Two new reports published two weeks ago by the European Environment Agency got little visibility in the media.

Read the full reports:

• Environmental tax reform in Europe: implications for income distribution

• Environmental tax reform in Europe: opportunities for eco-innovation 

Excellent article from the Harvard Business Review blog showing big business is learning rapidly. Unfortunately most policymakers are at least five years behind.

Very interesting facts in the article:

“… it takes 95 liters of water to produce one kilowatt-hour (kWh) of electricity; and each year, the US uses 520 billion kilowatt hours — or roughly 13 percent of all electricity consumed — to move, treat, and heat water. With agriculture accounting for roughly 70 percent of water use, you can imagine how complicated it can become to maintain a steady supply of all three to industry, citizens, and municipalities.”

Great analysis of the weakness of ideas for green growth and green economy. 

"Efficiency is a necessary but insufficient condition today, when the imperative is to find sufficiency in a finite and deeply inequitable world."

Some highlights of this must-read article:

On Martin Wolf’s (and the FT’s) views on how to fix the financial sector (and capitalism):

“Fixing finance, the elephant in the room, needs in his view higher capital ratios, stronger oversight, and smarter consumers. Whilst no one would disagree with such common sense advice, there are equally few who would agree that these actions will fix the problem. They leave in play perverse incentives, conflicts of interest and the entire, under-regulated shadow banking system that is busy repeating yesterday’s profitable errors.”

On corruption:

“Frankly, the main difference between corruption in developed economies compared to weakly governed societies is that corruption in the former has been legalised into super-profit taking, obscene remuneration, laying-off risks on the poor, and systematic under-contributions of the rich and profitable through the tax system.”

On the fact that Wolf (and other economists") keep seeing the environment as an “after-thought” to “serious economic analysis”:

“… you appear to see no links between the state of the economy and the state of the natural ecology that sustains our lives on this planet. The real problem with the financial markets is not that they are unstable and liable to periodic implosion – it is that they are not doing their task of investing our money in creating a resilient, sustainable economy that will benefit current generations and those to come. Endemic short-termism is another way of saying that investors are disinterested in what creates real value, financial or otherwise, but have decided that competing with each other to make money out of money is a simpler way to get rich. Even if you are unwilling to value what cannot be monetised, take a look at how catastrophic last year was for the insurance business because of natural disasters, or the speculation-driven food price peaking just before the Egyptian revolution.”

On the Great Transformation (the theme of Davos this year) and the impossibility of the Clubs of the powerful to embrace the Disruption needed for this transformation:

“It is tough to seek to disrupt the lives and livelihoods of one’s own members, sponsors and friends. That is certainly true in Davos, but is also painfully true in the inner world of international NGOs, or the bureaucracies of government and international organisations. Try supporting nuclear in a Greenpeace meeting and see how far it gets you. But it is disruption that is needed, of that there is no doubt. The Davos strapline, the Great Transformation, is not conceivable without the Great Disruption, and there are few if any incumbents that will welcome that.”

This Scientific American article summarises a report in Nature magazine confirming that the age of cheap oil is over and that as a result we live in different times. Will The Anthropocene give way to the Post-Oil, Post-Growth era?

Another interesting quote from this report makes the link between peak cheap oil and the current economic crisis:

“King and Murray [the authors of the report] argue that global economic growth itself may be impossible without a concurrent growth in energy supply (that is, more abundant fossil fuels, to date). "We need to decouple economic growth from fossil-fuel dependence," King adds. "This is not happening due to industrial, infrastructural, political and human behavioral inertia. We are stuck in our ways."

Interesting article on Rio+20 but wrong recommendation. Why would we need to save Rio+20? There are other ways of fighting for a new economy based on ecological and social justice. Let’s not spend too much of our precious energy on wrong lost battles.

Excellent analysis by UN Special Food Rapporteur Olivier De Schutter of the failures of capitalist globalisation.

The big question is whether globalisation can "be done better" under current rules of free and fast movement of big capital, easy delocalisation for industries and consumer demand for low prices of consumption products. How can governments do globalisation better whe they have no grip on the systems and values of production and consumption. This is where we really need a complete overhaul of existing capitalism but who will drive this?

Reading this article makes you realise Rio negotiators have no clue on the real sustainability challenges.

Although it might make “diplomatic” sense to keep climate change off the agenda at Rio+20, the interconnectedness of the world’s sustainability challenges makes this a complete nonsense. The verticalisation or departementalisation of political problems at national government level as well as in international fora is something which urgently needs some rethinking.

Furthermore, when I read in this article the following quote from Brazil’s main Rio+20 negotiator, I have to despair about the ability of our political elites to understand the real transition that we will need to manage:

“Sustainable development is an easier sell globally than climate change, even though sustainable development is a way of tackling global warming and other environmental issues, he said. Climate change is an (issue) that has very strong resistance from sectors that are going to be substantially altered, like the oil industry," do Lago said. "Sustainable development is something that is as simple as looking at how we would like to be in 10 or 20 years." (my highlighting).

Sustainability “easier to sell” because it is a “long-term” problem? Do these so-called “leaders” live on another planet? What part of of the “ rethinking our global economy, governance, democracy, growth and business to be able to operate within the planets’ limits” do they not understand? Do they not see the need to start the emergency preparedness now?

Resource constraints or energy dependence are hardly mentioned in this report and the call for a "new growth model" is made into a caricature.

More innovation needed is one of the "recommendations" of the report. Maybe the World Bank should start innovating in its own thinking about growth?

Does Mr Schwab practice what he preaches at WEF? Any of his lowest paid workers want to answer that question?

The future of capitalism is not the right question anyway. The real question is about the future of democracy and the future of economic growth in a geopolitically-changed, resource-constrained world.