FROM ECONOMIC GROWTH TO QUALITY OF LIFE

PCDForum Column #64,   Release Date November 1, 1993

by People's Research Institute on Energy and Environment

In official discussions of the environmental crisis, one important reality is consistently ignored or denied Sustained economic growth is simply incompatible with environmental protection. Japan and other industrial countries must trim their economies to reduce the burdens our lifestyles place on the rest of the world.

Energy consumption and related CO2 emissions are central. As a Japanese citizen organization we are deeply concerned that Japan's carbon-dioxide emissions are the fifth highest in the world and our per capita emissions are now twice the world's average. A number of proposals have been offered by the Japanese government and business community to address the energy issue through techno-fix approaches to conservation and conversion to renewable energy sources. It is also proposed to use pricing mechanisms to internalize full environmental costs in product pricing.

Studies carried out by our institute, however, conclude that while such measures are important they cannot be considered more than partial answers. In the end, it will be impossible to resolve such problems as global warming, ozone depletion, and radioactive waste disposal until we address the real issue: economic growth. Economic growth invariably involves net increases in energy consumption, in the extraction of material resources from the environment, and in the disposal of wastes into the environment. We must slim the economy itself through structural and lifestyle changes and eliminate growth as an imperative of our economic systems. Both production and consumption must be made environmentally friendly.

In the case of Japan, our economic growth has not only had negative consequences for the global environment, it has created trade conflicts with other industrialized countries and has depended on sacrificing the Third World by extracting its resources, stripping its forests, and exploiting its workers. Eliminating the excess fat from the Japanese economy is crucial if we are to live harmoniously with the rest of the world. Having been a leading contributor to the world's environmental and economic crisis, Japan must now provide the world with a new and more positive example of economic leadership.

There has been almost a near taboo against discussing the fundamental issue of life style change in public policy forums, perhaps because of the assumption that real reductions in consumption would seriously undermine the economic system. Actually, reducing consumption need not be a particularly frightening prospect. We have examined the possibilities of an economic slimming approach in a computer simulation that introduces measures such as the following:

• Restrict Advertising. People are freed from image oriented consumption by gradually reducing advertising expenditures.
• Increase Durability of Goods. Planned obsolescence is phased out and the life-spans of houses and social overhead capital extended.
• Streamline Government. The number and size of government agencies and staff are decreased.
• Reduce Trade Surplus. Japan's trade surplus is eliminated and Japan's share in world exports is reduced to the 1960 level.
• Revise Employment Relationships. Working hours are shortened and job sharing is introduced to address unemployment pressures resulting from reduced consumption.

Our model shows that if economic growth continues at the present rate, GNP and income will double the 1990 levels by 2010. Land prices will triple and the number of cars will double, requiring massive investments in new infrastructure as urban congestion increases. The trade surplus will grow to ten times the 1990 level, sharply increasing Japan's export of unemployment to the rest of the world and bringing trade conflicts with other countries to a critical level.

Under an economic slimming scenario, household income would drop to a significant degree, but so too would land prices, related costs such as house rent and housing loan interest payments, and the prices of many basic commodities. The number of cars would remain at current levels, urban congestion would be arrested, and new capital investment needs would decrease. Overall energy demand would be reduced to two-thirds of the present level, nuclear power generation would be eliminated, and carbon dioxide levels would be reduced to 75% of the 1990 level. We would have more time for family and community life, enjoying inexpensive necessities and carefully using durable goods with minimal environmental destruction. Overall, the quality of life of the Japanese people would be significantly improved.

The full report, "Our Choices for 2010: From Minamata to the Global Environment" is available from the People's Research Institute on Energy and Environment, OG 103, 1-5-8 Komagome, Toshima-ku, Tokyo, 170 Japan; Fax (81-3) 3945-9441 for US$29 including postage. This column was prepared and distributed by the PCDForum based on the report's summary, entitled "Toward a Slimmer Economy."

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