Maximum wellbeing within ecological limits

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from Max Koch

Herman Daly’s “steady-state economy” (Daly, 1974) is the most cited case of an economic system that functions within ecological boundaries. It is a model of an economy that does not grow in the sense that it keeps the level of throughput (extraction of raw materials from nature and their return to nature as waste) as low as possible and ideally within the regenerative and assimilative capacities of the ecosystem. However, the original concept of a steady-state economy was not developed at the global level. Yet environmental threats such as climate change are global issues, because for the atmosphere it does not matter from which part of the globe greenhouse gases are emitted. Accordingly, the ecological footprint and the associated matter and energy throughput of the whole planet would need to shrink if the world’s mode of production and consumption were to respect ecological limits. However, due to massive differences in economic development and unprecedented socio-economic global inequality (Piketty, 2014) such a re-embedding of the world’s production and consumption patterns would imply different challenges for different regions and nations. Recent comparative research demonstrates that not only nations’ social inclusion, wellbeing and democracy scores largely increase with GDP per capita but also their ecological footprints and carbon emissions. According to Fritz and Koch (2016), who divided 138 countries into five clusters of economic development measured as GDP/capita (“poor”, “developing”, “emerging”, “rich” and “overdeveloped” countries), it is only the poorest group of countries that could currently be seen as environmentally sustainable.

Such a global comparison of national eco-social performances has repercussions for the internal structure of a global steady-state economy as countries at different levels of economic development would need to undertake different measures to achieve a maximum in wellbeing within ecological limits. The policy challenge for “poor” countries would be to enhance the quality of life and social inclusion while maintaining low ecological footprints and carbon emissions; “developing” and “emerging” countries face the double challenge of combining individual wellbeing with social welfare, while preserving relatively low amounts of matter and energy throughput as well as carbon emissions; “rich” and especially the “overdeveloped” countries would need to produce and consume differently so that lesser amounts of material resources and fossil energy are used and to make production and consumption processes more environmentally sustainable (Fritz and Koch, 2016, p. 48). Hence, the socio-ecological transitions required for setting up a global steady-state economy would involve issues of redistribution of wealth, labour, time and natural resources both within and between countries. It goes without saying that these issues are contested and that addressing them would involve questioning the material interests of the currently rich and powerful. Future growth-critical research would therefore be well advised to consider features of the global class structure more systematically (Leonardi, 2019).

In a situation where the production and consumption patterns of the vast majority of countries are beyond the Earth’s carrying capacities, it is for the time being difficult to see how a re-embedding of the global economy into planetary boundaries could, in terms of welfare provision, mean much more than the satisfaction of basic human needs (Koch and Mont, 2016). The question how this can be done for all human beings and across generations should hence be prioritised not only in degrowth research (Koch et al., 2017; Büchs and Koch, 2019) but also in corresponding efforts within economics.  http://www.paecon.net/PAEReview/issue87/Koch87.pdf