It’s the green economy, stupid
As we get closer to June, excitement is building in the global environment community about the UN Sustainable Development conference in Rio.
And that is precisely the problem!
As long as Rio+20 remains the hot topic for eco-lobbyists, it will remain profoundly worthy; but it will fail.
Rio must be of interest to finance ministers. It must redefine the way we understand and measure our national and global economies. Economics is actually at the heart of what environmentalists call sustainable development – what else is economics about, if not the allocation of scarce resources? But international economic understanding has yet to construct an adequate model that can supply the essential resources of water, food and fuel in a way that balances current and future demand with both equity and need.
It is a particular sort of blindness that can recognise a credit bubble when it comes in the form of the securitisation of subprime mortgages, but not when we are consuming each year the resources that it takes the planet one year and four months to replace.
Ask 10 economists how to measure a nation’s wealth and nine of them will talk about ‘output GDP’. The smart one will talk about ‘natural capital’. The smart one will tell you that the natural environment is fundamental to supporting the basis of all economic value and that ‘natural capital’ is just as important as built capital (railways), social capital (a well-functioning judicial system) or cash. But few people have even heard of natural capital.
The idea that the pollination of our crops by bees might have a value that we need to account for seems quite ridiculous; until colony collapse, varroa mites and fungal diseases saw honey bees die in their millions with a consequent reduction in yield both to our farmers and to the Treasury. The National Audit Office estimated it at £200m!
The US is rarely seen as a leader on environmental matters these days, but for years the good people of Manhattan have been paying hard dollars to farmers in the Catskills to maintain and manage the forest landscape that purifies the water Manhattan depends on. Economics shows them it is cheaper than paying for an enormous concrete and steel water treatment plant.
Classsical economics has regarded ecosystem services like pollination and water purification as ‘externalities’ – free goods that don’t have to be taken into account in the economic calculations. Increasingly though, economists in the World Bank and elsewhere have come to regard these as the fundamental building blocks of all wealth accounting.
In his speech to the Social Market Foundation Ed Miliband pointed out that the rules which encouraged wealth creation ‘focused on short-term returns not the productive creation of long-term value’. He is pointing to the deficiencies in an economic model that looks increasingly flat-footed in its capacity to respond to the challenges of global resource allocation: a model where community and cooperation are undervalued in pursuit of consumption and where overconsumption is regarded as an unconditional right.
By contrast, George Osborne has abandoned Green Conservatism and reasserted his belief in the fundamental antagonism between the environment and economic growth. His recent comments about the Habitats Directive show his own inability to think outside of a neoliberal economic framework, the perfect counter to which was stated succinctly by the Norwegian government in its response to the UN’s Zero Draft document for Rio: ‘With the ongoing economic, climate and food crises, it has become clear that neoliberal economic policies, including unfettered trade liberalisation, do not promote human wellbeing for all. Rather, these policies are part of the cause of the crises and at the same time limit countries’ opportunities to respond to them.’ No wonder David Cameron is not going to Rio this summer!
It is essential that Labour articulates a vision for Rio+20 that is coherent internationally and resonates at home with a public preoccupied by job losses and declining living standards. The green economy must create employment opportunities if it is to succeed. One of the major challenges facing investors in the green economy is the lack of a strong skills base in appropriate technologies – both new and old. Sustainability skills colleges should be established in each region to deliver the human capacity to install the new wave of energy efficiency measures, domestic insulation and micro-renewable technologies. Popular support for the green economy will come about in direct relation to a reduction in people’s fuel bills.
But the jobs required by young people are not only in new technologies. Rural communities are seeing an ever-increasing drift by young people to the cities. Labour must invest in the agricultural extension services to improve our farming sector and create new rural employment. The lack of proper management of the UK’s woodlands and peat moors cause major environmental loss. New supply chains for wood fuel and community power systems require government to pump prime but the new jobs they would create will help reverse the drift to cities and reduce carbon emissions while improving woodland biodiversity. Peat reclamation schemes on some of our most important moorland landscapes can similarly create hundreds of new jobs and improve watershed protection and carbon sequestration provided by our peatlands at the same time. Few people realise that the carbon stored in the peat bogs of the UK and Ireland sequester more carbon than all the forests of France, Poland and Germany combined!
Where the Rio outcome document calls for governments to ‘recognise the limitations of GDP as a measure of wellbeing’, Labour should propose the creation of a new chief secretary ministerial position in the Treasury to chair the Natural Capital Committee that would audit all departmental budgets for long-term wealth creation and sustainability.
Education is one of the UK’s great export earners. As the world moves towards a green economic model we can pioneer the courses in sustainability that become the certification standards for others. Our universities should be models of best practice setting an example of sustainability both in their facilities on campus and in teaching sustainable development as a module across all disciplines. More than this we should begin in schools to teach the concepts of planetary limits, resource efficiency and sustainability as key elements of every child’s education.
Public procurement is a tool that government uses poorly in pursuit of its wider objectives. Labour must have a comprehensive vision of how to use the purchasing power of government to incentivise companies in the private sector to adopt higher environmental, and social standards. It is absolutely legitimate to demand that food prepared in hospitals and schools, or timber used in public buildings should conform to sustainable production and consumption standards. By doing so we can create reliable markets for environmentally and socially sound products that contribute to our social, environmental and economic wellbeing.
This is the generation where 1.5 billion people (the poorest people on the planet) depend upon the natural environment to provide more than 50 per cent of their GDP. Because of this, the convergence of environmental and economic sustainability is being brought home to this generation in a way never before apparent. Rio must set sustainability goals that complement the Millennium Development Goals. Labour must articulate the need for this as an economic imperative, not simply a social one. What is abundantly clear is that when it comes to Rio the Conservatives simply don’t understand that ‘It’s (still) the economy, stupid!’ But now the economy is green.
Barry Gardiner MP is Ed Miliband’s special envoy on climate change and the environment
Conservatives, development, economy, Ed Miliband, environment and climate change, GDP, George Osborne, growth, Millennium Development Goals, National Audit Office, Social Market Foundation, sustainability, UN, World Bank