflected in GDP. The document also discusses how viewing the economy separately from the environment is flawed and that we need systems thinking to understand the interdependence of the economy and environment.

1. Managing Sustainable Enterprise
GCSE 7508
Griffith Business School
Asia Pacific Centre for Sustainable Enterprise
January 2013
Jeremy Williams
jeremy.williams@griffith.edu.au
@jeremybwilliams
@TheGreenMBA
facebook.com/profjeremybwilliams
jeremybwilliams.net

2. Session 5:
The International Political Economy
and Sustainable Development

4. 4
The Brundtland Report (1987)
• The most widely accepted
definition:
‘development that meets the
needs of the present without
Gro Harlem
compromising the ability of future Brundtland
generations to meet their
economic needs’.

5. 5
Inter-generational and
intra-generational equity
• Principle 3, Rio Declaration: ‘… to equitably meet
developmental and environmental needs of
present and future generations’.
• inter-generational equity
– a necessary condition for sustainability
• intra-generational equity
– a necessary condition for development

7. 7
The ends-means spectrum
Daley (1973)

9. 9
Criticisms of GDP as an indicator of
economic well-being
Traditional criticisms: Contemporary criticisms:
• Measurement problems: • The counting of ‘defensive’
− The underground economy expenditures as positive
− Domestic production contributions to GDP
− Quality and composition of • Failure to account for changes
output in the value of ‘natural
• Leisure time capital’.
• Income distribution

10. 10
GDP and its detractors…
‘If a truckload of toxic chemicals spills somewhere,
the money spent cleaning it up is added to the GDP.
If nearby residents can no longer use their wells for
water, their expenditures on bottled water is added
to GDP. If they become sick from exposure to the
substance, their medical costs are also added to the
official measure of well-being’.
Mike Nickerson, The Sustainability Project,
Ontario, 1997
Source:http://www.foe.co.uk/campaigns/sustainable_development/progress/annex1.html

11. 11
GDP and its detractors…
‘Unfortunately GDP figures are
generally used without the caveat
that they represent an income that
cannot be sustained. Current
calculations ignore the degradation of
the natural resource base and view Barber B Conable Jr,
Former Republican
the sale of non-renewable resources Congressman and Former
entirely as income. A better way must President, World Bank,
1989
be found to measure the prosperity
and progress of mankind.’
Source:http://www.foe.co.uk/campaigns/sustainable_development/progress/annex1.html

12. 12
GDP and its detractors…
Simon Kuznets,
(creator of GDP
concept) 1962
‘The welfare of a nation can scarcely
be inferred from a measurement of
national income as defined by the
GDP... goals for ‘more’ growth should
specify of what and for what.’
Source:http://www.foe.co.uk/campaigns/sustainable_development/progress/annex1.html

13. 13
The GPI for the United States
Further reading:
Clifford Cobb, Ted
Halstead, and
Jonathan Rowe
(1995), ‘If the GDP is
Up, Why is America
Down?’, Atlantic
Monthly
Source:
http://www.rprogress.org/newmedia/articles/9510_atlantic.pdf
Source:http://www.foe.co.uk/campaigns/sustainable_development/progress/international.html

14. 14
The ISEW for the UK
Source: http://www.gpionline.net/othergpi.htm

15. 15
The GPI for Australia
Source: http://www.gpionline.net/index.htm

16. 16
What the GPI counts that GDP
doesn’t …
• Personal consumption • Costs of noise pollution
• Income distribution • Costs of irrigation water use
• Public consumption expenditure • Costs of urban water pollution
• Value of household and community • Costs of air pollution
work • Costs of land degradation
• Costs of unemployment • Costs of loss of native forests
• Costs of underemployment • Costs of depletion of non-renewable
• Costs of overwork energy resources
• Private defensive expenditure on • Costs of climate change
health and education • Costs of ozone depletion
• Services of public capital • Costs of problem gambling
• Costs of commuting • Value of advertising
• Costs of transport accidents • Net capital growth
• Costs of industrial accidents • Net foreign lending
• Costs of crime
Source: http://www.gpionline.net/whatis.htm

18. 18
GDP and the neo-classical
circular flow model
• What is ‘assumed away’ in the model?
Wages, profit, rent, interest
Resources
Households Firms
Goods and services
Payments for products

19. 19
The neoclassical world view
The economy
The
environment

20. 20
The ecological economics
world view
The environment
The
economy

21. 21
The economy and the environment
Reduction in
natural capital
Economic
growth

22. 22
The economy and the environment

23. 23
The economy and the environment

24. 24
The economy and the environment
At some point,
the flows
between
environment
and economy
become
unsustainable

25. 25
• The Economics of the
Coming Spaceship
Earth
By Kenneth E.
Boulding, 1966

26. 26
Chinese proverb: “Better to give a man a rod than a fish”
Source: Daly, H.E. (2005) ‘Economics in a full world’, Scientific American, September, p. 102.
… the supply of fishing rods is no longer the problem

27. 27

28. 28
15 football pitches per day
Image source: nationalgeographic.com
• It is a shortage of trees, not chainsaws, that threatens timber
production

29. 29

30. 30
The Aral Sea once the fourth largest lake in the world, continues to
shrink and is now 10 percent of its original size
• Water itself has become scarce relative to the
powerful pumping technologies used to access it

31. 31
Santa Fe residents "flood" the Santa
Fe RIver's dried up riverbed
Everyone's holding blue because
that's where the river should be
flowing
Source: 350/org

32. 32
Examples of ecosystem services (Costanza et al 1997)
Ecosystem service Examples
Climate regulation Greenhouse gas regulation, dimethyl sulfide production affecting cloud
formation.
Disturbance regulation Storm protection, flood control, drought recovery and other aspects of
habitat response to environmental variability mainly controlled by
vegetation structure.
Water regulation Provisioning of water for agriculture (e.g. irrigation) or industrial (e.g.
milling) processes or transportation.
Water supply Provision of water by watersheds, reservoirs and aquifers.
Soil formation Weathering of rock and the accumulation of organic material.
Nutrient cycling Nitrogen fixation, nitrogen, phosphorous and other elemental or nutrient
cycles.
Waste treatment Waste treatment, pollution control, and detoxification.
Pollination Provision of pollinators for the reproduction of plant populations.
Biological control Keystone predator control of prey species, reduction of herbivory (plant
eating by insects) by top predators.
Food production Production of fish, game, crops, nuts, fruits etc. by hunting, gathering,
subsistence farming or fishing.
Raw materials Production of lumber, fuel or fodder.
Genetic resources Medicine, products for materials science, genes for resistance to plant
pathogens and crop pests, ornamental species (pets and horticultural
varieties of plants).
Recreation Eco-tourism, sport fishing and other outdoor recreational activities.
Cultural Aesthetic, artistic, education, spiritual and/or scientific values of
ecosystems.

33. 33
Welcome to the Anthropocene
http://vimeo.com/39048998

35. 35
The ecological footprint concept
• How many planets would
we need if everyone lived
like you?
http://www.myfootprint.org

36. 36
Worldwide, there
exists about 1.9
biologically
productive global
hectares per person
Image source: www.adbusters.org

37. 37
At what stage do you think humankind will outstrip
its supply of biologically productive hectares?
A. 2010
B. 2020
C. 2050
D. 2100
E. No answer

38. 38
38
Image source: http://www.footprintnetwork.org/

39. 39
Image source: http://www.footprintnetwork.org/

41. Paul Gilding

44. 44
Source: nationaljournal.tumblr.com

45. 45

46. 46

47. 47
New colours on the temperature map

48. 48
The Stern Review, October 2006
• On climate
change:
“The greatest
market failure the
world has ever
seen”
Sir Nicholas Stern

49. 49
IPCC Fourth Assessment Report
February, 2007:
Evidence of Human-
caused Global Warming
is ... “Unequivocal”

50. 50
November 2012:
The 10 warmest
Novembers have occurred
in the past 12 years, and
November 2012 was the
36th consecutive November
and 333rd consecutive
month with global
temperature higher than the
20th century average.
Source: The National Oceanic and
Atmospheric Administration
(NOAA) of the US Department of
Commerce

51. 51

52. 52
James L. Powell reviewed 13,950 peer-reviewed papers published between
January 1991 and early November 2012, and only 24 (0.17%) clearly reject global
warming or endorse a cause other than CO2 emissions for observed warming.

53. 53

54. 54

55. 55
2005: CO2 = 379ppm

56. 56
350.org

57. 57
Source: http://www.21school.ox.ac.uk/news/archive/200702_inaugural_lecture.cfm

58. 58
Source: http://www.21school.ox.ac.uk/news/archive/200702_inaugural_lecture.cfm

59. 59
1928
2004
Upsala Glacier, Argentina

60. 60
Blomstrandbreen Glacier, Norway
1922

61. 61
Blomstrandbreen Glacier, Norway
2002

62. 62
The Imja Glacier, Himalayas

63. 63
The Imja Glacier, Himalayas

64. 64
Southeastern China, February 2011
Anhui Province, China, August 2006

65. 65
Floods in Southern China, June 2011,
Floods in Southern China, June 2011,
550,000 left homeless
550,000 left homeless

66. 66
Forced migrations
• UN study estimates that there were
50 million environmental
refugees around the world in 2010
• Same study estimates that as many as
100 million people live in areas that
are below sea level or liable to storm
surge

67. 67

68. 68
• 1 metre sea
level rise will
inundate
more than 15
percent of
Bangladesh,
displacing
more than 13
million people

69. 69
Annual carbon dioxide emissions
• Bangladesh: 172kg per capita
• United States: 21 tonnes per capita

70. 70
China
Image source: http://www.footprintnetwork.org/

71. 71
71
John Howard refused to sign Kyoto

72. 72
Kevin Rudd signed on his first day
in office

73. 73
Julia Gillard’s government introduced a
carbon tax in July 2012

74. Case Study:
Envisioning the future

75. 75
75

76. 76
The future
• If you don't know where you're going, you
end up somewhere else
• We have to decide where we want to go,
and balance that with where it is possible
to go

77. 77
Envisioning
• The processes of envisioning and goal setting are
extremely important
• They are also very underdeveloped skills in our
society!
• In order to effectively envision, it is necessary to
focus on what one really wants, not what one will
settle for.

78. 78
For example:
Really want Settle for
• Self-esteem • Fancy car
• Serenity • Drugs
• Health • Medicine
• Human happiness • Higher GDP
• Permanent prosperity • Unsustainable growth

79. 79
Two world views
Technological optimist Technological sceptic
• Technical progress can deal • Technical progress is limited and
with any future challenge ecological carrying capacity must be
• Competition preserved
• Linear systems with no • Cooperation
discontinuities or • Complex, nonlinear systems with
irreversibilities discontinuities and irreversibilities
• Humans dominant over • Humans in partnership with nature
nature • Partnership with others
• Everybody for themselves • Market as servant of larger goals
• Market as guiding principle

80. 80
Four visions of the future
Real state of world
Optimists right Sceptics right
? ?
Technological
optimist
World view
? ?
Technological
sceptic

81. 81
Dystopian ‘Mad Max’ world?

82. 82
Alternative ‘Star Trek’ world?

83. 83
Controlled ‘Big Brother’ world?

84. 84
Ecotopian world?

85. 85
Four visions of the future
Real state of world
Optimists right Sceptics right
Technological
optimist
Star Trek Mad Max
World view
Technological
sceptic
Big Brother Ecotopia

86. 86
Watch archive footage in 2055

87. 87
Trace the events back to 2013
from 2055 … what happened?
• Sketch out one of the four visions of the future
• Reflect upon the various initiatives that might, or might
not have been taken, and the prospective consequences
• Prepare a 10-12 minute presentation