Forward, but which way? Developing a Vision for Wales.

Wales is a lucky country, it still has abundant natural resources, it has a very intelligent population which is outward looking, it is a small country and thus open to experimentation, but most of all it is a world leader in a domain which is vital for the future of Wales and for that matter the world.

You might think I’m talking about rugby here, I could be, but I’m not. No I’m talking about ecology, the way in which our planet reproduces its natural and human resources to enable a dynamic but stable environment where mankind can live in harmony.

Wales was the first country in the world to produce an ecological footprint, in 2001. I hope I’m not, as they say in Yorkshire where I grew up, teaching me grandma to suck eggs here: an ecological footprint study sets out to identify the total environmental burden we place on the planet by our human activities, it uses available data on resource flows to measure this, often focussing on consumption (as opposed to production) of raw materials, energy and food, and accounts for the waste we produce through these activities. In other words it seeks to measure the ecological processes in any given area, transforms these into a convenient unit of comparison, in this case global hectares which can then be reduced to a per person measure so that the population can be aware of and compare their impact to other people and other countries.

Wales is a comparatively “good” country, it’s footprint is less than any other country or region in the U.K. , however having heaped praise on ourselves if we all lived like Wales then we would need a further two worlds to accommodate the human population, and unfortunately both the population and our footprints are currently going in the wrong direction. You could say that we humans are hastening our own death as a species, and that’s not “good.” It’s not, as some economists like E.F. Schumacher say, an example of “right livelihood”. We are living beyond our ecological means and Wales owes it to the world to maintain our leadership and do better.

But let’s give credit where credit is due, The Welsh Assembly is the only national government in the world to use the footprint as an indicator of progress for its overarching Sustainable Development Scheme, Learning to Live Differently. Moreover there is currently consultation on a Natural Environment Framework which follows on from similar crucial work happening internationally like The Economics of Ecosystems and Biodiversity project.

The Welsh Government consultation “aims to increase our understanding of the value of our environment and how it contributes to our well-being. This will help us make better informed, long term decisions for the future of Wales.” If only we could act on those decisions with the appropriate powers.

Recently One Planet Wales has identified the potential to reduce the footprint by 75 % by 2050, but that this needs “action across the board,” with transformation of markets and distribution, energy and transport, agriculture, food policy, and almost every branch of production and consumption. You name it, we need to change it. They conclude that “this is no small challenge”, and indeed it isn’t, but then the Welsh population is not one to shy away from challenges. We just don’t own the tools to get the job done properly yet. This is because all these worthy and excellent reports have been produced under a regime which assumes that the Welsh Government, although it shows willing, does not have the control over some of the key “levers” in our society, both economic and political levers, which will enable us to transform our economy and society, and become a true, resilient country. A country which because of our success will have people queuing up on the other side of the border to get in and enjoy the ride, a problem that we will need to address in due time.

Lets get there first.

I don’t know about you, but over the last year, I have the feeling that there is building up a momentum, a sort of renaissance of thinking, propositions and reports coming out of Wales. Many of these cogently argue to dispel negative myths about what Wales could be like post independence and argue in positive terms for a new reality. Most recently I read Bethan Jenkins writing in WalesHome.org, a wonderful polemical article in support of Leanne Wood, truly inspirational. Any contemporary politician who is prepared to quote both David Harvey (a Marxist intellectual) and André Gorz (a libertarian utopian sociologist) in the same piece can’t be going too far wrong.

Other recent reports emanating from Plaid Cymru have outlined excellent strategies in the field of Energy, Transport, or “Collective Entrepreneurship”. And then there is Leanne Wood’s Greenprint for the Valleys, which sets out a number of practical steps and policies in different sectors which would go a long way towards revitalising The Valleys.

Last year Adam Price (with Ben Levinger) produced a report entitled “The Flotilla Effect”, which in a very detailed and finely researched analysis showed without doubt that given appropriate powers, country size should be no barrier to economic success in a globalised world. They potentially place independent Wales in a group of countries (like Denmark) which adopt supply side, open to trade, social-partnership models and say that “small size does appear to confer certain important advantages in relation to Economic Growth” especially in the context of the European Union’s Lisbon Agenda, and that small size seems to mean that small countries can more easily shift direction when the European, or world economic context changes (which it seems to be doing at present.)

Indeed they go on to show that although Wales’s Economic Growth has been on average 0.9% each year since 1990, if Wales had become independent at this time (along with other colonised countries especially those from the former Soviet Union) then Wales could have shown growth at 2.2 % or even 2.5 % depending on how you calculate the index. Marvellous we all say, licking our lips and clapping our hands, all we have to do now is convince the voting population, and this is one sure way of doing so, independence means more growth, more growth means better off, better off means vote for Plaid, and independence. Let’s go for it.

If only things were that simple. And this is where I start to differ. Apart from certain problems I have with the neo-liberal Lisbon Agenda, I’m more concerned about this slavish adherence to GDP as a good measure of progress. GDP does not measure distribution of income or wealth, nor does it measure well being, happiness or ecological effects. It’s a blunt tool.

So let’s go back to the Ecological Footprint. The latest report from the Stockholm Environmental Institute “Scenarios to 2020” says that Wales’ ecological footprint has been increasing by 1.5 % each year since 1990, in line with but at a faster rate than GDP growth. Imagine if we had had 2.5 % growth, then our E.F. could have been increasing by over 4 % each year. In the first case this would leave us with a 20% bigger E.F. in 2020 than in 2003, in the latter it could lead to an E.F. almost 50% bigger. A catastrophe. So there are some hard choices in priorities to be made.

And this is where we can turn to one school of Political Economy, Ecological Economics to offer a different analysis and different policy prescriptions to enable us to make those choices, still make progress economically, and provide greater well being for the population, while putting the future of the Earth (and mankind) at the heart of our plans. In the second part of this article I want to talk about the principles of this school of thought and then offer some policy ideas for a 10 year radical transformation post independence but always as a starting point for a debate amongst us.

“Economics cannot function in isolation, it has to take into consideration that we live in a world with finite resources, which we cannot replenish. Infinite, exponential or even rapid, straight line economic growth in a world with finite resources is impossible, but this is exactly what a growth driven, profit orientated system seeks!”

The contemporary history starts with a Romanian Economist Nicholas Georgescu-Roegen. In 1971 he published “The Entropy Law and the Economic Process.” This masterpiece explains the economic importance of the 2nd Law of Thermodynamics. In brief the earth is a closed natural system, the only real external resource flow in, is that of the continuous fine drizzle of photons which arrives from the Sun and is expected to continue, well beyond the age of Mankind. All the rest just churns around the Biosphere, but in one general physical direction. Mankind’s economic process transforms low entropy (useful) matter-energy into high entropy (chaotic and not useful) waste.

This might seem self evident, except that modern economics, (broadly since the advent of capitalism in the late eighteenth century ) be it Classical, Neo-Classical, Monetarist, Neo liberal, Keynesian, whatchamacallit Supply Side social partnership, even to a greater extent Marxist schools do not make this self evidence central to their analysis. This is surprising because the an etymological definition of economics means just that

“Economics is a science which studies human behaviour as a relationship between ends and scarce means which have alternative uses”

Which is why some Ecological Economists consider that

“In a finite world, if you believe in exponential growth, then you are either a fool … or an economist”

So how does Ecological Economics differ? Here is an academic definition from Saskia Sassen, probably the western world’s leading urban theorist and a recent convert:

Ecological Economics : What is it?

“Many of the biophysical stocks, flows and functions that we use are difficult to quantify and price through conventional understandings of markets, and others are simply invisible to conventional analysis: these are the issues taken up by ecological economists, beginning with the work of Rees (1992), Schulze (1994), Daly (1977) among others. In contrast with neoclassical economics, ecological economics seeks to move away from models of infinite economic growth that separate the economy from the environment and move towards a model of sustainable growth that integrates social capital, built capital, natural capital and human capital components (Gund Institute 2009). Ecological economics rejects the belief that economic growth alone can lead to development and seeks to incorporate measures of quality of life and environmental sustainability alongside GDP in assessing development as human well-being; it rejects the idea that new technologies can overcome all limits to growth, instead suggesting that there are real, insurmountable environmental limits to growth; and it emphasizes allocative efficiency over market efficiency (Costanza 2008; Gund Institute 2009).”

In the 1970s Hermann E Daly a North American Economist takes up the mantle. Having studied for his PhD under Nicholas Georgescu-Roegen Daly’s first book in 1977 attacks the ideology of economic growth and argues that because the earth has become “full” of human economic activity, the biophysical limits to growth mean that we need to shift in all urgency to a steady-state economy. For Daly the great advance made by his mentor was “to reunite economics with its biophysical foundations,”

Which is where we shall leave the story for the moment, watching the sand of resources flow through the hour glass. We can think about how we, in Wales, can use a few “grains of sand” to thwart the unthinking use of our precious and finite natural resources, while developing a more ethical, humane and ecological way of life, in keeping with our contemporary aspirations.

In the second part of this article, after a short break to take air, discuss and together debate this analysis, I’ll try and put together some practical applications. This will look at resource flows, waste, cap and trade, and shifting taxation away from labour and personal income to resource flows. How to design compensatory social programmes. Changes to finance, transport, mobility, food and agriculture.

But what do you think? are these useful ideas and principles for a post independence Wales? How can they help us to transform the Welsh economy? The discussion starts here :-)

Alun Griffiths is an Urbanist and Ecological Economist : In exile since the mid nineties he lives in Marseille and among other things teaches mature Masters students at the Institut d’Etudes Politiques, Aix – en – Provence, France. http://about.me/Alun_Wyn_ap_gruffydd

Further reading and listening:
http://www.thesocialcontract.com/artman2/publish/tsc1303/index.shtml
http://www.electricpolitics.com/podcast/2007/03/ecological_economics.html

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