Sustainable Development and OPEC by
Herman E. Daly, School of Public Affairs, University of Maryland, College Park, MD 20782, USA, Invited paper for the conference, “OPEC and the Global Energy Balance: Towards a Sustainable Energy Future”, Vienna, Austria [2001 September]
"In Part I the meaning of sustainable development, along with basic arguments for its desirability and long-term necessity, are considered. The economy is viewed in its physical dimensions as an open subsystem of a containing ecosystem that is finite, nongrowing, and materially closed. The ecosystem is open with respect to solar energy, but the solar flux is also finite and non growing. Sustainable development of the economy means qualitative improvement (development), without quantitative increase in matter-energy throughput (growth) beyond the absorptive and regenerative capacities of the sustaining ecosystem. Growth in physical throughput will become uneconomic long before it becomes physically impossible, in the sense that the extra environmental costs provoked by growth will be greater than the extra production benefits provided by growth. In sum, the economy has an optimal scale relative to the environment. Growth beyond the optimal scale is in reality uneconomic growth, even if we continue to call it economic growth. The idea of sustainable development is to avoid uneconomic growth, and to move the path of progress from quantitative expansion to qualitative improvement.
"Part II speculates about how OPEC might take a leading role in developing a global policy and fiduciary institutional framework in the service of sustainable development. The failure of Kyoto and the inability of high consuming countries, especially the US, to limit their energy throughput, opens an opportunity for OPEC to provide the missing discipline. OPEC could serve many of the functions of Kyoto by using its monopoly power over the petroleum source to collect a surcharge reflecting atmospheric sink scarcity. The sink rent surcharge would go into a special fund to be redistributed as aid to poor countries to finance sustainable development projects and technologies. Petroleum source rents would continue to belong to producing countres who own the petroleum deposits. Since no one owns the atmosphere its sink rents would be global public revenue, collected and redistributed by OPEC as a fiduciary, perhaps with UN participation."