Building a new economic model, fit for a low carbon world, is ‘the most urgent task of our times’
Financial muscle can drive agendas more quickly than anything else. Giles Crosse examines how rethinking economics might usher in a brave new world.
Tim Jackson, Professor of Sustainable Development in the Centre for Environmental Strategy (CES) at the University of Surrey, believes that building a new economic model, fit for a low carbon world, is ‘the most urgent task of our times’.
Plenty of voices agree with him. It’s widely accepted that the right economic drivers could deliver a green economy, with carbon trading and metrics at its core. Such systems put a price on carbon, but also look far down the value chain. They create jobs and widen wealth distribution, targeting services provision from poorer economies previously denied access to profitable trade.
“Instead of delivering widespread prosperity, our economies are undermining wellbeing in the richest nations and failing those in the poorest.” continues Jackson. “The prevailing system has already led us to the brink of economic collapse and if left unchecked it threatens a climate catastrophe.”
There’s little time to waste. Jackson’s figures suggest by 2050, the carbon content of each dollar of economic activity will need to be 130 times lower than it is today, in order to make room for much needed development in poorer nations and remain within a 2 degree warming boundary.
That’s against a background where global carbon emissions have risen 40 per cent since 1990, and will continue to rise inexorably unless action is taken urgently.
Global cash crisis
Such rethinking isn’t just about halting climate change. There’s a pressing need, and opportunity, to use a green economy to redistribute wealth. Right now, a fifth of the world’s population earns just 2 per cent of global income.
But under existing economic systems, such redistribution is nigh on impossible. A fairer future planet would be a world which nine billion people aspire to the levels of affluence achieved in Westernised nations. Such an economy would need to be 15 times the size of this one by 2050, and 40 times bigger by the end of the century.
“By the end of this century, we’ll need an economy in which each and every dollar of economic activity is taking carbon out of the atmosphere,” says Jackson. “What does such an economy run on? What does it look like? What kind of economic activities take place in such a world? Nobody knows the answer to these questions. But it’s fanciful to suppose we can achieve such a transformation without seriously examining the dynamics of the growth based model.”
Jackson thinks that economic growth has been the default mechanism for achieving social stability. Yet at the same time it drives the scale of ecological damage. “What’s needed now is an urgent commitment to building a different kind of economic system, one which puts people and planet at its heart,” he argues. “For the advanced economies of the western world, prosperity without growth is no longer a utopian dream. It is a financial and ecological necessity.”
Change for the better
According to Jackson, among steps necessary will be a dismantling of perverse incentives for unproductive status competition, a move away from materialism for its own sake. Further moves must establish new structures that provide capabilities for people to flourish, to participate meaningfully and creatively in the life of society in less materialistic ways.
A whole raft of measures will be needed to develop and incentivise this change: “We must have all the facts about greenhouse gas reductions, and their related costs, needed to mitigate climate change,” says Helen Fisher from the worldwide Organisation for Economic Co-operation and Development (OECD).
“The effect of climate change on cities, and the role they play in creating and limiting greenhouse gases; innovation to mitigate and adapt; and taxes that can encourage ’green’ behaviour.” she remarks, naming further drivers.
If further evidence were needed, a recent European Union Chamber of Commerce in China report criticises massive overcapacity in the global economy, throttling sustainable development and catalysing environmental damage.
Chinese industries, producing at overcapacity, encourage resource wastage, with environmental and health and safety law cutting commonplace. Better enforcement of such laws removes the cowboys from the industry, increases product quality and lessens overcapacity, raising the prices for more environmentally friendly commodities. It’s a clear example of how economic trade and the environment are so closely linked.
The way forward
So what’s really needed to make any of this happen? Jackson advocates a ‘new macro economics for sustainability, that does not rely for its stability on relentless growth and expanding material throughput.’ Once this has been achieved, we need to change historical economic presets. ‘Social logic that locks people into materialistic consumerism is extremely powerful, but detrimental ecologically and psychologically.’
If these elements are combined with a focus to ‘establish clear resource and environmental limits on economic activity, and develop policies to achieve them,’ we should be on the right course to altering planetary economies for the better.
There’s no doubt all this is extremely challenging, but as Copenhagen begins the depth of desire and willingness for change is becoming visible. The UK music industry is to present an open letter to the conference.
It will call for widening targets beyond the Kyoto signatories and realistic delivery timetables and financial mechanisms to stimulate extensive infrastructure investment in decarbonisation. Developing an equitable global price for carbon and fair mechanisms and resources to involve all countries, particularly those suffering from the effects of climate change now, will help underpin such measures.
Signatories including Radiohead, Groove Armada, Universal Music and Julian Lennon are all onside. As thought leaders, it’s hoped the musicians’ move can help political leaders bring about the global transformation required, urging that the best interests of our planet lie at the heart of the Copenhagen negotiations.
And a truly sustainable global economy, despite the change and upheaval it will be necessary to achieve, is our best shot at representing best interests for our planet and the people who inhabit it.
What are your views? Not sure? Read the resources below for more information. Add your comment below. We welcome your thoughts and proposals. Not a Planetary Citizen? Sign up and start making a difference!
Resources:
Sustainable Development Commission Reports:
Prosperity Without Growth
Every Child’s Future Matters
A Sustainable New Deal
OECD Report:
Financing Climate Change Action, Supporting Technology Transfer and Development
Reeep Report:
Renewable Energy and Energy Efficiency Partnership Report
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