Friday, October 26, 2007

Growth: Attali vs. Attali


By Hervé Kempf
Le Monde

Tuesday 23 October 2007

The day before the Summit for the Environment [Grenelle de l'environnement] roundtable and ten days after the Commission for the Liberation of Growth, over which Jacques Attali presides, rendered its first proposals, the objectives of each of these measures seem antinomic. One of the Summit preparation groups (Number 6) deems necessary "a profound reorientation of our methods of production and consumption, given the scope and the seriousness of present ecological disequilibria." The Attali Commission targets five percent growth without mentioning the environmental problem intense economic activity poses.

The heart of this apparent contradiction rests in the very notion of growth, used daily by political and economic decision-makers as though it posed no problem. Yet, at a moment when the ecological crisis is obvious and arouses a broad discussion within the framework of the Summit for the Environment, the concept of growth has become a very inadequate instrument for guiding collective action.

Strangely, it's Jacques Attali himself, who, in a text published in 1973, clearly posed the problem he seems to have forgotten. At that time, he published in Issue Number 52 of "La Nef" (a review of commentary that has since ceased publication and was then managed by Lucie Faure, wife of the politician Edgar Faure) an article entitled, "Towards What Economic Theory of Growth?" The young economist - he was then 30 - explained how the Club of Rome's report, "The Limits of Growth," was a "cautious" book. Then he highlighted the main pitfalls of the notion of growth. Growth models are "incapable of analyzing the relationship between growth and well-being," he wrote. That remark has since been confirmed by numerous studies showing that GDP growth does not give rise to an increase in individuals' satisfaction, as the OECD synthesizes in its "Panorama of Society," published in 2006.

Mr. Attali then attacked the very indicator that growth measures the increase of, GDP (Gross Domestic Product - at that time people wrote about GNP - Gross National Product): "The magnitude of national accounts leads to measuring growth by a single indicator, GNP, the inadequacy of which it has become commonplace to emphasize." This remark remains so valid that Group Number 6 recommends "elaborating the aggregate indicators of sustainable development such as Green GDP, the ecological footprint, or public natural capital."

In fact, today as in 1973, GDP does not measure the impact of economic activity on the environment. For example, economist Jean-Charles Hourcade, director of CIRED (Centre international de recherche sur l'environnement et le développement [International Center for Research on the Environment and Development]), observes, "GDP growth may also count the repair of what was damaged twenty years before as an increase in wealth. It's nonsensical growth!"

The third argument of the young Attali: growth glosses over inequalities of income. If the pie grows a little for those at the bottom, they're less tempted to question the share those at the top appropriate for themselves. "It's a myth knowingly preserved by (neo-)liberal-(free-market) economists, that growth reduces inequality," Mr. Attali wrote. "That argument, which allows all redistributive claims to be put off until "later," is an unfounded intellectual fraud." In 2007, the remark takes on all the more weight, given that inequality is much bigger than it was in 1973, as numerous works, such as those of Thomas Piketty and Emmanuel Saez, have demonstrated.

"Return to the Stone Age"

A new phenomenon has appeared since the 1970's that the young Attali could not perceive, but which aggravates the case against GDP as it is ordinarily perceived still further: In spite of technological progress, the impact of the economy on the environment has not been reduced. During the 1990's, neo-liberal free-market economists suggested, in a theory called the "Kuznets curve," that at a certain level of wealth, the pollution generated by an economy diminishes. In fact, as Olivia Montel-Dumont highlights in a study that appeared in "Les Cahiers français" (March-April 2007, "La Documentation française"), "the empirical data do not clearly validate" that thesis. The balance is even definitively negative if one considers that damage to the environment in its turn affects the level of production, as the report by economist Nicholas Stern on the economic effects of global warming demonstrates.

A concrete way of grasping this problem is to analyze the consumption of raw materials, space and energy, which is the best overall marker of the impact of economic activity on the environment. The higher it is, the stronger is that impact. Now, as the French Institute for the Environment [Institut français de l'environnement] notes in its report, "The Environment in France in 2006" ["L'Environnement en France 2006"], growth in European countries does not translate into a reduction in the consumption of resources; there's no "uncoupling" between the two magnitudes, to use economists' terminology. Even though our economy is more efficient (we require less input for the same GDP unit), the growth in GDP surpasses the progress of this productive efficiency. "It doesn't matter much to our planet that vehicles and industries are unilaterally more efficient," summarizes Jean-Marc Jancovici in the review of the Ecole polytechnique, "La Jaune et la Rouge" (August 2007): "What it 'sees' is the overall consumption in flows of energy, materiel and wastes."

In sum, growth cannot be posed as an objective in itself: The level of the economy's materials consumption is central. "The economic objective of environmental policy is not to promote a de-industrialized economy," write the Summit's Group Number 6, "but an economy more restrained in carbon, energy, and non-renewable natural resources."

On France Inter October 16, Mr. Attali asserted: "The best way not to pollute is to revert to the Stone Age." That caricatural response does not do honor to the debate. On the contrary, it's all about defining an economy that stops the damage to the environment, all the while allowing an equitably shared well-being. To do that, it is appropriate to rigorously re-question the concept of growth and of GDP, as the Attali of 1973 did so well.


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Summit for the Environment: Two Days to Define France's Ecological Policy
By Gaelle Dupont
Le Monde

Wednesday 24 October 2007

For two days, Wednesday, October 24, and Thursday, October 25, Jean-Louis Borloo's Ecology Ministry, located on the Boulevard Saint-Germain in Paris, will resemble a buzzing beehive. The final roundtable of the Summit for the Environment will bring together representatives from the five circles that have been engaged since July in this unparalleled exercise of cooperation, consultation and dialogue: the government, local governments, environmental non-governmental organizations, the employers' organization and labor unions. The objective of the Summit, promised by Nicolas Sarkozy during his campaign, is to redefine the great axes of France's ecological policy.

Forty people will be present around the table - eight representatives from each circle. All the participants may be accompanied by two experts of their choice. One will be present in the negotiation room; the other will stay in a waiting room where he will follow the debates by videoconference. The presidents of the work groups will also be present.

The discussions will be conducted by Jean-Louis Borloo, Secretary of State for Ecology Nathalie Kosciusko-Morizet and Secretary of State for Transportation Dominique Bussereau. Other ministers may intervene should the topic concern them.

Four half-days of work are scheduled. Climate policy and health will be discussed Wednesday the 24th; agriculture, biodiversity and the reform of institutions on Thursday, the 25th. Nicolas Sarkozy will conclude the work in the presence of the full government. Right to the end, improvisation will be the order of the day in the organization of this new process.

The evening before the opening of the summit, the ecology minister did not have a list of specified participants. These two days are the culmination of a labor conducted since July within six preparatory groups. The discussions have been very vigorous, sometimes stormy.

They have allowed disagreements to be put on the table and for the formulation of dozens of propositions. The measures proposed - some of which are consensual, others highly contentious - sweep through all the big subjects: agriculture, transportation, habitat, consumption, energy, etc.

Law of Departure

These proposals are all gathered in a working document of some thirty pages, which reviews the positions presented and will constitute the basis for the discussions. This document has seen several successive versions, with the different circles battling for their point of view to be represented there. The points to be negotiated figure between square brackets, following the model of documents discussed at an international level.

For example, in the chapter devoted to transportation, it is proposed that "the realization of a network of high-speed transport lines be accelerated, so as to offer more alternatives to the airplane and the car, by realizing between now and [2020-2030] [4,500] kilometers of additional new lines." It will now be up to the government to arbitrate between contradictory positions.

The record of regional debates, delivered October 23, will also be put on the table. In her report, Adviser to the State Bettina Laville highlights "the acceptance of environmental regulations" by all participants. "The attachment to the principle of care is general, uncontested, and its application is demanded by all groups, including the economic ones," reports Mrs. Laville.

Right to the end, the environmental NGOs have tried to keep up the pressure to avoid an outcome of "measurettes." Nicolas Hulot, worried about the "unbelievable power of lobbies," met with Nicolas Sarkozy over the weekend to remind him of the expectation aroused by the process.

The decisions announced over these two days will mark not the end, but the beginning of a new process. About fifteen detailed action plans will be made public at the end of the year, and a law of departure will be presented to Parliament in the first semester of 2008.


Translation: Truthout French language editor Leslie Thatcher.

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