Gus Speth
Dean, Yale School of Forestry & Environ. Studies; Author

Dean Gus Speth on Economic Growth and Disaster

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The fundamental dishonesty of pricing.

Gus Speth

James Gustave "Gus" Speth, is the Carl W. Knobloch, Jr. Dean of the School of Forestry & Environmental Studies, and Sara Shallenberger Brown Professor in the Practice of Environmental Policy

From 1993 to 1999, Dean Speth served as administrator of the United Nations Development Programme and chair of the UN Development Group. Prior to his service at the UN, he was founder and president of the World Resources Insti-tute; professor of law at Georgetown University; chairman of the U.S. Council on Environmental Quality; and senior attorney and cofounder, Natural Resources Defense Council.

Throughout his career, Dean Speth has provided leadership and entrepreneurial initiatives to many task forces and committees whose roles have been to combat environmental degradation, including the President’s Task Force on Global Resources and Environment; the Western Hemisphere Dialogue on Environment and Development; and the National Commission on the Environment. Among his awards are the National Wildlife Federation’s Resources Defense Award, the Natural Resources Council of America’s Barbara Swain Award of Honor, a 1997 Special Recognition Award from the Society for International Development, the Lifetime Achievement Award of the Environmental Law Institute, and the Blue Planet Prize. Publications include The Bridge at the Edge of the World: Capitalism, the Environment, and Crossing from Crisis to Sustainability, Red Sky at Morning: America and the Crisis of the Global Environment; Worlds Apart: Globalization and the Environment; and articles in Foreign Policy, Foreign Affairs, Environmental Science and Technology, the Columbia Journal World of Business, and other journals and books.


Question: Will the world economy's obsession with growth lead to disaster?

Gus Speth: Well, first I think there is a-- you have to appreciate that economic activity, in general, is destructive of environment. It could be more so, or less so, but in general it is. And the more of it you have, the more destructive potential there is. And if you look at the big trends, the big trends in environmental deterioration, the release of greenhouse gases and the release of toxic chemicals, the overuse of ecosystem services and the destruction of those services, the overharvesting of the fisheries, these are driven by economic growth, by and large, by the economic activity of human beings. And now that economic activity is expanding enormously. It took all of history to grow to the $7 trillion world economy that we had in 1950, we now add that much activity to the world economy every decade, not all of history, but every decade. So the world economy is slated to double within 15 to 20 years in size and doubled again within another period of that length. So the potential for additional deterioration of the environment is simply enormous. And we can see, perhaps, the worst of that unfolding in China today. It's not just for growth, per se, this growth is driven by a profound commitment to profit. And profit is enhanced when the environmental costs of this economic activity are kept off the books of the companies. The economists refer to this as the externalities and these external dis-economies, so called. So this externalization of environmental costs sustains profitability, but it also has another effect. It means that the prices that we pay in the market for the goods and services that are produced are artificially low, both in general and particularly low for activities that are enormously destructive of environment. And so we are running this mammoth market economy where the principle signals that are steering that economy are prices, including the price of labor, but let's think about the price of goods and services. And those prices are fundamentally dishonest from an environmental point of view. So we not only have all this growth, but it's out of control in an environmental sense, profoundly out of control.

Recorded: 3/23/08