Can Economic Growth Deliver the Future We Want?

With Britain’s economy slipping into a double dip recession there is an urgent need to stimulate economic growth. This is widely seen as a panacea that will save us from austerity but can the pursuit of economic growth deliver the future we want?

The post-war period saw many nations equating economic growth with progress driven by technological innovation. While capitalism and the quest for economic growth have produced many benefits, this has come at a cost to the natural environment which is often not reflected in the balance sheet. The expansion of the production of good and services has required large amounts of labour, materials, energy and capital. Economic production has produced pollution and waste, degraded natural habitats and depleted natural resources to an extent that our future survival is now under threat.

In 2008 the world experienced multiple crises with regard to finance, fuel and food that contributed to the worst international economic recession since the 1930s Great Depression. The global financial crisis led to global per capita income contracting and the volume of world trade declining. It demonstrated serious flaws in our current western economic model of development and highlighted the need to reconsider the principles that have guided our economic policy making.

It is now time to think again about economic growth and how we actually measure it. Gross Domestic Product (GDP) has been used as a key indicator to measure the sum of all goods and services produced in a country over time. However, this national indicator of economic progress does not consider inequality, pollution or damage to people’s health and the environment. Critics have called for GDP to be replaced with new indicators that better measure how our national policies can truly deliver a better quality of life for all.

Economic debate has tended to imply a choice has to be made between going green or going for growth. Yet we have no choice if we are to address simultaneously the current crises in global economic and environmental systems. The traditional pursuit for growth has expanded the economy to such a size that it now must conform to global environmental constraints.

Further growth will be uneconomic because it will produce more social and environmental costs than it does benefits. The only option is for ‘green’ growth that meets the dual objectives of economic growth and environmental protection with a focus on better outcomes not more outputs – a shift from quantity to quality.

In Prosperity Without Growth Tim Jackson argues that this will require a different kind of economy for a different kind of prosperity – one where human beings can flourish within the ecological limits of a finite planet. Our growth economy is driven by the consumption and production of novelty which locks society into an iron cage of consumerism. Change at the personal and societal level is necessary to make the transition to a new form of prosperity that does not depend on unrelenting growth.

In June world leaders were called upon to commit to a revolutionary paradigm shift from traditional quantity-oriented fossil fuel dependent growth towards green growth. More than 100 heads of State and government attended the United Nations Earth Summit in Rio de Janiero to shape new policies to promote prosperity, reduce poverty and advance social equity and environmental protection. The Summit marked twenty years since the original 1992 Rio Earth Summit that set out the framework to address climate change and implement sustainable development into practice.

A transition towards a greener economy requires long-term sustainable growth and the efficient use of natural resources, reduction of carbon emissions, and eradication of poverty. This will require developing a green economy in the UK and working at an international level to tackle long term challenges.

In the short-term the transition to a green economy will involve additional costs and difficult choices. We will need to transform what we produce and how we produce it and take advantage of resource efficiencies. This will be achieved by using new technologies and adopting different ways of living and working, and investing in infrastructure. All economic sectors will need to grow without undermining the capacity of the environment to support our future quality of life. They will need to develop greater resilience to future environmental challenges such as climate change, material, energy and food insecurity and natural disasters.

The transition to a green economy will allow businesses to benefit from resources efficiencies and market opportunities and contribute to creating new green jobs. UK business could save as much as £23 billion a year through efficiency savings by improving the way they use energy and water, and by reducing waste. In addition, they could take advantage of the global market for environmental goods and services which has been estimated to be worth about £2.27 trillion, with forecasts predicting 4 per cent growth on an annual basis.

However, a recent report by the Institute Public Policy Research (IPPR) examined the views of over one hundred British industries on the transition to a green economy, particularly in the energy, transport and manufacturing sectors. Despite David Cameron’s Coalition government claiming to be the greenest government ever, IPPR found that industry was critical of the Coalition due to a perceived disconnect between the rhetoric of ministers and the policies they were pursuing.

Recent policy changes such as the feed-in tariffs for solar photovoltaic installations were seen as shifting the goal posts and doing little to maintain business and investor confidence in the green growth agenda. The report highlighted the need for policymakers to taken on a more active role in addressing the barriers to green growth faced by many manufacturing and energy-intensive industries.

Greening the economy will undoubtedly be good for business, people and the planet. The Earth Summit resulted in the International community simply affirming the need to achieve a green economy. However, the rhetoric contained in the final report of the conference needs to be matched by action. Clear financial incentives are need to encourage greener investment and behaviour in government, businesses and consumers.

If we are to create the future we want we need to need to develop a new form of prosperity that is not dependent on continual growth. Fundamental change to the structure of society and the market economy is needed if real environmental gains are to be achieved. Change on the scale achieved in the industrial revolution is required driven by clean, efficient and sustainable renewable energy technologies. The only solution to austerity is to ensure the UK is firmly placed at the forefront of this new global green revolution.

© Gary Haq 2012

Can The Tories Lead a Green Revolution?

WHEN David Cameron became leader of the UK Conservative Party, he vowed that the Tories would lead a new green revolution in Britain. In the 2006 local elections he urged voters to “Vote Blue, Go Green”.

As Britain approaches a General Election, the environment policy of all political parties will come under scrutiny. What will the Tories need to do in order to achieve their promise of a green revolution in Britain?

Climate change poses the greatest environmental threat to the country. Action will therefore be required to address our contribution to the problem as well as ensuring we are able to cope with the impact of extreme weather events and a rise in temperature.

It has been claimed that most Tory MPs are sceptical about the party’s focus on climate change policy and at least six shadow cabinet ministers are sceptical about the economic consequences of a low-carbon policy.

Not only will David Cameron need to convince his colleagues that climate change poses a real threat to our way of life, he will need to reduce our dependency on coal and increase in renewable energy and energy efficiency.

About 27 per cent of the country’s carbon dioxide emissions are the result of domestic energy use. Mr Cameron should follow the example of Kirklees Council’s award-winning Warm Zone scheme.

This home insulation scheme targeted at 170,000 homes has resulted in the average household saving £200 on fuel bills each year while reducing their carbon dioxide emissions by over one tonne. He should roll-out similar schemes across the region and provide cavity wall and loft insulation, energy efficient glazing, draught proofing, improved boilers and low energy light bulbs free to every home.

All new buildings should meet stringent energy performance standards. And we should move away from using energy and resource intensive materials such as steel and concrete to straw bale and timber. To see an example of sustainable construction in practice, Mr Cameron should take a look at York’s Eco-Depot – a timber framed building with straw bale cladding all sourced in regionally in Yorkshire.

There is great potential in the country to use renewable sources of energy. As the saying goes “Where there’s muck there’s brass” – Britain’s sewage could be used to produce biogas. Wind power could be harnessed by constructing Danish style offshore wind farms along the region’s coastline while water turbines in major rivers and streams could be used to provide hydropower.

These measures, together with the introduction of community-based low carbon technologies such as solar water heating, solar electricity, ground heat pumps, micro-wind turbines and combined heat and power, could allow regional “smart grids” to be developed and reduce the region’s dependency on energy from the National Grid.

Britain has already experienced its share of flooding due to torrential rain. This has resulted in serious disruption to roads, schools, offices and caravan parks and has caused great distress and millions of pounds in flood damage.

Mr Cameron should invest in flood and coastal defences to ensure all flood prone towns and villages are adequately protected. In addition, there should be a major tree-planting programme throughout the country to increase the uptake of rainfall and prevent future flooding.

The creation of new woodlands will also have the added benefit of providing fuel wood and wildlife habitats.

We also need to see a revolution in the way we grow our food. Greater incentives should be available to adopt sustainable agricultural practices such as permaculture – an ecologically harmonious efficient and productive approach that stresses the value of diverse crops.

Support should also be given to promote small-scale local food production, which not only increases food security, but also reduces food miles.

Mr Cameron should visit Todmorden’s Incredible Edible initiative to see how public attitudes to local food production have been revolutionised. The whole community – including businesses, schools and farmers – have been “growing their own”. Public flowerbeds have been transformed into community herb gardens and vegetable patches. The initiative has increased the amount of local food grown and eaten in the town.

Our urban environment desperately needs to be made safer, cleaner and more people friendly. Mr Cameron should promote car free cities, walking and cycling and convert car parks to green spaces.

In order to maintain local distinctiveness, he should limit the number of supermarkets and chain stores allowed to open on our high streets and promote local businesses instead. Reducing pollution, improving the character and feel of our local environment will result in happier and healthier residents.

A green revolution cannot take place without its foot troops. Mr Cameron should provide funding for a nation-wide “Green Home Front” to encourage residents, businesses, public bodies, community organisations and schools to work together to make their communities greener. Only by harnessing people power can we revolutionise the way we live and ensure a transition to a new greener age.

If Mr Cameron succeeds in becoming Prime Minister, he will need to deliver on his promise to put environmental policies at the heart of government. In doing so he should remember the words of his predecessor, Margaret Thatcher, who said: “No generation has a freehold on this earth. All we have is a life tenancy – with a full repairing lease.”

© Gary Haq 2010
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