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Prosperity Without Growth?Transition the Prosperity to a Sustainable Economy 2009

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Prosperity Without Growth?Transition the Prosperity to a Sustainable Economy 2009 Prosperity without growth? The transition to a sustainable economy to a sustainable The transition www.sd-commission.org.uk Prosperity England 2009 (Main office) 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 support as I am for the financial support of the Economic and Social Research Council (Grant No: RES-152-25-1004) 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 been developed at the SDC over the last five years (see Appendix 1 for a summary of recent work). Throughout this period, my fellow commissioners past and present – Jan Bebbington, Bernie Bulkin, Lindsey Colbourne, Anna Coote, Peter Davies, Stewart Davies, Ann Finlayson, Tess Gill, Alan Knight, Tim Lang, Alice Owen, Anne Power, 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 particular Simone d’Alessandro, Frederic Bouder, Madeleine Bunting, Ian Christie, Herman Daly, Arik Dondi, Paul Ekins, Tim Kasser, Miriam Kennet, Guy Liu, Tommaso Luzzati, Jesse Norman, Avner Offer, John O’Neill, Elke Pirgmaier, Tom Prugh, Hilde Rapp, Jonathan Rutherford, Jill Rutter, Zia Sardar, Kate Soper, Steve Sorrell, Nick Spencer, Peter Victor, Derek Wall, David Woodward and Dimitri Zenghelis. A number of other colleagues and friends have helped and advised – sometimes without even knowing it! Particular thanks are due to Mick Common, Andy Dobson, Angela Druckman, Ian Gough, Bronwyn Hayward, Lester Hunt, Nic Marks, Miriam Pepper, Alison Pridmore and John Urry. Finally, my thanks are due to the SDC Secretariat for their boundless expertise and enthusiasm throughout the project. Sue Dibb, Sara Eppel, Andrew Lee, Rhian Thomas, Jacopo Torriti, Joe Turrent and Kay West in particular have been a constant source of invaluable advice throughout. I owe a special debt of gratitude to Victor Anderson, whose wealth of intellectual experience and unswerving personal support have been indispensable at every turn. Contents Foreword 5 Summary 6 1 Introduction 15 2 The Age of Irresponsiblity 19 3 Redefining Prosperity 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 1 0 Governance for Prosperity 93 11 Steps towards a Sustainable Economy 101 Appendix 1 The SDC ‘Green Stimulus’ Package 108 Appendix 2 Towards a Sustainable Macro-Economy 110 References 113 Endnotes 122 Foreword Every society clings to a myth by which it lives. Ours momentous challenge of stabilising concentrations is the myth of economic growth. For the last five of carbon in the global atmosphere. And we face 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. global economy is almost five times the size it was 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 same rate the economy will be 80 times that size founded on ecological destruction and persistent by the year 2100. 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 odds with our scientific knowledge of the finite we also stand in urgent need of a renewed sense resource base and the fragile ecology on which of shared prosperity. A commitment to fairness and we depend for survival. And it has already been flourishing in a finite world. accompanied by the degradation of an estimated Delivering these goals may seem an unfamiliar 60% of the world’s ecosystems. 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 – financial crises aside – growth will continue misguided vision of unbounded consumer freedoms. indefinitely. Not just for the poorest countries, where 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 away the short-term thinking that has plagued wellbeing. society for decades. To replace it with considered The reasons for this collective blindness are easy policy capable of addressing the enormous challenge enough to find. The modern economy is structurally 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 their jobs and sometimes their homes. A spiral of 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 who still live on less than $2 a day. It has failed life of society. the fragile ecological systems on which we depend Prosperity consists in our ability to flourish for survival. It has failed, spectacularly, in its own as human beings – within the ecological limits of terms, to provide economic stability and secure a finite planet. The challenge for our society is to people’s livelihoods. create the conditions under which this is possible. It Today we find ourselves faced with the imminent 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 the degradation of forests, lakes and soils, conflicts Economics Commissioner over land use, water quality, fishing rights and the 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. Growth has delivered its benefits, at best, unequally. urgent need of economic development. A fifth of the world’s population earns just 2% of But it also questions whether ever-rising incomes for global income. Inequality is higher in the OECD the already-rich are an appropriate goal for policy in nations than it was 20 years ago. And while the a world constrained by ecological limits. rich got richer, middle-class incomes in Western 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 coherent policy proposals (Box 1) that will facilitate 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 and asks: is it possible to achieve prosperity without achieving prosperity.
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