Measuring Progress in the

Degrowth Transition to a

Steady State Economy

Daniel W. O’Neill

2nd Conference on Economic Degrowth, Barcelona

March 26–29, 2010

SUSTAINABILITY

RESEARCH

INSTITUTE

CENTER for the

ADVANCEMENT of the

STEADY STATE ECONOMY

2

The Degrowth Transition to a SSES

ize o

f E

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Time

Carrying Capacity

Growth Degrowth SSE

3

So

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-eco

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Ac

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The Conceptual Framework

Ultimate Means The natural resources that sustain life and

all economic transactions.

Intermediate MeansThe factories, machines, and skilled labour

that transform natural resources into

products and services.

Intermediate EndsThe goals that the economy is expected

to deliver.

Ultimate EndsThose goals that are desired only for

themselves, and are not the means to

achieve any other end.

• Biocapacity• Materials• Energy

• Built Capital • Population

• Meaningful Work• Leisure• Meeting Basic Needs• Equality

• Community• Education• Good Governance• Stability

• Life Satisfaction• Health

• Hedonic Well-being• Flourishing

4

The Steady State Economy Accounts

� Socio-economic Accounts:� Measure the functioning of the socio-economic system, and how effectively it delivers well-being

� Include subjective and objective indicators

� Biophysical Accounts:� Measure the annual rate of change of biophysical stocks and flows over a 10-year period (e.g. 1995–2005), and the scale of these flows in relation to ecosystem sources and sinks

5

Environment

Human

Population

Built

Capital

Stocks, Flows, and Scale

Sources Sinks

Energy

MaterialInputs

MaterialOutflows

Energy

6

Biophysical Accounts: The Indicators

� Stocks

� Population growth rate

� Built capital growth rate

� Flows

� Energy use growth rate

� Material inputs growth rate

� Material outflows growth rate

� Scale

� Ratio of material throughput to the capacity of ecosystems to:

� Regenerate materials

� Assimilate wastes

7

The Indicators (in Practice)

� Stocks

� Population growth rate

� Built capital growth rate

� Flows

� Energy use growth rate

� Material inputs growth rate

� Material outflows growth rate

� Scale

� Ratio of material throughput to the capacity of ecosystems to:

� Regenerate materials

� Assimilate wastes

Working on this…

Biomass, Minerals, and Fossil Fuels

CO2 Emissions

Ratio of Per Capita Ecological Footprint to Fair Earthshare

Data readily available

Data readily available

8

Some Results: Growth Economies

0.53.79.40.99.92.0..Cambodia

4.61.41.00.20.81.0..U.S.

1.31.52.31.92.21.3..World

2.83.14.73.34.31.0..Spain

..

Built Capital

0.8

Population

Change in Stocks (%) ScaleChange in Flows (%)

1.04.36.33.96.5China

Ratio of

EF to FES

EFCO2

(Out)Materials (In)

EnergyCountry

Shrinking (< –0.5%/year) or Scale Too Small (<0.8)

Stable (–0.5 to 0.5%/year) or Optimal Scale (0.8 to 1.2)

Growing (>0.5%/year) or Scale Too Large (>1.2)

Yellow

Red

Green

9

Some Results: Degrowth Economies

1.4-0.2-2.3-1.1-2.1-0.5..Romania

..

..

..

Built Capital

-0.9

-0.1

-1.3

Population

Change in Stocks (%) ScaleChange in Flows (%)

1.3-2.6-1.0-0.6-0.3Ukraine

1.9-0.7-1.80.4-1.1Poland

0.6-1.3-3.3-3.1-1.5Moldova

Ratio of

EF to FES

EFCO2

(Out)Materials (In)

EnergyCountry

Shrinking (< –0.5%/year) or Scale Too Small (<0.8)

Stable (–0.5 to 0.5%/year) or Optimal Scale (0.8 to 1.2)

Growing (>0.5%/year) or Scale Too Large (>1.2)

Yellow

Red

Green

10

Some Results: Stable Economies

2.50.2-1.43.3-0.20.2..Sweden

..

..

..

Built Capital

0.4

0.1

0.3

Population

Change in Stocks (%) ScaleChange in Flows (%)

2.4-0.20.22.10.5Switzerland

2.0-1.0-0.3-2.40.2Germany

0.92.60.10.20.1Cuba

Ratio of

EF to FES

EFCO2

(Out)Materials (In)

EnergyCountry

Shrinking (< –0.5%/year) or Scale Too Small (<0.8)

Stable (–0.5 to 0.5%/year) or Optimal Scale (0.8 to 1.2)

Growing (>0.5%/year) or Scale Too Large (>1.2)

Yellow

Red

Green

11

The Pathway to a SSE

Change in Flows

0 +1 +2

Scale

1

GrowthDegrowth Stability10

0.1-2 -1

Desirable

Growth

Undesirable

Growth

Desirable

Degrowth

Undesirable

Degrowth

SSE

Too

Larg

e

Too

Sm

all

Optim

al

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The Pathway to a SSE – Results

-0.7

0.0

0.7

-5 0 5

Change in Ecological Footprint (%/year)

Ra

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Pe

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ap

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oo

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Fa

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art

hs

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5

1

0.2

DesirableDegrowth

UndesirableGrowth

UndesirableDegrowth

DesirableGrowth

Spain

Cuba

US

Romania

Poland

Moldova

Ukraine

Germany

UK

China

Cambodia

17Ukraine

156Switzerland

91Poland

64Germany

Years to FES

Country

Switzerland

13

The Pathway to a SSE – Results

-0.7

0.0

0.7

-5 0 5

Change in Ecological Footprint (%/year)

Ra

tio

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Pe

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ap

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Fa

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art

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Happy (≥7)

Relatively Happy (6–6.9)

Relatively Unhappy (5–5.9)

Unhappy (<5)

DesirableDegrowth

UndesirableGrowth

UndesirableDegrowth

DesirableGrowth

5

1

0.2

Life Satisfaction (0–10)

Spain

Cuba

US

China

Romania

Poland

Moldova

Ukraine

Germany

UK

Colombia

Brazil

Cambodia

Switzerland

14

Life Expectancy & Life Satisfaction

6.267Increasing

6.775Stable

5.369Decreasing

6.268Growing

6.369Stable

6.572Degrowing

6.975Too Large

6.770Fair Earthshare

5.462Too Small

Life Satisfaction (0-10)

Life Expectancy (Years)

Change in Population

Size of Ecological Footprint

Change in Ecological Footprint

� Life expectancy and life satisfaction are highest when:� Ecological footprint is large (but degrowing)

� Population is stable

15

Unemployment & Inflation

7.26.0Increasing

12.48.7Stable

50.011.4Decreasing

6.25.6Growing

12.48.1Stable

18.19.3Degrowing

13.87.8Too Large

5.05.7Fair Earthshare

7.66.0Too Small

Inflation (%)

Unemployment (%)

� Unemployment and inflation are lowest when:� Ecological footprint is close to a fair earthshare� Population and the ecological footprint are growing

Change in Population

Size of Ecological Footprint

Change in Ecological Footprint

16

Conclusion

� To measure progress we need two sets of indicators: � Biophysical and Socio-economic

� The Steady State Economy Accounts provide a framework with these indicators

� Preliminary results indicate:� We live in a world of growth economies

� A number of economies are degrowing� Not the ones where degrowth is needed most

� Rates are slow

� There are no steady state economies� Some economies are closer than others

� Social conditions are good in these countries

17

Conclusion

� Life expectancy and life satisfaction

� Higher in degrowing and stable economies than in growth economies

� Correlate with resource use that is too high

� Unemployment and inflation remain key issues to resolve

� Significant structural and policy changes will be required

� To achieve a SSE we must change our macroeconomic goals

Thank you!

CENTER for the

ADVANCEMENT of the

STEADY STATE ECONOMY

SUSTAINABILITY

RESEARCH

INSTITUTE

Dan O’Neill

d.oneill@leeds.ac.uk

www.steadystate.org