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Can Hawaii Achieve a Steady State Economy?

3p Contributor | Thursday August 18th, 2011 | 2 Comments

the magical island of Kauai

By: Kainoa Casco

Can we?  As Hawai’i’s own Barack Obama said it, “Yes we can!”  Why? Because we need to.

A steady state economy is an Ecological Economics (EE) principle that promotes an economy that is not based off of continuous growth – rather, it is based upon a steady state.  It is an economy that does not exceed its ecological capacity.  Similar to the rest of the country, Hawai’i’s current economy is based off of neo-classical economics where growth is the main objective.  This poses major issues for Hawai’i, an island state that simply cannot continue to grow due to land and resource availability.  So at what point should Hawai’i begin making that transition into achieving a steady state economy?  It seems the answer is…now.

Hawai’i is a state where the cost of living is out of control, housing prices are unaffordable for the local community, the welfare of the environment and local culture is  in decline, and the risk for catastrophe is at the door step.  Accounting for the law of diminishing marginal utility and the law of increasing marginal costs(diminishing returns), Hawai’i may have passed the point where marginal costs exceed marginal benefits.  So, has Hawai’i exceeded is ecological limits?  Let’s see.

Hawai’i imports 80%-90% of its food and energy, leaving only up to two weeks (hopeful estimate) of food and energy supply if ships stopped coming to Hawai’i, which they might for many reasons from outbreak of war to a global food/energy crisis.  Dependence on fossil fuels is expensive when they need to be shipped across an ocean. On some islands, gas prices reached over $6 per gallon this spring.  Electricity in Hawai’i has averaged $0.23/kwh since 2006, while some islands have averaged $0.35/kwh,  reaching up to $0.50/kwh.
Imported food prices are also vastly more expensive than elsewhere in America, something visiting tourists frequently complain about.

Invasive species cost the state hundreds of millions of dollars every year to remediate or control.  Reefs are dying, near shore waters are becoming polluted, streams are dry, native landscapes are disappearing, and the Native Hawaiian host culture is tremendously frustrated by all the negative impacts on the environment and their people.  There is also a great amount of social displacement in Hawai’i.  Increasingly high home prices cause local families to move to cheaper communities on the US mainland where they can afford to live, such as Las Vegas and the Pacific Northwest.

The good news is that Hawai’i is primed for a shift toward a steady state economy and sustainability.  The state has already developed the Hawai’i 2050 Plan to kick start its transition toward sustainability.  Hawai’i has a new governor, Neil Abercrombie, who aims to push a sustainability focused agenda.  Maybe he will be the governor to incorporate sustainability criteria into quantitative indices for Hawai’i’s income, wealth, and welfare.  Maybe he will set the framework of regulatory and incentive-based instruments to help society and business move toward sustainability.

One solution to Hawai’i’s dependence on imports is the abundance of renewable energy opportunity and agricultural land for food production.  Hawai’i’s social culture is also supportive of sustainability.  There is a movement toward integrating indigenous Native Hawaiian closed loop resource management practices into current business practices to set the foundation for operating in a closed loop ecological system.  Growth in the number and size proponents for sustainability in Hawai’i’s community has increased tremendously in the private, public, government, and non-profit sectors.  So much so that it is extremely difficult to keep track of who is doing what for sustainability.

And yes, there are issues that will make it difficult for Hawai’i to make the transition into sustainability.  Many issues are known and many probably are not.  One sustainability hurdle that very few people in Hawai’i are aware of is the fact that while everyone is talking about sustainability, very few people are talking about a steady state economy.  The term steady state economy has not been widely spread or accepted in Hawai’i.  Given the current welfare of Hawai’i’s host culture, community, environment, and economy, it is evident that the current economic system based on continuous economic growth in Hawai’i does and will not work.  One can ask if sustainability in Hawai’i is even possible without operating in a steady state economy.  In the coming decades we shall soon see around the globe if an economy based off of continuous growth can maintain human well-being and happiness.  But, there is hope is that if there is anywhere that can be the example for operating in a steady state economy as a means for sustainability, it will be Hawai’i.

If you are interested in learning more about sustainability in Hawai’i, please check out these organizations below.

Hawai’i 2050 Plan
Hawaii Clean Energy Initiative
Sustainable Living Institute of Maui (SLIM)
Sustainable UH

[Image Credit: janthepea, Flickr]

Kainoa Casco is owner of Casco Pacific LLC specializing in sustainable business consulting centered around Hawai’i place-based cultural, environmental, and business solutions. He is also an MBA Candidate in Sustainable Management at Presidio Graduate School.


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  • Mark Sutton

    What about population growth which is required to be 0 in a steady state economy? Could that be achieved through market forces (people leaving because its too expensive?)

    That is very scary that there is only enough food and energy for two weeks.

  • laurie sanford

    I think this is an interesting article. I wish, however, that you would discuss more, how a steady state economy would actually function.
    I also think that ‘the two week supply’ idea, is inaccurate due to the massive presence of military resources in Hawaii. Secondly I think it also has the potential to simply frighten people, which, in my view, discourages creative thinking and problem solving, rather than encouraging solutions. The last thing we need in Hawaii or anywhere else in the world for that matter, is more fear. What we need is more courage and creative problem solving and cooperation.