Wednesday, June 20, 2012

What does sustainable really mean in an unsustainable economy?

There is renewed interest in sustainability issues, ahead of ‘Rio +20’, the follow up to the UN Environment conference of Rio 1992. What has been called ‘sustainable development’ for the last twenty years is now often referred to as the ‘Green Economy’. As before, one of the tools for its promotion are markets for ‘sustainable products’. And of these, organic products are one of the most prominent examples. Certainly, there has been a tremendous increase in the market for various sustainability schemes, such as organic and fair trade schemes, as well as others like the Rainforest Alliance, the Marine Stewardship Council (MSC), etc. In the most developed market segments some of these schemes are taking significant market shares. There is a tendency for  people to assume that sustainability standards represent something new, but that is not true.

Gandhi advocated the boycott of machine-made European clothing as it caused large-scale unemployment in India. He took to wearing hand-made cloth called Khadi  that was inexpensive and suitable for poor Indians. Most importantly, it showed Indians how to be self-reliant by a symbolic act. His arguments are similar to arguments used today of sustainability proponents. 

“Khadi is only seemingly expensive. I have pointed out that it is wrong to compare khadi with other cloth by comparing the prices of given lengths. The inexpensiveness of khadi consists in the revolution of one's taste. The wearing of khadi replaces the conventional idea of wearing clothes for ornament by that of wearing them for use. (Young India, 7-8-1924)”

There are still many issues associated with the schemes that need to be discussed. ‘Can you trust them?’ is one of the questions. On this matter ISEAL has worked hard to develop codes of good practice. And in the organic sector there are many layers of watchmen all watching each other over and above the constant criticism by competitors. Compared to other claims in the market  place, the credibility and integrity of sustainability schemes is generally high.

‘How sustainable is the production?’ is another increasingly common question. As the term  sustainable’ is often badly defined, or defined in hundreds of different ways, and everybody pays lip service to sustainability, it is very hard to respond to such a question. Even systematic and
standardised methods of measuring sustainability, like Life Cycle Analysis, are ultimately based   on subjective values and depend on how much weight is given to different parameters. The ultimate answers are not scientific but ideological.

‘Could the schemes be merged?’ is another common question. It is often the same clients that ask this question who are interested in the many facets of sustainability, and it is not so farfetched to believe that there could be benefits in merging them. But reality speaks a very different language, new  sustainability schemes emerge all the time. Those who call for schemes to merge do not really understand that the main role of a scheme is to be a marketing tool for differentiation.

Also, they don’t realise that consumers are different. For some environment is the most    important, for others personal health, fairness or animal welfare is more important. For the
ethical vegan it can hardly be acceptable to support a sustainability scheme that allows animal products; while anti-globalisation activists would probably not approve schemes built on free international trade.

Questions that are not asked often enough are:
• What is the role of a sustainability scheme in our world?
• To what extent can we rely on markets to shape our world?
• Under which conditions do they work and under which don’t they work?
• Will fair trade or organic schemes really change the bigger picture?

While Gandhi’s cloth was a forceful symbol for self-reliance, in the end not many Indians wear hand-spun cloth today. Perhaps buying organic products is more like a statement of how we want the world to be; a statement of what is good and sometimes even a statement of status, of being  hip.

Most of the sustainability schemes work purely as a marketing tool. Their need comes from the market place which relies on a pricing process that does not internalise social or environmental costs into the price of products. This means that some consumers foot the bill for what essentially   are market failures, while other consumers are free-riders – that is they get the benefits without contributing. What are the issues that are best dealt with by voluntary markets and what are best dealt with by regulation, or by a combination?

For example, in carbon offset trading the often-hyped voluntary markets (i.e. where a supplier claims to be carbon neutral by buying offsets) represents only around 10% of the total market value for carbon offsets, the rest is created by regulations. The organic sector in  Europe is as much driven by political endeavour as it is by the market, which results in measures such as direct subsidies, proclamation of areas dedicated for organic farming (nature reserves, water-protection areas) and public procurement. These issues should be discussed to a much greater extent within the ‘sustainability industry’, rather than the detail of a particular standard, or another layer of supervision

(leader in The Organic Standard, Issue 134)

Khadi means handspun and handwoven cloth. In 1918 Mahatma Gandhi started his movement for Khadi as relief programme for the poor masses living in India's villages. Spinning and weaving was elevated to an ideology for self-reliance and selfgovernment. Every village shall plant and harvest its own raw-materials for yarn, every woman and man shall engage in spinning and every village shall weave whatever is needed for its own use. Gandhi saw it as the end of dependency on foreign materials (symbolizing foreign rule) and thus giving a first lesson or real independence. Raw materials at that time were entirely exported to England and then re-imported as costly finished cloth, depriving the local population of work and profits on it. Gandhi also felt that in a county where manual labor was looked down upon, it was an occupation to bring high and low, rich and poor together, to show them the dignity of hand-labor. Thus Khadi is not mere a piece of cloth but a way of life. Readmore

Monday, June 18, 2012

Why oil price and grain price follow each other

This is a sad hoax, for industrial man no longer eats potatoes made from solar energy; now he eats potatoes partly made of oil.
(Howard T. Odum, Environment, Power, and Society, 1971)

Farming uses energy in many different forms: diesel for tractors and pumps; electricity for pumps, fans and indoor machinery such as milking machines, etc. Fertilizers represent a big energy use. Energy represents 90% of the production costs for nitrogen fertilizers, 30% for phosphorus fertilizers and 15% for potassium fertilizers. For production in the United States, energy costs represented 22–27% of the production costs for wheat, maize and cotton and 14% of the production costs for soybeans[1] (US CRS 2004). These figures do not include embedded costs in buildings, machinery, etc., so the actual share of the costs is substantially higher. In Argentina, energy costs were calculated to 43% of production costs in 2006 (Baltzer et al. 2008). In a situation with rising energy prices, agriculture prices will follow suit. This could also be seen in the case of food prices and in the case of the oil price hike in 2007–2008.[2] Increased energy prices influence food prices:
  • by making the production more expensive;
  • by making biofuel more interesting to produce and, therefore, reducing the production of food, leading to higher prices;
  • through increased transport costs that directly reflect on food prices; and
  • through reduced competition in the food sector (increased transport costs means that the pressure of global competition is reduced).

[1]            Can be grown without nitrogen fertilizers as they bring about natural nitrogen fixation.
[2]            Other factors too were driving this, but increased oil price doubtless was one if not the main driver. 

(Extract from Garden Earth)

Sunday, June 10, 2012

Paving farms

On our way to Bob Stewarts farm in Yorkville, Illinois, we see many newly "developed" areas with huge houses (sometimes referred to as McMansions in the US) with generous compounds. This on some very good agriculture land.  Bob tells us that he sold some land for that development and that he buys more land down in Farmer City, far away from the urban sprawl. It reminds me of the discussion in Brazil, where the expansion of soy beans is blamed from de-forestation, not because the soy beans are grown in the rain forest, but because soy production pushes cattle breeders from expensive fertile land into the cheap Amazon land. Ultimately, land resources are limited, and when we pave fertile land, some other land will be needed for farming. Also, most big cities are located in rich farm areas - which is why they became big in the first place, unless they were trading towns - and one acre of good land, may need to be replaced by three or four acres of less good land.

 During the past 30 years, much of America’s most fertile farmland has been lost to wasteful development. The National Resources Inventory   The NRI, conducted by the USDA Natural Resources Conservation Service (NRCS) in cooperation with Iowa State University’s Center for Survey Statistics and Methodology, is a survey of the nation’s non-federal lands that tells the story of farmland loss by the numbers. The most recent NRI, covering the 25-year period between 1982 and 2007, reveals that more than 23 million acres of America’s agricultural land have been lost to development—an area the size of Indiana. (

 I have called for an international soil convention several times before. Unfortunately it doesn't seem to be on the agenda for the upcoming Rio +20 event.

Some earlier blog posts on land "development"
Your 200 square meters of concrete and asphalt
Paving the land - and taking it back again
EU farm land increasingly sealed
Time for a soil convention!

(The trip to Illionois was part of the process to write the book "keep your ear to the ground" for the SSNC)


Thursday, June 7, 2012

The myth of the country of opportunity

"A closer look at those at the top reveals a disproportionate role for rent-seeking: some have obtained their wealth by exercising monopoly power; others are CEOs who have taken advantage of deficiencies in corporate governance to extract for themselves an excessive share of corporate earnings; and still others have used political connections to benefit from government munificence – either excessively high prices for what the government buys (drugs), or excessively low prices for what the government sells (mineral rights)."
writes Joseph Stiglitz in an article, about inequality in the USA.

In Garden Earth I write:

A widespread myth is that United States is the country of opportunity; the success of the individual is in his or her own hands. This was in particular repeated in conjunction with Barack Obama being elected as President, and by Obama too in his speeches. One is told that American society is a model for how people can be successful if they just work hard. Perhaps this was true[1] in nineteenth–century United States when conditions were very different and where there were almost inexhaustible natural resources waiting to be exploited (well, if one doesn’t consider that Native Americans, salmon and bison already used the space), especially compared to Europe, which was still half feudal. But the growth of the welfare state in Europe and the closing of the frontier in the United States changed this radically. Studies comparing the United States and Great Britain, on the one hand, with Canada, Germany and Scandinavian countries, on the other hand, show that social mobility is considerably higher in the Scandinavian countries and Canada and to a lesser extent in Germany than in Great Britain and the United States (Blanden et al. 2005). 

This pattern coincides with the level of inequality so that the countries with the lower equality show less social mobility. Unfortunately, many Americans still seem to believe the opposite and nurture the myth that the only thing that needed to get rich is hard work and dedication. Consequently, even if rarely spelled out as clearly, if one is poor one is to blame oneself. Those who ‘win’ are in some way seen as ‘better’ and therefore they have the moral right to their wealth. Considering that most wealth is just circulated among the already wealthy, this simply gives a moral superiority to those who are already rich. This also seems to be the message from Christian fundamentalists who have adopted the virtues of wealth and success as expressed in Proverbs 10:22 ‘The blessing of the Lord brings wealth, and he adds no trouble to it,’ instead of the dull and depressing moral of Matthew 19:24 ‘Again I say to you, it is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God.’

I note that in comments to Stiglitz article as well as in many other articles on the same topic, many refer to that many have been brought out of poverty the last decades. That is certainly true. Unfortunately, the most impressive record for this poverty reduction comes from a dictatorship with no liberal-capitalist policies, China. A country where inequality is rampant and extend also into other spheres than economics.  

In have written many more posts on inequality. e.g. 

The monuments of the city are built on the backs of poor rural people
Location divide is more important than class divide today
Growing inequality, between people, between countries, between region, between urban and rural
Tale from the sandpit
Equality is good for growth, but growth is not necessarily good for equality





[1]            For whites not subject to indentured labour; certainly not for the Native Americans or the African slaves.