The Tension Between Growth and Progress in the Sustainable Development Goals: The Case of the United Nations Environment Programme (UNEP) Inclusive Wealth Report

The tension is obvious when it is applied to theSDGs. GDP growth is associated with several SDG targets; in fact SDG 8 is about boosting growth. But GDP growth “can also come at the expense of progress towards other goals”, such as climate and biodiversity action, says environmental economist Pushpam Kumar, who directs a UN Environment Programme (UNEP) project, called the Inclusive Wealth Report, to measure sustainability and inequality. Next month will be when the report will be published.

The trends were there before 2020, but then problems increased with the COVID-19 pandemic, war in Ukraine and the worsening effects of climate change. Pedro Conceio, lead author of the United Nations Human Development Report, said that the world is in a new uncertainty complex.

The present effort by Guterres and his colleagues is not the first time policymakers have tried to improve on GDP. The HDI was designed in 1990 by a group of economists. They were motivated in part by the fact that their countries had good growth rates, but not good quality-of-life data.

Rutger Hoekstra, a researcher who studies metrics for sustainable development at the University of Leiden in the Netherlands and author of Replacing GDP by 2030 said that GDP is the most popular indicator.

And in August, the White House announced a 15-year plan to develop a new summary statistic that would show how changes to natural assets — the natural wealth on which economies depend — affect GDP. The main architect of the project, Eli Fenichel, an economist with the White House Office of Science and Technology Policy, states that the aim is to help society determine if consumption is being done in a sustainable way. GDP only gives a partial and incomplete picture of economic progress.

GDP has become the world’s main index for economic progress because it is a measure of economic activity. By a commonly used definition, it is the numerical sum of countries’ consumer and government spending and their business investments, adding the value of exports minus imports. boosting GDP is what governments and businesses often talk about when talking about economic growth.

GDP also matters greatly to politicians. When India leapfrogged the United Kingdom to become the world’s fifth largest economy earlier this year, it made headline news. The GDP figures were supposed to be public last month but were delayed so that the party congress wouldn’t take place.

If every country signed up to the idea at the same time, an environment-adjusted GDP could be accepted. In theory, this could happen at the point when GDP’s rules — known as the System of National Accounts — are being reviewed, an event that takes place roughly once every 15 years.

It has been a similar story in Italy. In 2019, then research minister Lorenzo Fioramonti helped to establish an agency, Well-being Italy, attached to the prime minister’s office. It was to test economic policy decisions against targets. It was an uphill battle since the economic ministries didn’t see it as a priority.

The next revision to the rules is under way and is due to be completed in 2025. The final decision will be made by the UN Statistical Commission, a group of chief statisticians from different nations, together with the European Commission, the International Monetary Fund, the World Bank and the Organisation for Economic Co-operation and Development (OECD), the network of the world’s wealthy countries.

The UN has the power to make decisions over the questions that the review is asking. As part of their research, statisticians are interested in how to measure well-being and how to assess the value of the digital economy. Seven of the world’s top ten firms are technology and data companies, according to two economists at the University of Cambridge.

Peter van de Ven, the lead editor of the GDP revision effort, said that some parts of digital-economy valuation, along with putting a value on the environment, aren’t likely to be included in the revised GDP formula. One of the reasons, he says, is that national statisticians have not agreed on a valuation methodology for the environment. Nor is there agreement on how to value digital services such as when people use search engines or social-media accounts that (like the environment) are not bought and sold for money.

Yet other economists, including Fenichel, say that there are well-established methods that economists use to value both digital and environmental goods and services. One way involves asking people what they would be willing to pay to keep or use something that might otherwise be free, such as a forest or an Internet search engine. Another method involves asking what people would be willing to accept in exchange for losing something otherwise free. The Massachusetts Institute of Technology was the site of an experiment where management scientists calculated the value of social media by paying people to stop using it.

The economist at the school says that it is not true that valuing the environment would make economies look smaller. It depends on what you value. Daily is one of the principal investigators of a project that was used in China and is soon going to be used in other countries. GEP adds together the value of different kinds of ecosystem goods and services, such as agricultural products, water, carbon sequestration and recreational sites. There was a region in China that had a total GEP that exceeded its GDP.

Although past efforts to avoid using GDP have stalled, this time could be different. According to Van de Ven, national statisticians will not add nature or the value of social media to the GDP formula. But the pressure for change is greater than at any time in the past.

Conventional economic logic hinges on a core assumption: Bigger economies are better, and finding ways to maintain or boost growth is paramount to improving society.

The debate over growth versus green growth was argued for in an editorial in March 2022, by this journal. We agree. Growth will run into limits, but rather how we can enable society to prosper without growth in order to ensure a just and ecological future, is the question in our view. Let’s do it.

A lot of the plan to achieve this involve a dramatic reconfiguration of economies around clean energy and other emissions reducing solutions, and promote market innovations that make them more affordable. This would allow the world economy to keep growing, but in a way that is green.

A degrowth expert whose team received funding from the European Research Council said that more growth and energy use makes it harder to decarbonize the energy system. “It’s like trying to run down an escalator that is accelerating upward against you.”

The solution, according to the degrowth movement, is to limit the production of unnecessary goods, and to try to reduce demand for items that aren’t needed.

It’s a concern that has been echoed by the most famous climate activist. She criticized fairy tales about non-existent technological solutions andeternal economic growth. She talked about another point degrowthers raise about the current system: Is it working for us?

The weakness and strength of the degrowth concept is being highlighted by a researcher at the London School of Economics.

Yet in some corners, it’s becoming less taboo, especially as governments and industry fall behind in their efforts to stop the planet from warming beyond 1.5 degrees Celsius, after which some effects of climate change will become irreversible.

Even some on Wall Street are beginning to pay closer attention. Investment bank Jefferies said investors should consider what happens if degrowth gathers steam, noting “climate-anxious” younger generations have different consumer values.

In the debate over how to avoid climate catastrophe, there’s a key point of consensus: If the worst effects of global warming are to be averted, the world needs to slash annual carbon emissions by 45% by 2030. After that, they need to decline steeply, and fast.

The Global South fears that the green energy revolution could replicate existing patterns of exploitation and excessive resource draining, but with minerals like nickel or cobalt instead of oil.

The Love for Growth Movement: The Case of Bahia and its Implications for Sustainable Development and the Sustainable Future of the Universe, as advocated by some in Brazil

The “love for growth,” said Felipe Milanez, a professor and degrowth advocate based in the Brazilian state of Bahia, is “extremely violent and racist, and it’s just been reproducing local forms of colonialism.”

Adopting degrowth would require a dramatic rethink of the market capitalism that has been embraced by just about every society on the planet in recent decades.

But advocates, which often speak about recessions as symptoms of a broken system, make clear they aren’t promoting austerity, or telling developing countries that are eager to raise living standards they shouldn’t reap the benefits of economic development.

They talk about sharing more goods, reducing food waste, moving away from privatized transportation or health care and making products last longer because they don’t need to be purchased at regular intervals. Cabaa said it was about thinking in terms of sufficiency.

Yet some proposals could exist within the current system. A universal basic income — in which everyone receives a lump sum payment regardless of employment status, allowing the economy to reduce its reliance on polluting industries — is often mentioned. A four day work week is also included.

The UN authority on global warming recently stated that addressing inequality and many forms of status consumption and focusing on wellbeing supports Climate change mitigation efforts. The movement was named, too.

The degrowth people think that if you bake a smaller cake, the poor will get a bigger share of it. “That has never happened in history.”

The backers of green growth are convinced that their strategy will work. They cite a number of promising examples of GDP gains being created from emissions from the United Kingdom and Costa Rica.

Gates admits that it is difficult to change global energy systems. However, he thinks boosting the accessibility of the right technologies is still possible.

Source: https://www.cnn.com/2022/11/13/economy/degrowth-climate-cop27/index.html

A policy for degrowth to support sustainable development: From inequality to jobs, education, health care, public transport and education in Europe and in New Zealand

Could a growing cohort agree? In 2020 his book degrowth from a Marxist perspective became a surprise hit in Japan, which has been concerned about the consequences of stagnant growth for decades. “Capital in the Anthropocene” has sold nearly 500,000 copies.

Reports this year by the Intergovernmental Panel on Climate Change (IPCC) and the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) suggest that degrowth policies should be considered in the fight against climate breakdown and biodiversity loss, respectively. There are policies to support such a strategy.

It is helpful to enable sustainable development. This requires cancelling unfair and unpayable debts of low- and middle-income countries, curbing unequal exchange in international trade and creating conditions for productive capacity to be reoriented towards achieving social objectives.

Introduce a green jobs guarantee. This would train and mobilize labour around urgent social and ecological objectives, such as installing renewables, insulating buildings, regenerating ecosystems and improving social care. A programme of this nature would end unemployment and ensure that workers in industries that depend on fossil fuels transition out of their jobs. It could be used with a universal income policy.

Some countries, regions and cities have already introduced elements of these policies. Free health care and education can be found in many European nations, Vienna and Singapore are well known for their high quality public housing, and nearly 100 cities worldwide offer free public transport. Job guarantee schemes have been used by many nations before, and experiments with basic incomes and shorter working hours are under way in New Zealand.

Source: https://www.nature.com/articles/d41586-022-04412-x

Macro-Economic Models for the Development of the Economy: The Cases of Argentina and Greece in 2001 and 2011 at the Cross-Border Scale

Economies today depend on growth in several ways. Welfare is often funded by tax revenues. Private pension providers rely on stock-market growth for financial returns. Firms cite projected growth to attract investors. Growth dependency can be identified and addressed on a sector-by-sector basis.

Company directors need to have a different fiduciary duty. Instead of being focused on the short term financial interests of shareholders, companies should focus on their social and environmental benefits. Public funding is needed for social care and pensions, as well as better regulation and the deconstruction of perverse financial incentives for private providers.

Balancing the national economy will require new macro-economic models that combine economic, financial, social and ecological variables. EUROGREEN and MEDEAS are already being used to project the impacts of degrowth policies, such as redistributive taxes, and reductions in working time.

These models are usually focused on a single country and don’t take into account cross-border dynamics. If there is a low growth rate in one country, some companies might move their capital overseas, which could affect the original country’s currency and increase borrowing costs. Conditions such as these posed severe financial problems for Argentina in 2001 and Greece in 2010. International cooperation for tighter border control of capital movements needs to be considered and the effects modelled.

Source: https://www.nature.com/articles/d41586-022-04412-x

Inflationary Risks Management Using Monetary Issues: Evidence from the Case of the United States and the Emerging Market

There will be needs for new forms of financing in the future. Governments need to stop subsidies for fossil fuels. Meat production and air travel should be taxed. Wealth taxes can also be used to increase public resources and reduce inequality.

Governments that issue their own currency can use this power to finance social and ecological objectives. The approach was used after the global financial crisis to bail out banks and hospitals.

Inflationary risks must be managed, if increased demand outstrips the productive capacity of the economy. Earmarking currency for public services reduces cost-of-living inflation. A degrowth strategy can reduce the demand for material goods through progressive taxation, incentivizing renovation and repair, and supporting community-based services.

Another risk is that when states or central banks issue currency, it can increase the service payments on government debt. There is research that suggests that the coordination of fiscal policy and monetary policy is necessary to manage this risk. Modelling and empirical research is needed to shed light on the pros and cons of innovative monetary policy mechanisms — such as a ‘tiered reserve system’, which reduces the interest rate on government debt.

Source: https://www.nature.com/articles/d41586-022-04412-x

Towards a more sustainable world: How degrowth affects the economic and social welfare of low-income countries and how they can help to stop their degrowth

Barriers to reduced hours need to be understood. It’s more expensive for employers to add staff when there are capped tax contributions and health insurance. Personal debt might encourage employees to work longer hours, although recent trials showed no evidence of this7,8.

There need to be links between hours of work and carbon emissions. Although less commute affects energy use and carbon emissions during workweeks, people don’t pay as much attention to what they do on the weekends. More travel or shopping during free time could increase emissions, but these effects could be mitigated if production in problem sectors is scaled down.

The researchers need to look at resources other than energy. They need to examine the provisioning systems for housing, transportation, communication, health care, education and food. Social and institutional changes might improve the quality of provision. What types of provision have the most beneficial social and environmental outcomes? Such research can be done using empirical observation, as well as through modelling.

Take housing, for example. Developers, landlords and financiers can find the property markets in many parts of the world. This can push working people out of city centres so that they are reliant on cars, which leads to fossil-fuel emissions and contributes to segregation. Public housing, as well as a financial system that focuses housing as a basic need rather than as an opportunity for profit, are alternative approaches.

Fourth, a better grasp is needed of the political and economic interests that might oppose or support degrowth. How do groups such as the think tanks, corporations, lobbyists and political parties organize to stop progressive economic and social policy? The role of the media in shaping growth attitudes is under investigation. The links between economic growth and geopolitics make individual nations less likely to act alone. This ‘first mover’ problem raises the question of whether, and under what conditions, high-income countries might cooperate towards a degrowth transition.

Political transformation often begins with social movements and cultural change below the surface. Four areas should be examined by social scientists. They need to conduct polls and focus groups to see how attitudes are changing.

Second, they should learn from sustainable ‘transition towns’, cooperatives, co-housing projects or other social formations that prioritize post-growth modes of living. The experiences of countries that have had to adapt to low-growth conditions — such as Cuba after the fall of the Soviet Union, and Japan — also hold lessons.

The La Via Campesina movement is an example of a political movement aligned with degrowth values, as well as the municipalist and communalist movements and governments in progressive cities such as Barcelona or Zagreb. Better understanding is needed of the obstacles faced by governments that have ecological ambitions, such as those elected this year in Chile and Colombia.

Strong social movements are necessary. Forms of decision-making that are decentralized, small-scale and direct, such as citizens’ assemblies, would help to highlight public views about more equitable economies13.