A speculative sketch of a successful
ecologically- sustainable economy

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Philip Sutton
Director, Policy and Strategy
Green Innovations Inc.
Tel & fax: +61 3 9486 4799
Philip.Sutton@green-innovations.asn.au

21st June 1998 - Version 1.a.w:i

Paper marked up in HTML format
by Martin Powell

Contents

  • Introduction
  • Sector zero - ecosystem services
  • Primary sector - extraction and production
  • Secondary sector - resource processing
  • Secondary sector - simple manufacturing
  • Secondary sector - complex manufacturing
  • Tertiary sector - human services
  • Tertiary sector - physical services
  • Quaternary sector - information
  • Quinary sector - domestic economy

  • Introduction

    A successful ecologically sustainable economy would, more than likely, continue to generate economic growth around the historic trend rate. It would however, over time, dramatically reduce non-renewable resource use, pollution production and would decisively reduce impacts on the natural environment. The result would be (eventually) that society would be ecologically sustainable, that is, life support systems and other species would be maintained in perpetuity 1.

    To offset the reduced use of newly extracted non-renewable resources and to maintain economic viability it would be necessary to use:

    (a)
    much more and much better quality information

    (b)
    more and better quality labour (the gross quantity would be limited by full employment)

    (c)
    more and better quality capital goods (plant and equipment)

    (d)
    more and better quality recycled materials and cascaded energy (that is, energy used at progressively lower grades until it is dissipated)

    (e)
    more and better quality renewable energy

    (f)
    perhaps more sea space (instead of greater quantities of land).

    These fundamental changes will give rise to further consequential changes. Possible transformations in the sectors of a successful green economy are described below. These changes would be driven by a suite of ecotaxes which would be indexed to grow as the economy grew.

    Sector zero - ecosystem services

    Major efforts would be made to restore this sector after the massive reductions caused since the European colonisation of Australia. Natural ecosystems would be restored and extended. Greater emphasis would be placed on the management of ecological communities and the prevention of threats to such communities and to individual species. This preventative approach would be supplemented by recovery programs for threatened species. Wilderness-style management would be increasingly be used in natural environments as is the most cost effective strategy for the protection of large areas.

    Artificial ecosystems such as agricultural ecosystems would be modified so that they could perform more of the nature conservation and ecosystem functions of the natural systems they had replaced. Efforts would be made to strengthen or re-introduce natural or quasi-natural ecosystems into the city to manage the flow and purification of drainage water and to provide greater aesthetic and nature conservation benefits.

    Primary sector - extraction and production

    In the mining and extractive industries the biggest changes would be a reduction in fossil fuel production. Society's aim would be to reduce their production to zero because of their greenhouse impacts. The biggest initial drop would be in coal. Oil production would fall more slowly. Demand for fossil fuel gas would grow significantly for a decade or so while transitional greenhouse policies were operating but would eventually fall to zero like the other fossil fuels.

    The structure of mining would change, with underground mining 2 making a partial comeback as a means of cutting the energy costs but overall demand would fall very significantly due to a dramatic increase in recycling. As the technology developed, more and more of the minerals needed to replace those that 'leaked out' of the closed-cycle manufacturing system would be supplied from non-conventional sources. For example, as a way of reducing the pollution and other environmental impacts of mining, membrane technology would be used to extract minerals from heavily mineralised water flows (from old tailings dams, groundwater from heavily mineralised regions and even seawater).

    Demand for stone, gravel and other materials needed for the building industry would stay high for several decades as the urban areas were restructured to achieve a much higher level of resource use efficiency. Building material recycling would however temper this demand.

    Primary industries harvesting resources from natural environments (e.g. timber and fish) would reduce output since higher ecological standards of management would result in lower sustainable yield levels and higher costs of production. Instead, output from plantations, agro-forestry and aquaculture projects would significantly increase their output. Mariculture would not occur to any extent in natural shallow waters or on the coastline but instead would be based on artificial structures in deep water.

    The production of non-food biological products (e.g. wood and animal fibre products) would decline due to more efficient consumption patterns and the substitution of recycled products.

    Exports of non-renewable energy and mineral resources and non-food biological products would remain stable or could decline. Resource conserving services and manufactured goods would offset the overseas demand for resource products.

    Local and overseas demand for chemical free or minimum chemical residue agricultural products would increase dramatically. This demand combined with the need to halt and reverse land degradation would lead to a further polarisation of land uses between low intensity grazing based on the retention or establishment of semi-natural ecosystems and high intensity animal 3 and crop production in limited areas.

    Rural land values would remain high due to intensified competition between alternative uses (e.g. for grazing, cropping including for fuel crops, agro and plantation forestry, aquaculture, conservation, tourism, some forms of mining and dwelling and industrial construction). However, land would no longer appreciate greatly in value because of the introduction of a broad based land tax indexed to the growth of the economy. Agricultural systems would be re-designed around native species as a way of reducing the ecological impact of agriculture (e.g. greater use of native plant species for forage and for specific products such as wild flowers and broombush).

    The growing cost of using rural land and of environmental maintenance would require a greater production of high value products and value adding should occur as far down-stream as possible.

    Secondary sector - resource processing

    While a high proportion of products extracted from the environment (e.g. minerals, non-renewable energy and biological products harvested from natural environments) would be fully processed, the total quantity of such processing would eventually decline in absolute amount due to lower extraction rates.

    Eventually a large proportion of processed materials would be derived from post consumer and industrial waste. This would be a growth area for several decades.

    Overall there would be a significant decline in the quantity of material processed due to reduced production of throw away products and the steady elimination of in-efficient consumer systems. Manufacturing systems with virtually closed materials cycles would be introduced to reduce waste disposal and pollution emissions to negligible levels.

    The substantial shift to a renewable energy resource base would mean that solar, wind and wave energy systems would expand dramatically.

    Secondary sector - simple manufacturing

    The refurbishment and remanifacturing of used products would expand.

    Secondary sector - complex manufacturing

    In economies that had been dominated by resource production there would be a relative increase in the production of manufactured products as the physical aspects of manufacturing decentralised and localised under the impact of ecotaxes and the imperatives of just-in-time production. The physical volume of manufactured products in countries with 'average' economic structures would decline for some decades (due to longer product lives) before stabilising. However the real economic (or use value) of manufactured products would continue to increase into the future due to the strong emphasis on value-adding and the increasingly sophisticated requirements of industry and the domestic sector.

    Food products would become much more diverse to match the particular health needs and preferences of individual consumers.

    Because of the emphasis on quality there would be a blurring of the distinction between parts of the manufacturing and services sectors. Services to help diagnose customer needs would be coupled with flexible manufacturing processes to provide custom-made products at low cost.

    Tertiary sector - human services

    The human services sector would expand significantly. Preventative health/welfare services would increase considerably, but curative services would stabilise. Demand for human services by lower income people would expand significantly (due to their improved purchasing power and the declining relative costs of labour intensive products due to the conserver pricing system).

    Tourism, recreation and entertainment activities would continue to increase with rising incomes and growing leisure time both locally and overseas. The duration of stays would increase to offset growing transport costs. High quality natural environments would be in increasing demand as destinations. Artificial environments (quasi-natural and built) would be created to provide recreational and educational experiences and to take user pressure off natural environments.

    One-child families would become very common for a half century or more during which the world population was declining to a stable level that would permit a high quality of life for all while achieving ecological sustainability. Services would emerge to help people raise children successfully in such circumstances eg. 'match-making' services so families could find partner-families to share some aspects of child rearing so that their children could grow up with sibling-like relationships.

    Tertiary sector - physical services

    Retailing would decline somewhat in physical volume but would continue to increase in value added. Hire services and public lending 'libraries' for a wide range of products would expand. Resource efficient home delivery services supported by user friendly electronic shopping systems would grow significantly. With increased recycling there would be a need for a comprehensive used products collection system to complement the existing goods distribution system. The used-components industry would grow significantly as would repair services. The cleaning of returned containers would expand significantly.

    Maintenance services would expand dramatically as society moved to ensure that virtually all physical products were managed to extend their useful life to the maximum.

    A new service industry would be established to carry out the warehousing and long term storage of waste products (as disposal to landfill was phased out). With the advent of closed cycle production, wastes that were produced in low volume or for which effective recycling technology did not yet exist would be accumulated until recycling was feasible.

    Energy and resource conservation services would expand greatly. The energy utilities would buy 'conservation' from companies running energy conservation programs in industry and in the domestic sector as an alternative to building new power stations or extracting more liquid hydrocarbons. Industries wanting to undertake new energy intensive products would also promote energy conservation as an energy 'source' that was low in carbon dioxide, thus reducing the need to purchase internationally traded greenhouse gas permits.

    Road and air transport would decline in volume but public transport and telecommunications would increase and there would probably also be an increase in sea transport for the energy efficient carriage of goods between capital cities. The physical volumes of goods and materials shipped overseas would fall but the real economic value of the goods carried would increase. The international shipment of waste products would increase as countries developed specialist skills in reprocessing.

    Tourism, recreation and entertainment activities would continue to increase with rising incomes and growing leisure time both locally and overseas. The duration of stays would increase to offset growing transport costs. High quality natural environments would be in increasing demand as destinations. Artificial environments (quasi-natural and built) would be created to provide recreational and educational experiences and to take user pressure off natural environments.

    The building industry would grow due to higher levels of renovation and retrofitting of improved energy systems and due to higher levels of re-use of building materials. For as long as very low quality building stocks remained, there would still be a high level demolition and new building to provide resource efficient, high quality replacement structures.

    Quaternary sector - information

    This sector would expand greatly to become the strategically leading sector of the economy. There would be a greatly increased demand for skilled labour and the education/training system would expand accordingly. There would be significantly higher levels of local design in products and services. Research and information dissemination services would grow significantly. Environmental management and resource conservation research, development and consulting would grow very significantly, especially during the first few decades of the transition to a conserver economy.

    Mass advertising would tend to decline and the advertising industry would shift its emphasis from creating and manipulating mass markets for manufacturers and retailers to servicing the unique needs of purchasers. Industry's own emphasis on quality rather than quantitative production would drive this change; regulatory changes where they were needed would tend to follow rather than lead the change.

    The ethical sector of the finance industry would eventually become its largest component. There would be growth in the absolute size of the finance industry due to greater rates of saving and investment. Ethical investment would contribute to growth in savings levels because it would also have some of the attributes of consumption expenditure being experienced as a contribution to the investor's immediate quality of life. (Providing direct or vicarious opportunities to see one's money at work would become both a marketing technique for such investment and a form of entertainment.)

    The information sector would provide the core of virtual economic clusters. These clusters would play a major role in the development of rural and remote areas.

    Quinary sector- domestic economy

    Due to increased leisure, the progressive equalisation of male/female roles and changed expectations for the work environment, the domestic economy would emerge as an even more significant sector of the total economy. More people would begin to do paid work at home or in neighbourhood serviced offices which incorporated creches and were close to schools and shops. The boundaries between salaried work, self employment and leisure would begin to blur. The national accounts would be altered to formally recognise the quinary or domestic sector including its very large non-monetary elements e.g. unpaid housework and child rearing.

    The domestic sector would produce a significant proportion of its energy needs using solar technologies.

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    Footnotes:

    1 Strictly speaking the extinction rate would be brought down to the level that would have applied between major extinction events (such as strikes by large meteors and by ice-ages) and that would have applied before humans dominated the landscape by the use of technology (starting with the use of fire and efficient hunting tools). This is an extinction rate that is dramatically lower than the present rate. Return to text -1

    2 To avoid the safety problems of underground mining, the mining would be largely carried out by robots. Return to text -2

    3 For animal welfare reasons this would not include the battery rearing of chickens or the feedlotting of cattle etc. Return to text -3



    Last modified: 6 August 1998

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