“The necessity for a recent economic model has never been clearer,” Scottish First Minister Nicola Sturgeon told CNBC. “I feel that is why we’re seeing such growing interest in approaches to the welfare economy, each here in Scotland and all over the world.”
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LONDON — For a small but growing network of countries, the worldwide measure of economic health is not any longer fit for purpose.
Mostly led by women, Finland, Iceland, Scotland, Wales and Recent Zealand are members of the Wellbeing Economy Governments partnership. The coalition, set to expand in the approaching months, goals to rework economies all over the world to deliver shared prosperity for people and planet by 2040.
This implies abandoning the concept that percentage change in gross domestic product is an excellent indicator of progress, and as a substitute reformulating economic policy to make sure a top quality of life for all people in harmony with the environment.
“The necessity for a recent economic model has never been clearer,” Scottish First Minister Nicola Sturgeon told CNBC. “I feel that is why we’re seeing such growing interest in approaches to the welfare economy, each here in Scotland and all over the world.”
Encouraging other policymakers to contemplate a prosperity-focused economic approach, Sturgeon said many global crises, corresponding to the climate crisis, Biodiversity loss and the associated fee of living crisis “raise fundamental questions on what we value – and what our economies are actually for.”
“Constructing an economy of prosperity is a large challenge for any country at any time, and the present crises we face make that task harder – but additionally they highlight why we’d like to make this transformation urgent,” Sturgeon said. “We have made progress over the past five years, but we still have lots more to do.”
I often say that we’d like to maneuver from power, profit and patriarchy to people, planet and prosperity.
Sandrine Dixson-Decleve
Co-President of the Club of Rome
Recent Zealand in the previous few months published its first national welfare report; European Union recognized the necessity to transition to a welfare economy; and the World Health Organization fired an initiative that calls for prosperity to be the premise of economic recovery.
Australia, Canada and Costa Rica are among the many countries which have worked closely with the Wellbeing Economy Governments partnership in recent months, and post-growth advocates imagine it is simply a matter of time before more countries embrace the Prosperity Movement. A post-growth society is one which resists the demand for continued economic growth.
“Constructing an Airplane While Flying”
Dominick Stephens, chief economic adviser to Recent Zealand’s Treasury, hailed the country’s first prosperity report as a “watershed moment”, saying it goals to offer lawmakers an entire picture of what life is like within the South Pacific country.
“We would like to look beyond GDP to know progress, but we haven’t got a single measure of well-being – so we’d like to have a look at a variety of indicators and evidence to know progress on this broader sense,” Stephens told CNBC.
“This helps us all understand where Recent Zealand is doing well and where it’s lagging behind and how different people in our country are experiencing well-being.”
Amongst the outcomes published on 24 November, the report noted a large and growing gap between the well-being of older and younger residents, with older residents doing higher on numerous indicators.
Mostly led by women, Finland, Iceland, Scotland, Wales and Recent Zealand are members of the Wellbeing Economy Governments partnership.
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The State Treasury has identified three priority areas for improvement: mental health; educational achievement; and affordability and quality of housing.
Stephens said that while the report wouldn’t be the last word, now Recent Zealanders must determine how concerned they are about these issues and the actions needed to handle them.
“In Recent Zealand, we haven’t got a silver bullet on how well to do well-being reports,” said Stephens. “Different countries have taken different approaches. We form of construct the plane while we fly.”
“More countries trying different approaches to mainstreaming well-being evaluation into policy means more opportunities for Recent Zealand and other countries to learn from one another’s experiences,” he added.
“Limits to Growth” – 50 years later
The gathering momentum of the transformation of the present economic system comes half a century after the Club of Rome think tank published the groundbreaking “The boundaries of growth” report.
A 1972 book warned that the planet’s resources wouldn’t have the opportunity to sustain the exponential rate of economic and population growth, and would due to this fact collapse before the tip of this century. Overall – and after vehemently contradicting their dire predictions on the time – the world followed the trail envisioned by the book’s authors.
Academics and economists told CNBC that an ultimatum from the world’s leading climatologists on the hazards of exceeding 1.5 degrees Celsius of worldwide warming – a critical temperature threshold above which dangerous tipping points develop into more likely — stresses the necessity to end the obsession with growth in any respect costs.
“In the event that they didn’t realize 50 years ago that we already needed a change, I feel now’s the time because we’re facing a polycrisis,” Sandrine Dixson-Declève, co-chair of CNBC’s Club of Rome think tank, told CNBC over the phone.
The term “polycrisis” refers to crises that occur across multiple global systems and intertwine in such a way that they cause more damage than those crises combined.
“Not only is our planet sick from continued growth scenarios as we now have gone far beyond the healthy use of natural resources, but our people are getting sicker and our young people are making less and less money,” said Dixson-Declève.
Asked if this meant she believed there was no alternative to the wellness strategy, Dixson-Declève replied: “Yes, absolutely. I often say we’d like to maneuver from power, profit and patriarchy to people, planet and prosperity.
How vital is GDP?
US Senator Robert F. Kennedy once said that a rustic’s GDP measures every part “except what makes life worthwhile.”
Critics of GDP, which represents the entire value of products and services over time, argue that the index is misleading since it measures “good, bad and ugly” economic activities and calls every part good.
For instance, GDP doesn’t bear in mind unpaid work, nor does it distinguish between economic activities that positively or negatively affect human health and well-being and the environment.
I feel it just shows our lack of imagination. We cannot even imagine an economy higher than growth.
Catherine Trebeck
Co-founder of the Wellbeing Economy Alliance
Within the UK, Rishi Sunak said in his first speech as prime minister that his predecessor Liz Truss was right in wanting to spice up economic growth within the country. “It is a noble cause,” Sunak he said outside Downing Street, October 25.
Three months earlier, the leader of the opposition Labor Party, Keir Starmer he said Britain needed three things to fix a broken social contract. “Increase. Increase. And growth.”
“I feel it just shows our lack of imagination. We will not even imagine an economy higher than growth,” said Katherine Trebeck, co-founder of the Wellbeing Economy Alliance, a network of scientists, businesses and social movements.
“One of the best we will do is put some nice adjectives in front of growth – sustainable growth, green growth, inclusive growth, collective growth – but we are hardly allowed to contemplate the prospect that a growing economy is the recipe for the twentieth century,” she added.
“High-income countries have had enough usually, but there are huge, deep inequalities within the richest countries. In order that they have to take into consideration how one can share these resources and how one can nurture them,” said Trebeck.
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“I take advantage of an expression that they need to acknowledge that they’ve arrived. The event task is finished and now they should move on to the second project which is settling into the home.”
Trebeck described welfare economics as a “picnic term” that features movements corresponding to “degrowth”, “doughnut” economics, or circular and regenerative models, somewhat than alternative policies.
“I feel there’s a deep moral obligation [on high-income countries] because they absorb greater than their fair ecological share, which not directly says that countries all over the world that wouldn’t have enough resources to satisfy the essential material needs of their residents will effectively stay there,” said Trebeck.
“The purpose is to essentially say how one can live fairly on this one finite planet?”
“GDP is just not a measure of wealth”
The push to look beyond economic growth comes at a time of growing calls to finish fossil fuel production all over the world.
“Essentially, by having a commitment to growth, you are committing to using more energy and materials, which in turn ends in environmental impacts – and hinders decarbonisation,” Julia Steinberger, an ecological economist on the University of Lausanne, told CNBC over the phone.
“What it’s essential to do to decarbonize is stop using all fossil fuels and replace your energy needs with renewable or low-carbon or zero-carbon energy sources, and that is harder to do [and] it should take longer if we now have ever-increasing energy demands,” said Steinberger. “That speaks for the climate.”
An island nation within the South Pacific, Tuvalu last month it became the primary country to make use of the annual UN climate summit to push through a fossil fuel non-proliferation treaty. The European parliament, Vatican and WHO all supported the proposal.
Nonetheless, thus far only just a few small countries have backed the initiative, and the fossil fuel industry has tended to emphasise the importance of energy security within the planned transition to renewables.
The burning of fossil fuels – corresponding to coal, oil and gas – is the foremost driver of the climate crisis.
UN Secretary General Antonio Guterres recently called what he called “a large public relations machine, raking in billions to guard the fossil fuel industry from scrutiny.”
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UN Secretary-General Antonio Guterres has also recently joined the chorus of voices calling for the abandonment of GDP because the foremost global indicator of economic growth, as a substitute urging policymakers to shift to a circular economy.
This refers to an economic system that relies on reusing and repairing materials to increase the lifetime of products so long as possible, and moves away from the world’s current “take, make, throw away” model.
“We must change course – now – and end our senseless and suicidal war on nature,” Guterres said. he said at a significant international environmental meeting in early June.
“We must give real importance to the environment and look beyond gross domestic product as a measure of humanity’s progress and well-being,” Guterres said. “Let’s not forget that by destroying the forest, we create GDP. By overfishing, we create GDP. GDP is just not a measure of wealth in the present world situation.