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23.05.2024. Misha Gipsman Zeldin


Gipsman Zeldin M. Environmental Agenda: Political Trad-off Or Planetary Economy.













Annotation: This paper aims to propose an economic prism on the environmental agenda. It outlines a chronology of key agreements and explores the interconnection between consumerism and wealth growth. The text introduces concepts such as trade-offs, tragedy of the commons and externalities. It considers behavioral factors and the role of green ideology. The nexus between economic interests and environmental protection necessitates a pragmatic economic paradigm that includes a public policy framework with tailored provisions for entrepreneurs and an adopted system of education.

 

Keywords: ESG, ecological economy, environment, political economy.


Author: Misha Gipsman Zeldin, Ariel University (Israel). Email: mishag@ariel.ac.il.  ORCID: 0000-0003-1783-1604.


– This is the thing that killed them all?

No. Indeed, it was their own hubris that ended their reign, their belief that they were the pinnacle of creation that caused them to poison the water, kill the land and choke the sky. In the end, no nuclear winter was needed, just the long heedless autumn of their own self-regard…

– Are you okay?

– Yeah, sorry. Thought that would sound better than, "Nah, they just screwed themselves by being a bunch of morons."

Love, Death & Robots series, s.1, ep.2. (2019). Robots.


Introduction


The issue of human activity and its impact on the environment is the subject of much alarm. However, it is difficult to ignore the sheer volume of light, arable land usage, fuel combustion, and other emissions that are generated on a daily basis. People are feeling the affects of pollution and climate changes. This led to a growing awareness of the need for sustainable practices and greater conservation efforts in order to mitigate the negative consequences of human activity on planet.


Public policy and interdisciplinary research can benefit from a knowledge of economics prism. Even though economics is inept at precise predicting, it is dissecting already occurred phenomenons by strong models. Therefore, such modelled lessons of the past do not allow us to look into the future; instead, they direct a gaze in the right direction and establish a realistic framework for what is possible and applicable. It can provide valuable insights into how to manage resources better, how to create incentives for individuals, and how to create incentives for stakeholders. It can also help identify areas where interventions may be needed and how regulations should be designed. The recent scandals such as "Dieselgate", where VW used cars' software to cheat emissions testing, and "Batterygate", where Apple Corporation deliberately reduced the speed and resource of batteries in iPhones have raised concerns about the need for government involvement and social control. (Bouzzine 2020, Hotten 2015, Romm 2020).


By the end of the 20th century, developed nations had recognised the consequences of industrialisation and commercial competition. It is difficult to imagine a leading university, scientific journal, or even parliament today in which the topic of sustainable development does not take one of the central fields. (Hallinger, P. 2019; Vergura, D.T. et al. 2023). The 21st century has come with environmental pollution, emissions, animal extinctions, exploited or polluted soils, climate change and many others. Governments of leading countries are entering an environmental race of existential significance for humanity, where there is still no optimistic outlook. There is a striking example of the importance of a balanced non eco-populistic solution in Sri Lanka, where the ban on chemical fertilisers, pesticides, and herbicides increased the price of rice by 50% and agricultural yields by about 25% and eventually led to the country entering into default (Jayasinghe 2022; Rodrigo 2022).


Chronology of Key Agreements


The formal recognition of environmental problems at an international level occurred only 50 years ago. Below is a timeline of the most important events and agreements.

●      1949 – International Convention for the Protection of Birds: One of the earliest international agreements focused on nature conservation.

●      1968 – UNESCO Biosphere Conference in Paris: This conference brought attention to the importance of biodiversity conservation.

●      1972 – United Nations Conference on the Human Environment in Stockholm: The first major international conference dedicated exclusively to environmental issues.

●      1973 – Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES): Regulation of the international trade in endangered animal and plant species.

●      1977 – Tbilisi UNESCO-UNEP Intergovernmental Conference on Environmental Education: Establishment of the field of environmental education.

●      1987 – Montreal Protocol: Aimed at reducing and eventually eliminating substances that deplete the ozone layer.

●      1989 – Basel Convention: Regulates the transboundary movements of hazardous wastes and their disposal.

●      1992 – United Nations Framework Convention on Climate Change (UNFCCC): The primary international platform for climate change discussions.

●      1992 – Convention on Biological Diversity: Conservation of biological diversity and sustainable use of its components.

●      1997 – Kyoto Protocol: Establishing legally binding targets for reducing greenhouse gas emissions for developed countries.

●      2005-2014 – United Nations Decade of Education for Sustainable Development: A decade dedicated to education in sustainable development.

●      2009 – UNESCO World Conference on Education for Sustainable Development in Bonn, Germany: Transitioning into the second half of the UN Decade of Education for Sustainable Development.

●      2015 – Paris Agreement: A global climate agreement aimed at keeping global warming below 2 degrees Celsius.

●      2019 – UN Climate Summit: The summit focused on enhancing ambitions and accelerating actions under the Paris Agreement.

●      2021 – United Nations Climate Change Conference (COP26) in Glasgow: Discussions on efforts to achieve carbon neutrality and adaptation to climate change.


It is important to mention that there are some criticisms regarding the effectiveness of the implemented measures, the level of autonomy of control organization and the consistency between different countries.


Economic Growth and Consumerism


The sciences, and especially economics, have increasingly influenced society. John Maynard Keynes' pre-World War II theory of economic growth identified aggregate demand, specifically consumption, as a primary driver of economic activity. Consumption has been suggested to trigger a multiplier effect, which should drive economic growth and promote a broad-based satisfactory quality of life, leading to widespread well-being. Although Keynesians criticise colleagues for their oversimplification of his works, it is evident that governments and businesses have embraced the acceleration of consumption. Further outcomes reflect Keynes's famous quote from his book “The General Theory of Employment, Interest and Money” (1936): “But apart from this contemporary mood, the ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back. I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas. Not, indeed, immediately, but after a certain interval; for in the field of economic and political philosophy there are not many who are influenced by new theories after they are twenty-five or thirty years of age, so that the ideas which civil servants and politicians and even agitators apply to current events are not likely to be the newest. But, soon or late, it is ideas, not vested interests, which are dangerous for good or evil.”


The best or even only correct policy decision was seen as a means to increase the number of goods and the frequency of their consumption. All marketing and sales tools for increasing payments and improving presence in customers' journeys are even more natural for businesses. Then, lifelong services thus took precedence over manufactured goods.


One of the first authors who raised the issue was Vance Packard, who characterised consumerism as excessive materialism and creative waste (Packard, V. 1960). Later, the social scientist Jean Baudrillard documented consumption as the new foundation of social life in his work "The System of Things" (1968). In the paradigm, mass production is grafted by limitation in quality, intentional obsolescence, and planned failure of products (Whiteley, N., 1987; Slade, G., 2006). But the issue of planned obsolescence cannot be assessed in a single manner. Bisschop et al. (2022) reframe it as corporate environmental crime. However, Iizuka (2007) showed that intentional obsolescence alone could not explain the decision to release products. Furthermore, economics industrial organisation school has shown that because of the development costs, achieving technological innovations or market survival may require planned obsolescence as a necessary condition (Coase, R.H. 1972; Bulow, J. 1986; Fishman, A., et. al. 1993; Waldman, M. 1993; Choi, J. P. 1994; Grout, P. A. 2005).


The global apparel manufacturer and retailer Zara epitomises a quintessential example of the unimaginable in the past super rapid consumer market. This company removes unsold items every two weeks for recycling or redirection to secondary markets. Zara employs real-time analysis of sales data and trends to guide consumer behaviour towards timely purchases of new products strategically. The company's process for launching a new model, encompassing design, production, and distribution to stores around the world, takes no more than 15 days, with the number of collections per year reaching up to 40 (Aftab,  M., 2017;  Ferdows, K., 2004; SCM Globe., 2016). The doubling of clothing production between 2000 and 2020 emphasises environmental repercussions (Niinimäki, K. et al. 2020). Each stage of clothing production, from raw material sourcing to manufacturing and distribution, contributes to environmental degradation, pressing the need for a sustainable paradigm shift to ‘slow fashion’ industry (Bailey, K. et al. 2022; Raj, M, & Bajpai, P. 2022). Sustainable fashion is growing fast and prioritises the recyclability of garments, as well as responsible consumption practices. This transition advocates for quality, longer-lasting design, and a closer connection between the consumer and the creation process over quantity.


However, fashion brands such as ASOS and Boohoo have been scrutinised for misleading sustainability claims, suggesting a prevalent issue of greenwashing within the industry (Smith & Lee, 2023; Johnson et al., 2023). Responding to these challenges, Kering company (which includes Gucci, Kenzo, Balenciaga, Brioni etc.) has introduced a special "greenwashing" guide to foster transparency and ensure genuine sustainability efforts are recognised (Davis, 2023; Thompson, 2023).


Prior to the international agreements in the 1980s, the establishment of specialised journals in the 1990s, and the publication of numerous special issues, mainstream economics paid insufficient attention to the irrationality of unsustainability. Ecological economics, like many other multi- and transdisciplinary eco studies, is rapidly expanding and aims to provide hope for the possibility of a sustainable breakthrough.


Dilemmatic Situation


The occurrence of the environmental issue can be conceptualised as the lateral side of a coin, with the other side encompassing the attainment of well-being, life expectancy, and the spread of education. The issue in economics is aptly termed ‘Externalities,’ as it represents side effects, indirect, unexpected, and unpaid results that accompany and have proliferated with the milestones of growth. The opposite example of externality is the batteries of electric cars, which are designed to reduce human influence on nature but are getting a new threat.

The pursuit of growth has often coincided with what is known as the 'Tragedy of the Commons'. It is a situation where rational competition of independent agents for self-interest, involving unrestricted resource exploitation, clashes with the long-term interests of society (all agents). This concept reflects the conflict between individual actions, motivated by immediate personal gain, and their broader impact on communal resources, leading to their overuse and depletion, ultimately undermining collective welfare. See Hillman's book, "Public Finance and Public Policy" (2019), which comprehensively explains economic concepts and the basics of political economy.

 

The green movement was enriched by Carson, R. (1962) and her seminal work, which brought global attention to the “silent tragedy” unfolding across the fields where lethal poisons like DDT were utilised. Under significant public pressure, new regulations concerning chemicals entering the soil and water systems were established. However, even more terrifying is "The Great Tetraethyl Lead Scandal.” For 70 years, the planet suffered from the use of lead in fuel, causing widespread health issues, IQ level decreases, psychological health deterioration, and environmental contamination. Despite widespread knowledge of the issue among scientists, politicians, and businesses, the fuel industry defended its interests for decades until the 1990s, when mandatory ecological standards were transitioned (Needleman, 2004; Nevin, 2007; Kovarik, 2021; Hannah, 2022).


Looking at it objectively, modern-day governments and businesses are not deliberately trying to cause harm to the planet. It does not align with their objectives or interests. However, the challenge lies in balancing economic progress with environmental protection, known as the 'environmental-profitability trade-off.' In the short term, adopting sustainable practices could increase infrastructure expenses and require giving up specific sources of profit that are considered 'toxic,' which can make it difficult for entities that prioritise predicted financial gains. National energy production is an example. Trade-offs can lie not only with profits but also with alternative social goods that also require resources (Gradus, R., 1993).


Entrepreneurs or officials often face the challenge of balancing economic, social, and ecological value due to competing objectives in acquiring funding and resources. This can be particularly challenging for minorities, necessity entrepreneurs and those who struggle to align business goals with shareholders. Additionally, consumers may prioritise affordability over sustainability, making it difficult for entrepreneurs to develop a sustainable business model that the same time meets their financial and social goals. The new conditions imply a balance in dimensional trade-offs that integrates economic, social and environmental outcomes (Rashid, L., 2022; Neesham, C., 2023).

 

A green transition can be delayed by ventures with market power and political lobbying, but they can achieve it more confidently if they expect benefits. Meanwhile, those with less entrepreneurial capital may view it as a potential threat to their short-term revenue. It cannot be guaranteed that the expenses incurred for certain eco components of the ecosystem or business will necessarily lead to enhanced performance, and most probably, such costs are often viewed as detrimental. Many illustrations exist worldwide, including EU candidate countries, “Global South”, etc. A worrisome question arises regarding how to motivate adherence to green norms among autarkic or predatory countries, particularly when their elites are insulated from external influences (Morrison-Saunders, A., 2012; Nand A.A., 2022).


China, initially perceived as a laggard in terms of the number of agreements prior to the Glasgow 2021 conference, deserves particular attention. Contrary to journalistic scepticism, China has not remained on the sidelines. It has emerged as a leader in the production of batteries, solar panels, and wind energy components. As one of the fastest-developing nations in renewable energy, China has made a significant shift and, in recent years, has supported green standards and restrictions. Similar paradoxical processes are observable in countries from the Persian Gulf or Norway, which, unlike much of the world, do not experience a shortage of energy resources (Gallagher, K. S., 2014; Campbell, E. 2018; Cohen, R., et al. 2022).


Behavioral Factors


Environmental trade-offs are not popular in public discourse. It makes development less rational and more dependent on psychological and cultural factors. From a behavioral perspective, particularly in terms of biases, hyperbolic discounting emerges as a predominant issue. This bias entails an overvaluation of the present moment and an undervaluation of the future, representing a major obstacle in the behavior of politicians and entrepreneurs. The tendency to prefer immediate, smaller rewards over complex and delayed benefits often hampers long-term planning and sustainable decision-making. This is compounded by the fact that the willingness to adhere to sustainable principles is directly linked to personal traits. This is a wide field. Traits like agreeableness, openness, and extraversion promote social and sustainable entrepreneurship (Nga & Shamuganathan, 2010). Resilience and power distance positively affect consumer perceptions of sustainability (Vizcaíno et al., 2020). Perceived behavioral control, empathy, and assertiveness shape entrepreneurial behavior, and managing behavior and emotions is key to integrating sustainable practices (Gast, J., 2017; Baciu et al., 2020; Rosário, A.T., 2022).


Ecocentric Ideology


Classical economic theory traditionally distancing itself from ideologies, focusing primarily on the material-mathematical aspects. However, contemporary economics, particularly within institutional and behavioral schools, acknowledges that decision-making, including environmental policy, occurs with cultural norms, attitudes and values (North, D. C. 1990; Costanza, R. et al., 2014). This is particularly evident in environmental policy, where recent decades have witnessed a paradigm shift and a heightened awareness of societal choice in ecological matters.


The adoption of green values among generations did not happen by chance. In fact, the most eco-friendly countries in the world started promoting environmental awareness and advocacy campaigns in schools as early as the 1970s (Gough, A. 2014., 2016; Ardoin, N., 2020; . For social changes, it may be necessary to educate not only children but also them as the generation of actually future parents of the next generation of people, who will strictly adhere to the principles of waste segregation and strive to reduce their carbon footprint.

 

Modern science recognises Earth as a holistic complex, chaotic network system, validating some previously disregarded non-technical, archaic panpsychistic concepts (Swimme, T. & Berry, T., 1992). The outcomes of the Anthropocene, an era marked by human domination, prompt a reassessment of affect on the planet. Consequently, there is an increasing interest in elements of previously inadmissible concepts, such as transcendentalism. Biocentrism or social ecology theory, representing a radical shift, has become mainstream and increasingly influential, potentially competing with traditionally capitalist mercantile individualism. This ideological niche was previously occupied by socialist theories advocating for fair labour and gain distribution. Approaches such as feminist ecology, ecological collectivism, and ideas of Gaia, permaculture, deep ecology, as well as more radical ‘green religions’, are gaining traction in political and public discourse (Taylor, B., 2010). They have become integral to the platforms of many green political parties and movements (Merchant, C., 1980; Bookchin, M., 2005; Wall, D. 2010; Klein, N. 2019). Contemporary debates no longer revolve around the necessity of changing humanity’s relationship with nature but rather focus on choosing a caring, organic approach. This includes conservationist isolationism, paternalistic stewardship, strategies of gradual sustainable development, or ecological collectivism (Naess, A., 1989; Worster, D., 1994). It seems worth noting that the question of the ratio of economic literacy and populist, unrealistic "stop ecocide" slogans and ecotopian ideas, sometimes combined with “unmake civilisation”, which do not compare with reality, remains disfavoured (Pepper, D. 2005; Franco, M. P. V. 2020; Żuk, P. 2020). It is utopian to attempt a simple ban on what is supposedly not environmentally friendly. Moreover, additional regulations do not always lead to a stronger state or society. Nonetheless, they are more likely to incur additional public costs, particularly due to the presence of stakeholders of changes.


Drawing on experience, it can be inferred that the green idea will not replace but permeate all spheres in the form of Hayek’s catallaxy: its principles will become one of the foundations of economic relations’ efficiency.

For the most influential green works and books, see: (Carson, R. 1962; Lovelock, J. 1979; Bookchin, M. 1982; Naess, A. 1989; Shiva, V. 1993; Hawken, P. 1993; McKibben, B. 1989; Paech, N. 2012).


Conclusion


Many environmental issues did not arise from human intent, but studying their roots can provide insight into present and future. It remains uncertain whether humanity will continue relying on quasi-utilitarian principles or whether a novel economic model or a more stringent ecological doctrine will take shape. The discussions and assessments in publications may significantly impact collective environmental aspirations, similar to the historical influence of Protestant ethics and Political Economy. Or, they may not?


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