International trade in the context of degrowth for ecological - PowerPoint PPT Presentation

International trade in the context of degrowth for ecological sustainability and social equity Filka Sekulova Research & Degrowth / Universitat Autonoma de Barcelona

Outline 1. The trade discourses: from neoclassical economics to degrowth economics 2. Degrowth: definitions, intellectual sources and reasoning 3. The failure of the international 'developmentist' trade model 4. Degrowth proposals in the context of international trade 5. Degrowth proposals in a wider context

Trade: from neoclassical economics to degrowth 1. Neoclassical economics: “if based on comparative advantage trade always promotes economic growth and welfare improvement in the exporter as well as the importer country” 2. Environmental economics “If policies necessary for sustainable development are in place, trade can promote development that is sustainable”

Trade: from neoclassical economics to degrowth Ecological economics: I. We cannot assume substitutability between natural resources and capital. - >replacement costs are infinite II. Disagrees on the connection between: <international trade and economic growth>, & < economic growth and environmental protection >

Trade: from neoclassical economics to degrowth Degrowth economics Based on ecological economics vision, but not limited to it Economic growth is not only preventing any improvements in environmental conditions and well-being, but is actually deteriorating them. The pursuit of higher levels of trade: part and parcel of growth-driven policies .

Degrowth: definitions Décroissance, decrecimiento, decresita, degrowth is: A call and a collective decision to: 1. challenge the consensus for growth, and 2. reduce the capacity to produce and consume while ensuring the ecological sustainability, well-being, capability and social justice; Degrowth is not a uniform concept. It is a set of ideas, which put important questions on the table. It is not a finished concept, either, but one in evolution. Degrowth is imagined as: balanced, democratic, convivial, positive, cultural, innovative, diversified, targeted, local, global and transitory.

Degrowth: sources/reasons Culturalist & anthropology & anti-utilitarian schools A call to decolonize our imaginary , to disentangle ourselves from a specific type of development based on growth, which is a mental construct born in the North colonizing/unifying the global imaginaries (Latouche, 2009) What does that involve: refuting profit/utility maximization or the accumulation of wealth as the primary drive of behavior; refute the standartization/uniformity of lifestyles in the North and South; refute the commodification of human relations and dependence on market transactions ; give less room to economic/ market transaction, and more to society

Degrowth: sources/reasons Desire for more simplicity in lives and living The loss of having fulfilled and meaningful lives, => movement towards voluntary simplicity. Movement towards deeper democracy The need to deliberatively and collectively decide on the economic and social organization of society, and on the existence, design and growth of technology in general. The biophysical and ecological limits are now evident Defending ecosystem sustainability and adapting to the biophysical limits of earth: <bringing macroeconomics within the ecological limits of the planet> Degrowth is inevitable as availability of non-renewable resources decreases. Complementarity between sources!

Green/zero growth/new deals do no solve environmental crises Economic growth so far has always been associated with increasing use of natural resources, and increasing environmental deterioration . (Majority of the growth associated with pollutive sectors: Hueting, 2008) Thus - > no absolute decoupling. Maintaining the present level of energy consumption in the North with alternative sources of energy is unfeasible (eg. Energy Return on energy invested EROI, fossil fuels vs solar) The rebound effect/Jevons paradox = >

Micro-Rebound effect More fuel Innovations Efficiency efficient cars Efficiency gain Reduced fuel Reduced costs costs We can travel Savings can be Rebound further reallocated

Jevons Paradox: Newcomen In 1760 for 1kwh En 1910 for 1kwh

Does energy efficiency reduce absolute coal consumption? “The very contrary is the truth” William Stanley Jevons, 1865 He was right: From 1760 to 1910: production of energy from coal increase by a factor 2000.

Jevons Paradox Efficiency and available technologies have improved several folds resulting in: 1) higher capacity to: • extract resources, • manufacture products, • explore new markets, • build infrastructure, 2) freeing more time for consumption, and 3) increasing the number of false needs-satisfiers.

The failure of the international 'developmentist' trade model A few facts to keep in mind: At the global level there is a clear flow of primary commodities from poor to rich countries (R. Muradian, J. Martinez-Alier : Ecological Economics 36 (2001) 281–297): Developing countries net exporters of primary products , while the North – net importers (unprocessed raw materials - >75% of the 48 poorest countries’ exports in 1995 (OECD, 1997) - > Poor countries tend to have the ‘dirty’ and material intensive production , & richer countries specialize in clean and material extensive production (Stern et al., 1994; Suri and Chapman, 1998).

The failure of the international 'developmentist' trade model There has been worsening terms of trade for exporting countries specialized in non-renewable resources (the South) Thus, the countries specialised in polluting products, whose prices tend to fall down over time, have fewer opportunities to internalise environmental costs into prices; - > “ Stuck to the bottom effect” - > There is a transfer of wealth from poor to rich countries, and of environmental costs from the North to the South (Martinez-Alier and O’Connor, 1996; Hornborg, 1998)

Degrowth proposals in the context of international trade Not only fair trade The trade which we call fair at present is actually “less unfair trade” (still there are salary and social security differences) Environmental costs not taken into account (transport) Fair trade used as a justification of the present system: it does not challenge the decision WHERE goods are produced (need not produce and import straw hats from Patagonia)

Degrowth proposals in the context of international trade Regionalization of trade is crucial but not enough: A REDUCTION OF THE OVERALL VOLUME OF MATERIAL TRADED IS NEEDED Trade regionalization does not mean producing all that we import/consume today locally (rebound effect, limit to renewable energy capacities) First step is brining down consumption of raw materials in the North, (also by brining down imports & exports)

Degrowth of international trade What compensations for developing countries if material volume of international trade scaled down? One of the primary drivers of international trade is debt repayment, thus mass cancellation of odious, illegitimate and unpayable debts, incurred to IFIs, and Northern donors : Change the nature of trade, and internalize the environmental costs: RE-PAYING ECOLOGICAL DEBT which the North owes to the South

Degrowth of international trade Repaying the ecological debt can involve: - leaving resources underground (Yatsuni ITT proposal) - made transfers which strengthen social security rather than ending in the hands of a few local elites (as it happens with development aid at present) - make transfers which create public commons : esp. giving back the commons we have stolen (return the land which has been grabbed, for example) - abandon patents (especially on pharmaceuticals)

Detour: degrowth in the North. Some basic principles Frugality : searching for ways to produce and consume less ; Selectivity : abandon unsustainable practices /institutions/ products, increase sustainable ones; transforming some institutions and replacing others Multiple strategies by combination of: grass-root and institutional level action, opposition and alternatives building, practical and intellectual work, personal and collective-based action, local and international initiatives.

Degrowth policy proposals (from the 2 nd international conference on degrowth Barcelona 2010 www.degrowth.eu) MONEY & FINANCE:  facilitation of local currencies; gradual elimination of private banks ability to create money and reforms of interest; SOCIAL ECONOMY  promotion of small scale, self- managed not-for-profit companies; PRIVATE/PUBLIC PROPERTY  defence and expansion of local commons and establishment of new jurisdictions for global commons;

Degrowth policies WORK SHARING  Integrated policies for reduced working hours (work-sharing), a 21 h working week, for example  introduction of a basic income;  institutionalization of an income ceiling based on maximum- minimum ratios POLITICS  de-commercialization of politics and enhancement of direct participation in decision-making;

Degrowth policies ADVERTISING Taxation of advertising and its prohibition from public spaces