How a sustainable turnaround can be achieved

In late June, the European Union’s Environment Committee rejected the Nature Restoration Law with 44 votes to 44. Conservative parties opposed it, arguing that more time would be needed to make a more scientifically sound decision. [1]

And despite the fact that more than 3,200 renowned scientists previously pointed out in a petition that we would not be able to achieve the 2030 climate targets without this law. There was no lack of time in which to take action. Why is it, however, that research results are ignored and appeals from scientists are not being heard? In 2022, the latest report to the Club of Rome was published under the title “Earth for All – A Survival Guide for Humanity”. The book is a milestone in the effort to reduce human-induced global warming and deserves attention for two reasons:

1. Because the international group of researchers says how it can be achieved.

2. Because it states very clearly what will happen if we do not implement that immediately and consistently.

The beginning of the end

But let’s take a look back. In the 1960s to 1970s, more and more people began to worry about the future of our planet. Specifically – fearing that the rising world population and environmentally harmful economy are causing serious damage to the Earth. ^[2] And not without reason: In 1970, for the first time, humanity consumed more natural resources than can be replenished in a year.[3] In 2022, World Overshoot Day – or Earth Overshoot Day – fell on July 28. This means that by the end of 2022, we had alltogether consumed 1.75 Earths worldwide. There are considerable geographical differences concerning the distribution of the ecological footprint on a global scale – This year Austria had already consumed “its” share of resources on April 6 – in other words: We proportionally consumed about 3.8 Earth units.

In 2020, we crossed another significant threshold in the world: For the first time, the weight of concrete, steel, plastic and other manufactured materials exceeded the weight of all living biomass in the world. One of the ways we managed to achieve this dubious record is by currently producing 530 kilos of cement and 240 kilos of steel per person per year.

THE FATAL CONSEQUENCES OF THE ECONOMIC SYSTEM

In 1974, Horst-Eberhard Richter [4] stated that we must develop new guiding principles because we have reached the limits of expansion with competition and growth.

Two years earlier, a group of young researchers from MIT published the first report to the Club of Rome with the title “Limits to Growth” [5]. It did not only predict the consequences of our economic system. Several scenarios were published, which were worked out with the help of the computer model World3.

As a reminder – I’m talking about the early 1970s. One of the scenarios was that we would not take the threat seriously and continue as before (Business As Usual – BAU). Another scenario assumed double the resources (BAU2). Both scenarios predicted a collapse of the global economy and therefore also of society in the 21st century.

Another scenario assumed disruptive technological innovations (Comprehensive Technologies CT) and a fourth, more positive one, assumed that we would take the threat seriously and thereby stabilize the world (SW). This was the only scenario in which prosperity increased moderately. Even though we have known for 50 years what it would take, we ignored the research results and continued to act as if there was no man-made global warming. Probably in order to have more time to “think about it further and find scientifically sound solutions”. Decades later, several scientific studies compared the scenarios with the actual measured values and came to the conclusion: We are very close to playing out the first scenario of “Business As Usual.

Even though we have known for 50 years what it takes, we have ignored the research and continued to act as if there was no man-made global warming.

The fact that since 1970 we have been consuming more natural resources than can be regrown in a year does not only mean that we have been living on credit ever since. It also means that many models, theories and strategies that we work with in economics, society and politics are based on the false assumption[6] that limitless growth is possible. The models were developed in a time where we pretended that we could not exhaust natural resources despite continuous growth. Those were completely different framework conditions. It makes a fundamental difference whether we pursue a business or economic concept that assumes a world of abundance and plentiful resources or a situation of scarcity.

Technical innovations proposed by business representatives as solutions for climate change such as replacing fossil fuels with e-fuel or bonding CO2 in concrete are therefore unrealistic. Serious researchers emphasize that climate change will only be possible in combination with innovation, (supranational) regulation and behavioral change.

NEW ECONOMIC MODELS

But there are also current economic models that offer hope because they do not deny the context of the changed framework conditions.

The concept of circular economy [7], elaborated by David William Pearce in the 1990s, is an example for an economic system developed in the face of a scarcity world in the context of existential threats such as environmental destruction (pollution of waters, deforestation of rainforests, loss of biodiversity…) and a climate crisis increasing due to human-induced global warming.

In 2009, an international research group published the concept of planetary boundaries. It addresses the question of which ecological boundaries threaten the stability of the Earth’s ecosystem if we overstep these limits. Kate Raworth refers to planetary boundaries in her economic theory of doughnut economics published in 2017. [8] This work has resonated strongly in professional circles.

More recent research is focused on a post-growth or degrowth economy [9] – that is, on economic concepts that are no longer based on the growth paradigm.

It seems as if politics and interest groups from industry and business hardly have the issues on their radar. On the other hand, we observe that companies are reacting more quickly to the changed framework conditions. There are numerous examples of committed and innovative solutions for sustainable or even regenerative business.^[10]

In 2015, under the lead of the UN, 193 countries agreed on 17 goals to avoid a climate catastrophe at last. The Sustainable Development Goals (SDGs) come very close to a joint ecological vision for our world. The international community has agreed that all countries will try to achieve the goals by 2030. Especially because it seems almost unrealistic today to think that we can achieve the goals we have set, more than 50 years after the first report to the Club of Rome, researchers [11] have come together to show ways and possibilities. In 2022, they published the second report to the Club of Rome and showed the effects of the economic activities of the last 50 years.

5 TURNAROUNDS FOR SUSTAINABLE CHANGE

Only two of the scenarios examined are described in the book “Earth4all”: The scenario called “Too Little Too Late” assumes that we continue to do as we have been doing – hesitantly and inconsistently pursuing a policy of small steps. The second scenario, aptly named “Giant Leap,” assumes that we recognize the connections between the greatest threats and act decisively by taking extraordinary system-shifting steps in five key areas.

It is remarkable that the first interventions are not focused on abandoning fossil fuels or other forms of reducing CO2 emissions – that would have been expected. The authors’ starting point is that we cannot solve the climate crisis unless we radically address inequality. Our democratic institutions will only be able to make and implement viable decisions if we do not focus solely on the superficial issues of environmental degradation, CO2 emissions, and so on. The consistent reduction of inequalities between and within societies is at the very least just as important. The first pillar is based on that thought:

1. Poverty turnaround

Aims of this intervention should be:

• Improving the possibilities of financially weaker social groups and curbing indebtedness: At the moment, there is a lack of funds to invest in infrastructure. This slows down economic development. Countries are unable to invest in combating poverty and reducing global warming at the same time.
• Transforming the financial landscape by strengthening the currencies of economically weaker countries and thus counteracting the flight of capital. To achieve this, the rules for international organizations such as the IMF or ICF would have to be changed. Currently, the rich countries are benefiting from the framework conditions for the granting of favorable loans. Poorer countries have hardly any opportunities to access international funds and are dependent on loans from other countries that pursue their own economic interests.
• Transforming world trade: CO2 emissions should be generated where the consumption takes place. If production takes place in low-wage countries, they also bear the higher costs for emissions trading. Thinking more strongly in terms of regional markets.
• Improving access to technology – skipping development stages: Transferring knowledge from wealthy, high-research countries, e.g., by regulating intellectual property protection.

2. Inequality turnaround

This intervention is based on the idea that countries with increased equality between people have stronger social cohesion. This enables viable social policy choices. Research on inequality confirms that countries with greater equality perform better on all well-being indicators. The income levels of countries are of secondary importance.

Aims of this interventions should be:

• Progressive taxation on income and wealth
• Strengthening of unions
• Distributing wealth through a basic dividend (For example: Dividend on global commons).

3. Empowerment turnaround

The authors see three starting points for gender equality:

• Education for all: This requires an education system that promotes critical thinking and a systemic approach.
• Leadership positions and jobs for women
• Financial security for the elderly: When we talk about the growth of the world’s population, we usually think of birth rates. But more attention needs to be paid to the aging population and the way we provide for the older group in society, e.g. in the form of pensions.

Of course, all this does not only concern women, the authors say – on the contrary. Empowerment is only possible if we also take men and marginalized groups into account.

4. Nutritional turnaround

Since the 1970s, we have achieved great success in the fight against hunger as a cause of death. And that despite the fact that the world’s population has doubled in the course of those 50 years. At the same time, however, the system of agricultural production, the food industry, and the way we transport and consume, cause more environmental problems than any other sector. The agricultural sector is the largest contributor of greenhouse gases: Deforestation and land consumption, dependence on large agricultural countries, loss of biodiversity, freshwater consumption, and the use of polluting fertilizers that end up in the soil, air and water.

9% of the world’s population is still living with food insecurity. 25% are overweight or obese. 8% of deaths worldwide are related to obesity.

Approaches to this turnaround would be:

• New cultivation techniques and forms of agriculture: Regenerative economics, achieving more with less input of resources. Livestock farming, fishing.
• Dietary change: Healthier diet to combat malnutrition and overconsumption.
• Preventing food loss and waste: One third of all food goes to waste and causes 6% of greenhouse gas emissions.

5. Energy turnaround

Approaches to this turnaround would be:

• More efficient energy systems: Our existing systems are not efficient. Studies suggest that we could reduce consumption by 40% globally, with all societies still having access to a sufficient amount of energy.
• Electrification of (almost) everything: Engines running on fossil fuels and e-fuel are part of the problem, not the solution.

Organizations can make significant contributions to ensuring that turnarounds succeed. Some are already taking action. We are convinced that in the future, only the companies that are aware of their responsibility in society will be able to do business successfully. We call them “beautiful” organizations. Read more about this topic in the article on corporate contributions written by my colleague Lothar Wenzl.

Earth4all – a book that encourages and inspires me to take action without hesitation.

^{_{[1] The Austrian Minister of Agriculture Norbert Totschnig in the “OE1-Mittagsjournal” on June 27, 2023
[2] cf. Rachel Carson: Silent Spring, 1962
[3] https://en.wikipedia.org/wiki/Earth_Overshoot_Day, May 3, 2023
[4] Horst-Eberhard Richter: Lernziel Solidarität, Rowohlt, Reinbeck bei Hamburg, 1974
[5] D.H.Meadows et al, 1972: The Limits to Growth – A Report for the Club of Rome’s Project on the Predicament of Mankind
[6] For example, urban planning in the context of global warming must follow completely different principles than it did 50 years ago
[7] David W. Pearce, 1993: Economic Values and the Natural World: The MIT Press
[8] Kate Raworth, 2018: Die Donut-Ökonomie: Endlich ein Wirtschaftsmodell, das den Planeten nicht zerstört München: Hanser. ISBN 3-446-25845-0
[9] Federico Savini, https://ontgroei.degrowth.net/post-growth-degrowth-the-doughnut-and-circular-economy-a-short-guide/
[10] Z.B. Institute of Regenerative Economics – https://www.regwi.org/
[11] Sandrine Dixson-Decleve, Owen Gaffney, Jayati Ghosh: Earth for All. A Survival Guide for Humanity. A Report for the Club of Rome.}}

Images:

^{_{Image 1: York University, FoDaFo, Global Footprint Network, 2023 National Footprint and Biocapacity Accounts, Note: last three years are estimate
Image 2: York University, FoDaFo, Global Footprint Network, 2023 National Footprint and Biocapacity Accounts, Note: last three years are estimate
Image 3: https://www.bafu.admin.ch/bafu/en/home/topics/economy-consumption/info-specialists/circular-economy.html, July 3, 2023
Image 4: https://ontgroei.degrowth.net/post-growth-degrowth-the-doughnut-and-circular-economy-a-short-guide/, July 3, 2023}}