Enough is Enough Ideas for a Sustainable Economy in a World of Finite Resources

This is the report of the first Steady State Economy Conference, held in Leeds, UK on 19th June 2010. The conference had two main aims. The first was to raise awareness about the substantial volume of scientific evidence that shows that economic growth (i.e. continuously increasing production and consumption of goods and services) is (a) not environmentally sustainable, and (b) not improving people’s lives in wealthy countries like the UK. The second aim was to identify specific, implementable policies to achieve a steady state economy (i.e. an ecologically and socially responsible alternative to economic growth) within the UK. Over 250 economists, scientists, NGO members, business leaders, government employees,

and interested citizens attended and contributed.

Keynote speakers at the conference included:

 Peter Victor – Professor in Environmental Studies, York University (Canada)

 Tim Jackson – Professor of Sustainable Development, University of Surrey

 Andrew Simms – Policy Director, nef (the new economics foundation)

 Dan O’Neill – European Director, CASSE

The main proposals in this report come from the conference’s ten interactive

workshops, which explored specific areas where change is needed to achieve a

steady state economy. Workshop speakers included Kate Pickett (co-author of The Spirit Level), Franny Armstrong (Director of The Age of Stupid), Roger Martin (Chair of the Optimum Population Trust), Molly Scott Cato (Economics Speaker for the Green Party), David Fell (Director at Brook Lyndhurst), and many others.

A key theme that came out of the conference, and one that unites many of the ideas in this report, is the concept of enough. This report summarises the ideas generated at the conference, and provides insights into the structures and policies that would be needed in an economy where the goal is enough instead of more. The hope is that these ideas will contribute to the development of a new “macro-economics for sustainability”, and help us build a prosperous, non-growing economy in the UK.

The Environmental Limits to Economic Growth

In order to appreciate why an economy based on enough is worth striving for, it is useful to examine why an economy that forever chases more is destined to fail. In the first place, the economy is a sub-system of the environment. All of the inputs to the economy come from the environment, and all of the wastes produced by it return to the environment. As the economy grows, it requires more resources and discharges more wastes. Since we live on a finite planet with limited resources, it is not possible for the economy to grow forever.

For the vast majority of human history, the size of the economy was small compared to the size of the biosphere. But over the past century or so, the economy has grown massively, and the balance has shifted. Between 1900 and 2005, world economic output increased by a factor of 24, from $2 trillion to $47 trillion.

This incredible increase in economic activity has resulted in an equally incredible increase in the use of resources and energy. Humanity now uses eleven times as much energy, and eight times the weight of material resources every year as it did only a century ago. The appropriation of materials, energy, and land for human activity has profoundly impacted ecosystems and reduced the space available for non-human species, leading to species extinctions and biodiversity loss. As the amount of material extracted from the environment has increased, so has the production of wastes. Emissions of one pollutant in particular, carbon dioxide, are

now so large that they are destabilising the global climate.

Recent research indicates that humanity has transgressed three of nine “planetary boundaries”. These boundaries define the safe operating space for the planet. By transgressing them we risk causing abrupt and catastrophic environmental change.

Other environmental indicators, such as the ecological footprint, suggest we are in a state of “global ecological overshoot”. We are harvesting resources like forests and fish faster than they can be regenerated, and producing wastes like CO2 faster than they can be absorbed. The result is the steady erosion of the stock of natural resources and the supply of ecosystem services upon which our economies and societies ultimately depend.

The Diminishing Social Returns of Economic Growth

Even if we could find a way to grow the economy without using up resources or

negatively impacting the environment, there are strong reasons to believe that further economic growth in wealthy countries would not be a worthwhile pursuit.

While economic output per capita has more than tripled in countries like the UK and U.S. since 1950, data from surveys of life satisfaction reveal that people have not become any happier. When data are compared across multiple countries, an interesting picture emerges. Happiness and life satisfaction increase with income, but only up until a point. Once people’s basic needs are met and they have enough goods and services, economic growth fails to improve people’s well-being.

Economic growth has also failed to deliver lasting solutions to unemployment and poverty. Despite our continual pursuit of rising economic output in the UK, the unemployment rate has bounced up and down over the last forty years. Jobless growth has become a common occurrence. And even with the 24-fold increase in the size of the global economy over the past century, more than one billion people in the world still live on less than $1 per day, and a total of 2.7 billion live on less than $2 per day. Someone is profiting from global economic growth, but it’s not the world’s poor.

These findings seriously call into question the continued pursuit of economic growth in countries like the UK. Given that global resource use is already at an unsustainable level, further growth in wealthy countries only serves to reduce the amount of ecological space available to poor countries, where economic growth is still needed to alleviate poverty.

The Desirable Alternative to Economic Growth

The challenge then is to figure out how to sustain economies that already have enough goods and services, without relying on consumption growth.

A steady state economy represents a positive alternative to the pursuit of endless economic growth. It is an economy that aims to maintain a stable level of resource consumption and a stable population. It is an economy where energy and resource use are reduced to levels that are within ecological limits, and where the goal of maximising economic output is replaced by the goal of maximising quality of life.

There are four key features of a steady state economy: (1) sustainable scale, (2) fair distribution, (3) efficient allocation, and (4) high quality of life. Sustainable scale means that the size of the economy fits within the capacity of ecosystems to provide resources and absorb wastes. Fair distribution means that people have equal opportunities to obtain wealth and income, and limits to inequality prevent big gaps between the rich and the poor. Efficient allocation means that the power of markets is harnessed appropriately (taking account of where markets work and where they don’t) to allocate resources among competing uses. And an emphasis on high quality of life means that economic growth takes a backseat to things that really

matter to people, like health, well-being, secure employment, leisure time, strong communities, and economic stability.