FacebookTwitterGoogle+RedditEmail

The World Bank and the Green Economy

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

More articles by:

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).

April 24, 2018
Carl Boggs
Russia and the War Party
William A. Cohn
Carnage Unleashed: the Pentagon and the AUMF
Nathan Kalman-Lamb
The Racist Culture of Canadian Hockey
María Julia Bertomeu
On Angers, Disgusts and Nauseas
Nick Pemberton
How To Buy A Seat In Congress 101
Ron Jacobs
Resisting the Military-Now More Than Ever
Paul Bentley
A Velvet Revolution Turns Bloody? Ten Dead in Toronto
Sonali Kolhatkar
The Left, Syria and Fake News
Manuel E. Yepe
The Confirmation of Democracy in Cuba
Peter Montgomery
Christian Nationalism: Good for Politicians, Bad for America and the World
Ted Rall
Bad Drones
Jill Richardson
The Latest Attack on Food Stamps
Andrew Stewart
What Kind of Unionism is This?
Ellen Brown
Fox in the Hen House: Why Interest Rates Are Rising
April 23, 2018
Patrick Cockburn
In Middle East Wars It Pays to be Skeptical
Thomas Knapp
Just When You Thought “Russiagate” Couldn’t Get Any Sillier …
Gregory Barrett
The Moral Mask
Robert Hunziker
Chemical Madness!
David Swanson
Senator Tim Kaine’s Brief Run-In With the Law
Dave Lindorff
Starbucks Has a Racism Problem
Uri Avnery
The Great Day
Nyla Ali Khan
Girls Reduced to Being Repositories of Communal and Religious Identities in Kashmir
Ted Rall
Stop Letting Trump Distract You From Your Wants and Needs
Steve Klinger
The Cautionary Tale of Donald J. Trump
Kevin Zeese - Margaret Flowers
Conflict Over the Future of the Planet
Cesar Chelala
Gideon Levy: A Voice of Sanity from Israel
Weekend Edition
April 20, 2018
Friday - Sunday
Paul Street
Ruling Class Operatives Say the Darndest Things: On Devils Known and Not
Conn Hallinan
The Great Game Comes to Syria
Jeffrey St. Clair
Roaming Charges: Mother of War
Andrew Levine
“How Come?” Questions
Doug Noble
A Tale of Two Atrocities: Douma and Gaza
Kenneth Surin
The Blight of Ukania
Howard Lisnoff
How James Comey Became the Strange New Hero of the Liberals
William Blum
Anti-Empire Report: Unseen Persons
Lawrence Davidson
Missiles Over Damascus
Patrick Cockburn
The Plight of the Yazidi of Afrin
Pete Dolack
Fooled Again? Trump Trade Policy Elevates Corporate Power
Stan Cox
For Climate Mobilization, Look to 1960s Vietnam Before Turning to 1940s America
William Hawes
Global Weirding
Dan Glazebrook
World War is Still in the Cards
Nick Pemberton
In Defense of Cardi B: Beyond Bourgeois PC Culture
Ishmael Reed
Hollywood’s Last Days?
Peter Certo
There Was Nothing Humanitarian About Our Strikes on Syria
Dean Baker
China’s “Currency Devaluation Game”
Ann Garrison
Why Don’t We All Vote to Commit International Crimes?
FacebookTwitterGoogle+RedditEmail