The Green Growth Agenda

The US social scientist Kenneth Boulding once commented ‘If you believe exponential growth can go on in a finite world, you are either a madman or an economist’. This cuts to the heart of what I’ve been asked to speak about – the Green Growth agenda and the politics of a low carbon economy.

We currently live in a world beset by an economic crisis borne out of greed and sloppy regulation, gross inequality and peak oil. Climate change is not some far off threat but a reality. It already drastically affects many of the poorest people around the world and is predicted to seriously affect 660 million people by 2030 – only 20 years from now! While economic collapse is painful, environmental collapse – the collapse of all that we depend upon – is literally unbearable.

Yet despite this still the economic paradigm pervails that economic growth will deliver us from this mess. But proponents of this approach fail to explain how we can have infinite growth in a finite world. It is time we faced up to the fact that the maths just don’t add up – and started investing in a sustainable and fair economy.

To do this we have to be prepared to question what we are told are givens – that progress is synonymous with growth, that more stuff equals more happiness and that gross domestic product is a suitable way of measuring success.

Gross Domestic Product has wrongly become the accepted measure for standard of living. Yet GDP measures war, car crashes and prisons as equally ‘productive’, and as good for growth, as schools, hospitals and grocery shopping. Anything which stimulates the economy is seen as positive irrelevant of the suffering or problems it causes. This is not sustainable.

The ideology of infinite growth is very recent. GDP has only been around since the late 1940s and only 8 of the 125,000 generations of humans have experienced consistent growth. Historically growth is a paradox and steady state is normality.

The Green New Deal and a low carbon economy

And so what is the alternative? Do we have to stay locked into casino capitalism that gives us financial chaos and environmental breakdown? Must we resign ourselves to horrific far reaching cuts that our Governments claim will put us back on track and restore business as usual? Are we going to accept that vast inequalities and broken communities are a necessary part of our economic system? Or dare we dream and work for a better future. After all the economy is a human construct, not an act of God. We made it, we can change it.

Academics and economists created the Index of Sustainable Economic Welfare some years ago, as a an early alternative to GDP. And much work is being undertaken now to develop better indicators of prosperity, well-being and sustainability. EU policy is looking hard at these fresh indicators.

The Green Party has worked with leading academics, economists and commentators under the umbrella of the New Economics Foundation helping to launch the Green New Deal project – a set of joined up practical policies to solve the major challenges facing teh 21st century, those of the credit crisis, climate change, peak oil and increasing inequality. The project takes inspiration from President Roosevelt’s New Deal for the post-depression America of the 1930s.

A Green New Deal calls first for a radical transformation of the regulation of national and international financial systems, together with major changes to taxation systems.

And second for a sustained programme to invest in energy conservation and renewable energies. This would channel funding into making the nation’s buildings truly energy efficient – making ‘every building a power station’. It would involve training a ‘carbon army’ to carry out a vast environmental reconstruction programme – creating hundreds of thousands of jobs in the process.

Because the good news is that green technologies create jobs. If you compare the number of jobs created by different energy sources per unit of energy the difference becomes stark – 75 jobs a year for nuclear per TWh of power, 250 jobs a year for oil and gas – compared to 900-2000 jobs for wind power.

We now have a Green New Deal group at EU level too working hard to transform our economy, rethink the way we produce and consume, create jobs and find solutions to our resource, climate and economic challenge. This group is looking at a wide variety of issues from how we can ensure good working conditions in a new sustainable economy to how we can finance investment in the Green New Deal. This is about being imaginative, its about joined up thinking and its about having political courage.

That’s political courage to question our priorities at EU level. Political courage to take the steps that are really needed, not just those that are politically useful in the short term.

Political parties work on a very short-term calendar, often planning only as far as the next press release or ballot box. But strategic policy making to protect or develop our environments should be consistently developed and applied over 50 or 100 years, not just as many days.

David Cameron promised us his would be the greenest government ever, just a few short weeks ago. How quickly those words ring hollow now with the announcement the government’s strategic advisors, the Sustainable Development Commission are to be summarily dismissed in a move described by Caroline Lucas as an ‘absolute disgrace’.

There is growing consensus that the Green New Deal makes good economic sense. As Tom Jackson notes in his book ‘Prosperity Without Growth’, economic recovery demands investment to avoid plunging us into a double dip recession. The transition to a low-carbon economy also demands investment. It seems pretty logical to put these two together and create an investment package with multiple benefits – a ‘Green Stimulus’ that can secure jobs and economic recovery in the short term and provide energy security and a sustainable future in the long term.

Creating a Low Carbon economy

So how do we get there? Well contraction and convergence, which involves adopting scientifically safe global annual emission targets and implementing them in an achievable way, could provide a smooth and equitable transition to safe levels of emissions.

Nations would be allocated quotas for emissions and would have to reach these targets annually, rather than over long periods of time. In the UK a system of individual tradable quotas could be established.

On introduction the total carbon quota would be equivalent to current emissions levels, but would reduce year-on-year to meet the needed emission cuts. Individuals and businesses would have to pay from their carbon quota for all purchases of fossil fuel based products. A system for buying and selling quotas would be set up, financially benefiting those who live a low carbon lifestyle and individuals would be able to choose how they spend their carbon quota.

We will also need to re-examine the Emissions Trading Scheme in the light of evidence, such as the most recent Friends of the Earth Report, which concludes that Carbon Trading is not delivering and has failed to cut emissions. Rich countries are responsible for ¾ of emission historically despite representing only 5% of the world’s population. It’s time we faced up to our responsibility, rather than offsetting our emissions by exporting the problem to developing countries. We need to drastically cut our emissions address global inequalities and support low carbon development in developing countries. We need to grasp the opportunity we have and we need to do it now.

A fundamental element of carbon reduction is, I believe, setting a proper price on carbon. Certainly the economic systems envisaged in former SDC chair’s book ‘Capitalism as if the world mattered’ which suggest that the capitalist status quo model can be harnessed to act as a force for positive carbon emission reductions would depend on it. Governments have a crucial role to play in creating the right regulatory frameworks and proactive taxation models to encourage sustainable products, services or actions, while discouraging those that do not. Equally the government should make immediate improvements to building standards which insist on top spec insulation materials, sustainable design and tough renewable energy targets.

All or some of these measures will help deliver a low carbon economy.

The need for immediate action

We need to act now because millions are already being affected by climate change, and most of those affected did not contribute to the problem. According to Christian Aid if nothing is done to stem a rise of 2C in global average temperatures by 2050 then 250 million people will be forced to leave their homes, around 30 million people will go hungry as agricultural yields go into recession and 1-3 billion people will suffer acute water shortages. And let’s be very clear about it – this would be our fault – politicians, academics and everyday citizens alike. Because we already have the tools to move to a low carbon economy, now we just need to do it.

And transition does not have to be grim – in the UK a sustainable economy can mean more jobs, a fairer society and thriving local communities.

Countless evidence has shown that beyond a certain point consuming more doesn’t even make us happy. The massive rise in GDP in rich countries over the last 50 years hasn’t automatically delivered happier societies.

In their ground breaking book ‘The Spirit Level’ by Wilkinson and Pickett it is argued that inequality is bad for us – and not just bad for the poor, but for the rich too! More equal societies have less crime, a lower prison population, better health, more scientific discoveries and…are happier. Equality – rather than simple average wealth – is the main route to a better society for everyone, rich and poor.

Just think, we can help bankers live healthier, happier lives by….cutting their bonuses!

But seriously, improved equality is good for the rich as well as the poor and…crucially it is also good for the planet. Our economy and our environment can work with, rather than against each other for the benefit of all, if we have the courage to look beyond the status quo.

As the climate change sceptic said to the green party candidate…”what if it’s all a great big hoax…and we created a better world for nothing?”

ENDS