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Prosperity Without Growth? Prosperity the Transitionthe to a Sustainable Economy Prosperity without growth? The transition to a sustainable economy to a sustainable The transition www.sd-commission.org.uk Prosperity England 2009 0DLQRIßFH 55 Whitehall London SW1A 2HH without 020 7270 8498 [email protected] Scotland growth? Osborne House 1 Osbourne Terrace, Haymarket Edinburgh EH12 5HG 0131 625 1880 [email protected] www.sd-commission.org.uk/scotland Wales Room 1, University of Wales, University Registry, King Edward VII Avenue, Cardiff, CF10 3NS Commission Development Sustainable 029 2037 6956 [email protected] www.sd-commission.org.uk/wales Northern Ireland Room E5 11, OFMDFM The transition to a Castle Buildings, Stormont Estate, Belfast BT4 3SR sustainable economy 028 9052 0196 [email protected] www.sd-commission.org.uk/northern_ireland Prosperity without growth? The transition to a sustainable economy Professor Tim Jackson Economics Commissioner Sustainable Development Commission Acknowledgements This report was written in my capacity as Economics Commissioner for the Sustainable Development Commission at the invitation of the Chair, Jonathon Porritt, who provided the initial inspiration, contributed extensively throughout the study and has been unreservedly supportive of my own work in this area for many years. For all these things, my profound thanks. The work has also inevitably drawn on my role as Director of the Research group on Lifestyles, Values and Environment (RESOLVE) at the University of Surrey, where I am lucky enough to work with a committed, enthusiastic and talented team of people carrying out research in areas relevant to this report. Their research is evident in the evidence base on which this report draws and I’m as grateful for their continuing intellectual VXSSRUWDV,DPIRUWKHßQDQFLDOVXSSRUWRIWKH(FRQRPLFDQG6RFLDO5HVHDUFK&RXQFLO *UDQW1R5(6 which keeps RESOLVE going. Though written as an individually authored thinkpiece, this study builds on work from right across the Commission. In particular, it draws extensively from the work programme on Redefining Prosperity which has EHHQGHYHORSHGDWWKH6'&RYHUWKHODVWßYH\HDUV VHH$SSHQGL[IRUDVXPPDU\RIUHFHQWZRUN 7KURXJKRXW WKLVSHULRGP\IHOORZFRPPLVVLRQHUVSDVWDQGSUHVHQWt-DQ%HEELQJWRQ%HUQLH%XONLQ/LQGVH\&ROERXUQH$QQD &RRWH3HWHU'DYLHV6WHZDUW'DYLHV$QQ)LQOD\VRQ7HVV*LOO$ODQ.QLJKW7LP/DQJ$OLFH2ZHQ$QQH3RZHU Hugh Raven, Tim O’Riordan, Waheed Saleem and Becky Willis – have been generous with their time, attending workshops, offering critical commentary and reviewing various drafts of this document. Special thanks are owed to all those who contributed directly to the Redefining Prosperity workshops, in SDUWLFXODU6LPRQHGp$OHVVDQGUR)UHGHULF%RXGHU0DGHOHLQH%XQWLQJ,DQ&KULVWLH+HUPDQ'DO\$ULN'RQGL 3DXO(NLQV7LP.DVVHU0LULDP.HQQHW*X\/LX7RPPDVR/X]]DWL-HVVH1RUPDQ$YQHU2IIHU-RKQ2p1HLOO(ONH 3LUJPDLHU7RP3UXJK+LOGH5DSS-RQDWKDQ5XWKHUIRUG-LOO5XWWHU=LD6DUGDU.DWH6RSHU6WHYH6RUUHOO1LFN Spencer, Peter Victor, Derek Wall, David Woodward and Dimitri Zenghelis. $QXPEHURIRWKHUFROOHDJXHVDQGIULHQGVKDYHKHOSHGDQGDGYLVHGtVRPHWLPHVZLWKRXWHYHQNQRZLQJLW 3DUWLFXODUWKDQNVDUHGXHWR0LFN&RPPRQ$QG\'REVRQ$QJHOD'UXFNPDQ,DQ*RXJK%URQZ\Q+D\ZDUG/HVWHU +XQW1LF0DUNV0LULDP3HSSHU$OLVRQ3ULGPRUHDQG-RKQ8UU\ Finally, my thanks are due to the SDC Secretariat for their boundless expertise and enthusiasm throughout the SURMHFW6XH'LEE6DUD(SSHO$QGUHZ/HH5KLDQ7KRPDV-DFRSR7RUULWL-RH7XUUHQWDQG.D\:HVWLQSDUWLFXODU KDYHEHHQDFRQVWDQWVRXUFHRILQYDOXDEOHDGYLFHWKURXJKRXW,RZHDVSHFLDOGHEWRIJUDWLWXGHWR9LFWRU$QGHUVRQ whose wealth of intellectual experience and unswerving personal support have been indispensable at every turn. Contents )RUHZRUG Summary 6 1 Introduction 15 2 The Age of Irresponsiblity 19 3 5HGHßQLQJ3URVSHULW\ 29 4 The Dilemma of Growth 37 5 The Myth of Decoupling 47 6 Confronting Structure 59 7 Keynesianism and the ‘Green New Deal’ 67 8 Macro-economics for Sustainability 75 9 Flourishing – within limits 85 10 *RYHUQDQFHIRU3URVSHULW\ 93 11 Steps towards a Sustainable Economy 101 Appendix 17KH6'&o*UHHQ6WLPXOXVp3DFNDJH Appendix 27RZDUGVD6XVWDLQDEOH0DFUR(FRQRP\ 5HIHUHQFHV (QGQRWHV Foreword Every society clings to a myth by which it lives. Ours momentous challenge of stabilising concentrations LV WKH P\WK RI HFRQRPLF JURZWK )RU WKH ODVW ßYH RI FDUERQ LQ WKH JOREDO DWPRVSKHUH $QG ZH IDFH decades the pursuit of growth has been the single these tasks with an economy that is fundamentally most important policy goal across the world. The broken, in desperate need of renewal. JOREDOHFRQRP\LVDOPRVWßYHWLPHVWKHVL]HLWZDV In these circumstances, a return to business half a century ago. If it continues to grow at the as usual is not an option. Prosperity for the few VDPHUDWHWKHHFRQRP\ZLOOEHWLPHVWKDWVL]H founded on ecological destruction and persistent E\WKH\HDU social injustice is no foundation for a civilised society. This extraordinary ramping up of global economic Economic recovery is vital. Protecting people’s jobs – activity has no historical precedent. It’s totally at and creating new ones – is absolutely essential. But RGGV ZLWK RXU VFLHQWLßF NQRZOHGJH RI WKH ßQLWH we also stand in urgent need of a renewed sense resource base and the fragile ecology on which RIVKDUHGSURVSHULW\$FRPPLWPHQWWRIDLUQHVVDQG ZH GHSHQG IRU VXUYLYDO $QG LW KDV DOUHDG\ EHHQ àRXULVKLQJLQDßQLWHZRUOG accompanied by the degradation of an estimated Delivering these goals may seem an unfamiliar RIWKHZRUOGpVHFRV\VWHPV or even incongruous task to policy in the modern For the most part, we avoid the stark reality age. The role of government has been framed so of these numbers. The default assumption is that narrowly by material aims, and hollowed out by a t ßQDQFLDO FULVHV DVLGH t JURZWK ZLOO FRQWLQXH misguided vision of unbounded consumer freedoms. LQGHßQLWHO\1RWMXVWIRUWKHSRRUHVWFRXQWULHVZKHUH The concept of governance itself stands in urgent a better quality of life is undeniably needed, but need of renewal. even for the richest nations where the cornucopia But the current economic crisis presents us with of material wealth adds little to happiness and a unique opportunity to invest in change. To sweep is beginning to threaten the foundations of our DZD\ WKH VKRUWWHUP WKLQNLQJ WKDW KDV SODJXHG wellbeing. society for decades. To replace it with considered The reasons for this collective blindness are easy policy capable of addressing the enormous challenge HQRXJKWRßQG7KHPRGHUQHFRQRP\LVVWUXFWXUDOO\ of delivering a lasting prosperity. reliant on economic growth for its stability. When For at the end of the day, prosperity goes beyond growth falters – as it has done recently – politicians material pleasures. It transcends material concerns. panic. Businesses struggle to survive. People lose It resides in the quality of our lives and in the health WKHLUMREVDQGVRPHWLPHVWKHLUKRPHV$VSLUDORI and happiness of our families. It is present in the recession looms. Questioning growth is deemed to strength of our relationships and our trust in the be the act of lunatics, idealists and revolutionaries. community. It is evidenced by our satisfaction at But question it we must. The myth of growth work and our sense of shared meaning and purpose. has failed us. It has failed the two billion people It hangs on our potential to participate fully in the ZKR VWLOO OLYH RQ OHVV WKDQ D GD\,W KDV IDLOHG life of society. the fragile ecological systems on which we depend 3URVSHULW\ FRQVLVWV LQ RXU DELOLW\ WR àRXULVK for survival. It has failed, spectacularly, in its own as human beings – within the ecological limits of terms, to provide economic stability and secure DßQLWHSODQHW7KHFKDOOHQJHIRURXUVRFLHW\LVWR people’s livelihoods. create the conditions under which this is possible. It 7RGD\ZHßQGRXUVHOYHVIDFHGZLWKWKHLPPLQHQW is the most urgent task of our times. end of the era of cheap oil, the prospect (beyond the recent bubble) of steadily rising commodity prices, Tim Jackson WKHGHJUDGDWLRQRIIRUHVWVODNHVDQGVRLOVFRQàLFWV Economics Commissioner RYHUODQGXVHZDWHUTXDOLW\ßVKLQJULJKWVDQGWKH Sustainable Development Commission, March 2009 Summary Economic growth is supposed to deliver prosperity. Higher incomes should mean better choices, richer lives, an improved quality of life for us all. That at least is the conventional wisdom. But things haven’t always turned out that way. *URZWKKDVGHOLYHUHGLWVEHQHßWVDWEHVWXQHTXDOO\ urgent need of economic development. $ßIWKRIWKHZRUOGpVSRSXODWLRQHDUQVMXVWRI %XWLWDOVRTXHVWLRQVZKHWKHUHYHUULVLQJLQFRPHVIRU global income. Inequality is higher in the OECD WKHDOUHDG\ULFKDUHDQDSSURSULDWHJRDOIRUSROLF\LQ QDWLRQV WKDQ LW ZDV \HDUV DJR $QG ZKLOH WKH a world constrained by ecological limits. ULFK JRW ULFKHU PLGGOHFODVV LQFRPHV LQ :HVWHUQ Its aim is not just to analyse the dynamics of countries were stagnant in real terms long before an emerging ecological crisis that is likely to dwarf the recession. Far from raising the living standard the existing economic crisis. But also to put forward for those who most needed it, growth let much of FRKHUHQWSROLF\SURSRVDOV %R[ WKDWZLOOIDFLOLWDWH the world’s population down. Wealth trickled up to the transition to a sustainable economy. the lucky few. In short, this report challenges the assumption Fairness (or the lack of it) is just one of several of continued economic expansion in rich countries reasons to question the conventional formula for DQGDVNVLVLWSRVVLEOHWRDFKLHYHSURVSHULW\ZLWKRXW DFKLHYLQJSURVSHULW\$VWKHHFRQRP\H[SDQGVVRGR JURZWK" the resource implications associated with it. These impacts are already unsustainable. In the last quarter of a century the global economy has doubled,
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