The Club of Rome
Being
aware of the "Limits to Growth", of the limitation to natural resources which
mankind is facing on the planet earth we know that the traditional way of economic
growth wasting raw-materials and energies, destroying nature and environment
cannot be extended to the countries of the Third World with their high and still
growing population. But those who are setting the wasteful standard of consumption
- Northern America, Western Europe, Japan and the emerging economies in the
Pacific region (1.5 billion people in contrast to almost 4.5 billion people
in the poor countries) - are not entitled to criticise: they exploit more or
less 80% of all natural resources and they have not yet steered their economies
to new horizons, which will allow humankind to survive.
So we in economic thinking and business conduct as well as in policy-making
have to head for new horizons. Meanwhile ecological crises start to bother us
regionally or isolated and force us to react in direction of a more resource-oriented
economy. But they up till only have led to minor steps. No doubt we have to
speed up towards a sustainable economy. The later we act the higher the costs
coming generations will have to pay. We need a thorough restructuring of our
present economic setting whose achievements to a large extent are based on the
exploitation of scarce resources and the devastation of natural environment.
If the rich economies "economized" ecology, which successfully could be one
by introducing a widespread range of new technologies (product- and process
innovation) most of them already existing, new fields of employment would be
opened as these technologies have to aim at a substantial increase in the productivity
of resources automatically lowering the standard of our present high labour
productivity, based on capital-intensity and wasteful use of resources.
This way to "sustainable development" is paved with many uncertainties. It leaves
many questions open: Will this new "economy of sustainability" go along with
our traditional socio-economic pattern, which is widely based on materialistic
interests? There is a close link to another question: How much of our traditional
aspirations can be met by introducing new technologies, how far can we rely
on the capabilities of our scientists and engineers, how far do we have to change
our values and attitudes? And most important: How can these patterns of technology
and life-style be efficiently introduced in proper time into the process of
economic development in the Third World? The faster the rich and mature economies
are tackling this challenge with seriousness and credibility the more convincing
and coercing their new economy will be for the developing countries.
If we want to meet the challenges of sustainability, in the coming decades an
economy on global scale has to be developed being able to increase the resources
efficiency by the factor ten. For this dramatic de-materialisation the implementation
of innovative technologies as well as a change of life-styles is needed. How
can we reach this goal? Who are the actors on the political and economic scene?
What will be their role?
What economic scenery are we going to face? The opportunities, modern information
and communication technologies offering access to goods, services, capital,
technology and information on global level, are too attractive and persuasive
for not to be exploited. Thus there is no chance to stop the process of globalisation.
The globalisation of markets enhances competition and forces business to build
up border-crossing structures and networks requiring high flexibility and mobility
of capital, technology and management. This is not only done by "big business"
alone, but increasingly medium- and small-scale companies are exploiting the
chances of Information anc Communication Technologies (ICT) for global networking
too.
What are the chances of ITC and where are its risks? First of all the building
of networks of information and communication as well as intensified market relations
create a system of increased mutual dependencies, thus persuading all participants
profiting from the effectiveness of this system to a peaceful and co-operative
conduct. This is especially true for Western Europe where the development of
the Common Market has led to such a degree of economic integration that national
economies in the traditional way no longer exist within the European Union.
ICT allow a more effective exploitation and implementation of knowledge and
human capital. They allow leap-frogging for "late-comers" as demonstrated in
parts of the Third World. There they also offer the chance for an "educational
revolution". Moreover they can contribute to better international understanding.
Those groups, regimes or states wanting to dominate or exploit their people
- information monopoly or manipulation being one of the decisive instruments
for this purpose - increasingly are getting difficulties when access to information
no longer can be regulated or restricted.
Keener global competition forces the enterprise sector to be more resource effective
in order to save costs. This no doubt has a positive effect leading to less
exploitation of natural resources. But this qualitative effect in general is
more than outdone by the quantitative growth effect as there exists ample demand
for new different and better products and services. We have to realise that
almost all human beings living today and the generations to come still will
have perceptions and aspirations of a better life so they are open for - as
mentioned before - new different and better products and services. So growth
permanently stimulated by an dynamic and innovative process of "creative destruction"
is a built-in factor of an open society the enterprise sector has to react to
under competitive conditions. There is no use blaming market, competition, capitalism
or globalisation they more or less only reflect our societal reality.
But we all know that the traditional resource-consuming path of growth extended
to the masses of consumers - already living today and the days to come especially
in the southern hemisphere - will destroy the globes finite natural capital
needed for the survival of coming generations. An utopian answer would be: convince
humankind to return to a lifestyle of austerity. The technological answer: Let
us implement modem technologies (exploiting the synergies of information-, nano-
and bio-technologies), thus offering the possibility of increasing the resource-efficiency
by a factor four which already to day seems to be feasible. A third way: Realising
a factor ten of dematerialising our economy in a mix of improved resource-efficiency
and a changing life-style aiming at sufficiency. With new consumption patterns
focussing on "to be, instead of have" this could be reached.
What has to be done to stimulate the development of factor ten? The consumption
of natural resources has to be impeded by ecological taxation, so the introduction
of resources economising technologies and life-styles are supported. This process
has to start in the "Western World" as their highly developed societies are
setting the standard patterns for humankind. Whenever in the Third World with
its huge and still growing population there is a chance for economic development
offering a higher living standard this must not follow the present pattern of
western production and consumption. Copying the given western type of development
in the "successful Tiger-states" tells us that this way is leading into a disastrous
scenario of wasting scarce resources and destroying nature capital.
How to bring this socio-economic restructuring about? As we have to economise
the use of natural resources, this only can be done by instrumentalising the
creative forces of market and competition. The appropriate signals for the markets
aiming at less consumption of natural could be: Increasing the costs of nature
consumption by taxing thus giving for product and process innovation or change
of lifestyle. This only can be done if of the voters agree to these steps which
at least in the beginning requests sacrifices and pains of adjustment.
Introducing ecological taxation in the western democracies is not popular as
sacrifices, at least temporarily, are requested, indicating a threatening gap
between growing demand and reserves seemingly becoming finte, presently shown
in the exploding oil prices. In addition to that, the necessity for these measures
is not seen, as the environmental situation due to technological progress is
improving here. What is forgotten is the insight that the decisive "battle of
sustainability" has to be fought in the developing mass markets of the Third
World. For this battle, the path and the speed of technological progress the
Western World enjoy and is satisfied with, are too narrow and to slow to meet
the factor ten-challenge.
Obviously the horizon of time and space in our fun- and event-oriented society
is to narrow, so it is difficult to implement a long-term and comprehensive
policy taking sustainability into account. So do we need "market pressure" to
react to increasing energy costs by implementing smarter energy-saving technologies?
And what about the political scenery in the Third World? A plain analysis has
to realise that in many parts of the southern hemisphere there is a dramatic
decline of government authority and of rule of law and order. The traditional
political infrastructure is eroding and just fading away, crypto-states are
established with "élites" recklessly exploiting human and natural resources.
So what about business? The companies, more and more forced to become players
in widening markets, don't they know that the markets of the future will be
those of the Third World - just think of China and India - and that these markets
cannot be served with the traditional products, as that would lead into a resources
catastrophe. To be profitable, markets have to be sustainable! Thus business
has to play an important responsible role by transferring sustainable technology
and know how into these developing markets. Especially those institutions and
élites deciding on capital investment, still predominantly under pressure for
short-term profitability of investment, should learn to realise the meaning
of long-term sustainability. Enlightened entrepreneurship also is aware of that
profitable markets depend on surroundings guaranteeing political and social
stability. Thus for shaping a framework for sustainable development of natural,
social and human recourses, effective governance is vital for business activities.
So, facing the wide-spread inability of politics to act in the battle of sustainability,
NGOs should form a strategic alliance with those forces in business and enterprise,
especially banking, both being aware of the importance of sustainability. If
in addition to that the "green élites", preaching "sustainability", mostly belonging
to the wealthier part of the civil society, as consumers would focus on "green"
products and services in the markets, their considerable purchasing power could
make a substantial contribution to develop new sustainable structures in industry
and services. In addition, this would have an important demonstration effect
as it would strengthen the credibility of the "message of sustainability " suffering
from the fact that the élites irresponsibly are damaging their exemplary function
by preaching sustainability on one side and living in wealth and affluence on
the other side.
Uwe Möller
Secretary-General, Club of Rome
www.clubofrome.org