The Economics of Enough_ How to Run the Economy as if the Future Matters - Diane Coyle [40]
Adopting comprehensive investment as an additional guideline for policy, and one to trump GDP if something that raises GDP would reduce comprehensive wealth, is clearly essential. It isn’t the same as the answer to the question of how much consumption needs to fall now to avert catastrophic climate change. I suspect the answer to this is, as much as is politically feasible, and Nicholas Stern’s 1 percent of global GDP (1.8 percent of the developed world’s GDP) is an upper limit on the feasible. However, switching the policy focus to a measure taking account of the future, from one that only looks backward, would be a huge stride toward sustainability, both environmental and social. Evidence about long-term impacts from new statistics might make for a more constructive political debate.
Also essential is reform of the scientific and governmental institutions responsible for gathering the evidence on which scientific research is based. Not only the IPCC but also other UN environmental agencies, and national bodies and universities, have suffered a damaging loss of credibility recently thanks entirely to the way they’ve been run and their lack of transparency. It’s always hard to rebuild a damaged reputation, so there is a lot of work to be done by the climate change establishment in order to regain trust and create the political conditions for a different approach to spending and consuming. One of the lessons of this chapter, one of the reasons for dwelling on the bitter politics of the climate change debate, is that institutions matter enormously for the kinds of policies that can be introduced. The evidence and arguments relevant to policy decisions are completely entwined with the processes for reaching decisions, not just in the case of the environmental questions but also of all the social issues addressed in this book. The processes—the institutions or people making the decisions and the rules according to which they operate and engage with the wider public—affect how everybody else evaluates the issues. A wise and kindly dictator could not decide how much GHG emissions and therefore energy use need to be cut, on behalf of everyone else, because even if he got the calculation exactly right he would not have persuaded people to alter their behavior.
CONCLUSIONS
Sustainability is about how we weigh up the present against the future. How do we ensure that we have a sufficiently long-term focus in our everyday decisions? It takes us back to the measurement question of chapter 1 and what more and enough ought to mean.
It has been a damaging error to steer the assessment of welfare, and public policy, by looking at measures of how much is produced per year—that is, measures of income. Instead, we need measures looking also at changes in value, that is, measures of wealth, both natural and financial (the subject of the next chapter). This apparently small change of focus—after all, don’t income and wealth go hand in hand?—is in fact vital because it changes the time horizon over which we assess our decisions and policies. A sustainable economy will require us to set policies with reference to a much longer time frame than at present.
We do want more in order to be happier—but how much more is feasible without destroying the natural and social environment, and how much more is fair to the people who will come after us? The answers to these questions point us toward sustainability.
However, the dimensions of unsustainability go much wider than the environmental issues, important as these are. The following chapters go on to look at other features of our economic arrangements that also pay too little regard to the long term.
The next is the unsustainable burden of debt, especially government debt. Debt should not be mistaken for a merely financial indicator. It is an indicator of social obligations and excess debt is a sign