Economy vs environment
Q: What would actually happen if any significant proportion of the population suddenly took it into their head to reduce their environmental impact?
A: The economy would collapse.
If you look at the post-2008 recession, it is striking how much damage was done by relatively small changes in GDP. Of the highly developed nations, the UK (among the OECD countries, a middling performer at the time) was so badly hit that it experienced a loss of a little over 2.5% since the end of 2007.
What? 2.5% in two years? A bit over 1% a year? What’s the big deal? Yes, I know, losing 1/80th of my income would not be a good thing, but how can this be enough to do so much damage to an economy? The answer is, the economy is a system, and, just as your car would simply stop working if you shrank each of its engine components by 2.5%, so the economy operates within basic, and really very narrow, limits. By the end of 2009, foreclosures had topped 4 million, and 14% of homeowners with mortgages were either in foreclosure or behind on payments. Much the same percentage of the population was homeless, of which about 40% were children.
So what would happen if, say, 20% of the population managed to knock 50% off their environmental impact? Or 50% of the population managed to knock 20%? Surely that would be an excellent start. Well, from an environmental point of view, perhaps. But if that translated into a 10% fall in consumer spending, where would that leave the economy? Consumer spending represents about 50%-70% of German, Japanese, British and US GDPs. So a 50% fall in spending by 20% of all individuals (or vice versa) would cut these economies by somewhere between 5% and 7% of GDP. In other words, even such a small and apparently beneficent change by a small minority would reek more economic havoc than the post-2008 recession!
So, we all get the environmental bug, and the economy folds. And with it go (as the post-2008 recession also showed) investment in green technology and environmental solutions of all kinds. Not everything, but far too much to support the real greening of industry. And of course, investors would be heading for the safe, short-term returns. Governments everywhere would try to compensate for the shortfall with new spending – and so shoring up the very economic activity those who had cut their impact had hoped to eliminate.
This isn’t a criticism of taking action, of course. But it is the old problem of reform versus revolution. If you want only that the system work a bit more benignly, you need only reform the system so that it loses its more unpleasant foibles. But if the problem you are worried about is inherent in the system, this isn’t a possible answer. The only way to fix systematic problems is to change the system in systematic ways.
That in turn is a political issue. Our politicians are of course firmly committed to constant economic growth, but that is not an irreversible condition. But two things are fundamental.
Firstly, we must develop a credible explanation of this fatal link between economy and environment, and make it as central a plank of future political discourse and policy-making as growth and consumerism have been since the Second World War.
Secondly, we must define a programme for migrating our existing economy to a sustainable form. This cannot wait for 'the market' or the actions of private corporations, whose interests will never be to change themselves while there is still money to be made. What is more, it cannot rely on allowing businesses to freely invest in anything that makes money, regardless of its environmental impact.
Governments and local organisations must start to plan the elimination of environmentally destructive economic activity, undo the vicious circle of capital expansion that drives consumerism, obsession economic growth and the disregard of the poor and weak.
Or to put this point in more radical terms, if we are to prevent the end of the human world, we must end the world of ceaseless growth and profit.