Progress Report on the UN High-Energy Goals: The Status of the Continuum and Growth of the World and the Role of the SDGs
UN secretary-general António Guterres is worried. The latest progress report, published in July, was the reason for the need for an urgent rescue effort. Over the past year, Guterres and the heads of big UN agencies, such as the Statistics Division and the UN Development Programme, have been assessing what’s gone wrong and what needs to be done. The idea is to complement GDP with indicators linked to theSDGs to stop using it as the world’s main measure of prosperity. If this happens, it would be the biggest shift in how economies are measured since nations first started using GDP in 1953, almost 70 years ago1.
The trends were there before the war in Ukraine started, but after the COVID-19 pandemic, the problems got worse. The world is in “a new uncertainty complex”, says economist Pedro Conceição, lead author of the United Nations Human Development Report.
The effort by the leaders of the country to improve GDP is not for the first time. ul Haq and Sen were part of the group that designed the HDI. Their countries often have impressive growth rates, but they were motivated by the fact that their quality of life data was not as good as it could be.
There are 10–20 indicators that will be included along with GDP. It’s not easy to convince countries to use one number because of the value and ease of use. GDP is the greatest success because it is produced by countries according to agreed rules and allows for comparison over time. “It’s not a metric compiled by Washington DC, Beijing or London,” says Schweinfest.
The White House is working on a new summary statistic that would show how changes to natural assets affect GDP. The idea, according to the project’s main architect, economist Eli Fenichel at the White House Office of Science and Technology Policy, is to help society to determine whether today’s consumption is being accomplished without compromising the future opportunities that nature provides. Fenichel says that GDP only gives a partial and incomplete picture of economic progress.
GDP is more than a goal. It is also the benchmark for how countries measure themselves against each other (see ‘Growth gaps’). The GDP of the United States is the largest in the world. China, currently second, is on a path to overtake it.
GDP is important to politicians. When India leapfrogged the United Kingdom to become the world’s fifth largest economy earlier this year, it made headline news. China waited a month to publish the GDP figures so that they wouldn’t show up during the national congress of the Communist party, where the current president received a third term.
More recently, environment ministers have found that GDP-boosting priorities have got in the way of their SDG efforts. The environment minister of Costa Rica, Carlos Manuel Rodrguez, encouraged his colleagues to take into account the impact of economic development on the environment. But they were concerned about possible reductions in GDP calculations, says Rodríguez, now chief executive of the Global Environment Facility, based in Washington DC. Costa Rica didn’t want to be the first country to implement such a change only to possibly see itself slide down the growth rankings as a result.
It has been a similar situation in Italy. In 2019, then research minister Lorenzo Fioramonti helped to establish an agency, Well-being Italy, attached to the prime minister’s office. It was intended to test economic policy decisions against sustainability targets. The various economic ministries did not see this as a priority, and it was an uphill battle.
The next revision to the rules is under way and is due to be completed in 2025. The European Commission, the International Monetary Fund, the World Bank, and the Organisation for Economic Co-operation and Development will make the final decision, along with a group of chief statisticians from different nations.
Because the UN oversees this process, Guterres has some influence over the questions that the review is asking. As part of their research, national statisticians are exploring how to measure well-being and sustainability, along with improving the way the digital economy is valued. Technology and data companies that make up seven of the top ten firms in the world by stock-market values are overvalued, according to two University of Cambridge economists.
However, according to Peter van de Ven, a former OECD statistician who is the lead editor of the GDP revision effort, some aspects of digital-economy valuation, along with putting a value on the environment, are unlikely to make it into a revised GDP formula, and will instead be part of the report’s supplementary data tables. One of the reasons, he says, is that national statisticians have not agreed on a valuation methodology for the environment. Nor is there agreement on how to value digital services such as when people use search engines or social-media accounts that (like the environment) are not bought and sold for money.
Other economists say that there are ways to value both digital and environmental goods and services. One way involves asking people what they would be willing to pay to keep or use something that might otherwise be free, such as a forest or an Internet search engine. Another method involves asking what people would be willing to accept in exchange for losing something otherwise free. Management scientists Erik Brynjolfsson and Avinash Collis, both at the Massachusetts Institute of Technology in Cambridge, did an experiment6 in which they computed the value of social media by paying people to give up using it.
It is not true that valuing the environment would make economies look smaller, claims an economist at a university. It depends on what you value. Daily is among the principal investigators of a project called Gross Ecosystem Product (GEP) that has been trialled across China and is now set to be replicated in other countries. GEP adds value to a wide range of goods and services, such as water, carbon sequestration, and recreational sites. In the Chinese province of Quhai, researchers found the region’s total GEP exceeded its GDP.
Although past efforts to avoid using GDP have stalled, this time could be different. Van de Ven thinks that national statisticians will not add nature and social media to the GDP formula. But the pressure for change is greater than at any time in the past.
The logic behind economic logic hinges on a fundamental assumption: Bigger economies are better, and finding ways to maintain is paramount to improving society.
Yet proponents of degrowth are skeptical that the world can reduce emissions in time — and protect delicate, interconnected ecological systems — while pursuing infinite economic expansion, which they argue will inevitably require the use of more energy.
Plus, they see expanding a global economy that’s already doubled in size since 2005 — and, at 2% growth annually, would be more than seven times bigger in a century — putting the emissions goals necessary to save the world out of reach.
Giorgos Klukas, a top degrowth scholar based at the Universitat Autnoma de Barcelona, said an innocent 2 or 3% per year is an enormous amount of growth. I don’t think it is compatible with the physical reality of the planet.
The solution, according to the degrowth movement, is to limit the production of unnecessary goods, and to try to reduce demand for items that aren’t needed.
Degrowthers know their critiques are controversial, though in some ways, that’s the intent. They think that a bolder, more revolutionary approach is needed given that the UN reckons that global warming will rise to between 2.1 and 0.2 degrees Celsius by the year 2020.
“The fact that it’s an uncomfortable concept, it’s both a strength and a weakness,” said Gabriela Cabaña, a degrowth advocate from Chile and doctoral candidate at the London School of Economics.
Some corners are becoming less taboo due to the fact that industry and governments are behind in trying to stop the warming of the planet after 1.5 degrees Celsius.
Some on Wall Street are beginning to pay more attention. Investment bank Jefferies said investors should consider what happens if degrowth gathers steam, noting “climate-anxious” younger generations have different consumer values.
If the global warming is to be stopped, the world has to slash annual carbon emissions by 45% by the year 2030. After that, they need to decline steeply, and fast.
There are concerns in the Global South that the green energy revolution can replicate existing patterns of exploitation and excessive resource exploitation, but with minerals like nickel or cobalt instead of oil.
Degrowth is a nightmare: how the love for growth perpetuates colonialism in Bahia and the UN-IPCC report on climate change
Felipe Milanez, professor and degrowth advocate in the Brazilian state of Bahia, said that the love for growth is violent and racist, and that it has been reproducing local forms of colonialism.
As fear grows about a global recession, degrowth is hard to talk about, as all the pain of lost jobs and shattered businesses is implied.
The advocates who speak about the recessions as symptoms of a broken system make clear they are not promoting austerity, or telling developing countries that are eager to raise living standards not to benefit from economic development.
They talk about sharing more goods, reducing food waste, and moving away from privatized transportation in order to not need to be bought on a regular basis. It’s about “thinking in terms of sufficiency,” Cabaña put it.
Yet some proposals could exist within the current system. A universal basic income — in which everyone receives a lump sum payment regardless of employment status, allowing the economy to reduce its reliance on polluting industries — is often mentioned. So is a four-day work week.
The UN agency for global warming, the Intergovernmental Panel on Climate Change (IPC), noted in its most recent report that addressing inequality and many forms of status consumption and focusing on wellbeing supports climate change mitigation efforts. It was also name-checked.
“The degrowth people are living a fantasy where they assume that if you bake a smaller cake, then for some reason, the poorest will get a bigger share of it,” said Per Espen Stoknes, director of the Center for Green Growth at the BI Norwegian Business School. “That has never happened in history.”
Green growth supporters are confident their strategy can work. They cite examples in which GDP gains from emissions and renewable energy have been subsumed by the same thing.
It is a difficult task to reform global energy systems according to Gates. He thinks it’s possible to increase accessibility of the right technologies.
Source: https://www.cnn.com/2022/11/13/economy/degrowth-climate-cop27/index.html
Capital in the Anthropocene: a novel hitchhiker’s guide to the entropy of the 21st century
Could a growing cohort agree? In 2020, his book on degrowth from a Marxist perspective became a surprise hit in Japan, where concerns about the consequences of stagnant growth has inflected the country’s politics for decades. Over 500,000 copies of Capital in the Anthropocene have been sold.