Shifting Our Economies to Sustain Our Lives
The very purpose of a healthy economy is to sustain human life, daily activity, and advance the prosperity of its citizens. If an economy doesn’t achieve this anymore, the economy would be considered failed. Humans’ historic and current consumption, production, trade, and investment patterns, however, have exploited the planet’s and our economies’ resources far beyond sustainability. We have created an unhealthy global economy.
For a sustainable economy, we need to examine the planetary boundaries in which it exists. The Doughnut Economics framework, developed by Kate Raworth, illustrates the requirements for a thriving and sustainable economy. It depicts the levels of planetary boundaries that must not be breached in order to sustain the ecosystems that support humans and all other life forms with whom we share the planet.
Figure 1 below shows the nine identified planetary systems that need to be within their “safe zones” (in green) in order to sustain life. Currently, four of these processes (rate of biodiversity loss, climate change, human interference with the nitrogen cycle, and land conversion) have already exceeded their safe levels (in red), and there is mounting pressure on the remaining five. This table gives a numeric overview of ideal and current values.
Fig. 1:
We have an opportunity, but an urgent one
The severity of our current climate condition calls for decisive and swift action by governments, corporations, and individuals alike – at local, national, and global levels.
In an effort to help fight our climate emergency, some of the world’s leading scientists have identified several actions and initiatives we can take to help create policy and economic reforms:
Replacing the measure for economic “wellbeing” from GDP to GPI
Countries need to change the way they measure a nation’s economic wellbeing.
Since around World War II, governments have used a country’s GDP (Gross Domestic Product) to evaluate how well the nation is doing. The problem is the GDP focuses on the monetary amount of goods and services produced, consumption levels, and government spending. It ignores the widening gap between rich and poor, the depletion of natural resources, and the degradation of our biosphere.
GDP absurdly depicts it as a good sign when a country invests in wars or spends money to help clean up natural and climate disasters (such as floods, wildfires, or tropical storms). It claims an enhanced standard of living when people are spending more on medical insurance or education, even without receiving any advancement in education or health.
Economists globally are proposing that instead of using the outdated GDP measure, the Genuine Progress Indicator (GPI) should be tracked. With the GPI, an economy’s net benefits are assessed, which takes into account all positive activity minus any negative activity and costs. GPI includes the economic benefits reaped from unpaid labor, green and renewable energies, built infrastructure, and the economic and social advancements stemming from education.
While several nations have started to incorporate the measure of GPI, government leaders must be urged to adopt this metric into official economic policy as quickly as possible. Business leaders, as well as individuals and grassroots organizations, can help demand this change. For a resource on how to get involved and example letters you can draft to your local governments, visit the Ecology Democracy Network’s website.
Taxation needs to include external costs for production
Governments must adjust their taxation to account for ancillary costs of produced or traded goods and services. This includes costs that are currently unaccounted for in most tax policies, such as climate degradation (depletion or pollution of natural resources, waste creation, depletion of carbon storage, amount of greenhouse gas emissions produced, destruction of biodiversity, and others), as well as social cost (aggravation of unemployment, destruction of communities, industries, and the rise of poverty). Subsidies must be stopped for harmful products and practices, such as the use of fossil fuels, to help drive down the consumption of carbon-heavy goods and services.
In addition to decreasing harmful practices, these tax funds can also help supply urgent capital to fight climate disasters and to rebuild damaged communities.
Redefining “free” global trade
Free global trade is not actually free at all.
“Globalization can improve lives all over the world. Until you take it too far, then the costs start outweighing the benefits. We overshot the threshold of where additional globalization makes sense.”
When global trade has been exploited too far, its benefits collapse due to the law of diminishing returns. According to Investopedia.com, after an optimal level of capacity is reached, adding additional factors of production will result in smaller increases in output.
The negative consequences include an ever-growing gap between rich and poor, declining wages, community instability through poverty and higher crime rates, migration of skilled workforce, environmental destruction and depletion of resources, and intense levels of pollution due to accelerated international transport.
Investing in local production
“A modern and sustainable economy is based on using as little as we can,” explains Dr. Talberth. We need to dial back global hyper-trade and overspecialization, both of which lead to overproduction and overconsumption. Instead, we must diversify our communities, help them become more self-reliant rather than dependent on heavy resource extraction, and invest in local production of goods and services.
“Cheap goods are made to break.”
Many imported, cheaply-produced goods are part of “planned obsolescence”: they are specifically designed to have a short lifespan, creating the need to discard and replace them frequently. By shifting more to local production, we can gain better control over products, higher quality, and create a larger pool of domestic skilled workforce.
Individual contributions and mindset shifts
We must change our social expectations, norms, and cultures to adopt a different approach to how we live, consume, discard, and share our lives with each other.
Each household, family, and individual has the responsibility to change their own behaviors and actions from a mindset of hyper-consumerism, little regard to the waste they produce, and a desire for “more, quicker, cheaper” to one of buying and consuming more mindfully and at a slower pace. We must change our mindsets to one of sufficiency, efficiency, and long-term use before we lose the very floor we live on.
Please support our collective effort to help fight the climate emergency by donating to Scientists Warning Europe’s ongoing fundraiser: https://bit.ly/warningintoaction