Key Learning Points from the book
THE CONSTANT ECONOMY
BY ZAC GOLDSMITH

The case for change
We consume way beyond our means, roughly three times beyond our means but that doesn’t mean we must live lives that are three times poorer. It means we should demand food that has travelled shorter distances, less packaging for goods and products that will actually last.
A UN study of 2005 states that over the past fifty years, humans have changed eco-systems more rapidly and extensively than in any comparable period of time in human history, largely to meet rapidly growing demands for food, fresh water, timber, fiber and fuel. This has resulted in a substantial and largely irreversible loss of diversity of life on earth. Between 1970 and 2003, the population of land species declined by nearly a third and populations of tropical species declined by more than a half. In the past thirty years, humanity has destroyed almost half the planet’s original forests.
Our water consumption globally is growing at twice the rate of our population. Environmental refugees now outnumber conflict refugees.
The global economy does a very good job of hiding its consequences. It is a hugely effective system for delivering wealth, but it grows at the expense of the natural world; its fresh water, forests, hydrocarbons, fisheries and farmland. The effect is that almost none of the wealth it creates can be transferred to our children.
If everyone on Earth consumed the same resources as the citizens of UK, it would need three planets to support us and likewise five planets if it was the same as US. If population doubles in forty years, as predicted, and people everywhere consumed as we do today, we would need to increase the level at which we exploit the natural world by a factor of sixteen.
A fifth of the world’s people consume roughly four-fifths of the world’s resources. 80% of malnourished children live in countries whose food base has been redirected towards intensive agriculture for export.
How to make it possible ?
Virtually everyone of us values the natural environment.The trouble is – green choices cost more. The challenge is to make it possible for everyone – not just the wealthy- to make green choices and to save money doing it. And that requires government leadership.
Our tendency typically is to do nothing, to let the situation drift and hope that someone else takes the risk.
Our defining challenge is to marry the environment with the market. In other words, we need to reform those elements of our economy that encourage us to damage, rather than nurture the natural environment.The great strength of the market is its unique ability to meet the economic needs of its citizens. Its weakness is that it is blind to the value of the environment. Unrestrained, we will fish until the seas are exhausted, drill until there is no more oil and pollute until the planet is destroyed.
People do not trust governments, so its crucial that whatever money is raised on the back of taxing ‘bad’ activities is used to subsidize desirable activities.
GDP stands for GROSSLY DISTORTED PICTURE. Chopping down a rain-forest and turning it into toilet paper increases GDP. IF crime escalates, then the resulting investment in prisons and courts will add to GDP.GDP can only add, it unfortunately cant subtract. We should have a more comprehensive measure of welfare.
The most effective tool available to government is taxation. Green taxation doesn’t mean extra taxation. It means shifting the burden away from taxing good things like employment, and towards pollution, waste and the use of scarce resources.
The precautionary principle when it comes to science
We should adopt a precautionary principle related to science ( like the case of Genetically modified (GM) foods). New scientific products should be seen as guilty unless proven innocent. With the use of nanotechnology and bio-technology, GM plants with leaves as efficient as solar cells could out-compete real plants crowding the bio-sphere with an inedible foliage. Tough omnivorous bacteria could out-compete real bacteria and they could spread like blowing pollen and reduce the bio-sphere to dust in a matter of days.
There is a tremendous upsurge in children’s use of chemicals through food,cosmetics, toys, plastic food containers etc. Some of these chemicals mimic the effects of oestrogen which leads to ‘precocious puberty’. The rarity of cancer among native man suggests that the disease is primarily induced by the conditions and the methods of living which typify pur modern civilization.
Food quality, Food security
We are effectively banking everything on the assumption that a) we will always be able to pay for the food we need b) that the world’s breadbaskets will always be able to provide it and c) that cheap oil will always be available to distribute it.
Small scale diverse farms may be less productive per unit of labour (they are more labour intensive) but they have long been proven to be more productive per unit of land.
A 2007 review of this same data found that organic production methods increased yields in subsistence agriculture by 80 percent. It concluded that if world agriculture went organic, overall food production would increase.
Faced with enormous problems – population growth, food shortages, erosion and water depletion – its far easier for decision-makers to pin their hopes on a future technology than it is to tackle these problems systematically. Its easier to imagine a magic bullet than to consider a wholesale shift in the global food system, even if that is what is required.
Children need to know about food, where it comes from, how it is produced. Every school should include food-growing in their curriculum.
Connectedness to the land also binds families together.
Pesticide manufacturers pass on the costs of cleaning up pesticides to farmers who in turn pass it on to water companies, who in turn pass it on to us consumers via water bills. Polluters get a hidden subsidy from anyone who pays a water bill. The non-polluter – the organic farmer gets no such subsidy. So when we talk of ‘cheap food’ vis-à-vis the organic food, it is worth remembering that more often than not, we have paid twice for it – through other taxes and over the counter.
According to New Economics foundation, money spent on locally produced food generates twice as much income for the local economy as the same amount spent in a typical supermarket.
Farmers discovered that by using antibiotics on their animals, they could massively increase their stock, and keep them in conditions that would normally have killed them. Animals could be brought in from the fields and cramped together on concrete floors, in airless rooms. Breeds could be developed that produce unnaturally high yields – chickens for instance, that fatten in just seven weeks instead of twelve. But the routine use of anti-biotics to accelerate growth and to keep animals alive in appalling conditions has led to a rapid spread of antibiotic resistance among harmful bacteria. When bacteria are exposed to antibiotics, many die, but some genetically mutate and develop resistance. As the drugs become stronger, so too does the resistance, until eventually super-bugs emerge that are virtually unstoppable. We are literally squandering the most important medical advance of all time (antibiotic) and all for short-term profit.
The industrial food system has fed more people than ever before, but fed many of them badly – and destroyed much of the environment in the process. It has also brought huge vulnerability. A small, mixed farm was nation’s insurance against catastrophic change. Once plants and animal were raised together on the same farm they therefore neither produced unmanageable surpluses of manure to pollute the water supply, nor depended on such quantities of commercial fertilizer. We have taken a solution and divided it into two problems. The politicians have traded the small, mixed farm for international competitiveness.
Saving our seas
Wilderness is the bank on which all checks are drawn. The woes of the fisheries is due to the industrial fishing activities. Money flowed into the construction of so-called draggers each one as big as a football pitch, weighed down with chains that dredged along the ocean floor, destroying everything in their path. They trapped whole shoals of fish, including the young and the inedible, and disrupted the ocean system. Between 70 and 80 percent of the world’s marine fish stocks are either fully exploited, over-exploited, depleted or recovering from depletion. The more carbon dioxide we release into the atmosphere, the more is absorbed into the oceans which are becoming increasingly acidic as a result. The destruction of our marine environment is more than an environmental issue. About 200 million people depend directly on the fishing industry. For more than a billion people, fish is their primary source of protein.
Our insatiable appetite for sea-food, coupled with the brutal efficiency of our industrial fishing technologies,have wreaked havoc. But above all, it has been a combination of government weakness, industrial greed and a scientific community lacking the courage to sound the alarm that has resulted in one of the greatest ecological tragedies of our time. So-called ‘ghost bets’ – vast nets that have been lost or abandoned by fishing vessels – also drift through the oceans catching fish indiscriminately and causing havoc wherever they go.Also , industrial fishing generates about 25 million tonnes of unwanted ‘by-catch’ every year. These unwanted fish are simply dumped overboard, dead or dying. For every pound of wild-caught shrimp, at least ten pounds of other sea life is wasted in this way.
Despite these horror stories, the good news is that it is possible to avoid catastrophe. Science and experience tell us there is still time. The oceans have a remarkable ability to recover when the pressure is eased.
Fish farming or aquaculture is already a major source of food for the planet’s population; it is also big business. But fish farming is intimately connected with the future of ocean fish stocks. Farming carnivorous fish, for example, is dependent on the capture of wild-caught fish, many of which, such as the sand eel and blue whiting, have been in headlong decline. Salmon farmers, for example, need at least three pounds of wild-caught fish to produce one pound of salmon. Fish farms have also been implicated in the decline of wild salmon and sea trout stocks, particularly in the west of scotland, due to diseases that are rife amongst fish penned in so close together. Meanwhile, the chemicals used in aquaculture routinely contaminate surrounding waters.
By far the most effective measure would be to divide the sovereign waters into marine-protected areas. A minimum of 30% of the sea needs to completely off-limits to fishing if we are to reverse the decline.
Sustainability means drawing on the world’s interest, not its capital.
An Energy revolution
From 2020 onwards, on current projections, Britain is likely to be importing 80 percent of its energy. IF supplies are compromised owing to geological or geopolitical problems – its hard to imagine the upheaval that would follow.
Industrial motor systems account for 40 percent of a country’s electricity consumption. Including variable speed drives – which match electricity demand to the speed of the motor – can eliminate waste energy upto 60 per cent. Only two thirds of the energy originally generated reaches its intended recipient. The rest is lost through the lines or as waste heat from cooling towers. A fifth of a country’s emissions of carbon dioxide comes from the waste heat alone. The best power station of all is the one that is not built because there is no need for it. Most current generation capacity is located too far from consumer for waste heat to be used; switching to a decentralized energy system that could radically change this – particularly if combined heat and power (CHP) plants were implemented. Steady heat and power loads will improve the economics of CHP and so systems should be designed to allow a suitably sized engine to run at or near maximum capacity for as much of the day as possible.
In a CHP system, energy can be produced in the same way as conventional electricity, but the heat is retained for heating, hot water and cooling, and is distributed to customers via highly insulated pipes. Given that 83% of energy usage in home is for space and water heating, the potential to use CHP is vast.
The best way to move to community-level energy generation is to introduce a levy on the waste heat generated by centralized power-stations.
Ground soure heat pumps which transfer energy from the ground into buildings are by now the most common heating system in single-family houses in Sweden. We should reward home-owners who generate their own energy in such a way that their payback time is cut to a matter of years.
Germany leads the race in renewable energy and it generates 12 % of its electricity from renewables.
Coal is a very carbon-heavy and polluting form of energy releasing 29 percent more carbon dioxide than oil and 80 percent more than gas, on an average. Even the cleaner coal stations run at an efficiency of not more than 40% compared to 90% which is practicable in biomass and CHP plants. The main technological development that could ensure a future for coal in a genuinely low-carbon world is ‘Carbon capture and storage’ (CCS). CCS captures carbon from combustion and pipes it into geological formations or old oil and gas beds under the ocean. It’s a solution that its backers believe will cut emissions by 85%.
Whereas the private sector is best placed to deliver energy from a variety of sources, it is for the government to provide the grid. For example on our coasts, without investment in underwater cables, neither wave power nor offshore wind will flourish. Without a long network of pipes to carry the captured carbon, CCS wont be possible. Just as all power plants benefit from the national grid, without which they couldn’t distribute their product, so too will CCS plants require the infrastructure to be provided for them. This investment needs to be done partly from the huge subsidies the government gives to fossil fuel segment. Huge sums of public moneys are spent each year to prop up a form of energy generation that is wrecking the planet. Dismantling and re-allocation of these subsidies is a must because renewables cannot compete unless there is a level playing field.
During the discussion of energy security, Nuclear energy is like a red herring. It takes too long to come into effect.Renewable technologies like wind,tidal and solar all have shorter timescales for implementation than nuclear. A significant problem is the amount of nuclear waste and the vast sums it takes to clear that up. Also the security dangers with nuclear power are always there.
Transportation and Environment
Aviation is the fastest growing cause of greenhouse gas emissions. Over a 500 km trip, aircraft emit six times more greenhouse gases than high-speed trains and twelve times more than a coach. Economic necessity is often used to justify airport expansion. But there are holes in this argument, not least the fact that the costs of aviation are routinely ignored. The huge subsidies like tax-free fuel are not accounted for. Nor are the environmental and social costs included. It fails to account for the congestion and other disadvantages due to passenger journeys to and fro from the airport or the effect on quality of lives and house prices under the flight path. Taxing short-haul flights where rail alternatives already exist is therefore on such means of raising the necessary funds. And every penny of such funds should be invested in high-speed rail network.
The cost of running an electric car is anything between eight and sixteen times less than a conventional car, so for consumers the benefits are obvious. The challenge is to create a network of charging stations.
On paper, bio-fuels appears to make a lot of sense, but in reality, bio-fuels have proven to be an ecological disaster and on every level a totally unrealistic alternative to oil. The rush to bio-fuels has already had an impact on food prices. In a country where people spend just 5 percent of their income on food, a 10 percent rise in food prices isn’t necessarily a problem. But where people spend upto 40 percent on their food, such a hike is painful. Throughout the world, the tropical forests are being destroyed to grow palm oil to produce bio-fuels. Bio-fuels are rightly called the deforestation diesel. Now, second generation bio-fuels are coming into the market. They are fairly good. They use waste products like human sewage to produce oil.As such, they don’t displace habitat or food production.
Land use planning & Sustainable architecture
As we build new settlements and improve existing towns and cities, we should do so with a view to designing out car dependency.
We should also increasingly use tele-conferencing and avoid car travel. Remote working has its own benefits.
Improving public transport to a standard where it offers a genuinely attractive alternative to the reliability and comfort of a private car is non-negotiable. Without it, we cant expect people to make a switch.
President Obama has once rightly commented that : ‘Over the longer term, we know that the amount of fuel we will use is directly related to our land-use decisions and development patterns, much of which have been organized around the principle of cheap gasoline.
We now need to move to a world of well-designed neighborhoods which gives people access to the things they need – shops,schools,hospitals,offices – without dependence on the car. A poorly planned neighborhood is the one that increases car dependence and fosters isolation.
When we build on grassland, meadows and other porous, natural surfaces with asphalt and concrete, rainwater has nowhere to run, it builds up and begins to flood our cities, towns and villages.
We should also give tax breaks on sub-letting homes for paying guests. This will help ease construction and all the greenhouse gases it brings about directly or indirectly.
Around half of a country’s greenhouse gas emissions come from energy use in buildings. Domestic buildings are responsible for an estimated 27 percent of that, with a further 10 per cent coming from the manufacture of construction materials. We need to look at ways to improve efficiency in our existing homes.
Losing heat through walls should be done away with using effective insulation. If our homes were fitted with easy-to-read displays of their energy use and its cost, we would be able to monitor the effectiveness of our efficiency measures and see how using certain appliances consumes energy.
Through retro-fitting old homes, the use of new technology and higher building standards and planning, it is estimated we could trigger a 60 percent reduction in carbon dioxide from the housing sector itself by 2050.
The government should resist the tendency to micro-manage. Builders should be required to reach high standards of energy efficiency but they are not instructed as how to do it. We too need to move towards a system based on outcomes, not processes. If the regulatory system is turned on its head in this way, we’d see an explosion in innovation and a leap forward in standards.
The government should reward home-owners who pursue energy-efficient standards. If the manufacturers are given notice that standards are to rise, they will always manage to meet them.
There is no doubt that our weather patterns are becoming more volatile as a result of climate change. The increased likelihood of drought is a definite possibility.
A Zero-waste economy
A stretch starting from the North Pacific Gyre Seas on the way between Los Angeles and Hawaii is the world’s biggest rubbish dump. It is roughly twice the size of United States itself, a vast mass that stretches from about 500 miles off the Californian coast, across the Pacific almost as far as Japan. IT is the single largest body of pollution anywhere in the world and is believed to contain a hundred million tonnes of plastic, kept together by swirling underwater currents. IT is effectively a giant plastic continent. About one-fifth of its rubbish is thrown from ships. The rest comes from land.
Small pieces of plastic are mistaken as food by all types of fishes and at the top pf the food chain, the contamination end up in our own bodies. Roughly 70 percent will eventually sink to the bottom of the ocean, where it will join what has already become a mountain of toxic waste.This leads to vast ecological mayhem and extinction of species.
Every year UK alone throws 335 million tonnes of waste – an incomprehensibly large figure, which causes groundwater pollution, resource depletion and contributes to climate change at every stage of the process. All this waste goes onto landfills where the rotting rubbish releases noxious fumes and vast quantities of methane – the most destructive greenhouse gas, worse by far than carbon dioxide. When not dumped into Earth, our rubbishes piled into deeply unpopular incinerators and burned instead. We bury it, we burn it but we don’t recycle it. We first of all, generate waste in such a profligate way.
In Denmark, recycling is free and use of landfill very expensive. As a result, landfill has been cut by about a quarter. Just 3 percent of CopenHagen’s waste goes to landfill. This was achieved through a combination of schemes including the establishment of furniture recycling centers, composting and the consumer right to return unused products like paint to retailers. All bottles,paper,newsprint,cans,cardboard and 85 percent of building waste goes to recycling.
Plastic lasts for use for an average of 12 years and then spend 20,000 or more years in landfill releasing methane.
If people had the right to take any packaging waste back to the shop it was bought from, retailers would be obliged to deal with that waste directly. If the chains are required by law to deal with the mess, they’ll design their products more responsibly in the first place – or pass on the pressure to those who do.
The construction sector alone is responsible for three times more waste than all the households combined. The simple,blunt and most effective way of minimizing this waste is to make it financially unattractive to produce it in the first place – which is why a meaningful landfill tx would be a hugely effective instrument for change.
Conclusions
We need to find a way to encourage manufacturers to stop making things with built-in obsolescence. One solution is to introduce a levy on goods with an average life expectancy of 20 percent less than the product average.
It is because world governments signed up to the Montreal Protocol in 1989 that 90 percent of the global production of ozone-depleting substances like CFC’s has been phased out. However, HFC’s whose effects are between 100 and 3000 times that of Carbon Dioxide need to be phased out too.
Emissions trading (carbon trading) is effectively a transfer of wealth from polluters to non-polluters. However, emissions cap-and-trade system covers sectors which are responsible for 45% of greenhouse gas emissions. We should make it more comprehensive to include sectors like aviation and manufacture of aluminium and chemicals.
The world’s great tropical forests are one of the most remarkable features of our planet- critical for maintaining the health of the atmosphere,regulators of rainfall and fresh water around the world and home to an estimated 50 percent of planet’s species. The world’s forests, leaf litter and soil store roughly 50 percent more carbon than atmosphere. The trees of Amazon alone release 20 billion tonnes of nwater into the atmosphere.
Deforestation is a result of market failure that makes trees more valuable dead than alive. World governments should make preservation of rain-forests a financially attractive option for countries like Brazil which hold most of The Amazon. Using the carbon markets and direct governmental contributions are two ways to make this work. Rich countries however should not use cheap forest carbon credits to trade their way out of historical responsibility for greenhouse emissions
If pollution and the use of scarce resources becomes a financial liability, we will see the very DNA of businesses begin to change and a low-carbon economy will become inevitability.
How can it be right that we spend more money developing drugs to manage ‘precocious puberty’ and surgical skills to normalize sexual organs than we do preventing these deeply worrying things from happening?
The economy sees no value in nature until it is cashed in. It behaves as if it is nets, not healthy fisheries that provide us with fish, as if saws rather than forests provide timber. The danger is that we invest disproportionate hope in technology alone. No matter how advanced a technology, we will never be able to renew biological systems. We should temper our belief that there are no limits to our ingenuity.
We may invest billions in space exploration, but of all the problems in the world, not being able to walk on Mars isn’t top of most people’s list. We lack the sense and the discretion as to where to invest our time and resources in.
Hrishi
January 7, 2010Very nice bhavin. Nicely compiled