Russel Norman
The big question

Jeanette decided to put the big question to Michael Cullen in the House today. He decided to avoid answering it, which is understandable because it’s a scary question but it can’t be avoided forever:

Jeanette Fitzsimons: When the [Finance] Minister’s goal of sustained economic growth runs into conflict with the Prime Minister’s goal of becoming the first truly sustainable nation in the world and he has to choose between continuous growth and genuine sustainability, which will be the Government’s priority goal and why?

Hon Dr MICHAEL CULLEN: I think the member makes a false dichotomy. New Zealand, for example, has a very poor record in terms of output per unit of energy consumed. We are clearly capable of substantially increasing productivity growth, while at the same time addressing the sustainability issues that the Prime Minister has outlined. Indeed, in the longer term one suspects that, for New Zealand, increasing the level of economic growth will require attention to be paid to those sustainability issues—if for no other reason than international marketing considerations.

To be fair to the good doctor, he did gently nudge the critical question of whether you can delink growth in GDP from growth in resource use by talking about increasing units of output (of GDP) per unit of energy used. But even here, if you become 2% more efficient in your energy use per unit GDP, but increase your GDP by 4%, you are still using more energy so he didn’t really address it.

I’ve said it before and I’ll say it again: the question of whether you can delink GDP growth from growth in resource use is the question that defines our age. It is not optional that we decrease our absolute resource use, but what does that mean for GDP growth?

The market system, as we’ve known it, is dependent on exponential GDP growth to maintain its stability. Yet in our lifetimes growth in GDP has been closely linked to growth in resource use and, on a finite planet, infinite growth in resource use is impossible. So either we will find a way to delink GDP growth from growth in resource use; or we find a way to make our market system cope with flatlining or declining GDP; or there will be some kind of crisis.

It’s a funny position we find ourselves in. Just as the social democrats (Europe), labourists (UK, Oz, NZ) and new dealers (US) of the 1930s and 1940s had to save capitalism from its own destructive tendencies by introducing a range of modifications and interventions on the market system, so now the Green Parties of the world find ourselves in possibly a similar position.

The best of the old social democrats like Michael Cullen are too locked in the old paradigm to understand it, and the sectional interests like the business roundtable and employers federation are too narrow to see it, but we have to intervene on the market system to place a price on resource use and pollution so that we can save the planet. And in the process we will quite possibly save the market system from its natural tendency to destroy or consume all resources leading to its own demise as well as the demise of the planet and all of us living on it.

13 thoughts on “The big question

  1. well said, Russ.
    So I take it as this comes down to the nimble young fish in the pond vs the hoary old trout? … when it comes to re-interpreting economic paradigms for the 21st century and beyond, that is ;-)

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  2. Katie

    “when it comes to re-interpreting economic paradigms for the 21st century and beyond, that is.”

    Good god woman, what DOES all that actually mean?, and where is the world “wellness”, how can you expect anybody to pretend to understand all that new age management speak if you do not use the latests phrases.

    In future please adhere to these rules:
    1 Always use the phrase “going forward” at least once in every post.
    2 Read same for “Wellness”
    3 Idea’s are not to be discussed any longer they are to be “socialised”
    4 I like the use of the word paradigm, keep it up.

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  3. russel

    in “be[ing] fair to the good doctor” i think you’ve acknowledged the point that many larger corporates are at. they’re using efficiencies and consumer appeal as motivators for driving cleaner production.

    this piece of shameless self promotion will illustrate:
    http://shoppingfix.blogspot.com/2007/03/my-ideal-job.html

    its looking more and more likely that big biz will have a lot more impact than govt action. especially if no coherent global policy is operative until 2013.

    gdp and emissions are not decoupled and (as you/i have posted/commented) they’re a long way from it. at the moment improving the gdp-emissions ratio is a likely first step.

    for gdp/energy intensities, the other week i threw a few numbers around in the context of nz and costa rica both wishing to become carbon neutral:
    http://shoppingfix.blogspot.com/2007/03/stolen-thunder.html

    more efficient gdp units are old-skool thinking but its still better than doing nothing.

    cheers
    mike

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  4. russel

    in “be[ing] fair to the good doctor” i think you’ve acknowledged the point that many larger corporates are at. they’re using efficiencies and consumer appeal as motivators for driving cleaner production.

    its looking more and more likely that big biz will have a lot more impact than govt action. especially if no coherent global policy is operative until 2013. check my latest post for examples (frog moderation wont let me link).

    gdp and emissions are not decoupled and (as you/i have posted/commented) they’re a long way from it. at the moment improving the gdp-emissions ratio is a likely first step.

    for gdp/energy intensities, the other week i threw a few numbers around in the context of nz and costa rica both wishing to become carbon neutral: look for miss costa rica (again, i cant link)

    more efficient gdp units are old-skool thinking but its still better than doing nothing.

    cheers
    mike

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  5. “And in the process we will quite possibly save the market system from its natural tendency to destroy or consume all resources leading to its own demise as well as the demise of the planet and all of us living on it.”

    A bit like trying to find a way to keep your body alive while at the same time trying to save the cancer that’s killing it.

    - Sam Buchanan

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  6. …maybe like a baby crying itself to sleep: the problem is gone in the morning.

    compared with drinking yourself to sleep and waking up with a monster hangover. it can only be dealt with by going back to sleep…

    mike

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  7. Gerrit, totally agree with Rod Oram and we’re having another go at it in the house today. We abstain on confidence and supply and do everything in our power to get the dinosaurs to see sense on public transport and in particular the electrification of the Auckland rail network.

    But Cullen plus Winston plus Dunne equals cars cars cars. I have no hope of bringing Peters and Dunne into the twenty first century which leaves us with Labour, in the current government. I’m always open to suggestions as to how we can push the Labour Party into the 21st century!

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  8. i hope you will have some back-up/follow-up questions..?

    as i live-blog questiontime…i sorta notice the greens need to get up to speed in the ‘follow-up’ question-area..

    eh..?

    phil(whoar.co.nz)

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  9. To put sustainability on the agenda in a very concrete way, I think we should be pushing the government on how they plan to deal with oil at $US100 a barrel.

    Most likely that’s no more than six months away. At the longest, three to five years away, but that’s really wildly optimistic.

    Forcing them to do the sums on that, will demonstrate how fragile and unsustainable the economy is, and how urgent it is to get it moving in a truly sustainable direction. Business as usual will no longer be an option, anyway.

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  10. Suggest a question directly to the Prime Minister along the lines of “Is electrification of the Auckland rail network in line with the Labour party stance towards carbon neutrality?” Follow up with a commitment on timeframe and funding. And while at it running a railline along the SH20 extension as it was intended to be 50 years ago.

    You need to keep putting the Labour party on the spot. They spouted being carbon neutral as a target, so keep asking questions.

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  11. the question of whether you can delink GDP growth from growth in resource use is the question that defines our age.

    Like that. Although I’m familiar with the background to each of the elements of that sentence, I’d not managed to put it into such a succinct form. Nice.

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