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Autarky vs. Trade: the Local-Global Dynamic and a Sustainable Future November 13, 2006

Posted by Michael Hoexter in Renewable Energy, Sustainable Thinking.
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In my last post(s), I outlined what I view as the primary aspects of sustainability. I believe these aspects can function as crystallization points within the concept of sustainability that become the focus of particular groups or individuals who want to contribute to a more sustainable world. They are both points of unity but also can indicate where substantial disagreements can emerge about what would constitute sustainable development. Beyond intellectual interest, these concepts are one basis for developing metrics for aspects of sustainability or an overall economic, a perhaps physical-scientific indicators for how sustainable is a given set of institutions or activities.

I had wanted to write my next post about the notion of an ecological footprint, a concept introduced in 1992, which is the most well-known overall measure of sustainability. In researching this concept, one of the main criticisms has come from economists Jeroen van den Bergh and Harmen Verbruggen who point out that the effect of trade and the desirability of at least some forms of trade are left out of the model.

And more recently:

http://www.feem.it/NR/rdonlyres/3FEE8432-329A-40A4-AB3F-B57CD27720A9/1826/506.pdf

Van den Bergh and Verbruggen have put their fingers on one of the key challenges in steering modern societies and economic organizations in the direction of sustainable economic development: is a sustainable society more autarkic or more interdependent than our current societies?

Autarky, a fancy Greek-stemmed word, means that a society is “an island unto itself’ and can function without the help of the outside world. Economic interdependence, fueled by trade and exchange within organizations, would be the opposite state of autarky. Most contemporary economists and economic models assume that trade and interdependence are the ideal state of an economy, yielding the most efficient and highest degree of welfare for the most people. Another way to put this is that an increase in the division of labor both within and across space is a good thing The movement in the last 15 years toward what we call globalization is the latest stage in what appears to be an inexorable movement towards more trade.

Advocates of sustainability on both an organizational and global level tend to suggest that more of the opposite dynamic, a move towards local self-sufficiency, is positive for the environment if not for qualitative social welfare as well. Take for instance the most pressing and fundamental bundle of issues related to the sustainability of contemporary industrial societies: energy, transport and greenhouse gas emissions. The common wisdom now among advocates of sustainability is that locally or regionally generated energy, be it renewable electrical or biofuels, is preferable to the import of petroleum, which in addition to its role in global warming is sourced from only a few areas of the globe. While as damaging to the atmosphere, coal’s relatively wider geographic distribution does not quite mesh as well with this local/global model but it is still less “local” in most places than solar radiation, wind or various hydro-electric sources. An additional element that speaks for locality and “autarky” is that transport of goods and therefore trade is of necessity energy-intensive, a fact that trade advocates will increasingly need to grapple with as energy prices climb.

In other areas, we are seeing the praise of local food and ingredients over the importation of food products, even those products with impeccable organic and fair-trade credentials. Beyond aesthetic and moral values, the ecological motivation behind this movement is that this reduces transport and supports a “small is beautiful” economy. Ecologically-minded consumers and activists are experimenting with how locally they can eat with their diet. Thus “autarky” in the area of food is becoming a fashion in the sustainability community.

Herman Daly, one of the contemporary economists who supports a movement towards sustainability and what he calls a “steady-state” economy, has used the example of Danish butter cookies crossing the Atlantic as other American cookies make their way to Denmark. Daly suggests that a sustainable arrangement would be to trade recipes rather than the actual cookies. In this, interestingly, Daly revives the prescriptions of the now unfashionable economist John Maynard Keynes, who believed that goods should where possible be “homespun” and the trade in ideas, travel and cultural products should be encouraged. Keynes’ economic philosophy reveals itself to built nation by nation rather than encompassing a single, unitary global economy as is the contemporary trend.

Using a less prescriptive approach, van den Bergh and Verbruggen, point out that bringing a spatial dimension into economic models may increase their relevance to sustainability issues. They write of “agglomeration effects”, a fancy word for the positive effects of physical proximity for economic processes. If we include both human welfare and ecological sustainability in the final equations, agglomeration may be suggested in certain areas of economic life. If we follow Keynes’s example, perhaps there are goods or economic activities that by their nature need to remain local while others are most valuable (to both people and the long-term sustainability) if traded on a global level. The “network effect” is one example of a good that disregards “agglomeration effects”.

To conclude I would like to suggest two thought experiments: one a more personal one, the other a more abstract and global one. First, let’s take the example suggested by Daly of the Danish butter cookies crossing the Atlantic and, let’s say, a container full of Keebler “Soft Batch” making their way to the EU. I do not have a personal attachment to either brand of cookie. I’m not as convinced as Keynes and Daly that homespun can become a prescription and the trade of recipes (meaning intellectual property/ideas of any kind) is necessarily the only desirable form of trade. Cooks and gourmets know that ingredients grown in one climate and produced through a particular cultural/agricultural regime have different properties than analogues or imitations grown or created locally. An economic regime that discourages the trade of ingredients or finished products will restrict the range of sensory experience in a given locality. While ecological CRISIS might require such restriction, there will be costs in terms of social “utility” some of which are acceptable some less acceptable. Distinctions in the proximity or agglomeration effects upon different types of products might help guide which types of trade are more vital than others.

A second experiment is of a more serious nature. Current renewable energy alternatives are largely decentralized, usually in units of much less than 5 Megawatts, the size of the current largest windmills. One of these behemoth windmills can supply about 4500 people with electricity. Photovoltaic panels and solar thermal power plants are usually of smaller unit scales and do not have substantial economies of scale as power plants. Therefore these technologies would support a decentralized approach to energy generation. A personal or local windmill or photovoltaic array is as economic or more economic as a centralized power generation facility. We therefore can encourage personal energy “autarky” or at least greater independence.

There are however potential future technologies that MAY compete with current carbon-neutral and renewable options and make economies of scale in energy ecologically sustainable. A recent piece in Wired suggests that an Italian inventor has created a credible model of a immense horizontal windmill that uses high flying kites to capture the wind energy of the troposphere, approximately 5000-6000 feet above the ground. Kitegen’s windmill would benefit, according to calculations, from larger scales, with arms of a kilometer in length leading to greater efficiency and power output. The projects founders claim an extremely low per kilowatt cost. Another, somewhat less green but nevertheless conceivable power generation alternative are thorium nuclear reactors, which generate one-fifth the radioactive waste of uranium reactors. As a stopgap in a transitional regime to a completely renewable energy portfolio, these reactors may be a possibility.

So local and sustainable may not be synonymous but there needs to be more thought and work put into scientific study, technological advance and economic models of how a sustainable society or societies might look. I suspect that we may have more choice in how we structure this society than is now commonly recognized.

More on this in future postings.

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