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Tuesday, 26 July 2011 13:20

Rethinking Growth and the Green Economy

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Despite two decades of policy discussions since the UN Conference on Environment and Development in Rio, policymakers have failed to apply the recommendations outlined in its comprehensive implementation plan, Agenda 21. In the build up to the upcoming Rio+20 summit, many civil society groups remain deeply sceptical about the possibility of creating a ‘green economy’ without first rethinking some of the widely accepted fundamentals of economic policy.

Of these, the status of economic growth as a panacea for progress and prosperity has been a major point of contention between campaigners and policymakers for decades, and one that requires urgent resolution if ‘sustainable development’ is to become a practical reality in the 21st Century.

It is widely accepted that growth can be extremely beneficial when its proceeds are effectively redistributed, particularly in relation to poverty reduction. But the growth of the global economy is dependent on rates of resource consumption and waste that the planet cannot sustain. Humanity is consuming natural resources and generating destructive externalities 40 percent faster than nature can replace them or reabsorb the resulting waste. Any attempts to decouple this excessive throughput of resources from economic growth are likely to be far outweighed by increases in population and aggregate levels of consumption.

Just as challenging are the unequal power structures that the pursuit of growth engenders, and the many detrimental consequences of prioritising growth and consumerism before equity and other pressing social concerns. Apart from the ongoing failure to tackle climate change and resource depletion, one of the most problematic outcomes of pursuing growth has been decades of deregulation. The global banking crisis of 2008 was an inevitable consequence of such policies, and one that continues to have a devastating impact on the poor and vulnerable.

Whilst the profit margins of large corporations and the income of high-net-worth individuals continued to soar after the crisis, an estimated 100 million people were pushed further into poverty in 2009 and a record number of people suffered from hunger. Not long afterwards, it became painfully apparent that the multi-trillion dollar bank bailouts had compromised public finances in many European countries, often with dire implications for employment and government spending on public services.

The costs to society and democracy of maintaining a ‘light touch’ approach to regulating markets are also significant. The pursuit of growth requires an endless stream of consumers to buy products from a relatively small group of very large corporations. To facilitate this process, corporate advertising is ever-present and increasingly intrusive, promoting materialistic desires that shape attitudes and encourage overconsumption, funded by spiralling levels of personal debt. Corporate profitability is further enhanced by building obsolescence and disposability into consumer products, and by encouraging unnecessary waste which places additional pressure on the natural world and its dwindling resources.

Multinational corporations have benefited most from the excessive commercialisation of society, many of which are now larger and more powerful than sovereign states. Their financial leverage and political influence is perhaps the single most persistent obstacle to reversing globalised patterns of unsustainable consumption and overproduction, and their lobbying power over national and global governance has helped maintain the status quo. Unless this trend is reversed it will be difficult, if not impossible, for governments to pursue a more environmentally and socially sustainable agenda.

Global Reform

The aggressive pursuit of economic growth by governments can ultimately hinder progress on implementing Agenda 21. Creating a ‘green economy’ means more than investing in green technologies and renewable energy, and requires addressing the more fundamental issue of unequal power relations that drive economies, shape public policy and influence societies.

An important first step in creating a more equitable and sustainable world is to substitute the imperative for economic growth with more socially and environmentally sound policy objectives. These should include securing basic human needs for all; significantly reducing carbon emissions; enabling greater civic participation in decision-making at the local, national and global level; strictly regulating the activities and influence of multinational corporations; promoting agroecological food production; stimulating local economies; and shifting consumption patterns to emphasise sufficiency, re-use and maintenance.

All of these policies demand greater economic sharing - the redistribution of economic wealth and power downwards to enable public and environmental concerns to take priority over corporate interests. Stressing the need for governments to prioritise economic sharing and deemphasise growth at the 2012 Earth Summit can help articulate the principles that should inform environmental and development policy over the coming decade. Rio+20 might be one of the few remaining opportunities for policymakers to respond to the growing demands of civil society, and to finally end decades of inertia in the pursuit of ‘business as usual’.

Rajesh Makwana, Director of Share The World’s Resources

Last modified on Friday, 05 August 2011 16:01

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