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Mittwoch, 4. Mai 2011

Sustainability in Shrinking and Expanding Societies

(My blogpost is also part of the publication "Unesco today" (special edition "Sustainability", only in German))

The population weighting of the world’s major regions will go through a drastic shift in balance by the year 2050. And as sustainability in shrinking societies is not the same as sustainability in expanding societies, this transition will lead to worldwide tensions.

Demographic Scenario for "Old Germany"

Demographic change denotes the interplay of such factors as ageing populations, changes in the birth rate and net immigration to a country. Current mortality tables show that in Germany newborn babies now have a life expectancy of between 77 years for boys and 82 years for girls. Drawing on these tables, the latest coordinated population forecasts from the Federal Office for Statistics predicate an increase in life expectancy. While at the beginning of the 20th century increased life expectancy could mainly be ascribed to lower infant and child mortality, today it is mainly due to the increased life expectancy of people aged 65 and over (17 years for men; 21 years for women) given by improved medical services. The present birth rate is 1.4 children per woman. While net immigration to Germany during the 20th century was around 200,000 people per year, 2008 and 2009 marked the provisional closure of a negative trend with net emigration of 56,000 and 13,000 persons respectively. The forecast for Germany predicts that the German population – assuming an annual immigration rate of 100,000 – will shrink from its present figure of 82 million to 65 million by 2060.

Demographic Scenario in Expanding Societies

While in Germany and many parts of the European Union we are having to deal with an ageing and simultaneously shrinking population, most other regions of the world are marked by rapid population growth. Projections by the United Nations for the period 2008-2050 show, for instance, clear populations rises of +168% for Uganda, +118% for the Congo, +82% for Ethiopia and +30% for India. The UN expects that by the year 2050 some 9.1 billion people will be living on earth (vis-à-vis 6.7 billion in 2008).

In the light of this development, there have been various proposals as to what forms sustainable development of society should take to factor in such demographic aspects. They raise the question of what kind of lifestyle is appropriate – and thus sustainable – vis-à-vis coming generations, and of what kind of challenges coming generations will have to face – challenges for which we now either consciously or unconsciously are laying the bedrock.

Sustainability in Shrinking Societies

Sustainability in shrinking societies means ensuring that future generations still enjoy a minimum capability for shaping their own political destiny. Experts forecast that by 2050 Germany will see a 30% drop in the numbers of people in gainful employment. Even though this does not necessarily imply a per capita drop in economic productivity, we may still expect shrinkage of the national economy and a decline in the growth curve of two to four percentage points. Such a development will have fatal consequences on government income as fewer employed people and more pensioners means near stagnation in the amount of money collected from taxes and contributions while at the same time demographic follow-on costs will impact ever more heavily on government expenditure. Ever wider cohorts of very elderly people will greatly increase the strain on statutory pension insurance, statutory health insurance and nursing care insurance. Particularly telling here is the way in which the balance between increased expenditure and stagnating income will develop. At the moment the baby boomer generation is in its mid-40s and 50s. This is the working age bracket characterized by a maximum of individual tax-payers and a minimum of people drawing government benefits and that thus offers a revenue surplus that at the moment mainly goes to finance pensions as well as servicing the current record debt of 1,700,000,000,000 Euros. In the coming decades, however, the baby boomers will themselves take retirement and thus turn from taxpayers to pension drawers, increasing social insurance expenditure and causing government income to stagnate. At the same time economic performance will decline while per capita debt will rise – alone because of the drop in population. Can such policies be called sustainable?

The very few remaining parts of the public sector budget that can still be disposed of must be consistently channeled into education together with a part of the pensions. Only a well educated workforce can afford to pay higher taxes. Public infrastructures need to be purposefully restored now with no time lost if we are to avoid burdening future tax and contribution payers with higher fixed costs. Against such a background, propagating tax breaks and wavering of debt reduction is the very reverse of what is meant by sustainability.

Sustainability in Expanding Societies

On the other hand, sustainability in growing societies is a completely different kettle of fish. General economic growth which may be expected from a flourishing economy should never destroy the basic conditions of life for future generations in these countries. At present economic growth in many countries is cancelled out since the demographic growth rate exceeds the growth rate resultant from economic activity, thus entailing a drop in per capita economic performance. At the same time, however, absolute consumption of resources is increasing and thus concomitantly – under the current conditions of non-sustainable growth – the amount of CO2 emissions. It was on this growth path in 2008 that China overtook the USA as the world’s biggest CO2 culprit. Taken together, these two countries afflict the rest of humankind with nearly half of human-made CO2 emissions. As China does not have enough of its own resources and land to cover domestic demand for raw materials and food, in recent years it has resorted to leasing whole regions of Africa at bargain prices for food production and to buying up large parts of the local oil industry. Nor is it difficult to imagine a scenario in which other countries like Russia, Brazil and India jostle for scarce resources. And it’s almost pointless to underscore that Africa is destined to succumb for a second time to the logic of market economics-driven exploitation. Given the future global distribution of population – by 2050 4% of people will live in the USA, 7% in Europe, 15% in China, 18% in India and 57% in Asia (including China and India) – the demographic of growing societies will lead to a new weighting of the importance of the Western and Asian worlds on the global political stage. And this will entail changes to the values on which worldwide rules of coexistence are built.

If growing societies continue to manage their economies as they have done so far, given the increased consumption of resources this entails we may expect over consumption of the planet’s resources far in excess of the present factor of two to five. For many decades now western industrialized countries have enjoyed increased prosperity at the cost of developing countries and the environment. The resultant experiences have led – now that we have gained a certain level of prosperity – to the realization that we now need to turn our backs on the dogma of quantitative growth. So how should growing societies in developing countries behave? Sustainable growth in expanding societies is only possible if they very quickly take to heart the lessons learned from the negative experiences western countries have been through. That this will be somewhat of a challenge for them is hardly surprising if we look at the consumerism of the emerging middle class in China and other countries.

Are western countries in the right situation to give "good" advices?

Western countries are long-in-the-tooth, up to their eyeballs in debt, losing their former importance on the world’s stage and largely responsible so far for climate change – yet despite everything they still want to give China and India good advice? The only remaining hope is if the populations of growing societies embrace an accelerated learning curve. Sand storms over Beijing, floods in Bangladesh, droughts in India and palls of smog over the great cities of Asia are so many side effects of the rapid pace of economic growth in these regions. We can only trust that these countries won’t need one hundred years before they too draw conclusions from these adverse life-impacting conditions and apply them to their own economic activity. The human family is sitting in one boat. There can only be all winners or all losers. Perhaps this is where young societies can learn from aged ones?