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Prosperity without Growth?
The UK's Sustainable Development Commission has released a major new report: 'Prosperity without Growth?: the transition to a sustainable economy'. Fuller details at this address. Reproduced here under the SDC's Creative Commons Licence.
The economy is geared, above all, to economic growth. Economic policy in the current recession is all about returning to growth – but an economic crisis can be an opportunity for some basic rethinking and restructuring.
Two objectives other than growth – sustainability and wellbeing – have moved up the political and policy-making agenda in recent years, challenging the overriding priority traditionally given to economic growth.
SDC's "Redefining Prosperity" project has looked into the connections and conflicts between sustainability, growth, and wellbeing.
As part of a two year programme of work, we commissioned thinkpieces, organised seminars, and invited feedback. This project has now resulted in a major SDC report: 'Prosperity without Growth?: the transition to a sustainable economy' by Professor Tim Jackson, SDC’s Economics Commissioner. Prosperity without growth? analyses the relationship between growth and the growing environmental crisis and 'social recession'. In the last quarter of a century, while the global economy has doubled, the increased in resource consumption has degraded an estimated 60% of the world’s ecosystems. The benefits of growth have been distributed very unequally, with a fifth of the world’s population sharing just 2% of global income. Even in developed countries, huge gaps remain in wealth and well-being between rich and poor.
While modernising production and reducing the impact of certain goods and services have led to greater resource efficiency in recent decades, our report finds that current aspirations for 'decoupling' environmental impacts from economic growth are unrealistic. The report finds no evidence as yet of decoupling taking place on anything like the scale or speed which would be required to avoid increasing environmental devastation.
Prosperity without growth? proposes twelve steps towards a sustainable economy and argues for a redefinition of "prosperity" in line with evidence about what contributes to people’s wellbeing.
SDC intends to generate discussion and debate on the challenges on the issues that Prosperity without Growth? raises. We have sent the report to the Prime Minister, government leaders in the devolved administrations, the Chancellor of the Exchequer, and other government ministers, as well as business and civil society leaders.
The following is the Foreword to the report. You can download the whole report from the url at the top (3MB pdf). Well worth reading the whole thing.
Every society clings to a myth by which it lives. Ours is the myth of economic growth. For the last five decades the pursuit of growth has been the single most important policy goal across the world. The global economy is almost five times the size it was half a century ago. If it continues to grow at the same rate the economy will be 80 times that size by the year 2100.
This extraordinary ramping up of global economic activity has no historical precedent. It’s totally at odds with our scientific knowledge of the finite resource base and the fragile ecology on which we depend for survival. And it has already been accompanied by the degradation of an estimated 60% of the world’s ecosystems.
For the most part, we avoid the stark reality of these numbers. The default assumption is that – financial crises aside – growth will continue indefinitely. Not just for the poorest countries, where a better quality of life is undeniably needed, but even for the richest nations where the cornucopia of material wealth adds little to happiness and is beginning to threaten the foundations of our wellbeing.
The reasons for this collective blindness are easy enough to find. The modern economy is structurally reliant on economic growth for its stability. When growth falters – as it has done recently – politicians panic. Businesses struggle to survive. People lose their jobs and sometimes their homes. A spiral of recession looms. Questioning growth is deemed to be the act of lunatics, idealists and revolutionaries.
But question it we must. The myth of growth has failed us. It has failed the two billion people who still live on less than $2 a day. It has failed the fragile ecological systems on which we depend for survival. It has failed, spectacularly, in its own terms, to provide economic stability and secure people’s livelihoods.
Today we find ourselves faced with the imminent end of the era of cheap oil, the prospect (beyond the recent bubble) of steadily rising commodity prices, the degradation of forests, lakes and soils, conflicts over land use, water quality, fishing rights and the momentous challenge of stabilising concentrations of carbon in the global atmosphere. And we face these tasks with an economy that is fundamentally broken, in desperate need of renewal.
In these circumstances, a return to business as usual is not an option. Prosperity for the few founded on ecological destruction and persistent social injustice is no foundation for a civilised society.
Economic recovery is vital. Protecting people’s jobs – and creating new ones – is absolutely essential. But we also stand in urgent need of a renewed sense of shared prosperity. A commitment to fairness and flourishing in a finite world.
Delivering these goals may seem an unfamiliar or even incongruous task to policy in the modern age. The role of government has been framed so narrowly by material aims, and hollowed out by a misguided vision of unbounded consumer freedoms. The concept of governance itself stands in urgent need of renewal.
But the current economic crisis presents us with a unique opportunity to invest in change. To sweep away the short-term thinking that has plagued society for decades. To replace it with considered policy capable of addressing the enormous challenge of delivering a lasting prosperity.
For at the end of the day, prosperity goes beyond material pleasures. It transcends material concerns.
It resides in the quality of our lives and in the health and happiness of our families. It is present in the strength of our relationships and our trust in the community. It is evidenced by our satisfaction at work and our sense of shared meaning and purpose.
It hangs on our potential to participate fully in the life of society.
Prosperity consists in our ability to flourish as human beings – within the ecological limits of a finite planet. The challenge for our society is to create the conditions under which this is possible. It is the most urgent task of our times.
Tim Jackson, Economics Commissioner, Sustainable Development Commission, March 2009