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IS POSSIBLE
How humanity can avoid system
collapse and craft a better economic
system
June 2016 : A report by Hunter Lovins, Anders Wijkman, John
Fullerton, Stewart Wallis, Graeme Maxton
2
EXECUTIVE SUMMARY
3
EXECUTIVE SUMMARY (CONT.)
4
INTRODUCTION
5
INTRODUCTION (CONT.)
6
METHODOLOGY
This report was developed in three stages. In the first stage, a group of
more than 20 internationally renowned experts on climate change,
economics, the media, finance, population, environment degradation,
project planning and other relevant areas were invited to Sweden for
three days in May 2015 to develop the methodology to be used for this
project, define the key issues for analysis and a working hypothesis,
identify data gaps, define the workplan and draft the report outline. A
steering committee was appointed.
During the second stage, the committee commissioned a number of
international experts to provide insight into issues such as an energy
transition, reforming the finance sector and sustainable agriculture,
where additional insight was needed. The results of this work were
then built into the report.
7
METHODOLOGY (CONT.)
8
CONCLUSIONS
9
CONCLUSIONS (CONT.)
10
CONTENT
11
1
Meadows, D. H., Meadows, D. L., Randers, J., & Behrens, W. W. (1972). The limits to growth. New York, 102.
Turner, G. (2014). Is global collapse imminent? MSSI Research paper, 4, 21.
13
IN 1972 THE LIMITS TO GROWTH ALSO WARNED OF
1 COLLAPSE (CONT.)
IPCC. (2014). Climate Change 2014: Impacts, Adaptation, and Vulnerability Summary for Policymakers.Cambridge University
Press, Cambridge, UK and New York, USA.
17
AND THE SITUATION WILL WORSEN FOR MANY
1 DECADES, NO MATTER WHAT WE NOW DO
Motesharrei, S., Rivas, J., & Kalnay, E. (2014). Human and nature dynamics (HANDY): Modeling inequality and use of resources in
the collapse or sustainability of societies. Ecological Economics, 101, 90-102.
21
HUMANITY CREATED THE ECONOMIC SYSTEM THAT
2 BROUGHT US HERE
22
WHERE SHORT TERM PROFIT AND MATERIAL
2 WEALTH ARE PURSUED
23
WHERE SHORT TERM PROFIT AND MATERIAL
2 WEALTH ARE PURSUED (CONT.)
24
SINCE 1980 NEO-LIBERALISM HAS BEEN THE
2 DOMINANT ECONOMIC IDEOLOGY
26
IT SHOULD BE POSSIBLE TO TRANSITION TO A MORE
2 SUSTAINABLE ECONOMIC SYSTEM
27
A UNIVERSAL MOVEMENT AND POLITICAL ACCEPT-
2 ANCE ARE NEEDED FOR A SUCCESSFUL TRANSITION
28
3
TELLING A BETTER
STORY
WE NEED TO COMMUNICATE AN ALTERNATIVE
3 ECONOMIC SYSTEM AND TELL A BETTER STORY
30
THIS SHOULD SEEK TO MAXIMISE HUMAN WELL-
3 BEING WITHIN PLANETARY BOUNDARIES
31
A SUSTAINABLE AND FAIR ECONOMIC SYSTEM, IN
3 OTHER WORDS
Just under two on the horizontal axis represents one planet living. If we
are all to live within planetary boundaries, countries need to move to the
top left through decoupling. Currently, many countries are doing the
opposite - increasing their footprint and reducing average wellbeing.
Jeffrey, K., Wheatleym, H. & Abdallah, S. (2016). The happy planet index 2016 report. A global index of sustainable well-being,
p.15. Available at http://www.neweconomics.org/projects/entry/happy-planet-index
33
WE NEED TO STOP BOOSTING GDP FOR ITS OWN
3 SAKE
Berry, C. (2014). Wellbeing in Four Policy Areas Report by the All-Party Parliamentary Group on Wellbeing Economics. London: New
Economics Foundation.
34
THE PLANET NEEDS TO COME FIRST BECAUSE THIS
3 IS WHAT MAKES LONG TERM SENSE
Economy Economy
35
3 HUMANITY NEEDS BETTER ECONOMIC PRINCIPLES
36
3 AND A REGENERATIVE ECONOMIC SYSTEM
Fullerton, J. (2015). Regenerative capitalism: how Universal Principles And Patterns Will Shape Our New Economy., p.43 Available
at http://capitalinstitute.org/wp-content/uploads/2015/04/2015-Regenerative-Capitalism-4-20-15-final.pdf 37
4
BUYING TIME TO
MAKE THE SHIFT
TO CREATE A BETTER ECONOMIC SYSTEM AND
4 AVOID COLLAPSE, WE HAVE TO BUY TIME
TIME
Ellen MacArthur Foundation. (2013). Towards the circular economy, p.25. Available at https://www.ellenmacarthurfoundation.org/
assets/downloads/publications/ Ellen-MacArthur-Foundation-Towards-the-Circular-Economy-vol.1.pdf
40
A CIRCULAR ECONOMY CAN REDUCE EMISSIONS,
4 CREATE JOBS AND IMPROVE THE TRADE BALANCE
Every effort must be made to reduce the pressure on the natural resource
base. By doing so we can avoid looming resource constraints, limit
ecosystem decline and reduce carbon emissions.
A recent study by the Club of Rome analyzed the impact of a circular
economy on carbon emissions, job opportunities and the trade balance in
five European countries.
It assumed 1) increasing the renewable portion in the energy mix by
cutting fossil fuel use by 50%; 2) enhancing energy efficiency by 25%, and
3) enhancing material efficiency by 25 % by replacing 50% of virgin
materials with secondary materials and doubling the life-time of long-lived
consumer products.
The results showed that a circular economy would lead to a reduction in
carbon emissions by roughly 2/3, a significant increase in the numbers of
jobs, and reduced trade imbalances. It makes sense within the existing
economic system, in other words, and so would aid a transition.
Wijkman, A. & Sknberg, K. (2015). Circular Economy and social benefits. Available at http://www.clubofrome.org/wp-
content/uploads/2016/03/The-Circular-Economy-and-Benefits-for-Society.pdf
41
HOWEVER, WISE POLICIES WILL STILL BE NEEDED
4 TO PROVIDE THE RIGHT INCENTIVES
42
5
THE KEY
ELEMENTS OF A
BETTER ECONOMIC
SYSTEM
DURING THE TRANSITION TO A BETTER SYSTEM.
5 SOCIETY WILL NEED TO REFORM KEY SECTORS
44
5
45
IN FINANCE, THE EXPECTATIONS OF CAPITAL
5 MARKETS AND INVESTORS NEED TO BE MODIFIED
The Global Commission on the Economy and Climate. (2014). Better Growth, Better Climate: The New Climate Economy Report: the
Global Report. Available at http://newclimateeconomy.report/2014/wp-content/uploads/2014/08/NCE-Global-Report_web.pdf
46
A REFORMED BUSINESS SECTOR REQUIRES
5 RELATIVELY FEW CHANGES
47
THESE CHANGES WILL HELP SLOW CLIMATE
5 CHANGE
If the business and finance sector put less store on continuously rising
quarterly earnings, resources are taxed rather than labor and the
environment is properly valued, business and investment priorities will
change.
Changes in investment priorities will help slow the pace of climate
change. Christiana Figueres from UNFCCC noted "Where capital goes
over the next 15 years is going to decide whether were actually able to
address climate change and what kind of a century we are going to
have.
This is made easier in some cases because many sectors are
competitively concentrated. Nearly two-thirds of carbon dioxide &
methane emissions can be attributed to just 90 companies, for
example.
Heede, R. (2014). Tracing anthropogenic carbon dioxide and methane emissions to fossil fuel and cement producers, 18542010.
Climatic Change, 122(1-2), 229-241
48
5
AGRICULTURE
49
THE CURRENT INDUSTRIALIZED APPROACH TO
5 FARMING IS FAILING HUMANITY IN MANY WAYS
Schwartz, J. D. (2014). Soil as Carbon Storehouse: New Weapon in Climate Fight. Yale Environment, 360.
50
WE NEED TO SHIFT FROM INDUSTRIAL
5 AGRICULTURE TO HOLISTIC LAND MANAGEMENT
United Nations Conference on Trade and Development. (2013). Trade and Environment Review 2013. Available at
http://unctad.org/en/PublicationsLibrary/ditcted2012d3_en.pdf
51
HOLISTIC LAND MANAGEMENT CAN RETURN
5 CARBON TO THE SOIL
Webster, K. (2015). The Circular Economy: A wealth of flows. Ellen MacArthur Foundation Publishing.
52
5
ENERGY
53
TO AVOID CATASTROPHIC CLIMATE CHANGE THERE
5 NEEDS TO BE AN ENERGY TRANSITION
Singer, S. (2010). The energy report: 100% renewable energy by 2050, p11. Available at:
http://assets.panda.org/downloads/101223_energy_report_final_print_2.pdf
54
RENEWABLES ARE ALREADY REPLACING
5 CONVENTIONAL ENERGY IN MANY PLACES
International Energy Agency. (2015). Medium-Term Renewable Energy Market Report 2015. Available at
https://www.iea.org/bookshop/708-Medium-Term_Renewable_Energy_Market_Report_2015
55
SOLAR WILL SOON BE CHEAPER THAN GRID
5 ELECTRICITY
O'Rourke, S., Kim, P., & Polavarapu, H. (2007). Solar photovoltaics. Technology and Economics: Thin Film and Crystalline Silicon.
Deutsche Bank, North America.
56
5 SO AN ENERGY TRANSITION IS POSSIBLE
Fuss, S., Canadell, J. G., Peters, G. P., Tavoni, M., Andrew, R. M., Ciais, P., & Le Qur, C. (2014). Betting on negative emissions.
Nature Climate Change, 4(10), 850-853.
57
5 AND THE STEPS ARE CLEAR
Fuss, S., Canadell, J. G., Peters, G. P., Tavoni, M., Andrew, R. M., Ciais, P., & Le Qur, C. (2014). Betting on negative emissions.
Nature Climate Change, 4(10), 850-853.
58
5
59
WE NEED TO TACKLE THE HURDLE OF JOB
5 CREATION
Frey, C. B., & Osborne, M. A. (2013). The future of employment: how susceptible are jobs to computerisation. Available at
2013.http://www.oxfordmartin.ox.ac.uk/downloads/academic/future-of-employment.pdf
60
FORECASTS SHOW THAT UNEMPLOYMENT RATES
5 ARE EXPECTED TO RISE SHARPLY
A 2013 Delphi survey of some 300 global experts carried out by the
Millennium Project found that without changes in socio-political-
economic systems, unemployment is thought of as an increasing
trend.
Nearly half of the workforce
will be affected by
automation in some way by
2030.
Glenn, J.C., Florescu, E. and The Millennium Project Team. (2015). 2015-16 State of the Future, p.246. Available at
http://www.millennium-project.org/millennium/201516SOF.html
61
RETHINKING PRODUCTIVITY AND REDEFINING WORK
5 WILL BE CRITICAL
64
THERE ARE A NUMBER OF BARRIERS THAT WILL
6 NEED TO BE OVERCOME
International Labour Office. (2012). Working towards sustainable development: Opportunities for decent work and social inclusion in
a Green Economy. International Labour Office.
65
THERE ARE A NUMBER OF BARRIERS THAT WILL
6 NEED TO BE OVERCOME (CONT.)
66
7
A FINER FUTURE IS
POSSIBLE
WE ARE IN OVERSHOOT AND NEED TO BRING THE
7 ECOLOGICAL FOOTPRINT BACK INTO BALANCE
69
7 .BUT A FINER FUTURE IS POSSIBLE
We first need to craft a new cultural story, one where humanity lives in
harmony with nature and where social tensions are drastically reduced
This will take time to implement and so we need to buy time
through implementing the circular economy
by progressively reforming key economic sectors (finance and business,
agriculture, energy and the nature of work)
by introducing policies that appeal to the short-term interests of the
democratic majority
Creating the political and social desire for change is key
A Finer Future IS Possible
70
7
CAN THE WORLD ACTUALLY EASE DOWN
BELOW THE LIMITS AND AVOID COLLAPSE? IS
THERE TIME? IS THERE ENOUGH MONEY,
TECHNOLOGY, FREEDOM, VISION, COMMUNITY,
RESPONSIBILITY, FORESIGHT, DISCIPLINE, AND
LOVE ON A GLOBAL SCALE?
- Donella Meadows in the Limits to Growth
71
REFERENCES
REFERENCES
1. Motesharrei, S., Rivas, J., & Kalnay, E. (2014). Human and nature dynamics
(HANDY): Modeling inequality and use of resources in the collapse or sustainability
of societies. Ecological Economics, 101, 90-102.
2. Meadows, D. H., Meadows, D. L., Randers, J., & Behrens, W. W. (1972). The limits
to growth. New York: Universe Books.
3. Turner, G. (2014). Is global collapse imminent? An updated comparison of the Limits
to Growth with historical data. MSSI Research paper, 4, 21.
4. Strauss, M. (2012). Looking Back on the Limits of Growth. Smithsonian Magazine.
5. Rockstrm, J., Steffen, W., Noone, K., Persson, ., Chapin, F. S., Lambin, E. F., &
Nykvist, B. (2009). A safe operating space for humanity. Nature,461(7263), 472-475.
6. Steffen, W., Richardson, K., Rockstrm, J., Cornell, S. E., Fetzer, I., Bennett, E. M.,
& Folke, C. (2015). Planetary boundaries: Guiding human development on a
changing planet. Science, 347(6223), 1259855.
7. Hirsch, T. (2010). Global biodiversity outlook 3. UNEP/Earthprint.
73
REFERENCES
13. Berry, C. (2014). Wellbeing in Four Policy Areas Report by the All-Party
Parliamentary Group on Wellbeing Economics. London: New Economics
Foundation.
14. Fullerton, J. (2015). Regenerative capitalism: how Universal Principles And Patterns
Will Shape Our New Economy, p.43. Available at http://capitalinstitute.org/wp-
content/uploads/2015/04/2015-Regenerative-Capitalism-4-20-15-final.pdf
15. Ellen MacArthur Foundation. (2013). Towards the circular economy. Available at
https://www.ellenmacarthurfoundation.org/assets/downloads/publications/Ellen-
MacArthur-Foundation-Towards-the-Circular-Economy-vol.1.pdf
16. Wijkman, A. & Sknberg, K. (2015). Circular Economy and social benefits. Available
at http://www.clubofrome.org/wp-content/uploads/2016/03/The-Circular-Economy-
and-Benefits-for-Society.pdf
17. The Global Commission on the Economy and Climate. (2014). Better Growth, Better
Climate: The New Climate Economy Report: the Global Report. Available at
http://newclimateeconomy.report/2014/wp-content/uploads/2014/08/NCE-Global-
Report_web.pdf
75
REFERENCES
18. Heede, R. (2014). Tracing anthropogenic carbon dioxide and methane emissions to
fossil fuel and cement producers, 18542010. Climatic Change, 122(1-2), 229-241
19. United Nations Conference on Trade and Development. (2013). Trade and
Environment Review 2013. Available at
http://unctad.org/en/PublicationsLibrary/ditcted2012d3_en.pdf
20. Schwartz, J. D. (2014). Soil as Carbon Storehouse: New Weapon in Climate Fight.
Yale Environment, 360.
21. Webster, K. (2015). The Circular Economy: A wealth of flows. Ellen MacArthur
Foundation Publishing.
22. Savory, A. (2008). A Global Strategy for Addressing Global Climate Change.
Available at http://savory.global/assets/docs/evidence-papers/climate-change.pdf
23. International Energy Agency. (2015). Medium-Term Renewable Energy Market
Report 2015. Available at https://www.iea.org/bookshop/708-Medium-
Term_Renewable_Energy_Market_Report_2015
76
REFERENCES
24. Savory, A. (2008). A Global Strategy for Addressing Global Climate Change.
Available at http://savory.global/assets/docs/evidence-papers/climate-change.pdf
25. International Energy Agency. (2015). Medium-Term Renewable Energy Market
Report 2015. Available at https://www.iea.org/bookshop/708-Medium-
Term_Renewable_Energy_Market_Report_2015
26. Singer, S. (2010). The energy report: 100% renewable energy by 2050, p11.
Available at:
http://assets.panda.org/downloads/101223_energy_report_final_print_2.pdf
27. O'Rourke, S., Kim, P., & Polavarapu, H. (2007). Solar photovoltaics. Technology and
Economics: Thin Film and Crystalline Silicon, Deutsche Bank, North America.
28. Glenn, J.C., Florescu, E. and The Millennium Project Team. (2015). 2015-16 State of
the Future, p.246. Available at http://www.millennium-
project.org/millennium/201516SOF.html
29. Maxton, G. & Randers, J. (2016 forthcoming). Reinventing Prosperity. Vancouver:
Greystone
77
REFERENCES
30. Fuss, S., Canadell, J. G., Peters, G. P., Tavoni, M., Andrew, R. M., Ciais, P., ... & Le
Qur, C. (2014). Betting on negative emissions. Nature Climate Change, 4(10),
850-853.
31. Frey, C. B., & Osborne, M. A. (2013). The future of employment: how susceptible are
jobs to computerisation. Available at
2013.http://www.oxfordmartin.ox.ac.uk/downloads/academic/future-of-
employment.pdf
32. International Labour Office. (2012). Working towards sustainable development:
Opportunities for decent work and social inclusion in a Green Economy. International
Labour Office.
78
Email: anders@wijkman.se
Visit: www.clubofrome.org