Economy
Solutions
Restructuring our economy holds tremendous potential for dealing with poverty, environmental decline, and security concerns, and moving us toward a just, sustainable future. It can begin accounting for the true costs to the environment, phasing out subsidies that mask those costs, damage the environment, distort markets, and hurt small producers.
Taxes are often used to adjust for some of these hidden costs. Explicitly shifting taxes away from things we want (like income and investment) and on to things we don’t want (like resource depletion and pollution) can be an important part of helping move business toward sustainability, and stimulating employment, which will in turn help alleviate poverty and protect the environment.
Overhauling economic indicators to reflect human and ecological well-being is essential, since current indicators such as GWP measure only the quantity of economic activity – not the quality of that activity. New indicators can tell us how we’re doing by reflecting human and ecosystem health through such benchmarks as infant mortality, education, gender equality, social cohesion, water and air quality, volunteer time, and biological diversity. For example, the non-profit research institution, Redefining Progress (www.rprogress.org) has developed the Genuine Progress Indicator, which considers these externalities in addition to a nation’s GDP.
It is possible – using current technologies – to create a “factor 10” reduction in throughput, meaning we can support the same level of economic activity and lifestyle while reducing resource consumption and pollution by 90 percent. Components of a factor 10 economic transformation include a “closed loop” materials economy, in which virtually everything is designed to be reused and recycled; conversion to a clean, renewable energy system centered around solar and hydrogen power; and sustainable agriculture, forestry, and fishing.
An economy whose goal is unlimited growth, that views nature only as a source of free materials, and that values capital over labor, may continue to generate the outcomes we see today – massive environmental destruction, unemployment and underemployment, inequity and poverty, and social disruption and conflict.
An economy whose goal is development in support of human and ecological well-being, that views “public goods” and “commons” – such as clean air and water – as shareholders whose interests must be protected, and that values meaningful work for all the world’s people, could generate far different and far more positive outcomes.