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Insights 5 Jul 2010

Reason to be Cheerful?

By Gary Kendall

Like many colleagues in the sustainability field, I continue to struggle with the notion that economic growth – and the ever-increasing consumption it implies – necessarily drives improvements in quality of life and delivers poverty alleviation. This is not to say that GDP is an irrelevance, only that it is increasingly recognised as an impoverished metric for assessing human progress, given that it measures only quantity and is silent on the distribution of economic benefits, not to mention costs. However, particularly when discussing development issues in high growth emerging economies like China and India, I’ve experienced the discomfort of challenging this basic premise from the moral low-ground of a privileged life in northern Europe.

So, at the ACCA (Association of Chartered Certified Accountants) Friday Forum last week on Ecological Footprinting, I was interested to hear Tony Greenham of the New Economics Foundation (NEF) – the organisation whose Impossible Hamster comically demonstrates the fallacy of growth without limits – asserting that for every $100 of GDP, roughly 60¢ reaches the poorest 10 percent of the population. In other words, the pursuit of GDP growth as a development tool effectively says: “We’re going to make the poor wealthier by making the already wealthy obscenely wealthy”!

Oliver Greenfield of WWF-UK’s Sustainable Business unit spoke eloquently of the One Planet Living concept that invites us to think in terms which are far more meaningful than tonnes of CO2, gallons of water, or other abstractions that leave non-technical citizens cold. It’s a powerful idea that we should all strive to live a “one planet existence”, especially when I reflect that here in the UK, for instance, we currently lead a three planet lifestyle, which means that if our consumption patterns were adopted worldwide, we would require three Earth’s to sustain us. In the US, it’s five planets.

And linking this back to quality of life, there is simply no correlation between the environmental impact of our lives and our cheerfulness. NEF’s Happy Planet Index – a composite indicator that attempts to quantify human well-being and environmental impact – places Costa Rica at number one in the world, with the UK languishing 74th out of the 143 nations assessed, and the US floundering in 114th place, which is pretty desperate for a country ranked number one by far according to GDP alone.

Paul Cooper of environmental consultancy Best Foot Forward presented a compelling case for placing a cost – and properly accounting for that cost – on society’s ecological footprint. We are already starting to internalise the cost of CO2 emissions in economic decisions, with policy instruments like carbon taxation and emissions trading schemes taking root in many parts of the world. Only by expanding this effort to encompass the totality of humanity’s natural resource consumption can we begin to address what common sense tells us we must: infinite growth cannot be sustained in a finite world.

My reason to be cheerful? The collective challenge ahead – nothing less than transforming business and the way societies produce and consume – is intellectually and practically far more exciting than the modus operandi, which is to worship at the altar of the Impossible Hamster.

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