Principles of Sustainability?

These notes are provided as a counterpoint to the main course text provided for AES8021: 
Dresner, S - The Principles of Sustainability, Earthscan, 2002.

1.    WHAT DOES "SUSTAINABLE DEVELOPMENT" MEAN (Chapter 5)?
Dresner makes some key points under this question, especially that the phrase has had some obvious resonance, and thus salience within otherwise rather naked commercial or old-fashioned policy circles, and has raised environmental concerns at least up, if not to the top of policy agendas both nationally and internationally.  Furthermore, it is clear that Sustainable Development is a contestable phrase and concept - there are many different meanings one can ascribe to the phrase. At root, these meanings are about social values, as Dresner quite rightly says.

However, it is a severe over-simplification to assert that policy "in the modern world is economics" (p63).  Much of the policy pursued in the modern world has little to do with economics, and much more to do with naked commercialism and mercantilism (protection of established producer interests) - which is exactly counter to the thrust of economics. Witness the arguments about trade liberalisation, which economics says will make consumers (households) better off, even if it damages existing producer interests in the short term.  It is easy to confuse economics with commerce, but it does not help to do so.  Economics is about making logical choices on well stated and logical premises - policies are the result of practical political choices on (frequently) well disguised and often confused premises.

It is also seriously questionable that "sustainable development" can mean what anyone wants it to mean - "you can claim anything to be sustainable development" (p 63). Slavery?  Fascism? Genocide? If you are willing to judge these sustainable, I will have to reconsider my willingness to respect your opinions and arguments on this subject.  There are sensible boundaries to the meaningful concepts of both sustainable and development, even if these boundaries are difficult to define in a commonly acceptable manner. It is counter-productive to suggest that the phrase is simply a facade behind which the usual suspects can continue their anti-social and amoral hegemony over the world. For the most part, these charlatans (whoever they are) have been obliged to sign up to the concept of sustainable development - it is up to us to expose their mendacity as and when they do not live up to their rhetoric - by not buying their products, and not voting for them, and by exposing their arguments as ridiculous them at every opportunity.

Is development necessary? Why not simply stop pursuing growth (as a synonym for 'development')?  After all, there is no evidence that economic development makes people happier. Our rampant consumer society, complete with its rat-race aspirations, is the root cause of the problem.  Well, maybe,  on a different planet.  Happiness is clearly both relative and also frequently virtual (as opposed to real) - how content are we with our present lot compared with what we imagine it might or could be like?
Meanwhile, let me know when you find a working majority willing to put their money where their mouths are when they agree with proposition, and I will applaud and even praise the lord.  Until then, I will continue to try and deal with the real world, in which continued development is necessary, but not sufficient, to pursue a more sustainable set of processes. 
This is NOT to say that we should not remember the seven deadly sins: sloth, greed, envy, lust, pride, gluttony and anger; or that we should not try and design and promote social institutions (as rules and codes of behaviour) which discourage these sins - long recognised as ultimately foolish behaviours (however apparently justified some may be in the instant).  By the same token, we would be wise to encourage behaviours which are traditionally regarded as virtuous: faith, hope, charity, prudence, temperance, fortitude and justice - long recognised as being wise courses for the continued survival and replication of human (as opposed to animal) life. 
By any measure, our current pursuits of development leave much to be desired, and thus much to be done to improve them, and the institutions which we use to develop ourselves.  You are important people in this pursuit - it would not be wise of you simply to decry the real world as an unfit place in which to live without trying to do something useful about it. You would be wise to try and practice humility, diligence, liberality and patience while you do so (which, I freely admit, I do not always manage).
Meanwhile, also, you should consider the arguments of someone who is conspicuously absent from Dresner's bibliography:  Fred Hirsch (a British Economist): The Social Limits to Growth (Harvard University Press, 1976).  Writing in the immediate aftermath of the Club of Rome's Limits to Growth, which he dismissed as nonsense (in common with most other serious modelers of the human condition). He argued that continued pursuit of material possessions as a route to happiness will eventually be confounded by the 'if everyone stands up, no one sees any better' syndrome.  Many of our present material pursuits are for 'positional' goods - those whose value derives from their rarity, and the fact that very few other people have them.  Clearly, we cannot all have these - if we did, they would lose their value completely. This pursuit of positional goods is clearly self-defeating.
However, unremarked by Hirsch, it is perhaps understandable as an instinctive (animal) reaction - ideal feeding positions, for instance, are clearly of considerable survival benefit, and are occupied by those individuals at the top of the heap in the animal kingdom, and fought over jealously.  More purposefully careful humans might be expected to behave differently, and perhaps will eventually learn how to - by differentiating themselves from their fellows in different ways - bespoke lifestyles rather than status lifestyles perhaps. Just because the last 200 years or so have been characterised by mass production, and the consequent attraction of positional goods as differentiators, does not mean that this is the final climax condition of the modern human.
"Much of what is conventionally called 'development' is really about joining a rat race of meaningless additional consumption" (p 74)  Well, maybe, but where does this get us?  The only course, then, is to convince those who have not got as much as we think we need that they do not really need as much as we have - go and try it, and let me know how you get on!
Happiness and economic growth:
For an economic assessment of the pursuit of happiness and its implications for policy, see Layard, 2006, "Happiness and Public Policy: a Challenge to the Profession", Economic Journal, 116 (March)" "The most obvious explanations come from three standard findings of the new psychology of happiness:
First, a person’s happiness is negatively affected by the incomes of others (a negative externality).
Second, a person’s happiness adapts quite rapidly to higher levels of income (a phenomenon of addiction).
Third, our tastes are not given – the happiness we get from what we have is largely culturally determined."

Check out the World Values Survey site for cross time and country comparisons: (Fig LHS from World Values Survey - collection of graphs representing WVS data. - RHS from World Bank Global Monitoring Report, 2010. (The Global Monitoring Report series, produced by the World Bank and the International Monetary Fund, focuses on how the world is doing in implementing the policies and actions for achieving the Millennium Development Goals (MDGs) and related development outcomes. The reports are a framework for accountability in global development policy.)
Happiness and GDP/hd.on the other hand






Notice, however, that the correlation between Life Satisfaction and GDP (lhs above) is represented as linear - $1000 extra income (GDP/hd) would not be expected to generate the same increase in life satisfaction for someone (country) who already has $25,000 as for someone (country) who only has $5,000.  "All this chart realy shows is that an extra dollar is worth less to the rich than to the poor. The interesting question is whether the same percentage increase in income means as much to a rich country as to a poor one."  (Economist, 27.11.10: The Joyless or the Jobless)
Happiness

See, also:  OECD, European Commission and others:  Beyond GDP: Measuring Progress, true wealth and the wellbeing of nations,
and also the Commission on the Measurement of Economic Performance and Social Progress.  and their recent (2009) report. "The Commission’s aim has been to identify the limits of GDP as an indicator of economic performance and social progress, including the problems with its measurement, to consider what additional information might be required for the production of more relevant indicators of social progress, to assess the feasibility of alternative measurement tools, and to discuss how to present the statistical information in an appropriate way. ...Policies should be aimed at increasing societal welfare, not GDP. Choices between promoting GDP and protecting the environment may be false choices, once environmental degradation is appropriately included in our measurement of economic performance. This report, building on extensive earlier work, describes the additions and subtractions that can and should be made to provide a better measure of welfare."

See, also, the New Economics Foundation: Happy Planet Index, 2009. "The Happy Planet Index (HPI) provides that compass by measuring what truly matters to us - our well-being in terms of long, happy and meaningful lives - and what matters to the planet - our rate of resource consumption. The HPI brings them together in a unique form which captures the ecological efficiency with which we are achieving good lives.  This report presents results from the second global HPI. It shows that we are still far from achieving sustainable well-being, and puts forward a vision of what we need to do to get there."  A recent poll (2012) suggests that GDP/hd. is not a good predictor of (self-reported) happiness, which is hardly a surprise, is it? 'Finally', see Graham, 2005, World Economics, which examines "the gap between economists’ assessments of the aggregate benefits of the globalization process and the more pessimistic assessments that are typical of the general public. The paper summarizes research on some of these questions, and in particular on those relevant to globalization, poverty, and inequality."

What makes us happy?

Dan Gilbert (author of "Stumbling on Happiness") - The Surprising Science of Happiness. challenges the idea that we’ll be miserable if we don’t get what we want. Our "psychological immune system" lets us feel truly happy even when things don’t go as planned. In the same way that optical illusions fool our eyes -- and fool everyone's eyes in the same way -- Gilbert argues that our brains systematically misjudge what will make us happy - our experience simulators frequently get things wrong - the Impact Bias - tendency to (substantially) overestimate the hedoninc impact of future events. And these quirks in our cognition make humans very poor predictors of our own bliss, but enable us to synthesise our own happiness - how we 'rationalise' our actual condition, our actual choices (which we then pre-suppose are the right ones (sometimes - see Schwartz below)). Freedom to choose helps 'actual' happiness, but really hurts synthetic happiness - we find a way to be happy with what we cannot change (and conversely - Schwartz below - be less happy if we can change things).
- and a set of 8 other related mini-lectures on What Makes us Happy? including
Malcolm Gladwell (author of "Tipping Point") : Choice, happiness and spaghetti sauce.  - people can't tell you what they want, until and unless you give them a choice (Henry Ford - as people what they want, and they will tell you a faster horse; and also people won't necessarily admit to what they really like) - there is no single recipe to please all the people all the time - no universals - people are different, and have (identifiably different) tastes (and cultures?) - diversity is the key to happiness.
Mihaly Csikszentmihalyi: Flow, the secret to happiness - creativity is a central source of meaning in our lives. A leading researcher in positive psychology, he has devoted his life to studying what makes people truly happy: "When we are involved in [creativity], we feel that we are living more fully than during the rest of life." He is the architect of the notion of "flow" -- the creative moment when a person is completely involved in an activity for its own sake.
Michael Norton:  How to buy happiness - money can, indeed buy happiness -- when you don't spend it on yourself. Listen for surprising data on the many ways pro-social spending can benefit you, your work, and (of course) other people - positively encouraging philanthropy might be a genuine Pareto Improvement (nobody loses)?
Barry Schwartz: The paradox of choice - choice has made us not freer but more paralyzed, not happier but more dissatisfied - choice is not the same thing as freedom. Too much choice leads to -unreasonably high expectations, question our choices before we even make them and blame our failures entirely on ourselves (with every choice available, there is no rational justification for failure - other than you - the peculiar and specific problem of modern affluence) - Income redistribution makes everyone better off.
Graham Hill: Less stuff, more happiness
Matthieu Ricard: The habits of happiness - Biochemist turned Buddhist monk Matthieu Ricard says we can train our minds in habits of well-being, to generate a true sense of serenity and fulfillment.
Daniel Kahneman: The riddle of experience vs. memory - our "experiencing selves" and our "remembering selves" perceive happiness differently - being happy in your life is different from being happy with your life - and it is the remembering self which makes decisions (which thinks of the future as a set of anticipated memories). This new insight has profound implications for economics, public policy -- and our own self-awareness. Happiness is NOT a substitute for well-being.
Ron Gutman: The hidden power of smiling

Meanwhile, lest we forget how much progress has been made, consider our recent history  Gapminder World..
2.   WHAT DOES ECONOMICS SAY ABOUT SUSTAINABILITY? (Chapter 6)
The conclusion of this chapter is that a root difference between economists and environmentalists about sustainability is about the "trade-off between growth and equality.  The environmental space argument allows environmentalists to put forward the view that one price of inequality is environmental destruction" (p107).  There are several points raised here:
How does society deal with inequity? Either charity, or compulsory redistribution from the rich to the poor.  Is either likely, unless everyone is already becoming better off? Should redistribution be towards those in greatest need, or towards those who would benefit most (the triage principle employed by medics at an emergency)?
Would or do the poor use scarce resources more efficiently, or more sustainably, than the rich? In spite of the fact that the rich do more consuming, the answer is not always obvious - the rich can also afford to more conserving of environments; as everyone becomes richer, it pays better to take a more conserving and sustainable attitude to production processes.  Both energy and raw material use per $ of GDP are falling, and falling more quickly in the richer countries of the world, even though GDP is still rising.  It is very far from clear that more inequality necessarily leads to more environmental destruction.  Indeed, it is possible that at some levels more inequality would actually reduce environmental destruction, since ownership of the worlds' resources would become more concentrated, and the wealthy might take more care to protect what they have.
Conventional measure of optimality fails (to count capital consumption) against income (p78) - this is incorrect - it is the key difference between measures of Gross Product and Net Product - the later allowing for capital depreciation.  Of course, it turns out to be difficult to measure natural capital and its depreciation - and this is not done as well as it could be. However, this is simply a reflection of the fact that natural resources are not properly valued by most markets, and rely on collective valuations (see notes).
In the real world, it is not possible to do the careful optimisation calculations using shadow prices (p 80) demonstrates a fundamental misconception of how economies work. People do the best they can in the circumstances in which they find themselves.  The net result of these trials and errors is that people end up effectively optimising their lives - no one seriously suggests that people (other than a few extreme economists, perhaps) actually go through the formal optimising procedures, any more than an earthworm does - but the net result is that economies, like ecologies, make the best possible use of the surrounding (social) environment and (political) climate.  Blaming economics for producing systems which are unsustainable is like blaming the dinosaurs for being wiped out.  They were wiped out because they did not get the necessary signals from their environment that it was fundamentally susceptible to catastrophe - the major difference between them and us is that we are supposed to be sensible enough to take more care - to provide the appropriate signals about the fragility of the environment, and thus to be able to do something sensible about it.
There are some things you cannot put a money value on (p 80).  This is a very common assertion, especially from deep environmentalists.  What does it actually mean?  If anything, it means that there are some things that are so important that we should move earth (and heaven) to preserve - in other words, there are some things which are so valuable that any cost (what ever it is) is worth paying for them. More often, the assertion means that we have a right to expect society to deliver the thing, and should not have to pay for it. So, if this thing takes resources, time and effort to deliver and sustain, who does this (for nothing)? If we have to give something else up to get this thing, then it has a value at least as great as what we have to give up. Remember Warren Buffet's definitions of 'price' and 'value':  Price is what you have to pay, Value is what you get.
Sound environmental policy making can operate only in an atmosphere of participation and democracy (p 80). We should, in other words, be governed by other peoples' opinions?  We need a much more complete account of how social decisions are reached through the democratic processes to be able to judge the value of this assertion.  However, such an account is not available.  If you want to pursue what we think we do know about these processes - check out the phrase "Public Choice".  In addition to this page - one of many - useful texts include:
Heap, S. H. et al., The theory of Choice, Blackwell, 1992
Margolis, H., Selfishness, Altruism and Rationality, University of Chicago Press, 1982;
van den Doel, H. and van Velthoven, B, Democracy and Welfare Economics, Cambridge UP, 1993;
Phelps, E.S., Political Economy, an Introductory Text, WW Norton, 1985
It is very far from clear that any form of democracy can be relied upon to generate sensible, coherent and sustainable collective (public) decisions.  Whatever you may think of the state of economics, the state of political science is in at least as much trouble, if not more, as far as throwing any serious light on these important questions is concerned.
Principles of Sustainability (Daly) (p83)?
OK, but what is the carrying capacity and how do we tell, and still further, agree on it? And, when we have achieved that, how do we implement our solutions?  This statement merely by-passes all the difficult questions.
What, exactly, does this apparently reasonable statement actually mean?
Technical change figureAs this market diagram illustrates, when we innovate, and generate technical change, we actually SHIFT supply curves of products so that we can have more of the product or service at the same price as before, or the same quantity at a lower price.  Which we actually choose to have depends on our demands for this product or service, not on the supply shift (the technical change).  Furthermore, the incentive to innovate depends on the relative prices we experience for the inputs and for the products, which again are determined to a considerable extent by the demand for goods and services.
Again, perfectly reasonable at face value, but the actual analysis is rather more complicated than this - see, for example, Pearce and Turner, Economics of Natural Resources and the Environment, Harvester Wheatsheaf, 1990, chapter 16, where our most economical harvesting rate depends critically on the rate at which we choose to discount the future, and also on who is considered to own the renewable resource stock - the property rights of the stock (see notes).  As far as waste emissions (pollution) is concerned - this again is more complicated, and depends critically on the values we attach to the polluted environment versus the benefits we think we get from the polluting activity (see, e.g. Pearce and Turner, Chapters 4, 5 and 6).
Once again, this seems to make superficial sense, until one thinks a little more about it. Substitutes are unlikely to be created until we feel we have the need for them, which is likely to be only when the value of the non-renewable resource reaches such a level as to encourage the development of substitutes.

Eco-taxes? (p92ff.) Exactly - put a realistic price on the bits of the environment we want to preserve, and then see how society finds ways of economising on their use and developing alternatives.  But this is NOT the same thing as strong sustainability, for which (contrary to the assertion in Dresner, p. 84) the case is not made.

The conclusion of this chapter is about the trade-off between efficiency and equity.  However, implicit in the arguments presented here is also the fundamental point of how we, as societies, value our environments - if we do not value them highly, we will end up abusing them.  If we value them extremely highly, we will end up preserving them and conserving them.  So, to Chapter 7

3.   CAN WE VALUE THE PLANET (OR ITS RESOURCES)? (Chapter 7)
The short answer to this question is Yes - we do so, implicitly, every time we make a choice - what we choose to do is necessarily what we value more than the alternatives available.  If there is no alternative, then there is no choice.  It is our choice systems which we need to examine if we do not like the outcomes we are currently experiencing.
A cynic is someone who knows the price of everything and the value of nothing [= an economist?] - See Warren Buffet above - price is what we have to pay, value is what we get.
If you don't value it, are you likely to look after it?  If you treat it as if it were free, won't you waste and abuse it?  If the price is NOT a good indication of the true value of something, then the sensible question to ask is: why not?  To seek refuge in the platitude that some things are beyond value and beyond price is to ask the question about how, then, we are supposed to make decisions about them?  According to moral or ethical judgments?  Whose and on what basis?  Is your recipe for success dependent on a second coming - a religious (with a small r) conversion of the planet's population?  Oscar Wilde also said: Truth is rarely pure and never simple. 
Cost Benefit analysis (p 119f) is simply a short-hand expression suggesting that we should carefully weigh the pros and cons before we do anything - how we attach weights to the pros and cons matters a lot, of course, and CBA tries to assess the social values and costs of things, rather than their private (current market) values.  Of course, it uses money as the measuring rod - what else do you suggest we try and use?  How else are we to make the trade-offs and relative rankings of different things (apples and oranges, clean rivers and human lives)?  To pretend that we ought not to have to make these choices is to side-step the real problems and issues of managing with our planet. So, what ought we to do?

4.   WHAT ARE THE ETHICS & MORALS OF SUSTAINABILITY? (Chapter 8)
This chapter turns to the normative questions of sustainability - what ought we to do, rather than the positive questions of what do we do and will we do?  How should we treat the questions of distributing well being, sacrifice and risk between the rich and the poor, and between now and future?  Much of the chapter is taken up with contrasting Rawls theory of justice (as a modern version of the contractual (contractarian) approach to moral behaviour (as a social contract of behaviour) with the utilitarian approach (the greatest good to the greatest number) said to underlie economics.

Is Utilitarianism - the individual (and usually selfish) pursuit of happiness) - really the foundation of economics?  I argue very strongly that it is not - the confusion arises because maximising (optimising) utility (roughly, happiness) just happens to be a convenient way of formalising the outcomes of an evolutionary process - the continual pursuit of better fits with (political and social) environments - as a constrained optimisation problem. To imagine that economics necessarily implies that this is what people both do and should do is to confuse the replica with the original.  Humans, behaving as economical people, no more pursue happiness than do the plants of the field or the birds of the air.

Economics is, I argue, no more than a formal exposition of the principles of survival of the fittest - with the important addition that people are the authors of their own misfortunes - meaning, in this case, that we need to take care that our economies are at least economically sustainable. For that, we need the usual tools of macroeconomic management - to balance the flows of spending and income so that they balance, and to preserve the value of the currency - and also the state to enforce laws of contract etc.

Consider the welfare-economic criterion employed by cost-benefit analysis - the Pareto Criterion: does the change being analysed cause at least one person to be worse off, while making no one better off - if so, then the change is judged to be inferior to the status quo. A change can only be judged superior if it makes at least one person better off, without making any one else worse off. In this way, this criterion seems to avoid any value-judgement about who is worthy and who is not.

Of course, we are seldom, if ever, faced with such a simple choice - our choices nearly always involve making some people better off at the expense of making others worse off.  How, then, does CBA (or any other sort of economic welfare analysis) reach a conclusion about the preferred course of action?
Economists invoke the compensation principle.  The usual (and misguided) version of this is:  If the total gains outweigh the total losses, then the change is judged to be worthwhile.  This is misguided, since it sneaks a value judgment into the supposedly positivist (and value-free) choice. A better (as well as being a more politically viable) principle is to add the rider that the policy (strategy) of actually compensating the losers should also be included in the principle:  Not only should compensation be possible, it should actually be carried out - so that the final change does not make anyone worse off.  Unless we do this, we run the substantial risk that our policy suggestions will be ignored.

However, even if we use this actual compensation principle, we still have a problem. Adding up the costs and benefits requires that some assumption is made about the value of money to each affected group.  The common presumption (frequently made without proper thought) is that $1 is the same value to everyone - which keeps things very simple, but almost certainly wrong (Wilde's second quote above). Once this is recognised, a possible solution is obvious. Society needs to decide how much more valuable $1 is to the poor versus the rich, to the present generations versus the future generations (which is what Stern did in his assessment of the costs and benefits of climate change).  This is our choice - as a human race, and we have to live with the consequences. There is no avoiding this value judgment.

As I think should be obvious, this compensation principle is actually very close to the ideas of Rawls contractual approach.  The supposed contrast between the two approaches as drawn by Dresner is more in the eye of the beholder than in fact.

This leaves us with the serious problem of how to develop social transactions and governance systems capable of making this judgment to everyones' satisfaction.  This problem is simply not amenable to rules - which occupies most of Dresner's discussion.  It requires processes capable of adapting and innovating in response to conflicts and pressures from the social environment and political climate.  Dresner's apparent favour of the precautionary principle and strong sustainability amounts to saying that we have no real idea of what it is that we do, so we should do as little as possible to disturb the status quo.  This is obviously untenable. So we move to the final chapter - the Future.
5.   SO WHAT SHOULD WE DO? (Chapter 9)
"Sustainability is trapped between the reflexivity of the world (which got us into this mess) and the need to be able to transform and control the direction of human society, which reflexivity implies is impossible.  There does not appear to be a satisfactory answer to this conundrum." (p 140).  Quite so - and we should not expect to find the answer by trawling through recent and current thoughts about political systems - since it is these very systems which are to blame for the current mess.  We are missing some important systems, which we need to cultivate. The systems we are dealing with are complex - they are far-from-equilibrium, they generate emergent properties which are not deducible or even explainable with reference only to their constituent parts, they are inherently unpredictable, and hence cannot be managed - they can only be managed with (cultivated). See here for one possible route to exploring our social interactions.

Meanwhile, for another critique of the sustainability focus, from a leading thinker in economics (Dan Bromley) see his paper to the International Association of Agricultural Economists in Durban, 2003: "The poverty of sustainability - rescuing economics from platitudes".

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