Can Colorado Lead in Economic Sustainability?

The Economist: Despite its immense growth, the state might be poised to redefine what economic growth and development really means

The global population exploded from 1.8 billion to 7.7 billion people in the last century. During the same period, Colorado’s population grew from 939,000 to about 5.8 million. This represents a 1.5 percent and 1.8 percent annual average compounded growth rate (AACG) for the world and Colorado respectively. When one adds the 6.5-fold increase in global per capita output since 1920 on top of population growth, the result is total economic output 16 times what it was 100 years ago. 

Our species apparently found the magic pill to enhance material well-being and increase life expectancy dramatically. Not quite the perpetual fountain of youth sought throughout history, but a decent substitute, nonetheless. Every human institution has been impacted in some way, and the growth has been reasonably reliable despite hard times like the Great Depression, isolated famine or world wars. The only real negative is the burden exponential growth places on ecosystems at local levels and Mother Earth cumulatively.

As the baby boomers’ youthful anti-establishment era waned from the tumultuous 1960s, we were all inspired by photos of Earth taken from the moon. Earth Day started in 1970, introducing us to an aspirational environmental movement to go along with combatting blatant pollution at the local level where many rivers were dead and smokestacks and auto emissions could be physically felt in many cities. 

As this movement grew and evolved over the last half century, it became almost mainstream in most developed and developing economies around the world and now has a name that expresses its core value: sustainability. Sustainability simply asserts that in pursuing our own material well-being, we should not be so aggressive as to threaten the environmental future for our children and their children.  

This is easier said than done. One of the few breakthroughs in economic fundamentals in recent decades comes from neuroscience, which clearly demonstrates the short-term bias in our brains. Today, behavioral economists challenge the fundamental economic theory that assumes humans are rational beings. Instead, science points to our being predictably irrational. Sometimes, I think we are all environmentalists — until we have to personally sacrifice. In other words, sure, I care about future generations, but make it easy, like single-stream recycling.

In economics, theories have evolved, debates are robust, and data is far more accessible. But virtually all aspects still focus on a growth paradigm. Growth in total output, growth in jobs and growth in incomes – mainly related to the last quarter, year, or maybe decade. The field of economics is virtually void of any real research or theory asking what a sustainable world could look like. Does it really come at the expense of growth or result in job losses? 

Just as more and more companies are finding greater profitability and more productive workers through social responsibility initiatives, can’t we find something similar in community and macro-economics? Instead of output levels, shouldn’t we primarily measure well-being or happiness?  

Recent projects have taken me to Colorado’s high country – essentially the central mountain counties running along the Continental Divide. While these areas are growing in terms of population (not as fast as the state average) and per capital income (slightly faster than the state average), what impresses me the most is the prevalence of young migration into the mountains with a new attitude. They are far less concerned about material well-being than they are with living in the natural environment, being healthy and having good social connections with other people. 

They report their overall quality of life as being high – even without affordable housing, new cars or extensive consumption. Overall, they appear high on the happiness index despite the day-to-day challenges. When I think about it, this is the Colorado paradigm in general. People migrate to the mountains for the overall quality of life and a closeness to the mountains – not for the money. 

Colorado, despite its reputation for rapid growth in the last century, has the potential to lead the next generation in making sustainable economic development mainstream. In fact, one University of Colorado economics professor and past state legislator, Daphne Greenwood, has written a couple of books on the topic. While the Great Recession kept most of us focused on traditional economic growth, we have to hope younger people will advance sustainable economics at a faster pace and redefine what economic growth and development really mean. 

Categories: Economy/Politics, Magazine Articles