FacebookTwitterGoogle+RedditEmail

The World Bank and the Green Economy

by PATRICK BOND

The debate over the Green Economy rages on next month in Rio de Janeiro, at the International Society for Ecological Economics meetings, the Cupula dos Povos alternative people’s summit, and the UN’s Rio+20 Earth Summit. Proponents and critics of ‘green growth’ capitalism will butt heads using narratives about valuations of nature and the efficacy of markets.

Boiling down a complex argument from her book Eco-Sufficiency & Global Justice, University of Sydney-based political ecologist Ariel Salleh observes how a triple externalization of costs ‘takes the form of an extraction of surpluses, both economic and thermodynamic: 1) a social debt to inadequately paid workers; 2) an embodied debt to women family caregivers; and 3) an ecological debt drawn on nature at large.’

At minimum, addressing these problems requires full-fledged re-accounting to toss out the fatally-flawed GDP indicator, and to internalize environment and society in the ways we assess costs and benefits. This exercise would logically both precede and catalyze a full-fledged transformation of financing, extraction, production, transport and distribution, consumption and disposal systems.

But it is only in the struggle for transformation that we learn how institutions of power hold fast to their privileges, and why genuine change won’t happen through mere tampering with national income accounts: ‘torturing the data until they confess’, the old economists’ adage.

The World Bank is one such institution, in part because the man taking charge next month, Jim Yong Kim, is a progressive medic and anthropologist. It’s fair to predict that he’ll add style to the Bank’s ‘talk left, walk right’ break-dance repertoire, spinning out arguments that will make our heads spin, while business continues more or less as usual.

A good example of environmental reformist PR can be found in the new Bank report, Inclusive Green Growth. ‘Care must be taken to ensure that cities and roads, factories, and farms are designed, managed, and regulated as efficiently as possible to wisely use natural resources while supporting the robust growth developing countries still need,’ argue Bank staff led by Inger Andersen and Rachel Kyte, in order to move the economy ‘away from suboptimalities and increase efficiency – and hence contribute to short-term growth – while protecting the environment.’

Of course, certain uses of resources are off limits for polite discussion, as Bank staff dare not question financiers’ commodity speculation, export-led growth or the irrationality of so much international trade, including wasted bunker fuel for shipping not to mention truck freight.

Yet the Bank cannot help but momentarily inject a power variable into its technicist analysis: ‘That so much pricing is currently inefficient suggests complex political economy considerations. Whether it takes the form of preferential access to land and credit or access to cheap energy and resources, every subsidy creates its own lobby. Large enterprises (both state owned and private) have political power and lobbying capacity. Energy-intensive export industries, for example, will lobby for subsidies to maintain their competitiveness.’

Would the Bank dare practice what it preaches about ending ‘inefficient’ subsidization, given how it amplifies irrational power relations when maintaining the world’s largest fossil-fuel financing portfolio? When Inclusive Green Growth argues that ‘Governments need to focus on the wider social benefits of reforms and need to be willing to stand up to lobby groups’, we cannot forget the Bank’s own largest-ever project credit, granted just two years ago. The $3.75 billion loan for a 4800 MW coal-fired power plant (‘Medupi’) was, according to outgoing Bank president Robert Zoellick and his colleagues, aimed at helping poor South Africans.

In reality the benefits are overwhelmingly to mining houses which get the world’s cheapest electricity (around US$0.02/kWh). The costs of Medupi and its successor Kusile are borne not just by all who will suffer from climate change (including an estimated 180 million additionally dead Africans this century). All South Africans are losing access to electricity through disconnections, and as a result, engaging in world-leading rates of community protest because to pay for Medupi and Kusile, price increases have exceeded 100 percent over the past four years.

The Bank’s Inclusive Green Growth arguments always return to profit incentives: ‘If the environment is considered as productive capital, it makes sense to invest in it, and environmental policies can be considered as investment.’

The nature-as-capital narrative leans dangerously close to the maniacal positioning of former Bank officials Larry Summers and Lant Pritchett, who in 1991 wrote their infamous memo in preparation for the original Rio conference: ‘The economic logic of dumping a load of toxic waste on the lowest wage country is impeccable and we should face up to that.’

Facing up to pollution externalities is deceptively simple within the Bank’s pre-existing neoliberal narrative, of fixing a market problem with a market solution. For example, ‘Lack of property rights in the sea has led to overfishing – in some cases with devastating results. The use of individual transferable quotas can correct this market failure, increasing both output and employment in the fishing industry.’

The Bank’s banal reversion to transferable quotas – also known as cap-and-trade – is most extreme in the greenhouse gas markets, where its writers fail to acknowledge profound flaws that have crashed the price of a ton of carbon from €35 to €7 these last six years. The Bank, which subsidizes carbon trading, mentions only a few allegedly-fixable European Union Emissions Trading Scheme design problems. It ignores the deeper critique of carbon markets developed, for example, in our new report, “CDMs Cannot Deliver the Money to Africa.”

Here’s an unintended consequence of Bank-think, however: if you do factor what it terms ‘natural capital’ into the national accounts, you find that when non-renewable resources are dug out of the soil, there should logically be a debit against genuine national savings (i.e. a decline in a country’s natural capital) instead of just a momentary credit to GDP.

Thus in many situations it becomes logical to leave resources in the ground (sacrilege!), especially in Sub-Saharan Africa, because since the commodity boom began in the early 2000s, according to another recent Bank report (The Changing Wealth of Nations), my home region has suffered negative genuine savings – ‘looting’ – mainly because of non-renewable resource decay in the context of resource-cursed neo-colonial politics.

I’ve had this argument with the Bank’s dogmatic chief Africa economist, Shanta Devarajan, and needn’t rehash it. Instead, let’s turn from Bank babble to listen to those at the base with more profound insights:

‘Today, those who have created the ecological crisis talk of the Green Economy. For them, the Green Economy means appropriating the remaining resources of the planet for profit — from seed and biodiversity to land and water as well as our skills, such as the environmental services we provide. For us, the privatization and commodification of nature, her species, her ecosystems, and her ecosystem services cannot be part of a Green Economy, for such an approach cannot take into account our traditions. The resources of the Earth are for the welfare of all, not the profits of a few.’

Patrick Bond directs the University of KwaZulu-Natal Centre for Civil Society. This originally appeared at TripleCrisis blog: http://triplecrisis.com/inclusive-green-growth-or-extractive-greenwashed-decay/#more-6011

Patrick Bond (pbond@mail.ngo.za) is professor of political economy at the University of the Witwatersrand School of Governance in Johannesburg. He is co-editor (with Ana Garcia) of BRICS: An Anti-Capitalist Critique, published by Pluto (London), Haymarket (Chicago), Jacana (Joburg) and Aakar (Delhi).

More articles by:

CounterPunch Magazine

minimag-edit

bernie-the-sandernistas-cover-344x550

zen economics

January 17, 2017
John Davis
Landscapes of Shame: America’s National Parks
Andrew Smolski
Third Coast Pillory: Politicians and Rhetorical Tricks
Chris Busby
The Scientific Hero of Chernobyl: Alexey V. Yablokov, the Man Who Dared to Speak the Truth
David Macaray
Four Reasons Trump Will Quit
Chet Richards
The Vicissitudes of the Rural South
Clancy Sigal
“You Don’t Care About Jobs”: Why the Democrats Lost
Robert Dodge
Martin Luther King and U.S. Politics: Time for a U.S. Truth and Reconciliation Commission
Jack Sadat Lee
I Dream of Justice for All the Animal Kingdom
James McEnteer
Mourning Again in America
January 16, 2017
Paul Street
How Pure is Your Hate?
Jeffrey St. Clair - Alexander Cockburn
Did the Elites Have Martin Luther King Jr. Killed?
Robert Hunziker
Global Warming Clobbers Ocean Life
Patrick Cockburn
The Terrifying Parallels Between Trump and Erdogan
Kenneth Surin
The Neoliberal Stranglehold on the American Public University
Lawrence Davidson
Is There a Future for the Democratic Party?
Douglas Valentine
Who Killed MLK Jr?
Robert Fisk
The Foreign Correspondent in the Age of Twitter and Trump
Dale Bryan
“Where Do We Go from Here?”
David Swanson
The Deep State Wants to Deep Six Us
Dan Bacher
Obama Administration Orders Speedy Completion of Delta Tunnels Plan
Mark Weisbrot
Obama Should Make Sure that Haitian Victims of UN-Caused Cholera are Compensated
Winslow Myers
The Light of the World
Bruce Mastron
My Latest Reason to Boycott the NFL: Guns
Weekend Edition
January 13, 2017
Friday - Sunday
Gregory Elich
Did the Russians Really Hack the DNC?
Jeffrey St. Clair
The President Who Wasn’t There: Barack Obama’s Legacy of Impotence
Anthony DiMaggio
Ethics Fiasco: Trump, Divestment and the Perversion of Executive Politics
Joshua Frank
Farewell Obummer, Hello Golden Showers
Paul Street
Hit the Road, Barack: Some Farewell Reflections
Vijay Prashad
After Aleppo: the State of Syria
John Wight
Russia Must be Destroyed: John McCain and the Case of the Dodgy Dossier
Rob Urie
Meet the Deplorables
Patrick Cockburn
The Russian Dossier Reminds Me of the Row Over Saddam’s WMDs
Eric Sommer
U.S.-China War: a Danger Hidden from the American People
Andrew Levine
Are Democrats Still the Lesser Evil?
Linda Pentz Gunter
What’s Really Behind the Indian Point Nuclear Deal?
Robert Fantina
Trucks, ‘Terror’ and Israel
Richard Moser
Universal Values are Revolutionary Values
Russell Mokhiber
Build the Bagdikian Wall: “Sponsored News” at the Washington Post
Yoav Litvin
Establishment Narcissism – The Democrats’ Game of Thrones
David Rosen
Return of the Repressed: Trump & the Revival of the Culture Wars
Robert Koehler
War Consciousness and the F-35
Rev. William Alberts
The New Smell of McCarthyism Demands Faith Leaders Speak Truth to Power
John Laforge
Federal Regulator Halts Move to Toughen Radiation Exposure Limits
Norman Pollack
Farewell Address: Nazification of Hope
David Swanson
Imagine the Confirmation Hearing for Secretary of Peace
FacebookTwitterGoogle+RedditEmail