The story of the 21^st century will be a story of how global society manages the perceived necessity of economic growth against the current ecological crisis, manifested significantly, but by no means only, by climate change.  Investment and trade deals are an important feature of the international landscape on which nations and societies will address this challenge.  In North America, the North American Free Trade Agreement, along with its environmental and labor side agreements, still provides the regional framework for managing the tension between growth and ecological impact.  So far, NAFTA has done little to align the North American economy with its ecological reality.

By Geoff Garver

This year marks the 15th anniversary of NAFTA and its environmental commission, the Commission for Environmental Cooperation or CEC.  This milestone presents the CEC Council, made up of U.S. EPA Administrator Lisa Jackson, Mexican Secretary of Environment Juan Elvira and Canadian Environment Minister Jim Prentice, the opportunity to take a fresh look at the dire and unprecedented ecological circumstances that mark this period in human history and to craft a reinvigorated agenda for North American environmental cooperation and action.  The strategic emphasis of this revitalized agenda must be on moving North America toward an economy and trade regime that both enhances individual and societal well-being and assures that the North American region lives within its ecological means.

The stakes are high and the need for a reformed approach to the trade and environment agenda urgent.  Global information on climate change, species extinctions, loss of biodiversity, depletion of freshwater and other resources, ocean dead zones, population growth, topsoil degradation, deforestation, dying coral reefs, decimation of ocean fish stocks and the sheer throughput of natural capital is beyond alarming.  This is the reality that should be driving the approach to North American trade and the economy.

The North American contribution to the global ecological crisis is unconscionable.  North America is a region of vast overconsumption and wastefulness, even as it copes with an economic and financial crisis.   The World Wildlife Fund’s 2008 Living Planet Report tells us that globally, the sustainable average per capita ecological footprint in 2005 was 2.1 hectares per person (hpp).  Yet, the U.S. average footprint was 9.4 hpp, the Canadian average was 7.1 hpp and the Mexican average was 3.4 hpp.  At 7.8 hpp, the North American average was over 3.5 times more than the sustainable rate.  This is not true sustainable development, and North America must do much better.

This region, and indeed the world, are at a critical turning point.  The ecological debt that the oversized human ecological footprint represents threatens the human prospect on this finite planet.  From here on, leadership in addressing this ecological crisis is what will make the real difference in the long term, not just economic leadership measured in terms of growth in gross domestic product.  At the very least, competitiveness, which features prominently in the policy agenda of North American political leaders, must go hand in hand with upward harmonization of environmental standards, and ultimately, it must be about who can drive their ecological footprint toward truly sustainable levels the fastest.  This will require a clear shift away from the tendencies of the three NAFTA governments to define their national interest in the international arena primarily in terms of maximizing international markets for their domestic products, services and investors.

The CEC Council, as the official environmental voice of the region, has the potential to provide the leadership that will show the world that North Americans can indeed live within their ecological means.  The stakes of not doing so are too great – not only to the environment, but to the economy as well; ecological economists like Herman Daly of the University of Maryland and Peter Victor of York University have shown clearly that economic growth becomes uneconomic when ecological limits are not respected.  NAFTA’s environmental side agreement, the North American Agreement on Environmental Cooperation, is filled with potential to provide this leadership.  It empowers the CEC to develop an environmental agenda that will live up to the desire of President Obama to address environmental concerns related to trade by strengthening existing mechanisms like the CEC – with the hope that doing so will avoid the need to renegotiate NAFTA and its side agreements.

The 2009 session of the CEC Council, which took place in Denver in June, provided some hopeful signs. The new themes that the Council chose for the CEC’s next 5 years are healthy communities and ecosystems, greening the economy, and climate change and a low-carbon economy.  These replace the previous colorless themes of trade and environment, environmental information for decisionmaking and capacity building, which provided the framework for the CEC’s lackluster 2005-10 strategic plan. The CEC’s new themes at least tell a substantive story of how North America should be steering its trade and environment agenda. Here are two things the CEC can do to meet its potential within this framework.

First, the CEC should do a more rigorous calculation of the North American use of ecological capacity, to publicize the results, and to develop clear strategies for driving it down. Quebec, through its Auditor General and Commissioner of Sustainable Development, has done a detailed calculation of Quebec’s ecological footprint.  This is a good model of the work the CEC should support, preferably with approaches that improve upon ecological footprint methodology.  The green building movement provides sound principles for economy-wide strategies for reducing use of ecological capacity:  minimize demand for energy, water and resources; maximize renewable energy; maximize reuse and recycling of materials; and favor local sourcing over long-range transport of materials.   Reducing the material and energy throughput of the economy, as this approach does, is essential, even if it entails reducing international trade or ultimately a radical re-thinking of economic growth as essential to societal well-being.

Second, the CEC should develop North American indicators, such as the Genuine Progress Indicator, that provide a much more accurate picture of our well-being than does gross domestic product.  By the measure of contribution to GDP, the oil spilled from the Exxon Valdez contributed more to society by being spilled and generating clean-up costs and lawyers’ fees than it would have had it entered the marketplace.  We must be guided by better indicators of well-being in North America and beyond.

The CEC has had successes in its first fifteen years, including accelerated elimination of DDT throughout the region, integration of information on pollutant releases and transfers in the three countries and an impressive array of information on the environmental impacts of North American trade.  But, the current CEC Council’s predecessors have underfunded the CEC and not allowed it to reach its potential as an honest broker of information on the intersection of the economy and the environment in North America. Moreover, the CEC has not yet come to terms with the unprecedented ecological reality we face: for the first time in human history, we are using up the Earth’s ecological capacity faster than it is being regenerated. As the CEC turns fifteen, it has a great opportunity to turn a new face to the future.

Special thanks to Booth Media Group, Inc.

This post is tagged CEC, ecological crisis, NAFTA