Is green economics the answer to mean economics?

The new economics ... isn’t really economics at all. It’s a new view of the world
— Christine Berry, New Economics Foundation
As in past times of crises, disparate groups have come together to propose a new solution to an epochal challenge
— The Green New Deal Group

Scientists can no longer prevent climate and ecological breakdown. Decades of ringing the alarm bell, largely ignored by the media and Government, has resulted in astonishing levels of grief within our community. Climate scientists have spoken out about this but others who work with nature and environment have born witness to spiralling degradation and felt powerless to act. 

The UK Government has pledged to implement policies to reach net zero carbon by 2050 which is twenty years too late and besides, they are way off target. Some of us, me included, have given up science and dedicated ourselves to speaking out. There will come a time again, soon I hope, when the huge infrastructure, economic and social changes required to co-exist harmoniously with our natural world will need us to turn our attention back to solving the practical issues but for now we need to give close examination to damaging cultural certainties and possible opportunities for change. The Green New Deal and economics for sustainable prosperity are some of these opportunities. I hear about them a lot but don’t really understand them, so I’m going to try and unpick these ideas here so everyone can get it. 

There is a dawning recognition that a new kind of economy is needed: fairer, more inclusive, less exploitative, less destructive of society and the planet.
— Michael Jacobs, a former prime ministerial adviser to Gordon Brown

The Green New Deal (GND) was inspired by Roosevelt’s New Deal, a governance framework designed to get the American economy back on track after the Great Depression during the 1930s. The original creators reflect a wide range of expertise relating to the 2008 financial, energy and environmental crises. Simply put, the GND is an alignment of policy, regulations and economic targets that would wipe out our fossil fuel dependence by creating thousands of jobs to build the infrastructure required for clean energy and transport. It goes further and aims to protect air and water quality and ensure access to healthy food. My interpretation is that it also examines the welfare of the weakest and most vulnerable members of society as indicators of success and relies less on the financial sector – a far cry from continually scrabbling after increased GDP as a measure of a population’s wellbeing.

After the financial crisis of 2008, the British public bailed out the bankers at no benefit to anyone other than the bankers. Many have suffered greatly under austerity particularly the poor, women, racial and ethnic minorities, children, single parents, and people with disabilities. The changes to taxes and benefits since 2010 have been highly regressive, and the policies have taken the highest toll on those least able to bear it. The government says everyone’s hard work has paid off, but according to the Equalities and Human Rights Commission, while the bottom 20% of earners will have lost on average 10% of their income by 2021/22 as a result of these changes, top earners have actually come out ahead. I don’t know about you but I’m pretty angry about that. 

If you have not read the report by Professor Philip Alston, the UN Special Rapporteur on extreme poverty and human rights, I urge you to do so. It is shocking, concluding that if existing policies do not change many in our society will lead lives that are ‘solitary, poor, nasty, brutish, and short’ and that compassion and mutual concern that has long been a part of the British tradition have been outsourced. It continues that ‘public spaces and institutions that previously brought communities together, such as libraries, community and recreation centres, and public parks, have been steadily dismantled and undermined.’ A fact that we can all testify too.

[The] 2008 financial crisis and the previously unthinkable government interventions that halted it have discredited two central neoliberal orthodoxies: that capitalism cannot fail, and that governments cannot step in to change how the economy works
— Michael Jacobs, a former prime ministerial adviser to Gordon Brown

Neoliberalism has dominated governance for the last forty years. This is essentially the idea that free market economics (buying and selling stuff to you and me) should be allowed at will with limited government interference and results in the public sector supporting private corporations which is why our healthcare, education and welfare systems have suffered the consequences. The concept has many critics and if you want to understand it better The Conversation has written an evidence based inter-disciplinary article on the origins and social impacts of such policies. 

An economy based on buying and selling stuff which in turn is dependent on fossil fuels and natural resources is also a big problem for the environment and since the financial crash in 2008, there has been a return to emissions growth in Europe and America. When I speak at public events, I encourage people to look around them and think about what everything in the room is made from. The TV looks like glass and electronics but is actually sand, oil and a variety of metals such as copper. The chair they’re sitting on maybe plastic in which case it’s made with oil again or steel, covered with cotton or possibly timber. In other words, everything we buy comes from a natural resource and currently nearly all the production requires fossil fuels.

Neoliberlism and trade as the basis of an economy requires vast and unsustainable use of the world’s natural resources. There are plenty of solutions to this such as cradle to cradle design and a circular economy if we adopt them fast enough but free trade alone has let down the most vulnerable in our society so alternatives need exploration and serious thought. 

The New Economic Foundation was one of the original architects of the Green New Deal in 2008. Last year, the concept was adopted in America by Representative Alexandria Ocasio-Cortez and Senator Ed Markey and the US Green New Deal brings ambitious action on climate change and biodiversity loss together with a new jobs guarantee and social support such as free healthcare. It addresses economic, social and environmental crises together and now there are many in the UK trying to revive the movement for people and planet. 

Currently the GND is an idea and a very good one but the nitty-gritty of how to transition and fund the campaign is yet to be worked out. There’s no shortage of talk about the potential of greener technologies and long-term environmental targets, but change is needed now and The Rapid Transition Alliance want a bigger conversation on the immediate possibilities of rapid transition and more sustainable behaviour.

[The Great New Deal will create] a ‘carbon army’ of workers [and] will be part of a wider shift from an economy narrowly focused on financial services and shopping to one that is an engine of environmental transformation.
— The Green New Deal

The Centre for the Understanding of Sustainable Prosperity (CUSP) is another exciting initiative you should know about. The research carried out here drills into the core of the destructive political and economic models adopted here in the UK. The Green New Deal alone may not bring about the major institutional reform we need for greener, kinder and more representative governance but CUSP are challenging the heart of our political systems in exciting and innovative ways.

The science and technology needed to power an energy-and-transport revolution are already in place. But at present the funds to propel the latest advances into full-scale development are not.
— Green New Deal

Short-term thinking and a lack of inter-generational responsibility in current policy making are degrading our planetary resources year on year. So how do we regulate for vulnerable groups struggling to make it until the end of the month whilst ensuring future generations can experience a good quality of life?

We need long-term politics that not only deal with immediate issues but also account for the time-lag effects of, as an environmental example, CO2 emissions, biodiversity loss and flooding the markets with disposable plastic or, as a welfare example, cutting funding for early-years education and maternal health. The current structure of our Government is crisis management, cherry-picking low hanging fruit for problem solving that benefits the most influential rather than the most in need.

Professor William Nordhaus of Yale University is a recent recipient of the Nobel Prize for Economic Sciences. He won the prize for ‘integrating climate change into long-run macroeconomic analysis’ but the development of the economy he proposes, thought to be adopted by our Government, relies heavily on growth and the burning of fossil fuels. His assumption being that future generations will be wealthier and therefore more able to cope with the extreme adaptations required to combat the consequences of global heating. In fact, his model comfortably allows the fossil fuel hungry UK economy to grow to the extent that the planet reaches a whopping 3.5 degrees increase in temperature. He does not account for the extinction of nearly all other species or large parts of the planet becoming uninhabitable and the dire consequences for the majority of humanity. In Nordhaus’s economic model the displacement and starvation of millions of people barely registers a blip in GDP.

Finance will have to be returned to its role as servant, not master, of the global economy, to dealing prudently with people’s savings and providing regular capital for productive and sustainable investment.
— Green New Deal

Long-term political thinking requires a transformation of government institutions and our electoral systems. CUSP delves deeper into this and explores how to reconfigure governance for the environment and social justice not just growth and goes further by challenging the concept of growth for growth’s sake. But more importantly, how has British and more widely, global economics created a crisis of personal meaning.

There is No Planet B is a book about saving the world but its core message examines another emergency which is a loss of ethical leadership and values in our society. Religion has been superseded by science as the major influencing tool for the many yet lacks the capacity for individuals to find personal meaning internally rather than bought off the shelf. Can a new economy designed around people rather than GDP solve such issues?

Populism is on the rise and currently exploited by malevolent characters who are offering disengenious solutions to parts of the electorate in despair. There are many, particularly those affected by austerity, who are looking for a saviour. Rather than abandon themselves to the far right we could offer them a new story of hope and sustainable prosperity. The Green New Deal offers jobs, social justice and the end of climate and ecological breakdown. Mortality, environmentalism and political action could acquire a common logic, that could fuel a participatory, egalitarian, green populism. There may even be scope to embrace broader use of Citizen’s Assemblies, as demanded by Extinction Rebellion, as a means of regaining a more meaningful democracy where everyone has a voice. A co-creation of the Green New Deal and long-term political innovation gives me great hope for the future.