I wrote this post for the Post Growth Institute and it was originally published here.
In 2015, 13 August is Earth Overshoot Day. The day marks the estimated calendar date when humanity’s demand on the planet’s ecological services (which produce renewable resources and assimilate wastes) outstrips what the Earth can supply. This means that for the rest of the year, we are taking more than is regenerated, operating in Overshoot. Last year, Earth Overshoot Day was August 19th. We first went into Overshoot in the late 1970s, and since then the day has crept ever earlier on the calendar. This means we are using the ecological resources of just over 1.5 Earths.
Meeting the challenge of providing for all humanity’s needs within the limits of what our Earth can provide will require a radical restructuring of the global economy. In this post I will discuss how a post-growth economy based around not-for-profit enterprise can help us get to One Planet Living.
Before we get into that, though, what is Earth Overshoot Day all about? It’s based on the concept of Ecological Footprinting, which is both a science-based sustainability metric and also a sustainability communication tool developed by the Global Footprint Network. You can read the methodological details here, but the basic idea is that the Ecological Footprint is the amount of productive space needed to provide the ecological resources and absorb the waste of an individual, a city, a business, a country or the whole world, expressed in global hectares. An Ecological Footprint is made up of cropland, pasture, fishing grounds, forest, land built-up with buildings or infrastructure and the land needed to absorb carbon emissions, with this last one usually accounting for at least half the footprint.
You may be wondering: how is it even possible for the world economy to be using more than the Earth produces every year? Never mind if it is ethical or sustainable, surely this situation should not be physically possible. Ecological Overshoot is possible (in the short-to-medium-term) in a couple of ways, but the most dramatic is that we can use geological resources to supplement what the planet can renew every year. Fossil fuel energy sources, coal, oil and gas, are all fossilized organic material from millions of years ago – essentially ancient sunlight. For millennia humanity had to live within the budget of what the biosphere could produce with the sun’s energy in any given year, but the discovery of fossil fuels meant a way to utilise the sun’s energy from millions of years ago. Unfortunately though, as we now know, this fuel has two major problems: it causes climate change and it takes so long to form that for our purposes it is finite. As well as using ancient biological material that has fossilized, we have also been able to operate in Overshoot since the 1980s by letting carbon pollution accumulate in our atmosphere and oceans (causing climate change), and by liquidating not just geological but present-day ecological assets such as forests and degrading soil fertility. Damaging ecological assets reduces their ability to generate resources and assimilate wastes, reducing the biocapacity of the Earth. This means that even if our economy doesn’t grow next year, Earth Overshoot Day will still be a little earlier. We don’t know for sure how long we can carry on operating in global Overshoot without total system collapse, but we do know what we can do to avoid that happening and build a sustainable and happy future that respects ecological limits.
Here at the Post Growth Institute, we’re interested in how Earth Overshoot and Ecological Footprinting relates to the new macro-economic model two of our co-directors, Jen Hinton and Donnie Maclurcan, have been working on for their upcoming book ‘How on Earth: Flourishing in a Not-for-Profit World by 2050’. The model is based around not-for-profit enterprises, which are businesses that focus on a social (or environmental) mission and reinvest all of their profit into furthering that mission. Distinct from both traditional non-profits that are reliant on donations, grants and volunteers and for-profit businesses that prioritise maximising profit while squeezing costs, not-for-profit (NFP) enterprise offers an exciting hybrid. They have the efficiency and innovation of for-profit business and the passion and purpose of the charity sector. It’s a common mistake to think that NFP means not making a profit. In fact this would be a very risky business strategy as selling everything at cost means one tiny change and suddenly you’re making a loss. NFP enterprises can make as much profit as they like, but none of it can be distributed to individuals (not to shareholders and not to workers either) and all of it must be reinvested in their social mission. This reorientation from the profit motive to the purpose motive is an incredible shift, with incredible consequences.
This graphic from the Global Footprint Network shows that if we carry on our present track, Earth Overshoot Day will be as early as June 28th in 2030, whereas a 30% cut in global carbon emissions will push it back to September 16th.
Our demand on the planet is simply outstripping supply and we need to rebalance this. On the demand side, we need to dramatically reduce our Ecological Footprints, which can most easily be done by switching to renewable energy, eating more plant-based and local food, using public transport and better urban design. On the supply side, we may not be able to make the Earth grow or magic up new hospitable planets, but we can increase biocapacity by restoring soil fertility, reforestation and using permaculture.
What does all this mean for our economy? Our global economy that needs to extract ever more and waste ever more just to avoid destructive recessions is clearly bumping up against ecological limits. We know a post-growth economy will need to be generative rather than extractive. It will need to shrink our Footprints to a sustainable size while distributing wealth in a much more equitable way, keeping human wellbeing high while actually increasing the Earth’s biocapacity rather than reducing it – which will be necessary to provide for a global population expected to grow at least another two billion. Our growth-driven capitalist economy doesn’t have a hope of meeting these deep challenges.
But meet them we must – and however difficult shifting economic hegemony is, it is possible (and has happened before), unlike shifting planetary boundaries.
Most of us in sustainability and social justice circles are aware of how destructive the profit motive can be. Under constant pressure to maximise profit, companies cut their costs by exploiting their workers, their suppliers and the natural environment and cheat their customers by providing shoddy products with built-in obsolescence. At the societal level this pushes up wealth inequality and hands corporations huge political power. At the global level, it does more of the same and also drives ever growing levels of resource extraction and pollution that are required to meet the demands of the capitalist growth economy.
In a NFP World, where all businesses exist with the sole purpose of meeting social and environmental needs and use their financial surplus (profit) as a means to that end, the economy would be regenerative rather than destructive. Such a post-growth purpose-driven market economy would for a start be much more equal (which alone offers many societal benefits), it would not harbour the same pressure to trample over the Commons and it would be a much more resource-efficient way of meeting human needs. At the moment, we rely on the so called ‘’trickle-down effect’’ to distribute wealth, where wealth is siphoned off to the very richest and slowly allowed to drip down through the economy to those who actually need it. This sounds bad enough, but there is growing evidence that ‘trickle-up’ would actually be a more accurate description of the process. If we use wealth to meet needs straight off the bat, we can have a bigger positive social impact while reducing the need for economic growth and associated resource use.
The best thing about the NFP model is that it isn’t just an idea: the idea for the book was sparked by the enterprises that are already pioneering this approach. All around the world, in sectors as diverse as retail, construction, healthcare and food, many businesses already operate as NFP. The forthcoming book How on Earth includes many examples of this emerging NFP economy. In many cases, NFP enterprises can actually out-compete their for-profit counterparts, because without the pressure to maximise profits, they can often offer lower prices or better quality or even both, they can easier attract passionate skilled workers and have higher worker-satisfaction, they enjoy positive reputations, they may receive tax benefits and they tap into the growing consumer demand for more ethical products and services.
Like all solutions, NFP enterprise is no panacea to ecological Overshoot. But it does offer a radical redefinition of what our economy is for: it doesn’t need to be for making a few ever richer at the expense of all else, it can be for meeting all human needs within the bounds of our one planet. Not-for-profit enterprise points the way to a truly sustainable market economy that allows us to improve social outcomes, shrink our Footprints and ‘pre-distribute’ wealth.
Let’s reframe business and push Earth Overshoot Day back to New Year’s Eve.
Images from Global Footprint Network.