24.9.2024
Read the Draghi report On September 9th, Mario Draghi, former President of the European Central Bank (ECB), published the much-anticipated Competitiveness Report that had been commissioned by the European Commission. As one might expect, the high investment needs and the proposal to use co-financing for part of the investment took up a significant portion of the media space in […]

On September 9th, Mario Draghi, former President of the European Central Bank (ECB), published the much-anticipated Competitiveness Report that had been commissioned by the European Commission. As one might expect, the high investment needs and the proposal to use co-financing for part of the investment took up a significant portion of the media space in Finland. However, as the President of the ECB understands quite well, financing is the easy part. The hard part is understanding what concrete changes are needed in Europe in order to meet climate goals and other targets, and how to bring about those changes. Draghi has spent a lot of time thinking about these very issues and is clearly trying to elevate the level of debate concerning them in Europe. Two thirds of the more than 300 pages of Part B of the report outline sectoral snapshots and propose sectoral measures. I will highlight some important aspects of the report and examine them from the perspective sustainability sciences. It would be a pity if the public discussion of the Draghi report were reduced to the knee-jerk reaction “A collective debt? — No”.

 

“Mario Draghi, European Parliament, Plenary session – The future of European competitiveness, 17/09/2024”, Source: European Parliament

In his opening words, Mario Draghi paints a powerful picture of a dwindling Europe at a time when the world is rapidly decarbonising its economy and technological progress is advancing by leaps and bounds. In the 21st century, the US has led the way in the most complex technologies and artificial intelligence, while China has invested in the value chains required for the electrification of energy and transport, ranging from raw materials to the finished products. Despite good starting points, such as high-quality research, Europe has been left behind. The war on Europe’s borders and the disruption of the flow of fossil fuels from Russia suddenly put Europe under much greater strain. The automotive industry, for example, which is so important for Europe, is struggling because it has not been able to modernise in time. In keeping with current fashion, Draghi is making his argument through macro-level abstractions such as economic growth and productivity, but this is not necessary. They are not essential if we want to understand the evolution of economic structures and the relationships between different economies.

Climate change, competitiveness and geopolitics play the same game – and then there’s AI

Draghi takes climate change, competitiveness and geopolitics seriously and discusses their interplay throughout the report. Draghi is firmly committed to Europe’s climate targets, which are more stringent than those of other countries and continents. But achieving these targets depends on international competition and other external relations, because Europe cannot decarbonise even its own economy, let alone the global economy, on its own. Some technologies and solutions are cheaper to buy from China than to make in-house, but Europe will be in trouble if it cannot design and manufacture a sufficient share of what it needs. In any case, Europe will have to source many raw materials elsewhere. If Europe’s own production is not competitive and if Europe does not have enough to offer to others, these purchases will become unacceptably expensive. Too strong dependence on other countries exposes Europe to large price fluctuations in normal times and to exploitation and blackmail in times of crisis. It is an important strategic question which kind of production Europe can manage, now and in the future. It will not be resolved without careful planning in the Member States and especially at European level.

The treatment of AI is more blurred in the report. Draghi sees AI and complex digital technologies and services in general as important drivers of productivity growth. But what does it mean to say that Europe should integrate AI into all sectors of its economy? So what do we do in practice? I have no doubt that Europe should be at the forefront of AI development, at least in the sense of understanding it, researching it, and developing new potential solutions. But the rush towards adopting and deploying something that we don’t quite see the benefits of is still worth a critical look. When you compare the clarity of the arguments, the difference with basic industry is striking: in the foreseeable future we will certainly need steel, cement and various chemicals, but the fossil fuels now required to make them and the greenhouse gas emissions from their manufacture must be eliminated. That is certainly worth investing in.

Modernising basic production and stretching technological frontiers require different policy measures

When I read the sectoral analyses, I see a background structure of industrial sustainability transition (see figure below, translated from Andersson, Bauer and Nilsson 2024). On the right-hand side of the structure is the production of basic materials, which is a major source of greenhouse gas emissions and requires large investments to decarbonise. There are no high expectations of increasing returns and productivity. In the middle are activities such as construction, transport and manufacturing. They do not generate as much direct emissions, but developments in them will affect the demand for basic materials. On the left are services and technological developments, which are the main focus of future economic expectations – the high yield -seeking investment world revolves around this (compare the development of the US in the 2000s relative to Europe as described in the Draghi report). Services and technological developments have little impact on emissions in their own right, but the impact on other sectors is considerable.

Figure: Classification of economic sectors and interactions in terms of greenhouse gas emissions and growth potential. Translated into English by DeepL from Andersson, F.N.G, Bauer, F. and Nilsson, L.J. (2024). Politikens roll för näringslivets klimatomställning, SNS Förlag.

Draghi is concerned that Europe has done rather badly on the left side of the structure in recent years, but he does not forget either the massive investments needed to upgrade the production of basic materials and to build, for example, energy, transport and defence systems in the coming years. Draghi recognises that achieving the objectives of these different sectors will require different policy measures (the proposed measures are partly horizontal, partly sectoral). Cutting-edge thinking and experimentation that pushes the technological boundaries cannot be guided by clear pre-set targets. Rather, support must be first given to diverse development, and only when promising starts are identified, more focused investment is viable. On the other hand, decarbonising energy-intensive industries and developing Europe’s energy, transport and defence systems require a strong emphasis on planning, collective choices and coordinated investment – and here the role of the public sector is absolutely essential (not forgetting, of course, the role of businesses and research institutions). I prefer to describe this with the term ‘infrastructure upgrade’ or ‘system upgrade’, although this is also a creative and innovative activity. And sometimes it also requires technological leaps. Take the electrification of a pulp mill, for example: you need to solve the problem of generating the necessary heat effect electrically and then processing the raw materials that are not burned into valuable battery materials, for example.

Is Finland listening? investments in upgrading energy-intensive industries often lack a “business case”

That different policy instruments are required to reform different sectors of the economy, is an important observation for Finland, which has the largest share of energy-intensive industry in the economy (in terms of value added) in the European Union, and an exceptionally large share of greenhouse gas emissions in the economy as a whole (about a quarter if the land use sector is excluded). Business and government also want to see more production facilities in Finland that benefit particularly from low-cost electricity, i.e. energy-intensive industry.

According to the Draghi report, the business case for investment in the renewal of energy-intensive industries is in many places poor or unclear (Part B, p. 99). In addition to the high direct capital costs, the operating costs are unclear when less well known technologies are introduced. Emissions trading and the future Carbon Border Adjustment Mechanism will help, but probably not enough. There is generally no significant additional market return available for green products compared to non-green products to cover the higher costs. In Finland (and Sweden), the situation is easier than in other European countries because the electricity required by the new technologies is available at relatively low cost. However, it is difficult to mobilise investment without significant public investment, even though it is recognised that emissions need to be brought down and industry needs to modernise to remain competitive in a remote corner of Europe. The required public investment is both financial and related to research, coordination and regulation (see also Löfgren and Rootzén 2021). In a recent research essay, Löfgren and colleagues (2024) outline how such state-level or EU-level industrial policy can preserve the useful features of technology neutrality while making clear choices about technology domains.

The European Union’s new economic rules, the so-called fiscal framework, look set to shrink Finland’s public investment capacity even further in the coming years – more than that of most other euro countries. Therefore, Draghi’s proposal that a significant part of public investment should be made through a Europe-wide shared financial instrument should be particularly attractive to Finnish policy makers and industry. A report authored by Raimo Luoma, published by the Confederation of Finnish Industries in February 2024, which sought to pave the way for the Finnish debate, tried to take the argument in this direction. However, according to public comments made when the Draghi report was published, Finland is still not ready for this.

The climate is really warming and natural resources are limited

Finally, a word from a slightly broader perspective. Namely, while the Draghi report takes global warming and the decarbonisation challenge seriously, it is still far from the reality where we will have to rapidly prepare for the increasingly dramatic effects of warming. We will have to cope with intensifying and more extreme weather events and invest an increasing share of our spending in climate disaster repair projects. We will also have to cope with the social unrest caused by these events. Deepening economic austerity measures and their essential element of ‘planned unplannedness’ (the political idea that we should not collectively think and decide at all about what we do, but only try to keep the market functioning properly) is probably not a very good starting point in such a world.

The picture of finite material resources created by the report is also confined rather tightly to the geopolitical perspective, where finiteness is conceived mainly as the ability to extract materials from the world for European use. In Draghi’s picture, the economy is not directly constrained by, for example, the limits to the sustainable use of natural resources and the maintenance of biodiversity. Including such factors would create considerable additional challenges for the rapporteur. If we go back to the classification proposed by Andersson, Bauer and Nilsson (2024), where the middle of the spectrum is, for example, construction and transport, both can be influenced enormously at the level of urban systems. If urban transport is largely public and buildings are repaired and modified rather than demolished and replaced by new ones, the climate and material burden will be at a completely different, i.e. lower, level. This will of course also have an impact on the factors of economic growth.

Draghi sometimes talks about the circular economy (for example, that because Europe has few virgin materials to mine for decarbonisation, increasing the recycling rate will give us comparative advantage), but this view misses the essential point that a high circular economy rate is impossible to achieve if absolute consumption levels keep rising.

Finally

All in all, Mario Draghi’s Competitiveness Report is very important reading across Europe. It is not (just) grey administrative rhetoric, but it also aims to reach a wider audience. One of the main merits of the report is its qualitative approach to the needs for economic change, rather than a ‘horizontal’ or ‘non-contextual’ approach. It also provides thoughtful advice on how to achieve these changes. In this paper I have highlighted only a few of the aspects covered in the report, and of the many sectors I have focused mainly on energy-intensive industry. As said, the Draghi report does not limit itself to these. I sincerely hope that the report will not just be read cynically from the perspective of the political campaigns of the day, but will be carefully studied and will form the basis of a broad social debate.

Paavo Järvensivu
Doctor of Business Administration, Associate Professor of Environmental and Social Policy

11.3.2024
Realising a sustainability transition through the “new” industrial policy The new industrial policy seems to push political reality closer to a position from which it is possible to articulate and act on the huge, complex task of a sustainability transition.

The “new” industrial policy – referring to the emerging political actions and wider policy programs around the Inflation Reduction Act in the US and the Green Deal Industrial Plan in the EU – has generated considerable enthusiasm, but also concern. For us, a multidisciplinary group of scholars studying the conditions for a rapid sustainability transition, the excitement relates to the way industrial policy operationalises the call to deeply and determinedly transform the infrastructures and activities of the economy. The new industrial policy seems to push political reality closer to a position from which it is possible to articulate and act on the huge, complex task of a sustainability transition.

BIOS organised a two-day pilot session for the science-driven planning of a sustainability transition at the Ateneum Art Museum. November 20, 2023. Photo: Juhani Haukka

Before the recent practical industrial policy innovations in the US and in Europe, there have been many expert-led initiatives and academic studies about sustainability transitions, such as the Green New Deal for Europe and the normative study of a Green State[1], in a more place-based fashion for instance our plan of Ecological Reconstruction for Finland, but they have remained rather far removed from the political reality. Previous political attempts have either had too little effect on shaping the direction of economic development (e.g. the EU Green Deal, despite its many carefully designed disciplinary mechanisms, such as the emissions trading system and the obligations on land-use) or they have not passed through the political machinery into action (e.g. the 2019 Green New Deal in the US).

Now there seems to be a political opening toward actually steering structural changes in the productive capacity of the economy. The COVID-19 response was already an exercise for modern states in strongly guiding and supporting various sectors of the economy. Interestingly, the pandemic-related state action was also largely based on scientific deliberation. The measures were, of course, hasty reactions to a sudden crisis. In comparison, the new industrial policy is more long-term and more proactive, responding to creeping, slowly emerging crises rather than acute, rapidly evolving ones.

The innovations in real politics have lately generated a lot of useful interdisciplinary sense-making of industrial policy, both on the policy that is now being pursued and on the theoretical potential of industrial policy. Recent discussions and texts, in the Anglosphere particularly the Varieties of Derisking interview in Phenomenal World, the response of JW Mason, an associate professor in economics, to the interview, historian Adam Tooze’s posts one & two, Transitioning Systems? by Melanie Brusseler at Common Wealth in the UK, and a number of reports by the Roosevelt Institute, have basically created a new public around the topic. These outputs form a mosaic-like but still somewhat coherent lens through which to analyse different economic and industrial steering mechanisms in their real-world contexts.

While we are excited about this shift, we also see room for elaboration and enrichment in the debate. Hence, we want to contribute to the body of work from the perspective of multidisciplinary sustainability science, by examining a bit more deeply the ecological goals and constraints of industrial policy and by shedding light on what we term science-driven planning. We propose the framework of societal metabolism as a complementary analytical lens to thinking about industrial policy.

Societal metabolism

As far as we can see, the debate has yet to go deep enough into the relationship between industrial policy and the transformation needed for economies and societies to give up on the use of fossil fuels and the over-consumption of other natural resources. The questions asked have been too imprecise to be answered adequately. We believe that the concept of societal metabolism is useful in finding both the right questions and the initial answers to them, as we will demonstrate below.

For example, the introduction to “Varieties of Derisking” asks: “Do these policies target the right constraints and the most important barriers to rapid decarbonisation?” The question is reasonable for a policy analyst, but from a sustainability transition perspective, it is crucial to first examine what we really mean by rapid decarbonisation. What kinds of real-world changes does it refer to?

In the same discussion, economics researcher Chirag Lala poses more questions: “What do we expect investment to do? And why is investment not happening at the requisite speeds or the requisite volume in the areas we would need for decarbonisation? We need not just new generation systems, but new heating systems, industrial equipment, transportation equipment, and so on.” If we stick to this line of thinking, industrial policy narrowly points at the production capacity of zero-carbon technology and products. There’s a sense that decarbonisation requires massive amounts of new things, and we need to focus on boosting the production of these things.

But we need to ask “productive capacity for what?” (You need to know what war you will be waging.) We have to have a comprehensive understanding of the socio-technical systems that we aim to build and reconfigure. The point of industrial policy is that production is matched with consumption, and based on the international scientific consensus reports by IPCC and IPBES, among others, we know that it is not just production systems but interconnected production-end use systems that must change. It may be helpful to have in mind a basic image of societal metabolism:

Figure 1. Stylised depiction of societal metabolism.

The starting point in the simplified image is that all human activity builds on ecological systems that have their own limits and properties. Human societies take in energy and materials and give out waste and emissions. Take and give too much, and the ecological systems discontinue to function in ways modern humanity is accustomed to. Society is built to provide humans with shelter, nutrition, mobility, culture, and so on. This is accomplished through production systems and end-use systems, which co-determine each other. On the whole, it is this societal metabolism that we urgently need to transform away from fossil fuels and other types of over- and mis-use.

Seeking to decarbonise while holding on to current levels and ways of end use is senseless for at least three reasons. First, the energy system and other related systems are easier and faster to decarbonise the smaller the throughput is. And this is not just philosophy. The decarbonisation process goes on by still using fossil fuels, because of the systems we have inherited. Especially in the early phases, the process is inevitably “dirty”. In the meanwhile, we are within only years of blowing up our existing carbon budget for staying below 1,5 or even 2 Celsius global warming. If we are serious about rapid decarbonisation, we must lower the volume of energy production wherever possible. This means simultaneously upgrading also end-use systems (concretely e.g. cities and transport infrastructure and services but also ways of life) to enable good life with less energy consumption.

Second, it is dangerous to take on decarbonisation as a singular challenge without acknowledging the broader ecological crisis we are facing. Biodiversity loss is also driven by climate change, but we cannot reverse it without reducing and qualitatively improving material resource use. The energy system itself uses plenty of materials, but energy is also used to modify, shape and distribute materials that are used for other purposes. And this is where all types of industrial production come into play, not just the ones directly related to energy production. It is the whole of societal metabolism that needs to be transformed in order to stop the destabilisation of ecological systems.

Third, international trade and supply chains are already stressed. From this perspective, it is quite clear that we do not want to extract and distribute minerals and other materials any more than is absolutely necessary. Holding on to current levels and ways of end-use while seeking to decarbonise holds precisely this risk – the new industrial policy not diminishing global inequalities and pressures for resource conflicts but exacerbating them.

All of the three points converge in the observation that qualitative change of the metabolism (its provisioning systems and the needs that are provided for) needs to accompany the quantitative decrease of its footprint.

The industrial policy discussion has from time to time touched upon the systems perspective. Typically, the reference point is electricity grids: how to make different elements of renewable power work together, and how to ensure that the investments are coordinated. That is an important theme, but as said, it is just part of the bigger picture. Even the technical properties of the grid might leak to the side of end-use systems, namely the flexibility in the necessary balancing of intermittent electricity production with its use can be answered either within production or usage or through a combination of them. One path to follow would be to make our social practices compatible with varying energy use (a small Finnish example would be to learn to heat the electric sauna when the wind blows; a more universal one would be to sync the charging of batteries based on electricity production patterns). How utopian that is, is contestable, and depends on established cultural traits, among other things.

Practical issues

To further clarify and concretise the scope of industrial policy in relation to a sustainability transition, let’s take two prominent examples: EVs and hydrogen. In both cases, solely from a production capacity perspective, it might make sense to proceed at full speed, but in terms of urgently transforming societal metabolism, there are considerable threats.

It may be in the interests of car makers to sell and produce as many electric cars as possible, but from a sustainability standpoint, it does not make sense. Rather, the goal should be to enable sufficient mobility efficiently. The solution that stands out from the research literature is to transform systems of mobility so that walking and cycling is prioritised, electrified public transportation comes second, and a mix of shared and privately owned electric cars make up the rest. An industrial policy focused solely on ramping up zero-carbon production systems will miss the mark.

Green hydrogen is another ride that should be closely examined before jumping on it. It refers to the generation of hydrogen through electrolysis of water, using renewable zero-carbon power. From an efficiency point of view, replacing fossil fuel -based raw materials seems plausible, for example in steel-making or agriculture. But because of great energy losses in the production process and other issues, such as explosiveness and difficulty of distribution, it is unlikely that green hydrogen would take a very broad role for instance in transport systems. In the meanwhile, large infrastructure projects are being developed in Europe that are not just for green hydrogen but also allow carrying natural gas. The risk is that building “green hydrogen compatible” capacity actually prolongs fossil fuel use.

Both examples have direct geopolitical implications. If we again consider Europe, green hydrogen is something that might become more “European” than fossil fuels ever could (save for Norway). That seems to be part of its appeal. The response to the energy crisis which hit Europe after Russia’s 2022 attack on Ukraine was in major part based on LNG, liquified natural gas. New LNG ports were built, and Europe sought to secure LNG deliveries from all other places than Russia. That trajectory was not very satisfactory either in terms of climate emissions or the goal to reduce dependence on non-democratic countries. There seems to be a hope that only if we could switch natural gas to green hydrogen, all would be alright. Materially speaking, the hope seems to be highly inflated. Green hydrogen will likely be produced for certain usages – but for many other types of usage, electrification is a far better candidate.

But electrification has its limits and complications, too. Europe imports a majority of the materials for batteries and solar PV generation. There is a wish to become more self-sufficient in minerals, but new mines take ten plus years to open. And when a new super-sized battery factory was recently opened in France, the machinery came from China for the most part. Reducing the size of the car fleet in Europe that needs to be electrified reduces the strain on nature and people everywhere.

Science-driven planning

The previous examples and the concept of societal metabolism lead us to recognise that the premises for a new industrial policy are more complex than the recent international discussion has so far suggested. Before it is meaningful to start thinking about how industrial policy can accelerate economic processes, we need to answer the question of what these processes should be qualitatively, what they aim to achieve (materially), and on what scale and under what conditions they are possible.

In the light of the above, we see multiple needs for planning, which has received increasing attention both in academia[2] and in politics in recent years. In our research (so far only in Finnish, articles in English forthcoming), we have looked at planning historically and explored what planning could be today, particularly in the context of a rapid sustainability transition. There are also illuminating pieces for non-academic audiences by Max Krahé, Yakov Feygin & Nils Gilman and Louis de Catheu & Ruggero Gambacurta-Scopello (in French).

We see two important roles for planning: first, it should indicate what are realistic and desirable future industrial paths, and second, it should provide a credible basis for critically evaluating whether policy and industry are going in the right (ecologically sustainable) direction and with enough speed.

Indicative planning needs to have an eye on both production and end-use systems and their interconnections – for example, in terms of their aims and temporal sequencing. Industrial policy must also have the best possible understanding, or situational awareness, on questions like what are the likely technological trajectories, what is the availability of sustainably sourced key materials, and what needs to happen on the whole-system level for individual elements of the system to proceed – and vice versa. This requires putting together information from multiple knowledge areas that typically remain isolated, such as natural systems, material resources, technologies, international trade, and social practices. To service decision-making, the planning also needs to balance between different rationalities, such as ecological resilience, economic competitiveness, geopolitical security, and human welfare.

Balancing between the sometimes conflicting rationalities calls for planning that is science-driven – referring above all to rising above individual interests but also to other scientific virtues such as transparency in data and methods. Planning should be science-driven also because of even a broader issue: it must form a legitimate and credible knowledge platform for public and private actors to anticipate and coordinate future changes in the economy. In this way, science-driven planning would enable three-way critical scientific and public evaluation: evaluation of the planning itself, of industrial policy-making, and of business decision-making.

One thing must be added: the planning, as a continuous process, is not just about the planners hired for the job, and the knowledge in their minds, rather it is about the way in which they can draw in information and understanding from multiple sources. The planning must form a respectful relationship not only to the scientific academic community but other knowledgeable communities as well, in businesses, technical consultancies, NGOs and elsewhere.

We believe that this is actually possible, even in today’s complex world. As we are yet unable to assess the lasting effects of the ecological planning put forward by Emmanuel Macron – and to our knowledge there are no better official attempts at indicative planning in Western contexts – our trust is based on our own work since 2015. The objective of our research unit has been to analyse the effects of environmental and resource pressures on Finland and to develop the anticipatory skills of decision-makers and citizens. One of our results is the plan of “Ecological Reconstruction” for Finland we published in 2019. In itself, the plan is not enough to form the basis for Finnish industrial policy, but by having gone through the process, we feel that we can grasp what kind of task it would be.

In the context of Finland, we have proposed the setting up of a new science-driven planning unit under the Prime Minister’s Office. As a high-profile unit, with transparent working methods and regular external communication, it would nationally become the central knowledge platform on the basis of which public and private actors could assess the realistic and desirable future paths of key production and consumption systems.

At the end of 2023, we organised a two-day pilot session that imagined and worked toward the processes of the would-be planning unit. We had some of the best experts in Finland taking part, and the results were promising. With a focus on the intertwined paths of clean electricity and forest, we achieved situational awareness that differs significantly from the recent public and political understanding in Finland and urges key actors to coordinate their actions under concentrated innovation and industrial policy. What became clear is that well-designed science-driven planning can achieve a solid critical assessment of existing industrial visions already in a short time-frame, but feeding into active innovation and industrial policy requires continuous adaptive planning in a dedicated unit.

Another study of ours took a look at existing plans, namely the low-carbon sectoral roadmaps in Finland that were initiated by the Ministry of Economic Affairs and Employment and realised by the different industries themselves. Our main finding was that although the roadmaps were a useful exercise in many ways, they pointed to directions that were ultimately dead-ends. The largest sectors all relied on greatly increased biomass use, and taken together, there is not nearly as much biomass available from sustainable sources. The roadmaps also remained sectorally isolated: the interconnections between the sectors were not considered.

Let’s go

The new industrial policy is very welcome for the potential capacity it gives to the state to transform the economy to collectively desired directions. Of course, industrial policy as a practice is ridden with contradictory goals and takes. There is a very real struggle to align geopolitical security with ecological sustainability interests, among others.

The practical policy innovations, especially in the US but to some extent also in Europe, have generated insightful discussions on the instruments and mechanisms of industrial policy. We have argued that there is a need for science-driven planning already before we can meaningfully choose the policy instruments. Achieving a deep sustainability transition requires getting many things right at the same time. Some of the things require well-targeted policies, others are adequately boosted through more broad-based support. Some things need discipline, others need cultivation. Private business is good at certain things, public organisations at others.

Planning is and is not something new. Scientific planning has a long history: its possibilities were intensively debated between and after the World Wars and some fruits of these debates materialised to planning that backed the success of post-war welfare states. But planning is new in the sense that after a few neoliberal decades we need to re-institutionalise it – in ways that work today –  as a strong part of the innovation and industrial policy system.  The test for ecological planning in France and potential attempts elsewhere is whether they produce meaningful shared understanding for the relevant actors, and whether the plans can be linked to the urgent but forward-looking industrial policy struggles.

Planning also exists everywhere already. Large international corporations are basically centrally planned economies. The EU is a large planning organisation for European single market rules. To complement the economic-technical planning of market rules, the new industrial policy demands substantive or qualitative planning, with a constantly updated outlook on industrial pathways that fit within ecological boundaries.

We are confident that industrial policy can become an important ally and a tool for a rapid sustainability transition. To succeed, industrial policy must be purposefully aligned with the best possible information and understanding, openly developed, on what it takes to transform particular economies with particular conditions.

Paavo Järvensivu, Tero Toivanen, Jussi Ahokas (BIOS Research Unit)

[1] Eckersley, Robyn. The green state: rethinking democracy and sovereignty. mit Press, 2004.

[2] For a recent overview, see Durand, Cédric, Elena Hofferberth, and Matthias Schmelzer. “Planning beyond growth: The case for economic democracy within ecological limits.” Journal of Cleaner Production (2023): 140351.

29.5.2023
Industrial policy and the European sustainability transformation: Reflections based on the Beyond Growth 2023 conference in Brussels During the high-level, three-day Beyond Growth 2023 conference at the European Parliament, leading scholars frequently emphasised that a sustainability transformation in Europe is a massive investment project. To reconstruct basic socio-technical systems, such as energy, mobility, food, and cities, an enormous amount of well-targeted economic activity needs to take place. Despite this sentiment, there was remarkable uneasiness around industrial policy.

Text by Paavo Järvensivu and Jussi Ahokas, researchers at BIOS Research Unit, based in Helsinki, Finland. Both participated in the Beyond Growth 2023 conference at the European Parliament, Brussels, May 15–17. Järvensivu took part in the panel discussion on industrial policy chaired by Green MEP Ville Niinistö.

Beyond Growth 2023 Conference: Opening Plenary – (c) European Commission

During the high-level, three-day Beyond Growth 2023 conference at the European Parliament, leading scholars frequently emphasised that a sustainability transformation in Europe is (also) a massive investment project. To reconstruct basic socio-technical systems, such as energy, mobility, food, and cities, a lot of well-targeted economic activity needs to take place. Despite this sentiment, there was remarkable uneasiness around industrial policy – arguably an essential dimension of the broad ecological reconstruction of Europe. From a degrowth/post-growth perspective, it is easy to see industrial policy as a means for the government to boost economic growth and competitiveness at home, at the expense of the rest of the world. And from a more conservative position, industrial policy easily looks like an unwarranted deviation from rules-based free-market policy. In this text, we elaborate on an industrial policy that aligns with the goals of a rapid sustainability transformation. We also examine its tensions with the recent developments in the EU.

***

Industrial policy is the co-development of industry and other sectors under the guidance of public authorities. The government that pursues industrial policy sets the direction for industrial renewal and ensures that the necessary actors can find each other, that sufficient knowledge and skills are available, that the infrastructure and resources are in place and that the financial conditions are favourable. Where necessary, the government will also provide employment and investment itself. Historically, industrial policy was at its strongest during the few decades after WWII. This was a period of reconstruction and rapid industrialisation, which also created the institutions and other basic conditions for the welfare state.

One could say that industrial policy in the European Union has been actively rejected since the 1980s. The EU focused on creating rules for a competitive market. Important tools were competition law and restrictions on state aid. The active intervention of the state in the market – once markets and their rules had been created by the state – was significantly reduced. This was in line with broader global policy trends.

However, in the 2010s, and increasingly in the very recent years, the European Union has taken giant strides towards a new industrial policy (for details, we recommend Di Carlo & Schmitz 2023). The background to this is above all the concern that Europe is being squeezed in a geopolitical struggle. China has taken over production chains and in many areas has also overtaken Europe in terms of technological know-how, the United States is supporting its own industry with massive aid packages, and Russia is violently breaking up old geopolitical configurations and relations. The EU has woken up to a reality in which it feels the need to strongly boost its industrial capacities.

Under the European Commission led by Ursula von der Leyen, industrial policy is being tied to the ‘digital-green’ objectives of the European Green Deal. Despite its shortcomings, the Green Deal has clearly been the overarching policy that has steered Europe consistently towards climate and environmental goals. In Finland, too, political and industrial actors have been surprised by its strictness: we have not been able to succumb to the old, somewhat delusional idea that our industry is always greener than elsewhere, so the requirements of the EU’s transformation policies will not affect us that much.

No treaties in the EU have been reopened and re-signed. The IPCEI (important project of common European interest) legislation, which has been dormant for a long time, has been raised as an enabler of industrial policy. It allows countries to be flexible on competition and state aid rules, as long as the economic activity at hand can be seen to contribute to the common European interest. The same approach has been followed in relation to the EU’s economic policy rules, which have been interpreted creatively, especially during the COVID-19 pandemic and after Russia’s full-scale attack to Ukraine, but also already in the 2010s after the global financial crisis, for example, in the area of monetary policy.

***

Today, industrial policy needs to be thought of and crafted in particular in relation to the sustainability crisis. The global consensus view in the natural sciences is that there has been dangerously little progress towards sustainability in the world’s major economies. This is also the case in Europe: climate emissions must be reduced radically faster than has been possible so far, carbon sinks must be increased, biodiversity must be safeguarded and resource use must be renewed and reduced to sustainable levels. Otherwise, the conditions for human life on our planet will deteriorate and become highly unstable.

Hence the great controversy experienced at the Beyond Growth conference: natural science shouting ‘do all you can’ and political realism resignedly stating that ‘unfortunately, this is all we can do’. The European Green Deal, for all its merits, has not been able to change this situation in any meaningful way. So, at the conference, researchers from various disciplines and representatives of many organisations took the stage to challenge this political realism.

What do the scholars calling for a rapid sustainability transformation offer as a way forward? Above all, they emphasise the need to reconstruct the socio-technical systems (energy, transport, food, cities) that sustain people’s daily lives. A phrase frequently heard at the conference in this context was efficiency & sufficiency.

Efficiency refers to the use of less energy and materials to perform the same task. Electric cars, for example, are significantly more energy efficient than cars with internal combustion engines. Sufficiency, on the other hand, refers to the fact that people have and will have in the future the means to adequately meet the needs that are essential for a good life. The sufficiency perspective addresses both the question of “how much is enough” and “how this enoughness can be made available to all”. Combining the perspectives of efficiency and sufficiency leads to a reflection on what is adequate mobility and how to achieve it effectively. In other words: what kind of a transport system allows good and sufficient mobility without placing too much strain on the environment? To which we would like to add: how to build such a system from where we are now, with existing structures in place?

We see industrial policy as an essential part of such a reform of socio-technical systems. First of all, the reconstruction is clearly an industrial activity: the building of biking lanes, electric public transport, the electrification of the remaining private transport, digital services and the related equipment, and the production and use chains that underpin all this. Secondly, the modernisation of systems requires a huge amount of research, education, innovation and investment (to be sure, degrowth researchers at the conference also stressed on several occasions precisely this kind of ‘massive investment’ in efficiency and sufficiency). Thirdly, energy- and material-intensive economic activities that do not contribute to purposeful system reconstruction must be abandoned. There are two reasons for this: to reduce the total amount of activity that must undergo transformation to be sustainable, and to redirect the resources devoted to it, including workforce, to the necessary reconstruction work.

The role of industrial policy is to direct, coordinate and accelerate this extensive and complex process. For businesses and workers, industrial policy reduces uncertainty: the ability to see realistic paths for the future, the courage to innovate and invest, the courage to get (re)educated, the courage to take on jobs that build a sustainable future. Industrial policy will make the business and work required to modernise socio-technical systems understandable and economically viable – now, not in the distant future.

***

The rapidly evolving European industrial policy faces major questions: How can we ensure that it really supports the sustainability transformation? How can we ensure that it does not slip into traditional anything-goes growth policy, Western protectionism or sheer extractive colonialism? From the perspective of small EU member states like Finland, there is an additional question: how to ensure that European industrial policy treats member states fairly?

In the industrial policy panel discussion at the conference, the perspective chosen by BIOS was one of knowledge production. We will deal with it next, and return to issues of power afterwards.

At the outset, we wish to highlight one major difference between setting up competitive markets and doing industrial policy. The former is concerned exclusively with market rules, while the latter, in addition to market rules, envisages concrete paths for the future of industry. Take the hydrogen economy, for example, now that so much is being fussed about it. Industrial policy requires that the public authorities understand, and in a democracy the public to a sufficient extent also understands, the basic elements and choices of the hydrogen economy. Is hydrogen seen as playing a key role in the reconstruction of transport systems? Will Europe or individual member states invest in the processing of so-called green hydrogen into fertilisers and other important raw materials, or will it aim to produce, distribute and use hydrogen as such on a very large scale?

We argue that in order to answer questions like these in a meaningful way, a “situation room” dedicated to the knowledge-needs of the industrial sustainability transition is needed. We call the process science-driven planning. It brings together typically disparate areas of knowledge, such as ecological boundary conditions, available material resources, infrastructure, social practices, technological trajectories, geopolitics and developments in international trade. It also balances different rationalities such as ecological resilience, economic competitiveness, geopolitical security and human well-being. Moreover, as industrial policy aims to (re)construct the conditions for “good enough” and sustainable living, like described above, the human, social and cultural dimensions are highlighted: issues such as sufficiency and the good life cannot be framed solely in technical terms. On the basis of all this, science-driven planning outlines realistic and attractive future paths that lead to a rapid and deep sustainability transformation.

Science-driven planning, thus, builds an overall picture of the required changes in socio-technical systems. It outlines the content of industrial policy that is in line with the sustainability transformation and treats the different actors fairly within and outside the EU. Planning is needed, but the best available information does not yet ensure that it is used properly. It must be insisted that the EU and its member states commit to the best multidisciplinary scientific knowledge when designing and implementing industrial policy. In practice, this kind of pressure comes from  the civil society. The obvious counterforce then is the established industries, demanding that no major changes should be made in the production of food, energy, chemicals, cars or, say, pulp, or at least not too quickly. Luckily, there are also a lot of industries and industrial actors that challenge the old fossil-fuelled regimes and systems.

The second major political counterforce arises from nationalism. The nationalistic reassurance is that as long as we do well, others do not matter so much. Of course, this makes no sense, even from a strictly instrumental point of view: in an era of climate and environmental disasters, no walls can hold back. Climate change and erosion of biodiversity must be prevented everywhere, and the most effective way to do this is through good cooperation, sharing material resources and knowledge fairly. At a time of intensifying geopolitical disturbances, the realistic conclusion for Europe is to build and maintain good partnerships wherever possible, with a particular focus on the Global South.

European and national industrial policies must go hand in hand. Here, too, science-driven planning has an important role to play. A realistic look must be taken at what are the sensible industrial development paths and what their roles are in different parts of Europe. This is influenced by geographical characteristics, natural resources, inherited industrial structures, etc. Science-driven planning helps to ensure that European industrial policy is not just a continuation of old industrial configurations, historically formed with and for fossil fuels.

***

Monetary and fiscal policy rules determine the conditions for a sustainability transformation in the EU and its member states. Many smaller states have been concerned, quite rightly, that the big countries, especially Germany and France, can support their domestic industries on a completely different scale. In other words, smaller countries expect their industries to suffer if the rules regarding competition and state aid are relaxed in the name of industrial policy. The European Commission has proposed a sovereignty fund, a kind of common EU fund, as one way of balancing the conditions for public funding of industrial development among EU countries. The details of the proposal (for example, where the money will come from, and how it will be spent) are not clear, and so far the proposal has failed to convince the long-standing opposition of many member states.

However, now that Germany is also behind it, it is very likely that the EU’s more active industrial policy will move forward at a rapid pace. To be successful, European industrial policy must, firstly, really contribute to the sustainability transformation – otherwise we are merely reacting to acute crises while forgetting the existential ones. Secondly, it must treat all EU member states fairly. Thirdly, it must find a globally just geopolitical stance  which accelerates the pace and widens the breadth of sustainability transformation. In practice, all this means pragmatic, multilateral and long-term negotiating capacity – backed by solid science-driven planning.

We can start by acknowledging the reality that despite the rhetoric and all the rules, industrial policy has been pursued in Europe all along, but from the 1980s to the present day it has been done indirectly and largely hidden from public scrutiny. Now that the ecological reconstruction of societies means deep, rapid and interconnected transitions in almost all economic sectors and industries, industrial policy needs to be brought into the democratic limelight. Industrial policy must be based on multidisciplinary scientific knowledge and subjected to constant scientific and public critique.

7.2.2022
Life matters everywhere. The notion of biodiversity in the Dasgupta Review The Dasgupta Review (2021) was both lauded and criticised upon its publication. Criticisms tended to focus on economizing Nature, ”laying a price tag on Nature”. However, such criticisms miss the mark in two key respects. First, the notion of biodiversity in the report is surprisingly nuanced, and secondly, Dasgupta is adamant that determining the “price” […]

The Dasgupta Review (2021) was both lauded and criticised upon its publication. Criticisms tended to focus on economizing Nature, ”laying a price tag on Nature”. However, such criticisms miss the mark in two key respects. First, the notion of biodiversity in the report is surprisingly nuanced, and secondly, Dasgupta is adamant that determining the “price” of Nature is crucially a matter of politics. Critique of The Dasgupta Review needs to delve deeper, and this is important in the context of the ongoing Kunming Process and the calls for ”Paris for biodiversity”. The key problem is that although the report at times recognizes the functional importance of biodiversity, its role in maintaining and renewing the crucial flows of energy and matter underpinning all life, in key sections this understanding fades away. But biodiversity is a key concern in all areas of life, also in the environments where humans live and produce things, not just a question of protecting or conserving Nature as a separate realm. 

Biodiversity, having for a long time been the stepchild of environmental awareness, has finally broken to the fore in recent years. The old gripe about climate change overshadowing biodiversity decline no longer seems that apt. The phrase “the sixth mass extinction” has become common currency – perhaps heralded by “the insect apocalypse”, which made us aware that not only are those buzzing bees threatened but also a host of stinging and swarming and crawling critters. Existential crisis hits all creatures great and small – and all things dull and ugly, as the Monty Python song goes.

The first full report by the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) was published in 2019. IPBES has often been called “IPCC for Biodiversity”, and its reports draw their inspiration from the climate reports: gathering together all the latest scientific knowledge about biodiversity decline in order to foster stronger policy. The first IPBES–IPCC collaboration, the Workshop Report on Biodiversity and Climate Change, was published in June 2021, emphasising the connections between these crises.

Seeing as the accomplishments of decades of global climate policy are not that laudable, that may not be the most inspiring model, but still calls for “Paris for biodiversity” have grown, especially during the continuing pandemic. The previous attempt, the Aichi Targets (2011–2020) by the Convention on Biological Diversity (CBD), was an abject failure: none of the targets were met. The latest incarnation was the Kunming Declaration in October 2021 – declaring that something should be seriously considered in May 2022.

The Economics of Biodiversity: The Dasgupta Review, commissioned by HM Treasury in 2019 and published in February 2021, arrived thus in a favourable climate. It was immediately compared with the 2006 Stern Review, an influential economic analysis of the costs of climate change. Launching a prestigious economic reading of the biodiversity crisis would hopefully lend the topic the kind of gravitas needed in the halls of economic power.

Alongside vocal praise, the review was immediately criticised for “economizing Nature”, “justifying the financialization of Nature” and “laying a price tag on Nature” et cetera. It was thus interpreted as an act of justifying the economic discipline against environmentalist critique and seen to be appropriating the whole issue into the territory of economics. Some of the rhetoric in the Review surely seems to serve such purposes:

Economics provides a remarkably effective language in which to read the socio-ecological world. The problem is not with economics, it is rather the fundamentally flawed reading of the structure of economic reasoning. (Dasgupta 2021, 130)

To detach Nature from economics is to imply that we consider ourselves to be external to Her [sic]. The fault is not in economics; it lies in the way we have chosen to practise it. (Dasgupta 2021, 310)

So the fault is in ourselves, dear Brutus, but who exactly is “us” here? Is it the legion of laypeople who have deeply misunderstood the nature of economics, or is this aimed at his colleagues in the discipline of economics? The Dasgupta Review offers ammunition for both – and in the end it is the reception, the interpretation and the use of the document that determines its effects. If and when it is seen as an act of justifying dominant economics (remember: “the fault lies not in economics”), it will no doubt also have such consequences. Interpretations more critical to dominant economic thought, practice and rhetoric, on the other hand, should have ramifications to that effect.

However, mostly absent from the discussion has been the question of how the Review handles the issue itself, biodiversity. This is crucially important, since the way biodiversity is understood determines what kind of “economizing” is even theoretically possible. It is my contention that the nuanced conception of biodiversity in the report actually detracts from the simplistic approach of “price-tagging” and commodifying Nature. Critique needs to delve deeper.

Not just about the headcount

For the wider public, and quite likely for the majority of decision-makers, economists and journalists, the most familiar manifestations of the biodiversity crisis are lists of endangered and extinct species. Accordingly, biodiversity is seen as an issue of less vs. more: the more species there are, the better. Nature is the Library of life, full of unique editions handed down by history, and preserving as many as we can is the metric of success. Some sections of the library are more packed with books or have a selection of the rarest titles; ergo, they are more valuable. These are named “biodiversity hotspots”, upon which our most forceful endeavours of protection should focus. Coral reefs, the lush rainforests and the like.

However, species richness and extinction rates is only one dimension of biodiversity, and it does not really work as a proxy metric for the whole issue. In this, biodiversity differs essentially from climate change. In a very real sense, climate change is one phenomenon. Although emissions stem from diverse sources, and their socio-economic backgrounds vary enormously, as do the effects suffered around the world, all emissions still take part in a unified global climate system. Greenhouse gases, annual emissions and current concentrations in the atmosphere afford a clear and properly justified metric of success and failure. As Dasgupta notes, climate change is not representative among a myriad of environmental problems (Dasgupta 2021, 27). Biodiversity decline does not have a similar systemic unity; it is rather constituted of a plethora of phenomena.

Nature is not a library whose contents can be tallied and categorised neatly, with readymade niches found on shelves – the books and the shelves transform over time. We still of course use the Linnean system, but adjusting it to fit an evolutionary worldview requires constant reshuffling. Nor do the myriad ecosystems of the planet form a unified system similar to the global climate system. Actually, if natural systems were unified in a tight manner, they would not have the kind of resilience that has allowed life to slowly recuperate from astonishing disasters throughout history. Therefore, one common metaphor for the biodiversity crisis is deeply problematic. Imagine you are sitting on an airplane, and the passengers are casually removing a screw here, a rivet there, and a bolt somewhere else. For a long time, the airplane keeps flying along just fine, until a critical boundary is passed, and the plane breaks down and crashes. But as L. B. Slobodkin has noted, there is no airplane: nature is not a single mechanism, so everything does not crash at once (Slobodkin 2001). Not with a bang but with a whimper goes the biodiversity crisis.

Nature is a mosaic, an assemblage of partly intertwined and partly separate ecosystems, working on different spatial and temporal scales. Of course, everything takes place on the same planet, but life’s ability to carve out habitable spaces practically everywhere, overlapping and intersecting, ecosystems within ecosystems or even within individual beings, makes the planet an absurdly vast place. Bigger on the inside, truly. Life creates space for itself – the habitable niches do not pre-exist; they are carved out by life’s processes. Barring a celestial disaster, everything cannot crash at once.

From this it follows that neither is biodiversity a unified phenomenon that can be properly measured by the number of species (those metaphorical bolts, screws and rivets). Like Dasgupta states, it is not a question of “a mere headcount of species” (Dasgupta 2021, 36). In addition to the diversity of species, there is the question of diversity within species: the genetic diversity of populations. And that is crucially “populations” in plural, since the fate of individual populations across the world is also of vital interest. A species may survive, but countless local populations can become effectively extinct, which can have huge ramifications in the world. This was pointed out by the renowned fisheries expert Daniel Pauly as he noted that the world does not lose abundant animals, only rare ones. That is, too much focus on the absolute extinction of species detracts attention from the background hum of biodiversity decline, as populations shrink and become genetically less diverse, and as species disappear from some areas of the world, changing the world fundamentally, a long time before the final lights of extinction wink out.

This points to another key dimension of biodiversity, their functionality. Just by looking at the headcount of species in a particular area, things may look fairly good for a long time, even as the state of ecosystems slowly degrades. The ecosystems may already have become dangerously compromised, irreparably even, before we notice a rise in local species extinctions.

This diversity of biodiversity is a widely recognised issue in science, even though awareness has not spread well enough to the wider public. One important scientific discussion considers functional diversity, the existence of functional traits in an ecosystem that maintain its central operations such as decomposition, circulation of water and nutrients, fluctuation of relative population sizes etc. The viewpoint of functional diversity is concerned less with the presence of particular species rather than the key functions taken care of in particular ecosystems – the precondition for their continuing viability and resilience in the face of disturbances and change. The old adage that the more species you have in an ecosystem the more resilient it is, appears to be questionable. It seems that the presence of key functional traits is the major factor.

It is however crucial to note that functional diversity cannot offer an alternative universal metric for biodiversity, as opposed to species headcounts. Function always appears in a context, a historically inherited situation of particular ecosystems. The importance of functional traits is realised in that conjuncture, and their value cannot be generalised globally. Thus attempts to make global functional trait inventories after the model of (species-focused) biodiversity “hotspot maps” would be very questionable. The diversity of biodiversity means that we will always need several parallel metrics and approaches to analysing and measuring biodiversity, and some of them need to be context-specific. There is no master metric.

The viewpoint of functional diversity reminds us that change is a natural feature of ecosystems, and not only seasonal or other circular change but also the transformative change of ecosystems over time. Resilience is not just recovering from shocks but also transforming and surviving in a new form in new circumstances. However, discussion of change in relation to biodiversity can be a touchy topic. On the one hand, evolutionary change and the constant fluctuation of ecosystems in the face of changing circumstances is what in the end makes biodiversity possible and ecology understandable. But on the other hand, there is a strong Western cultural tendency to consider one particular historical constellation of nature as the one to be preserved: the authentic, intact Nature. This is deemed more valuable than nature compromised (corrupted?) by human activity, with the attendant aversion towards discussion of change in nature – it is easily assumed to relativize the changes wrought by humans in this world. If all that is constant is change, why worry about human impact on the environment? This old quasi-conundrum seems to be an especially hardy weed in the case of biodiversity.

But change is necessary. It is neither good nor bad: its effects are determined by the pace and frequency of changes in circumstances, the abilities of adaptation and migration, the time it takes new ecosystems to get established, whether there are concurrent disturbances and so on. This was true even in the absence of humans. There have been several mass extinction events in deep history, after all. The inevitability of change is a crucial feature both for understanding biodiversity decline and for our attempts to protect biodiversity.

The problematic attitudes to change were exemplified by a 2019 study published in Science that revealed a pattern of local species richness gains and declines globally, instead of a general decline (Blowes et al. 2019). As the researchers pointed out repeatedly in interviews, at this stage the picture of the biodiversity crisis is more that of large-scale reorganisation rather than of primarily species losses (Kaplan 2019). That is, the global view of species decline is not reflected one to one on the local level. The key question of course is whether these local stories are about adaptation or homogenization etc. Compositional shifts can herald future changes of many kinds, and some of them clearly can involve accelerating extinctions and spread of “generalist” species. Still, the publication of the study sparked a concerned debate whether the study underestimated the urgency of the biodiversity crisis – the background assumption clearly being that species extinctions are its most important form, and that detracting from that focus can be dangerous. The cultural tension between notions of intact nature vs. change is visible even in scientific circles.

 The drive for a master metric

The diversity of biodiversity and the pros and cons of various metrics are ongoing topics of debate in science, but in general scientists favour a plural approach to this complex issue, as Dasgupta rightly notes. However, in the world of policy, there are strong pressures for finding straightforward environmental metrics. Climate change tends to be the representative model: we need one master metric like the carbon dioxide equivalence of various greenhouse gases to set common goals in order to forge “Paris for biodiversity”. As one key political figure in the Finnish center-right stated, we need clear numbers about species to be protected in order to craft a viable policy. Basically: how much biodiversity do we need and want? Less versus more. However, as we have seen, the mosaic of biodiversity decline does not lend itself to such a simplistic approach. The problems are at the same time local, regional and global, and the socio-political dynamics behind different forms of biodiversity decline, and their effects, vary enormously.

Blair Fix has shown how this “aggregation problem” arises repeatedly in environmental issues (Fix 2019). In trying to aggregate incommensurable things, it is necessary to choose a single unit of analysis, and this will always depend on one’s goals and the underlying theories. Biodiversity, as we have seen, is a host of incommensurable phenomena that cannot be meaningfully reduced to one metric, say, the number of species or the aggregate area of protected nature. In such cases of substantive incommensurability, aggregation inevitably gives rise to serious practical biases and should be avoided.

Choosing species number as the dominant dimension of biodiversity tends to favour decisions that maximise that number, irrespective of population vitality, of the fate of local populations, and of the state of ecosystems in general. Thus, for example, vulnerable local populations of widespread and globally abundant species seem less important, even if they may be functionally vital in the local contexts. This is of course not to say that the full-scale extinction of endemic species (living in only one geographical area) is not truly a tragedy. Losing rare species at an accelerating rate takes away something from the world. Keeping some areas devoid of intensive human activity is important. But this shows how the choices involved in aggregation affect policy and can leave some dimensions of biodiversity decline in the shadows.

Prioritising biodiversity policy on the basis of global “hotspots” is another good example. Again, there are very good reasons to try our best to protect the remaining rainforests, wetlands and coral reefs, and many other threatened biomes. But deciding aggregate global priorities on the basis of such mapping means that many other areas are deemed less important or even meaningless, biodiversity-wise. Negative environmental impacts that take place in many wealthy countries are deemed less important than those that happen, say, in the tropics, because tropical systems tend in general to be species-rich – but are “species-poor” ecosystems thus inherently less valuable? Recently there have been vocal scientific arguments against the primacy of global biodiversity protection priority mapping (Wyborn & Evans 2021). Global aggregation loses vital local information, but most conservation decisions occur at local level. So perhaps aiming for global biodiversity targets is not the best approach, at least when targets are set from a globally aggregated viewpoint. 

In this way, the idea of biodiversity as a less vs. more issue gets very real. If the more voluminous and valuable biodiversity is seen to exist somewhere else, it is tempting to say that it is not that useful for us to focus on actions over here. Such rhetoric has been a familiar feature in climate debates of wealthy countries, but the freeriding logic is even more tempting vis a vis biodiversity, since scientifically problematic aggregation actually can end up supporting it. You can follow the science and go wrong. In Finland, such rhetoric has increasingly been used to question the necessity of nature conservation, especially vis a vis forestry.

Such an approach tends to focus on labelling and certification schemes and boycotts of especially bad products. This means that less attention is paid to the background hum of biodiversity change: increasing extraction of natural resources, land-use change, intensive use of agricultural chemicals and other threats like climate change. These are the big drivers of biodiversity decline in its multiple forms. This is a crucial issue in the era of multiple concurrent environmental problems: even in the best of possible worlds, many things will be inevitably lost, and all will have to change and adapt to the new more uncertain times. Ensuring the capabilities of adaptation and transformative resilience, and taking care of the operation of crucial cycles of energy and matter in the environment, must be key viewpoints of biodiversity policies.

So, biodiversity as a mosaic phenomenon does not aggregate in a fruitful way, but environmental policy especially at a global level tends to require aggregate metrics. This is a truly wicked problem for biodiversity policy. Species numbers and the extent of protected areas tend to be the fallback positions, even though the scientific problems relating to that exclusive focus are well known. The Kunming Declaration includes a call for the protection of 30% of land and sea areas. But as this indicator transitions to de facto policy, it gives rise to a host of potentially perverse outcomes (Barnes et al 2018). Would the choice of protected areas be determined by sensible criteria? If for example success is measured primarily by the number of species, would those protected populations be viable in the long run against the great churn of our age of acceleration? A whole other can of worms is whether the 30% rule would amount to an unprecedented land grab from indigenous communities and other vulnerable groups.

And most of all: what would happen in the 70% of the world? This is not a trite notion: self-styled ecomodernists or accelerationists are constantly pushing the idea that human activity should be intensified to the extreme in the areas of human production and habitation, leaving potentially more and more areas for “intact” nature or for areas to be “rewilded”. The potential merits of rewilding aside, the idea is basically that wrecking the rest of the environment is fine, as long as we humans leave an increasing portion of the planet for the rest of nature. Of course, since over 40% of the ice-free land surface of the planet is taken over by agriculture, and 80% of that represents animal production, there surely would be significant leeway , e.g., for reforestation, provided that the food system and consumption habits could change in tandem. Otherwise, we are back with the old problem of land grabbing and destruction of commons by enclosures. There are no socio-economic dynamics currently in place that could even begin to guarantee that “land sparing” would result in that land ending up as rewilded areas (Rasmussen et al. 2018).

Fortunately, not all calls for the 30% rule are based on such an extremist form of separation between culture and nature. One hopes that most proponents consider it important also what happens outside protected areas. Life matters everywhere. What’s more, “intact nature” simply will not remain safe and separate in its reservations. If our age of environmental crisis has taught us anything, it is that environmental problems do not remain limited geographically. Thus, what happens in the 70% would inevitably determine what happens in the 30%. If the metabolism of societies remains on its current trajectory of increasing use of natural resources, the results will be grim all over the place.

Dasgupta notes repeatedly that humans are embedded in the rest of nature, and this is inescapably true. The modern illusion of emerging independence from nature was only possible by increasing use of energy (mainly fossil fuels) and extraction of an ever more diverse array of natural resources. In fact, the material and energetic ties to the rest of the world became ever more convoluted: complexifying dependence instead of independence. Now the illusion is broken, and we should not resort to new forms of it, however ecologically sensitive they might look at first glance.

Flows, not only stocks

The Dasgupta Review fares surprisingly well in this regard, considering that too often economist readings of environmental issues are fairly simplistic and fall back on adopting climate change as the representative model of all environmental problems. Human embeddedness in the rest of nature is no empty rhetoric or smokescreen: the idea really runs through the text on many levels. In the picture painted by the Dasgupta Review, it really does not make sense to distinguish “environmental issues” as a sector of society that can be safely enclosed while the rest of society keeps chugging along – just as long as we set the prices right. Anyone who reads this message out of the review – either critically or as a source of self-justification – has not read it properly.

The diverse dimensions of biodiversity described above all appear in the text, and Dasgupta offers a nice set of pedagogical tools for laypeople (which in this case includes the economists) to understand why biodiversity decline is such a wicked problem. Nature is mobile, silent and invisible. Mobility means that ecosystems and the fluxes that keep ecosystems viable move over human-made borders – or if those borders have strong enough physical manifestations, said fluxes can break down. Silence means not only that non-human beings are unable to stand up to themselves, but most of all that natural systems do not give clear and unambiguous signals about when they are about to be seriously disrupted. Invisibility refers to the fact that countless processes take place on a microscopic level, and keeping tabs on them properly is virtually impossible.

In addition to this triad of features, Dasgupta emphasizes non-linearity, complementarity and non-substitutability. First, complex natural systems function in a way that surprising regime shifts to qualitatively new states can take place. Second, nature cannot be neatly separated into distinct parts or sub-systems, as intertwined systems are dependent on each other in many ways. Third, there are myriad features of nature that can never be substituted by others or by technological surrogates.

Another set of tools heavily used by Dasgupta is a contested one, and one that often invokes fierce criticism. Dasgupta talks a lot about ecosystem services. For many, the mere word “service” seems suspect, and they see it as fatefully linked to commodifying attitudes towards nature. Ecosystem service is seen to be an inescapably instrumental and anthropocentric notion and thus suspect. But since human life will always be dependent on the rest of nature, in multifarious ways, in any conceivable future, we will also need tools to understand that dependence in a more detailed and operationable way than just saying “we depend on Nature”.

In 2017, IPBES proposed another word to get around this terminological resistance: “nature’s contributions to people”. It is supposed to be a higher level concept than ecosystem services, one taking in diverse worldviews and especially indigenous knowledge. However, in practice the differences between the words seem to be very small (Kadykalo et al 2019). But fair enough, sometimes we humans need new words as bridges to new discussion, even if the different words really refer to the same things. (Other times, we need to fight over the meaning of old words.) However, if and when there is a tendency to “commodify nature”, it is questionable whether any new term will by itself get rid of that inclination. Any word like this will become an object of a struggle over definitions. Dictionary definitions will not solve the issue.

I think the main problem lies elsewhere. Both “ecosystem services” and “nature’s contributions to people” encompass so much that they end up referring to everything in our relationships to the rest of nature. Dasgupta makes the familiar distinction to provision services, maintenance services, regulation and cultural services. Sometimes people also want to include negative contributions or “disservices”, which really inflates the area of reference. If the reference of a term is too vague, it really stops working well as a practicable concept.

The trouble here is especially that there is no generic nature or biodiversity that offers these various services (leaving “disservices” aside). Different environments are more fruitful in one regard, less in others. A forest can be an environment for production of lumber, a sink and storage of carbon dioxide, a habitation for various species, a good place to forage berries and mushrooms, and it can play a part in alleviating the effects of storms or in rainfall and drainage patterns. But in forestry, some of these tend to be emphasised over others – usually the production of lumber – and this hurts other “services”. The biodiversity of forests develops accordingly in different directions in these diverse practical relations, depending on which “services” are emphasized. Some trade-offs are inescapable.

Since in any kind of sustainable future, humans will still need food and other things that depend on the living world around us, we cannot focus only on the kind of services and contributions that are dependent on more “intact” or “wild” nature, and on that kind of biodiversity. We need also to pay heed to the kind of biodiversity that is important in the environments where we produce things and where we live: the life in agricultural soil is a topical example, as is the fate of insect populations. Knowledge about the connections between allergies and biodiversity in one’s living environment is increasing, and of course, the links between biodiversity and zoonoses is a pertinent issue. 

This is why biodiversity is important everywhere. And this gets more and more important every day: the historical era in which humans have tried to replace nature’s contributions with more and more intensive use of energy and resources is over, and we will have to rely on the environmental common goods provided by ecosystems much more (e.g. nutrient retention and cycling instead of intensive fertilization). This means in practice that the requirements of biodiversity in our production and habitation environments will change. But we cannot understand this by stating generically that we depend on “nature” or “biodiversity”: qualities are paramount. 

The Dasgupta Review is somewhat uneven in this regard. Sometimes it is heedful of this complexity, at other times it reverts back to simplistic notions of biodiversity:

The distribution of the world’s natural assets – and their associated biodiversity – is uneven across the Earth. For example, 17.3% of the Earth’s land surface maintains 77% of all endemic plant species, 43% of vertebrates and 80% of all threatened amphibians, in 35 biodiversity hotspots. (Dasgupta 2021, 372)

But conceptualising nature as an asset in this way precisely makes it harder to understand the diversity of biodiversity: it is not a simple less vs. more question as this quote suggests – and the review denies elsewhere! Natural “assets” should not be quantified in such a simplistic manner, as it detracts from the key contextual understanding that the review’s otherwise more nuanced perspective on biodiversity fosters.

Dasgupta’s insistence on nature as assets does have some fruitful uses. He employs the notion to criticise the use of GDP to judge economic performance. As it is a metric of annual flows, it does not measure wealth or stocks of assets, especially depreciating them. Thus you can increase your GDP flow by burning through your assets as if there was no tomorrow. And societies have of course in many ways been doing just that. This is not only an environmental question: according to Dasgupta, GDP is not a good metric of any kind of sustainability. (Dasgupta 2021, 334, 343) It is a tool for very limited uses. He also importantly reminds his fellow economists, and us all, that you cannot measure the worth of nature by its productive flows alone. Nature does not maximize its net primary production, so for example net primary production (NPP) does not work as a master metric for judging the state of ecosystems either. As Dasgupta notes, biodiversity is not about enhancing productivity in this simplistic sense. (Dasgupta 2021, 60)

However, viewing nature as assets leads us to focus on stocks, and with the tendency of looking at biodiversity as a less vs. more issue, this means that the Dasgupta Review easily slips back into the simplistic reading of biodiversity. But as we understand both the diversity of biodiversity and the multifarious forms of ecosystem services or nature’s contributions to people, we see how biodiversity policy should be both about stocks and flows. It is not only about maximising the amount of species, or about maximising the extent of “intact” or “rewilded” areas. It has to be also about taking care of the vital functions and flows of ecosystems everywhere: the constant reproduction and maintenance of all natural systems. Our production environments are no less important here, especially as failure there can easily lead to more appropriation of new areas following land or forest degradation or, say, collapse of fish stocks. The notion of nature as assets runs into the deep problems of aggregation and incommensurability.

Politics is inescapable

Despite these problems, it is clear that the Dasgupta Review is not an exercise in price-tagging nature. Nature cannot be parcelled out in portions that could be independently valued and substituted. Some changes wrought by humans in the environment are so grave or unpredictable that they simply should be prohibited, as Dasgupta unambiguously states (Dasgupta 2021, 124). They are effectively priceless.

These statements in can easily be shrouded by the fact that Dasgupta still relies on the customary economic terminology of environmental problems as “externalities” and the question of “internalising” them. However, this is where Dasgupta most clearly engages in a struggle of redefinition and criticises the dominant way these concepts are understood and utilized. But the review may be a tad too clever for its own good, as the critical message requires some excavation and is thus easily lost in popular readings. 

Dasgupta’s accounting prices and inclusive wealth, the proper prices and the calculations of wealth that take into account the importance of biodiversity, are key concepts in the review but also somewhat confusing ones. First of all, Dasgupta clearly does not mean them as actual, read-it-in-the-label market prices that would be somehow calculated, “internalising” environmental impacts and the importance of ecosystem services in this way. Such calculations would be hopelessly complex, and what’s more, they would encounter deep problems with incommensurability. Dasgupta talks about accounting prices as being implicit, with “indirect means” required to realize them (Dasgupta 2021, 496). By this he refers to taxes, subsidies, regulations, standards, offsetting and downright prohibitions. Such institutional actions affect the decisions and priorities of all economics actors and make accounting prices into a practical reality. For Dasgupta, the biodiversity crisis is not only a market failure, but also a policy failure and an institutional failure. Thus internalisation of externalities and determination of accounting prices does not only happen on the marketplace but in politics: 

In democratic societies, differences in people’s assessments of accounting prices influence the policies requiring their use are selected. We may think of candidates for political office as bearers or carriers of contingent policies. It is then no exaggeration to say that citizens express their differences over accounting prices by casting votes on their favoured political candidates. This caveat should be borne in mind when mention is made of ‘estimating’ accounting prices. (Dasgupta 2021, 302) 

Actually, Dasgupta states explicitly that political and institutional change is primary. The “fundamental failures” of those areas need to be solved, as “pricing and allocation of financial flows alone will not be sufficient to enable a sustainable engagement with Nature.” (Dasgupta 2021, 467)

Fateful effects of a problematic metric

Finally, I want to point out one serious problem in the review. Dasgupta introduces a familiar graph about the relationship of ecological footprint and income per capita (Dasgupta 2021, 120). One message of course is that the footprint of the globally wealthy or middle-class people is very large. Also while discussing global trade, Dasgupta notes that it has actually increased global inequality and led to a net flow of wealth to the centres of power and affluence. In this context this is a downright radical message (Dasgupta 2021, Chapter 15). The problem of global inequality and injustice is emphasised at many points throughout the text. 

However, in analysing this graph, Dasgupta ends up with a problematic conclusion. Since the curve of the graph is convex, it “suggests, ominously, that egalitarian redistributions of incomes lead to larger global ecological footprints” (Dasgupta 2021, 120). Being a proper economist, Dasgupta adds “other things [being] the same”. So in a nutshell, if the poorer people of the world get at all wealthier, they will climb rapidly higher in the convex curve. Ecological crisis gets worse if we alleviate poverty. This grim reading resonates through the review in many ways.

But there is a serious problem: ecological footprint by the Global Footprint Network is not a proper master metric for the diversity of environmental impacts, unlike Dasgupta seems to assume. When scrutinised closely, the ecological footprint really measures properly only climate change emissions, and even those via a cumbersome proxy (Giampietro & Saltelli 2014; see more in Finnish). And if we look at the curve only from the climate viewpoint, the interpretation has to go into concrete details. The convex curve is so steep only if poverty is alleviated mainly by using fossil fuels; if not, the curve will be less steep. Everything changes, and the conclusion does not hold. Poverty does not need to be alleviated by spouting carbon dioxide – but poorer countries will of course need huge amounts of financial support to make the energy transition by overstepping the fossil phase.

But the Dasgupta Review is not about climate change, and Dasgupta notes elsewhere that we should not take it as a representative model. There are many kinds of environmental problems that do not aggregate fruitfully: thus there is not one unified curve of environmental footprints. Biodiversity decline takes many different forms, and it stems from diverse socio-economic backgrounds. Some forms are more connected to poverty and social fragility, others more to wealth and overconsumption. So alleviating poverty will also reduce some forms of environmental impact as it risks increasing others. There are both convex and concave curves. Resorting to a supposed environmental master metric sadly muddles the message of the Dasgupta Review, losing sight of the importance of equality and justice during the ecological transformation of societies.

Ville Lähde

References

Barnes, M. D. et al, Prevent Perverse Outcomes from Global Protected Area Policy. Nature Ecology & Evolution 2, 2018.

Blowes, Shane A.  et al. The Geography of Biodiversity Change in Marine and Terrestrial Assemblages. Science 366/6463, 2019.

Dasgupta, Partha, The Economics of Biodiversity: The Dasgupta Review. HM Treasury, 2021

Fix, Blair, The Aggregation Problem, BioPhysical Economics and Resource Quality, 4/1, 2019.

Giampietro, Mario & Andrea Saltelli, Footprints to Nowhere. Ecological Indicators 26, 2014.

Kadykalo, Andrew N. et al., Disentangling ”ecosystem services” and ”nature’s contributions to people”. Ecosystems and People 15/1, 2019.

Kaplan, Sarah, The world’s ecosystems are being fundamentally transformed in the human era. Washingon Post, 17th October 2019.

Rasmussen, L.V. et al., Social-ecological outcomes of agricultural intensification. Nature Sustainability 1, 2018.

Slobodkin, L.B., The good, the bad and the reified. Evolutionary Ecology Research, 3, 2001.

Wyborn C. & M. C. Evans, Conservation needs to break free from global priority mapping. Nature Ecology & Evolution 5, 2021.

2.12.2020
Dashboard for transition politics: a new tool for monitoring the progress of ecological reconstruction The dashboard consists of five indicators through which the government, journalists and citizens can follow the progress of ecological reconstruction in Finland. The indicators are carbon balance, total material requirement, fiscal sustainability, societal resilience and transition employment.

Dashboard for transition politics now online at dashboard.bios.fi

Finland is committed to radically lowering its climate emissions and to stop biodiversity loss during the following years. Success requires abandoning the use of fossil fuels and the overconsumption of other natural resources. To be able to simultaneously secure the conditions for good human life, the key systems related to energy, transport, housing and food need to be thoroughly reconstructed. This massive task requires planning and systematic execution. It also determines the future of employment and industrial development.

The growth of gross domestic product, the level of public debt or the general rate of employment have very little to say about progress in the task. Nevertheless, they are the indicators that direct the government’s work and set the agenda for a major part of the public debate. At the same time, Finland risks missing the opportunity to make good use of the shock caused by the corona pandemic: instead of redirecting the economy toward a sustainable path, the aim seems to be to revive the economy back to its pre-corona state. The government does not have functioning indicators for a qualitative change of the economy.

To fill this gap, BIOS Research Unit has built a dashboard for transition politics. The dashboard consists of five indicators through which the government, journalists and citizens can follow the progress of ecological reconstruction in Finland. The indicators are carbon balance, total material requirement, fiscal sustainability, societal resilience and transition employment.

Carbon balance and total material requirement offer goals on the national level for emissions and natural resource use within a specific timeframe. Fiscal sustainability indicates the fiscal capacity of the state to finance public spending and investment during the reconstruction and afterwards – and does so without tying fiscal sustainability to economic growth. Societal resilience uses the traffic light metaphor to indicate if citizens feel that they are in the same boat during reconstruction; when green, participation is good, when yellow, there is reason to worry, and a red light means that societal resilience is breaking. Transition employment gathers information on how well employment in different sectors corresponds to the work that is needed for ecological reconstruction.

To check out the dashboard, please visit https://dashboard.bios.fi

Helsinki Art Museum HAM invited BIOS to be a part of the Helsinki Biennial, on Vallisaari island outside Helsinki, planned for summer 2020. Due to the global pandemic, the biennial was postponed, and the dashboard, initially intended as a part of BIOS’s participation in it, was presented in HAM during 15.–27.9.2020.

7.9.2020
Decoupling – where it falls short and a call for collecting research Decoupling “environmental bads” from “economic goods” is continuously proposed as a crucial tool that economies should use in the face of critical environmental problems. Two articles recently published by BIOS researchers point to one of the problems with the proposal: so far, the decoupling that has been observed is not wide, deep or fast enough. This can be seen better once the magnitude and timescale of the decoupling needed for ecological sustainability has been ball-parked. We discuss the findings of the articles, and make a call to add to an “open source” list of research articles that we have started.

Decoupling “environmental bads” from “economic goods” is continuously proposed as a crucial tool that economies should use in the face of critical environmental problems. Two articles recently published by BIOS researchers point to one of the problems with the proposal: so far, the decoupling that has been observed is not wide, deep or fast enough. This can be seen better once the magnitude and timescale of the decoupling needed for ecological sustainability has been ball-parked. We discuss the findings of the articles, and request everyone interested in the topic to contribute to an “open source” list of research articles that we have started.

Background

During the summer, two connected articles by BIOS researchers on decoupling, “Raising the bar: on the type, size and timeline of a ‘successful’ decoupling” and “Decoupling for ecological sustainability: A categorisation and review of research literature” were published in the journals Environmental Politics and Environmental Science and Policy, respectively. Their results were already discussed in a couple of articles by Nafeez Ahmed, in “Green economic growth is an article of ‘faith’ devoid of scientific evidence” and “’Green Economic Growth’ Is a Myth”. Here, we wish to continue that discussion and explain the thinking behind the articles. It seems to us that the discussion on decoupling would benefit from a more systematic attention to research results. That is why we are also starting to curate an annotated “open source” list of research articles on decoupling – and invite everyone to contribute and use it as they see fit.

But first, let us start from the beginning: why is decoupling receiving so much attention? 

The motivation for the concept of decoupling

The main motivation for the attention to the concept of decoupling is easy to identify. Mainstream economic policies see economic growth a necessity for continued well-being, poverty reduction, upholding public funds and even for environmental improvements. At the same time, the current environmental impact and resource use of many national economies and their global sum is unsustainable. Consequently, if economy is to grow or even stay at the current level, it has to be decoupled from its environmental impact and fitted inside planetary boundaries of resource use.

Another important motivation is that decoupling would make possible market-based solutions to environmental unsustainability. Depending on the view on the markets, some political intervention in the form of legislation or taxation may be seen as a complement but at the extreme decoupling can be used as an argument against state intervention. 

The problem we set out to investigate

The problem with the proposal that decoupling is a crucial tool for ecological sustainability is simple. Decoupling exists. There is robust empirical evidence. However, the kind of decoupling that is empirically happening is different (even if necessary) from the kind on decoupling that is absolutely needed (sufficient) for ecological sustainability. The two articles discussed below were designed to address this question: what would successful decoupling look like, and what does the evidence in the literature say about its existence? How much overlap is there between “decoupling according to evidence” and “decoupling sufficient (and therefore absolutely needed) for sustainability”? What does the overlap consist of?

Is there overlap between observed decoupling and the kind of decoupling that would be sufficient for ecological sustainability?

On the types of decoupling 

The question is made pressing by the fact that real world phenomena that are classified under the concept of decoupling are so varied that there is no necessary (logical, material) relationship between them. Quite the contrary: observed decoupling may be caused by recoupling elsewhere. 

Types of decoupling may be categorised along different axes. 

First, there is the spatial axis. Decoupling is discussed on various geographical scales, from the regional and national up to the global level. Obviously, decoupling on a limited geographical scale, such as a local region, is easier than on a wider geographical scale, such as a nation. For instance, a local region can diminish its use of chemical fertilisers, if it can buy foodstuffs with enough nutrients from outside the region, thus decoupling fertiliser use from GDP. However, when the wider context is taken into account, such decoupling disappears.

The second axis is temporal. Often, periods of decoupling are followed by periods of no decoupling or even recoupling. Making decoupling a continuous phenomenon is harder than achieving decoupling for a limited period of time, as continuous decoupling entails permanent changes in structures of production. For example, periods of decoupling have in certain areas of the world coincided with periods of economic downturns, and ended when economic growth has again picked up more speed.

The third axis is economical. Decoupling can be studied within one economic sector, or spanning many sectors, or across the whole economy. One of the problems widely discussed with relation to sectoral decoupling is the phenomenon of rebound or the so-called Jevons’ paradox. For instance, when energy efficiency is increased in a given sector, the result is sometimes increased energy use in other sectors. This means that evidence of decoupling in a given sector of the economy has to be analysed against the background of what is happening in other sectors.

It is also good to note that achieving impact decoupling is easier than achieving resource decoupling. Resource decoupling is typically discussed in terms of indicators like Domestic Material Consumption (DMC)  Material Footprint (MF) and so on. These indicators combine information on a wide range of material resources, capturing a large portion of the “metabolism” of an economy. In contrast, studies of impact decoupling typically report the decoupling between one environmental indicator, such as CO2 emissions, and the economy. As noted above, such specific impact decoupling may depend on increased material and/or energy use. For instance, an economy may replace a harmful substance, such as ozone-depleting CFC gases, and thus be absolutely decoupled from the specific impact, but such a decoupling may be achieved by increased material use, if the use of the replacement demand more resources, such as energy. 

Despite the inevitably rough generalizations of material flow accounts, they are the best available ‘proxy metric’ for the wide diversity of environmental impacts, including e.g. destruction of biodiversity, soil degradation or diminishing fresh water availability. As an International Resource Panel report (p. 47) puts it: “Environmental impacts – including pollution and climate pressure – cannot be mitigated effectively without reducing raw material inputs into production and consumption, because their throughput determines the magnitude of final waste and emissions released to the environment.” 

In sum, sectoral, temporally and geographically limited decoupling is easier to achieve than economy-wide, continuous and global decoupling. Obviously, relative decoupling, where environmental impact or resource use grows slower than the economy, is easier to achieve than absolute decoupling, where the impact or use declines in absolute terms. As presented in the table from the article “Decoupling for ecological sustainability”:

Easier and harder types of decoupling

More importantly, sectoral, temporally limited and geographically limited cases of decoupling can exist in the presence of or even depend on no decoupling or even recoupling outside the analysed sector, time or geographical area. This can happen, for example, through creating and maintaining an international division of production where a developed country is decoupling certain sector by moving the production to less developed countries. Thus evaluating the relevance of these kinds of cases for the larger, abstract claim of decoupling as a policy goal should proceed with careful analysis, taking into account the limits of the cases, and phenomena like outsourcing, trade, rebound and financialisation.

What is needed?

What about the “decoupling sufficient (and, consequently, absolutely needed) for ecological sustainability”? Currently, the combined environmental impacts of the economies of the globe are unsustainable, and the economies use too much (and wrong kinds) of natural resources. Consequently, in order not to push the planetary system over decisive tipping points and material limits, the impact has to go down, and resource use has to diminish.

This means that, in terms of time, decoupling has to be continuous, until the target is reached. Periods of decoupling followed by recoupling will not be enough. The same goes for the spatial axis. Decoupling in a limited area (say, rich countries), will not be enough if it is combined, (let alone if it is directly connected) with increased impacts and material use elsewhere. Ditto for economic scope: decoupling has to embrace the economy as whole, not just one sector of it. Importantly, decoupling one environmental impact (such as CO2 emissions), as welcome as it is, will not be enough. The decoupling of one specific impact is most meaningful when it is related to processes that cause decoupling also in terms of other impacts, world-wide and economy-wide. 

Clearly, the decoupling has to be absolute, as relative decoupling is, by definition, connected to increased impacts and/or resource use. And as resource use is too high, driving ecosystem and biodiversity loss, deforestation, negative land use change and so on, the needed decoupling is resource decoupling, not just decoupling relative to one specific kind of environmental impact. In sum, the ecologically sufficient decoupling is fast-enough, wide-enough absolute resource decoupling.

How fast? And what is the level of resource use that is sustainable? In the case of climate change, the collaboration of thousands of scientists has produced models that can give relatively precise quantitative values for CO2 concentrations after which specific environmental consequences become likely. In the case of resource use such models are lacking, not the least because resource use is an aggregate number that contains different kinds of materials, whose use has very different environmental effects. Consequently, the best one can do is estimate what a global aggregate number would be, if at the same time the contents of the aggregate are within limits. 

One way to arrive at an estimate is to see what kind of aggregate would be consistent with specific carbon budgets. (Assuming, for instance, that the relative proportions of the contents of the aggregate stay relatively stable.) The International Resource Panel (IRP) of the UN has presented a scenario where the target is to “freeze global resource consumption at the 2000 level, and converge (industrial and developing countries)”, and assumes a global population of 8,9 billion by 2050. This scenario amounts to a global metabolic scale of 50 billion tons (50 Gt) by 2050 (the same as in the year 2000) and allows for an average global metabolic rate of 6 tons/capita. The average CO2 per capita emissions would be reduced by roughly 40% […].” and “[…] is more or less consistent with the IPCC assessments of what would be required to prevent global warming beyond 2 degrees.” (p. 32)

Pinpointing a level of sustainable resource use is difficult, and much less studied than, say, GHG gas budgets. This is, primarily, a problem for the advocates of decoupling, as it considerably decreases the usefulness of the concept. Without a clear target, the concept allows quite a bit of “hand-waving” with regard to concrete steps towards success.

“Successful” decoupling

Proponents of decoupling typically refer to the concept so that they can keep maintaining that economic growth (in GDP terms) and less environmental damage/resource use are compatible. Very well, let us do a thought experiment: suppose that the economy grows and decoupling “succeeds”: what does such a decoupling look like? In the article “Raising the bar: on the type, size and timeline of a ‘successful’ decoupling” we defined a “successful decoupling”, for the sake of the argument, in the following way: 2% annual GDP growth and a decline in resource use by 2050 to a level that could be sustainable and compatible with a maximum 2°C global warming (with 9.7 billion as the global population by 2050, in the median range of UN World Population Prospects). The result? Compared to 2017, a “successful” decoupling has to result in 2.6 times more GDP out of every ton of material use, while the use of materials diminishes ca. 40 percent. There are no realistic scenarios for such an increase in resource productivity. Actually, global material productivity has declined since 2000. Obviously, the task of a “successful” decoupling would be even more formidable, if the goal would be a maximum warming of 1,5°C, as, for instance, in the Paris Agreement.

“Succesful decoupling” The green line depicts the scenario of material use of 7 tons per capita in 2050. The dotted green line presents a scenario where action is postponed until 2030 after which the reduction of material use is fast-tracked to reach 7 tons per capita in 2050. The (dotted) green line, in our estimation, depicts a ‘successful decoupling’, implying a modest GDP growth of 2% from 2017 to 2050, and a per capita use of materials of 7 tonnes in 2050.

We feel that this result puts the burden of proof decidedly in the camp of people promoting  decoupling as a solution: please, present a detailed and concrete plan on how the economy is supposed to get 2.6 times more value of every material ton used, while cutting material use 40 percent. Given the urgency and gravity of the issue, abstract hopes pinned on innovation and technological progress are not enough.

Decoupling according to evidence

What does the literature say about decoupling? What kind of decoupling has been observed?

In the article “Decoupling for ecological sustainability: A categorisation and review of research literature” we did a review of 179 articles published between 1990-2019. 

Like noted above, some kinds of decoupling are clearly happening. The literature finds evidence of impact decoupling (see the list of research articles), especially between GHG emissions (such as COX and SOX emissions) in wealthy countries for certain periods of time. There are extended periods of absolute impact decoupling of GHG gases. As welcome as these developments are, they are, however, i) not examples of “decoupling needed for sustainability” and ii) not necessarily connected or leading to “decoupling needed for sustainability” .

Breakdown of the articles reviewed in the article “Decoupling for ecological sustainability”

This means that there were only 11 articles that possibly are talking about the intersection in the diagram, both “decoupling observed in research” and “decoupling sufficient for sustainability”.

Unfortunately, when those 11 papers are examined, the intersection evaporates to nothing. You can check our article for details, but all of the 11 articles report limits of one or several type on the absolute resource decoupling that has been observed: limits of time, scale or depth, or several at once. This is hardly surprising as we know that globally, material productivity has been descending or flat since 2000. The general thrust from studies like Wood et al. (2018) and Krausmann (2017) is that when trade and consumption-based indicators are taken into account the recent (post- 2000) global trend is a recoupling of material use and GDP. 

Summa so far

There is evidence for absolute impact decoupling, in terms of GHG gas emissions, which are going down in some rich countries while GDP is growing. This is very welcome. But it is nowhere near the kind of decoupling sufficient for ecological sustainability. Nor is it based on trends that necessarily (materially, logically) will lead to decoupling sufficient for ecological sustainability. Not to speak of being fast-enough.

 

At the moment, the intersection between “decoupling observed in research” and “decoupling sufficient for sustainability” is empty. This, in our mind, presents a severe challenge to any policy or strategy relying on decoupling in order to solve the pressing environmental crises.

A call for collecting research

We have published an annotated a list of research articles on decoupling (the articles discussed in “Decoupling for ecological sustainability” are included in this list), and ask all of you to contribute to keeping it up to date. The idea is, first, to keep up with what is happening in terms of the empirical evidence presented for decoupling and, second, to specifically look for evidence of the kind of decoupling needed for ecological sustainability. Here is the link. The file is hosted as an OSF project, with DOI 10.17605/OSF.IO/WR5KM. (The list is also available as a Google Spreadsheet, if you prefer).

Please send e-mail to decoupling@bios.fi identifying any relevant articles that you see missing from the list. We hope that the “open source” list will help everyone stay abreast of what is happening in research, and so further discussions and research on decoupling and the related essential matters of resource use, environmental impact and sustainability.

7.4.2020
Quick, slow and intertwined crises – ecological reconstruction in an uncertain world Although the extent and the speed of the current pandemic, not to mention the scope of the necessary containment measures, took us all by surprise, the outbreak itself was no surprise. Something like this was bound to happen, and repeated warnings had been given. Widespread upheavals of social systems are in fact subject to an […]

Although the extent and the speed of the current pandemic, not to mention the scope of the necessary containment measures, took us all by surprise, the outbreak itself was no surprise. Something like this was bound to happen, and repeated warnings had been given. Widespread upheavals of social systems are in fact subject to an epistemological asymmetry that may be confusing from an everyday perspective. On the one hand, people who work with these issues have been aware that a crisis – a pandemic, a food system shock, a financial crisis – is inevitable, with solid ideas about its general outlines. On the other hand, nobody could have anticipated the details of the present crisis or the place and time of its occurrence precisely. This, in a nutshell, is the difference between prediction and foresight. For every accurate prediction you have countless failures, but the general nature of a crisis may still have been foreseen very well. Foresight is not a form of gambling, but a way of trying to understand the state of the world. 

The global food system, intricately interwoven, fell into crisis in 2006–2008 and again in 2010–2011. Those crises, like the international financial crisis of 2007–2009, were unique and hard to predict, yet still previously foreseen chains of events. Various studies and reports had warned about the inherent instability and crisis-prone nature of the food and financial systems. Although the concept of black swan that describes unforeseen events became fashionable during the financial crisis (Nassim Nicholas Taleb’s book was opportunely published in 2007), the crisis was not a wholly unforeseen event. Neither was the current pandemic by any means a thunderbolt out of the blue – as Taleb has himself reminded. The vulnerabilities had been recognized, admonitions offered… and taken as the proverbial boy crying wolf. The possibility of a global pandemic had been foreseen, and indeed its occurrence had been feared many times before, for instance, in connection to the SARS and MERS epidemics. But it was impossible to predict that this particular outbreak would result in a pandemic. 

There is a host of historical examples of widespread and destructive pandemics, but the probability of a truly global pandemic has grown as the movement of people and goods ever more accelerates, as geographically distant areas are increasingly networked in various ways, as population concentrations swell, climate change proceeds and human activities spread to new areas of the planet. In similar fashion, the potential for food and financial crises has grown as the corresponding systems become more and more complicated and depend on the rapid functioning of global delivery, transport and communication. Thus these crises are a systemic feature of an increasingly globalized and accelerated world. They are not the whims of fate, not the eternal cycle of calamities, not “nature striking back”, but part and parcel of the world order that has been constructed during the recent two centuries.

Diminishing the systematic vulnerability would have required fundamental changes in food systems, economic systems and practices that destroy biodiversity and constantly drive human activity into new areas. In a nutshell, making societies and production systems less vulnerable would have required developing redundancy, backup systems and other such features that were deemed wasteful in the perspective of narrowly determined economic optimization and efficiency. Unfortunately, not enough socio-political will and power was  mobilized to effect such changes. Warnings were heard but they were effectively unheeded. The costs of fundamental changes were, explicitly or implicitly, calculated to be too steep, and societies acquiesced to pay the price of crises (or at least to place the burden on somebody else). This resignation to fate was often legitimized by stating that despite the design flaws, we are still living in the best of possible times. “It’s getting better all the time.”

Quick and slow crises

One reason for this reticence must be that despite dire warnings people have hoped such crises would be relatively quick in passing, over after a few months or a couple of years at best. It is hoped that the situation can be controlled with emergency measures, a state of exception can be proclaimed, and after it is all over we can return to the normal state of affairs. The attitude towards quick crises has resembled that towards wars, which are followed by peacetime. Of course the notion of “the normal state of affairs” is always somewhat illusionary: crises create traumatized generations, destroy lives, demolish and redistribute property and create the conditions for reorganization of power. They accelerate the disappearance of some ways of life and give rise to new ones.The decades of the World Wars were a conflagration that crushed the earlier phase of multipolar and imperial globalization and gave birth to a new bipolar and frenetic one. After the upheavals that ended the Cold War, the world went through an unforeseen rush of globalization, which in turn has reached a crisis point during the recent decades.

People who spend their working hours devising disaster scenarios have of course also mulled over quick crises that would result in downright total devastation: a collision with a large comet, a supervolcano eruption, a nuclear war or a highly lethal and extremely virulent disease. In the end there is, however, little that can be done in the way of preparation for such calamities. An Extinction Level Event or one that results in total collapse of civilization arrives or it does not, despite all the best laid schemes of mice and men. This is a popular topic in movies, television series, computer games and books, but in everyday life the basic assumption is that after a crisis or a disaster we will return to a world which is largely recognizable. We can rely on the resources and possibilities of our known world when recuperating. “Let’s get back to work.”

It is precisely here that quick crises differ radically from the ongoing environmental and resource crises which are essentially slow. Even the feared climate tipping points are crawling processes in comparison with a long-lasting pandemic or an enduring war. Slow crises cannot be overcome by declaring a martial law or a state of exception, after which things can return to normal. Permanent systemic transformations of societies are necessary. It is because of this difference that many researchers have been reluctant to use terms like climate emergency or to use wartime metaphors. They may convey a false sense of transience. This is why the BIOS Research Unit has introduced the notion of ecological reconstruction into Finnish public discussion. It harks metaphorically back to the period after the Second World War, when many European societies, ruined by war, began a process of not just physical reconstruction but also of creating modern welfare states and more egalitarian political systems after decades of belligerence. The big difference with the current situation is of course that the virtual ruins of the fossil fuel economies cannot be reconstructed by using cheap and abundant fossil fuels as happened in the context of the post-war global acceleration of production and consumption. It is not reconstruction to recapture what was lost but construction of something new that preserves and takes further the best parts, such as equality and democracy, of the legacy. 

Slow environmental and resource crises necessitate an abiding, generational process of social transformation. If one looks, e.g., at climate change, it is not enough to set the target of carbon neutrality by the middle of the century. The transformation has to be realized with the long game in mind: net negative emissions are needed for decades and decades in order to bring the CO2 concentrations in the atmosphere to a level that avoids catastrophic long-term changes. Carbon neutrality is just the first step, after which another is needed, and another, and another. This is why it is vital to avoid troublesome path dependencies which make the later steps more difficult – for example to avoid investing in technological infrastructures that block further change and thus do not work well as transitional steps. This is necessarily a long process. Emergency measures, on the other hand, tend to lack the long view.

Perhaps some sectors can be transformed quickly though a wartime-like emergency mobilisation – transforming the energy system might be such a case, and it is one of the most urgent tasks at hand. This does not apply to many other required changes, however. Fundamental changes to ways of life and social organization are called for. How to effect social development that permanently diminishes the total consumption of natural resources? (When trade flows are taken into account, the level is exceptionally high and is still growing even in Finland, a supposedly environmentally aware society.) How to safeguard the many dimensions of biodiversity, not only the number of species but the functioning of ecosystems and the viable size and genetic diversity of populations? A wholesale sustainability transformation of societies is not an emergency project that ends in 2050 or in 2100. You have to play the long game. How can we grasp a social process of transformation that has its necessary waypoints (like carbon neutrality in 2050) but not a clearly-drawn finish line?

The crucial differences between climate and pandemic crises

For the same reason it is misleading to see a silver lining in the black clouds of the pandemia and rejoice over how “nature gets a breather”. Some news about rejuvenating ecosystems have been sheer misinformation, but it is clear that for example climate emissions will fall temporarily as production and consumption grind to a halt. However, they can also bounce back fast after the crisis, provided it does not last too long. But major environmental crises are incremental in nature, not saltatory. A temporary drop in climate emissions does not really amount to much, if emissions are still larger than sinks and thus the concentrations of greenhouse gases rise in the atmosphere. As the concentrations rise, it is getting worse all the time. 

Furthermore, the history of wars and financial crises shows us that busts are followed by booms, and even after crippling devastation emissions and consumption can rise rapidly, much higher than before. Those who romanticize about societal collapse simply cannot fathom how gargantuan phenomena the major environmental and resource crises are. The phenomena have a massive inertia. Not to mention that looking for a silver lining amongst widespread human suffering is not the most fruitful way to facilitate sustainable social transformations.

Actions have to correspond with the phenomena in question. This is where the oft-repeated question “Why don’t we tackle climate change with the same vigour as the current pandemic?” fails. These phenomena are not commensurable. You cannot create a vaccine against the climate change, and it will not fade away through time. Infectious diseases are being researched constantly, past struggles with epidemics and pandemics offer a trove of useful lessons, and emergency systems have been devised on that basis. The preparation was inadequate for the current pandemic, but there were at least initial successes in some countries. As the current scientific discussion around Covid-19 illustrates, there is always uncertainty about the behaviour of new pathogens and the dynamics of the diseases, so some scientific disagreement is inevitable. It takes time to reach a consensus and to test which countermeasures work best. Still, there are general unifying features between epidemics and pandemics. In rough outlines we know what should be done. 

In the rhetoric of the environmental movements, and in the climate change debate especially, there is a recurring statement: “We already know what to do. We just have to get to work.” But do we really know? On the one hand yes, on the other no. All the most important dimensions of climate change are extremely well understood – much better than the nature of the current pandemic, in fact – and no significant uncertainty remains about them. The sources and amounts of the major greenhouse gases are accounted for, and the remaining uncertainties are down to the sheer complexity of the phenomenon but do not change the big picture. We know the ballpark we are in, and the timetable is well understood. This knowledge does not however offer clear guidelines as to how the social transformation could and should be realized. Climate research cannot offer a blueprint for social transformation. The task gets even harder when one looks at the multiplicity of other environmental and resource problems. What is needed are simultaneous and concerted changes in various fields of society, ones that support rather than hinder each other.

Combatting a global pandemic may require drastic measures, the legitimacy of which is gained with their promised transience. Some day the disease will pass, or even if it becomes a recurrent phenomenon, it will no longer be met without immunity, experience, medical cures and even vaccines, if we are lucky. The restaurants, the schools and the movie theatres will open. The expected temporariness makes it easier to stomach the loss of life and other sacrifices (in one’s own country, that is, and not just in faraway countries or the borderlands of Europe, where suffering seems to be an acceptable “normal state of affairs”). Emergency measures are not meant to transform the society permanently – albeit it is a realistic threat that some exceptional policies will become a regular feature of societies, and not just in already autocratic countries. Hungary is a most extreme example at the time we are writing this.

It is much harder to grasp a prolonged process of change that affects not only one’s own life but the lives of the posterity through generations. As such a change shakes the foundations of the established way of life, it can even seem more threatening than a martial law that goes on for months. Everyday life is transfigured not once but again and again. This is why the concept of a just transition has become so central in thinking about profound eco-social transformations, for example in notions of Green New Deal, or the Finnish discussion about ecological reconstruction. The basic idea is that fundamental and permanent social change will not be possible without it being acceptable to the populace, which is why questions regarding equality, welfare, employment, social security, care, public health and education are at the core. These are not just not something “extra” that would be nice to include in addition to environmental protection.

Intertwined crises

But unfortunately quick and slow crises cannot really be differentiated so clearly. This is essentially what the concept of wicked problems is about. One of the key features of increasingly complex, accelerated and networked global social-ecological systems is that disturbances can spread rapidly and unpredictably. Crises tend not to stay limited to a certain sector of society and thus amenable to carefully tailored countermeasures. Successfully restricting disturbances to one system gets more and more improbable. In security studies, similar notions have been developed in the discussion about a wider conception of security.

Wickedness does not arise simply from the unlucky and unlikely coincidence of several calamities. This can happen, of course. Zagreb suffered an earthquake in the midst of the emergency measures aimed at containing the current pandemic. The suffering of migrants in the borderlands of Europe became suddenly both more terrible and invisible, as Covid-19 went global. The prospects of this in Syria, for example, are truly horrific. The essence of wickedness is however when one crisis can trigger others that were lurking under the surface. The international financial system had become extremely vulnerable before the outbreak of the current pandemic, so the resulting crash will most likely be much harder than could result only from the emergency measures. Tracking simple causal chains does not work in socio-ecological crises that spread through complex networks, amplifying each other. Societies have not devised contingency plans for them, and research on these issues is still marginal.

A word of caution is in order. Talking about networks, systems theory and complexity too easily becomes handwaving: butterflies, hurricanes, chaos theory, novelty on the edges, the works. This is not a shortcut to understanding. The fact that complex systems can reach a bifurcation point and change abruptly to a radically new state does not tell us what precisely is happening now. Systems theory, complexity studies, or whatever term one chooses to use for these kindred approaches, does not make things easier but harder. Diverse complex systems are not always and everywhere comparable and do not offer lessons about each other simply because they are complex and systems. In order to offer useful analogies, they have to be similar in a meaningful way.

In fact, this systemic perspective meets another epistemological asymmetry. In the real world, the borderlines between individual ecological and/or social systems are fuzzy, so there is always the possibility to widen the scope and to link systems that are distinct from one perspective into a more extensive perspective. Eventually it is possible to try to model the whole planet – this is the domain of the Earth System Studies. Widening the systemic scope loses details and local dynamics and gains knowledge about large-scale interactions. Global models are indispensable when truly global phenomena like the climate are studied. There are also good scientific grounds to look at the global flows of natural resources and the networks of production and consumption, because localities simply are less and less “insulated” from each other. 

But the global view has limitations when one wants to consider interventions on local and regional scale. The grand systemic view cannot give the required details. Even though everything is connected to everything else, the scope has to be narrowed pragmatically, fitting to the questions at hand. This unresolvable interplay between global and local is part and parcel of the wicked problematique. When small and large, quick and slow are in constant interplay, one needs both the grand systemic view and the local framework.

Social transformation in the era of chronic exception

In a world of increasing vulnerability to systemic crises and the intertwinement of quick and slow crises the whole notion of “a normal state of affairs” becomes questionable. No longer is it viable to think that the quick crisis (like a pandemic) must first be handled, the normal state of affairs restored and only then societies can return to consider the slow crises like climate change and the fundamental transformations that they require. The next quick crisis is most likely around the corner, especially as the slow environmental and resource crises work as “threat amplifiers” in multiple ways. The long game of societal transformation has to be played constantly in the conditions of adaptation to changes. In climate policy it has become finally obvious that mitigation and adaptation should not be understood as polar opposites, but this is true in a more general sense also. The wickedness of intertwined problems will never afford us the steady and peaceful normal state of affairs where farsighted and incremental environmental policy can be pursued.

Thus in reacting to day-to-day crises we should avoid creating obstacles to the more general societal transformation, which is necessary to overcome the enduring crises. On the other hand, the long-term transformation of societies must not impair the capacity of societies to adjust and adapt in the face of changes, to recover from disturbances or transform when meeting them. (The term resilience is most commonly used to refer to this family of capacities.) Fatih Birol, the Executive Director of IEA, noted this in a remarkably stark comment recently: “Rather than compounding the tragedy by allowing it to hinder clean energy transitions, we need to seize the opportunity to help accelerate them.

This brings us to a third oft-repeated problematic statement about the relationship of the current pandemic and the environmental crises: perhaps the pandemic will be a wake-up call? It might launch the long-awaited change in attitudes and push societies to a new trajectory. This thought can be interpreted in two ways: as hopeful prognostication or as a call to action. The first one, the hope of awakening in the midst of a crisis, tends to be somewhat naive. An old truth in the study of environmental action and policy is that changes in attitudes do not necessarily lead to changes in practices. Several things can obstruct the path from attitudes to actions. Individuals are largely subject to the inherited situation, the existing infrastructures, institutions and ingrained habits of societies. The symbolic and rhetorical power of “economic realities” is strong, and conversely in modern democracies the notion of citizenship has mostly narrowed down to the acts of voting and consuming, generating passivity in the face of such rhetorical/propagandist claims of political and economic “realism”. In general, without collective goal-setting, support and direction, the possibilities of individual action seem pitifully small. Such obstacles to action are not removed simply by changes in values.

Lately there seems to have been a veritable fashion of referring to studies according to which a change in the attitudes or values of only a small percentage of the populace can generate a radical change in complex social systems. This idea is highly problematic. First of all, the social upheavals that are the empirical basis of such studies are not comparable to, say, the needed socio-ecological transitions in modern democracies. Secondly, as we said, drawing analogies between changes in complex systems requires meaningful similarities. State shifts or regime changes in complex systems happen, but their course runs according to the nature of the system in question. With humans, as opposed to, say, pathogens, it takes agency as social and political animals that engage in collective action. Social change does not simply spread like an epidemic once you have enough “carriers”. (Simplistic applications of complexity studies or systems theory to social and political action are one reason some people consider those approaches inherently apolitical or politically naive.)

Thus, the call to action. No crisis in and of itself lays the ground for a specific kind of change: the potential for radically different bifurcations is always there. During the current state of exception, many economic and ideological restraints that stood in the way of an ecological transformation have been tossed aside. Huge public investments that aim towards a certain developmental path are suddenly possible. States can have a major role in steering the economy and coordinating economic activities, innovations and missions  that solve concrete problems and accomplish concrete tasks. But if political discussion and struggle about this direction is not begun now, if it is postponed until “the normal state of affairs” is reached, the emergency measures easily end up supporting the business-as-usual model, locking in accustomed developmental paths and propping up the fossil fuel economy and the growing use of natural resources. 

It is also clear that exceptional measures can erode basic rights and freedoms beyond the current state of exception. In the midst of a deadly pandemic it is hard to keep watching the watchers, but here is the catch: when climate change and other slow crises proceed and amplify the force and the frequency of quick crises, we end up in a state of chronic exception. In such a situation it is vital that the agency and the energy of the civil societies is not relinquished. The constant negotiation between the necessity of emergency measures and the judicial and political safeguards against cementing them is of the highest importance.

In a nutshell: if we wish to see the current crucible as a beginning of something better, we need lots of people who work towards such goals. The perspective of complexity studies adds a crucial reminder that it is very hard or even impossible to precisely plan and to direct changes of complex socio-ecological systems. Surprises are always on their way. There are simply too many moving parts. This is why strong path dependencies are risky: for example committing to technological infrastructures that work in only certain predictable conditions. Keeping the options for development open is a vital ingredient of resilience. Politically this requires a kind of imagination where visions of the future are not predetermined recipes of new societies. This change in thinking has proven to be so far very difficult.

The temptation of isolation and xenophobia

Political mobilization around the current crisis can also take a darker course, and it seems sadly rather likely. The current global system resonates with tight intertwinings, rapid mobility, diminished storage and quick delivery, frenetic speculation with futures and overall an extremely streamlined “efficiency” from a narrow economic viewpoint. When that system grinds to a halt, it is tempting to call for isolation, demolition of all globalization and self-sufficiency of regions. Here the political imaginary tends to retreat into simplistic opposition: either global or local, either self-sufficiency or dependency, either isolation or commerce. In the real world such “pure” alternatives have never existed, but dualistic thought is never that fussy about empirical evidence.

It is clear that regional self-sufficiency becomes more important in crisis conditions. And when the difference between the normal state of affairs and crisis conditions gets ever more blurred, self-sufficiency becomes a constant concern. This questions the inherited practices. The global food system has developed to function in fairly predictable conditions and with smooth deliveries. With the emergence of chronic crisis conditions, it will no longer operate reliably. Food crises have already become increasingly frequent, and things will get a lot more difficult as the major environmental crises get worse – and they will, even in the best of possible worlds. 

This does not mean that the goal should be wholesale self-sufficiency, or course, since global commerce has clear merits, especially in safeguarding against local disasters and harvest variability. But the trend has been away from autarchy, to the point that desolation of countrysides is even seen as a mark of social progress. Now a change of direction is necessary. Another example of resurgent locality are the decentralised renewable energy systems that will eventually succeed the fossil fuel economy, if mitigating climate change is taken seriously.

We have however inherited the globalized world with its existing institutions and infrastructures that will not change overnight, and with its truly global problems that transcend all borders. Rebuilding this legacy and solving these problems will be impossible with regional isolation. Mitigating climate change and adapting to it necessitates global cooperation in addition to local measures. In order to make the global flows of natural resources more equitable and sustainable, global trade agreements must be reformed. Singular countries cannot realize such goals by acting from a narrow national perspective.

Only the dream of national “free riding” while others carry the load or the fatalistic notion of fortifying one’s borders and enduring in the midst of crisis (until the literal or proverbial waves break the levees) can rationalize – so to speak – isolationist policies in this situation. Ethno-nationalist, xenophobic and racist groups take advantage of such sentiments in their own quest for “a world of regions”. They can easily exploit the current feelings of insecurity and the distrust and confusion fomented by crises. In fact, in many countries (like Finland) such groups have begun shifting from downright climate scepticism towards climate fatalism where safeguarding one’s own security and prosperity replaces all notions of global solidarity. This kind of “selfish realism” in the face of crises appeals to many people, unfortunately.

That is why the passive hopeful notion of awakening through crisis is not only naive but also dangerous. The direction that societies take has to be actively, collectively influenced. Others are already doing it, with a dim view of the future.

Communities of knowledge

The current pandemic illustrates also how wicked problems require the kind of knowledge production that is not possible without international cooperation. Global scientific communities are one example of global communication and mobility that has increased resilience rather than amplified propensity to crises. Infectious diseases that have the potential for global pandemics can cross even the most tightly guarded borders, and then experience gained and knowledge developed in other regions is precious. The state of the climate simply cannot be studied without the coordination of thousands of researchers and a global instrumentation network.

Thus appreciation of science, furthering scientific literacy and the active participation of researchers in society are crucial things in an increasingly crisis-prone world. “Follow the science” is the familiar clarion call not only regarding climate change but also in the midst of the current pandemic. It is, however, not a straightforward matter. Recent months have illustrated how well-meaning public discussion can go awry and end up fostering suspicion towards research. Hordes of “science activists” have delved deep into epidemiological studies and scenarios about the spread of the pandemic and criticised practicing researchers fiercely. This can unfortunately erode trust in research and end up reinforcing just the kind of sentiments of insecurity and suspicion mentioned above.

In this matter too, it is easy to slip into a naive simplification: if we should not criticize the researchers, should we then follow the experts blindly? The question is what to criticize and how. Most of us understand how deeply problematic it is when “lone wolves” draft their own scenarios about climate change. Without the support and the critical feedback of scientific communities they cannot produce meaningful criticism. Studying such phenomena is not the work of heroic individuals. This basic fact about the nature of the scientific endeavour has been much harder to grasp in the case of the current pandemic. For some reason many people who would balk at climate science denial are not bothered by amateur epidemiologists. It has been chilling to hear the same careless throwaway criticism “that is based only on models” that has been used to confuse and muddle the climate change discussion for years.

Science is not an enterprise of lone heroes and the search for magical grains of knowledge. It is a fundamentally collective activity built in the form of scientific communities. Many things can of course hinder the workings of these communities: look at how China has restricted the activity of journalists, or how the Trump administration dreams of hoarding key medical developments. Scientific communities work only as well as they work as communities. They require the support and the supervision of the rest of the society. But “science activists” should not assume that they possess the ability for detailed scientific critique about some of the most complex issues of the contemporary world. 

Climate change and pandemics are phenomena which require the collective expertise of scientific communities. Again, disagreements and uncertainty are unavoidable when people are studying a complex novel phenomenon like the spread of and the medical solutions to Covid-19, and it will take time to reach a consensus. (Climate science reached that point ages ago.) This is why also the people who want to “follow the science” have to endure uncertainty and avoid hubristic belief in one’s own capabilities to understand the intricacies of ongoing studies. Calling for instant clarity and unequivocal policy advice misrepresents how the sciences work. 

But on the other hand, neither are the epidemiologists or the climate researchers experts on economics, social sciences, psychology or care. That is why we need a multidisciplinary approach to the wicked problems of our time. Here too, it is important to keep watching the watchers, to avoid narrow technocratic responses to the crisis. This is the crucial role of activism: to make sure that the responses to crises at hand are not colonized by perspectives that bypass important questions regarding the environment, equality, human rights and democracy. We need an active citizenry that is willing to struggle over the direction of the coming social transformation and to support the kind of knowledge production that is needed.

12.11.2019
We Have a Plan: Ecological Reconstruction Ecological Reconstruction is the next step in a just transition at a national level. To find out more, please visit eco.bios.fi.

Press Release
12 November 2019
BIOS Research Unit

Ecological Reconstruction is the next step in a just transition at a national level. To find out more, please visit eco.bios.fi.

According to the latest scientific consensus reports (IPCC, IPBES, IRP, GSDR), societies need to rapidly and radically lower their climate emissions and natural resource use while ensuring equal opportunities for a good life. The recent calls for a Green New Deal, particularly in the US and to some extent in Europe, have managed to move the twin crisis of climate change and inequality to the center of the political debate. One of the key messages rising from the debates is that the transition is not bounded by money but by natural resources, ecosystems, technologies, skills, and – political imagination and capabilities.

What is now needed in all countries is 1) a comprehensive understanding of the social and material tasks that need to be accomplished internationally and locally, 2) a set of political tools that can be readily used to develop and build low-carbon infrastructure and practices, and 3) a meaningful, orienting narrative that invites people and organisations along.

Ecological Reconstruction is our answer to these three demands for Finland. Based on multidisciplinary research, we have identified key reconstruction sites and outlined a set of tools to accomplish something similar to the post-WWII reconstruction period, during which the basic infrastructure was rebuilt and the ground was laid to later welfare state developments. Unfortunately, the post-war developments also locked in the massive use of fossil fuels. This time, one of the most urgent tasks is to phase out fossil fuels.

Ecological Reconstruction continues the work that was summarised in our background report for the UN Global Sustainable Development Report 2019, noted, for example, by Vice, Huffington Post, and the Independent, and expanded later in LSE Business Review.

BIOS is an independent, multidisciplinary research unit which studies the effects of environmental and resource factors on Finnish society and the European Union – on the economy, politics, and culture – and develops the anticipatory skills of citizens and decision-makers. If you wish to contact us, please email paavo.jarvensivu@bios.fi.

19.3.2019
Problematic statements by secretary general of the World Meteorological Organization The Finnish climate scientist Petteri Taalas works as the secretary general of the UN affiliated World Meteorological Organization (WMO) that also hosts the secretariat of the International Panel for Climate Change (IPCC). WMO and IPCC have a central role in climate change research. Statements by these organizations and their personnel rightfully carry a lot of […]

The Finnish climate scientist Petteri Taalas works as the secretary general of the UN affiliated World Meteorological Organization (WMO) that also hosts the secretariat of the International Panel for Climate Change (IPCC). WMO and IPCC have a central role in climate change research. Statements by these organizations and their personnel rightfully carry a lot of weight. For instance, statements by secretary general Taalas are often relied on by Finnish commentators and politicians. However, it has not always been clear on which research sources Taalas’ statements are based on, or if he presents them as the secretary general or as a private citizen. If the grounds for the statements are unknown or the point of view from which they are presented is unclear, public discussion may suffer.

Several different areas of public interest, such as politics and science, are crucial for grappling with climate change. The phenomena connected to climate change are varied and dispersed both temporally and spatially. A huge network of measuring instruments, long periods of observation and collaboration of thousands of scientists is needed for collecting the whole picture. As climate change also poses an existential challenge to societies, the scientific views have to be thoroughly vetted. The work done by IPCC is a prime example of high priority and top quality international scientific collaboration.

Consequently, part of the gravitas of science is transferred to scientists in the public sphere. Scientists have every right to present views on matters pertaining to the future of all humanity. To think that scientists have to stick to presenting only facts within their specific area of expertise is based on a too restricted understanding on both the concept of facts and the public role of science.

This means that a delicate balance needs to be struck. A scientist can and should speak up, and it is good and right that the weight of their views benefits from the overall prestige of science. At the same time the message should be presented in a manner that makes it possible to distinguish between statements presented as parts of well-established knowledge within the scientist’s field of expertise and statements presented as opinions whether as a scientist, as a citizen or as a participant of political discussion.

As a representative of their field, a scientist speaks with the authority of science. The personal integrity of the scientist is evaluated both within the relevant scientific discipline and more publicly. The scientific integrity and the public integrity are, however, two different things. Consequently, the public needs to be able to distinguish between views that are to be evaluated as peer-reviewed facts of the relevant field, and views that are to be evaluated on the basis of the personal integrity of the presenter.

Due to his scientific merits and his position in the WMO, the views of Petteri Taalas have rightfully received a lot of attention and have been very influential in the Finnish discussion. They are repeatedly referred to as grounds for particular policy positions. Unfortunately, the views presented by Taalas have also created some unclarities, as it has not always been clear whether they have been presented from the position of the secretary general of the WMO or from the position of a citizen or scientist taking part in public debate. More particularly, it has not been clear on what kind of scientific evidence Taalas’ views are based on.

In August 2018, shortly before the publication of the IPCC report “Global Warming of 1,5°C”, Taalas gave an interview in which he said that “warming over 3°C is realism” (ref).

The first problem in interpreting this statement is that it is unclear what kind of realism is meant here. Realism from the perspective of climate science or from the perspective of politics? And is the statement presented from the position of a climate scientist or from the position of a citizen? Like the senior adviser of Finnish Innovation Fund Sitra Oras Tynkkynen wrote in a reply to Taalas’ interview, scientifically, technically and economically it is possible to stop global warming to 1,5°C. Furthermore, as Tynkkynen put it, the scope of political realism is decided by politicians. It seems natural to interpret Taalas’ statement as saying that three degrees of warming is the outcome one can expect from the perspective of political realism, since one of the main tenets of the IPCC report was that there are pathways to considerably lower degrees of warming. This interpretation, however would mean that the view presented by the secretary general of the WMO, overseeing the secretary of the IPCC, is quite different from the views presented, for instance, by Debra Roberts, one of the authors of the report, who in connection to the publishing of the report said: “I hope it mobilises people and dents the mood of complacency.”

Taalas has also given his support to the current Finnish forest policies that emphasise fellings for bioeconomy over the development of carbon sinks. He has said, for instance, that from the perspective of climate science and the atmosphere it is not a problem if forest carbon sinks temporarily shrink, if the emitted carbon is eventually captured (by the re-grown forests) (ref). The problem with this claim is that it directly contradicts the IPCC report. The report points out, first, that climate related risks, including potentially long-lasting or irreversible changes, depend on the peak of warming and carbon dioxide rates (A3.2.). It emphasises also that “Carbon cycle and climate system understanding is still limited about the effectiveness of net negative emissions to reduce temperatures after they peak”, which means that letting warming and GHG concentrations overshoot safe limits means taking unknown risks (C3.3.). All in all, the report emphasises the importance of the timescale with regard to emission reductions.

In addition, Taalas has stated that increasing carbon storage in old forests is not possible, as old forests are a source of carbon (ref). However, research suggests that old forests act as carbon sinks for a very long time, also in the boreal areas (1, 2, 3).(*) Old forests also have a major impact for biodiversity. Therefore a view according to which, from the climate perspective, old forests are a good target for logging (maybe even more preferable than younger forests) is doubly harmful.

Together the statements on forests contain the idea that a relatively rapid circulation of felling and regrowth is neutral from the carbon perspective. However, each felling causes a carbon debt that needs to be repaid by (re)growing biomass before neutrality is achieved. The carbon debt is greatest compared to a situation where no felling is done, when both the carbon sink and storage would have been preserved. The payback time is at least several decades (1, 2, 3). On top of this comes the problem mentioned above: even if the carbon is captured in the decades to come, it has already performed radiative forcing in the atmosphere, possibly contributing to warming and irreversible changes.

In connection to presenting these statements Taalas has said that the Finnish Climate Change Panel (an independent, interdisciplinary think tank serving as an advisor to the Finnish ministerial working group on energy and climate policy) has emphasised too much the opinions of researchers instead of doing forest research: “It is good that there is in Finland an entity that can present the views of the scientific community. But care should be taken, so that opinions do not get too much weight, but rather the task is to produce scientific knowledge for decision makers.” The irony is that it seems that in the statements mentioned above, Taalas has not been clear whether he is presenting opinions or established scientific knowledge. Unfortunately, his views seem to be in direct conflict with the views presented by the IPCC and by forest science.  

We asked directly both from Taalas and his colleagues in the WMO secretariat if they see a contradiction between the statements by Taalas and the research sources referred to above. Taalas replied to the message, but did not address the question. WMO personnel has not replied at all.


(*)
The report Biodiversity, carbon storage and dynamics of old northern forests contains from page 76 on a survey of research on carbon sinks and storage in old forests.

It is good to note that less than 5 percent of Finnish forests are untouched and more than two thirds less than 80 years old. The carbon balance of Finnish forests will be decided in the woods used for forestry and aging is not a threat to continued carbon capture in the near-to-mid term.

21.8.2018
Governance of economic transition: a scientific background document for the UN Global Sustainable Development Report 2019 The BIOS Research Unit was invited to produce a scientific background document on transformation of economies to support work on the UN Global Sustainable Development Report 2019. What will happen during the oncoming years and decades when we enter the era of energy transition, combined with emission cuts, and start to witness more severe effects […]

The BIOS Research Unit was invited to produce a scientific background document on transformation of economies to support work on the UN Global Sustainable Development Report 2019.

What will happen during the oncoming years and decades when we enter the era of energy transition, combined with emission cuts, and start to witness more severe effects of climate change? What kind of economic understanding and governance models do we need, now that economies are undergoing dramatic rather than incremental change?

While economists typically emphasize carbon pricing as a policy tool for tackling climate change, natural scientists and multidisciplinary environmental research groups argue for more profound political engagement and proactive governance of economic transition.

It can be safely said that no widely applicable economic models have been developed specifically for the upcoming era. In the background document we highlight underutilized tenets of existing economic-theoretical thinking that can assist governments in channeling economies toward activity that causes a radically lighter burden on natural ecosystems and simultaneously ensures more equal opportunities for a good human life. Our focus is on the transition period, the next few decades.

The document builds on the multidisciplinary work of BIOS since its launch in Helsinki, Finland, in 2015. The main task of the research unit has been to study the effects of environmental and resource factors on Finnish society and to develop the anticipatory skills of citizens and decision-makers. In the background document we review existing socio-ecological-economic studies and utilize our own findings in the Finnish context to construct tools for governance of economic transition on the global level.

Download the background document.

For more information about the upcoming UN Global Sustainable Development Report 2019: https://sustainabledevelopment.un.org/globalsdreport/2019

For more information on the BIOS Research Unit: https://bios.fi/en

Corresponding author: Paavo Järvensivu, D.Sc. (Econ.), paavo.jarvensivu@bios.fi