In this latest piece on Newsroom, I argue that it is time we democratised economics and work towards designing an economy that works for people and the planet, not the other way around.
Imagine a day when you tune into the financial news and the announcer reports:
“Share markets have plummeted to historic lows overnight with more of the world’s mega-corporations losing investor confidence. Investors are flocking instead to promising social enterprises, citing pressure from grandchildren who would rather inherit a liveable planet than a private jet.
“In New Zealand, the Domestic Happiness Index (DHI) is continuing its strong upwards trajectory and our national contribution to the Planetary Overshoot Index (POI) is trending downwards. This mirrors global trends, and leading ecological economic commentators are bullish, predicting that we may still have a liveable planet in 2050.”
This scenario may not be as far-fetched as we first think. But for it to happen, we must be part of redesigning an economy fit for the 21st Century.
Many of us are aware by now that we are facing multiple crises: climate change being just one – warming and acidifying oceans, depleted soils, global habitat and biodiversity loss are among the others in this ‘polycrisis’. The Auckland floods have made us acutely aware of how vulnerable our cities are to the ravages of extreme weather, events predicted to become more extreme and frequent as the effects of climate change bed in.
We know that this is not going to get better any time soon. There will be more floods, droughts and other weather events that will cause destruction, economic loss and human distress on a scale that we cannot yet imagine. Even the issues that affect us day to day, such as the cost of living, have at their root the unsustainability of our current economic system.
The realisation is dawning among many of us that we cannot solve this problem following the same path that led us here – that is, an extractive growth-oriented economy dislocated from the realities of a finite planet.
I have made a bleak realisation. I am a failure. I have failed at the single most important role in my life – to safeguard the future for my children.
This has been an awful realisation to make, and it crystallised when my 14-year old son, after listening to some climate-related report on the radio said, ‘We are doomed, aren’t we, Mum?’. Unusually for him, there was not even a hint of facetiousness or irony – he was quite sincere.
At that moment, a bit of my heart shattered into pieces.
We now face the growing certainty that we will breach the 1.5 degree warming threshold that may have enabled us to avoid catastrophic and irreversible climate change. We have been warned that accelerating climate breakdown will lead to more severe and frequent climate disasters, ecological collapse, economic and social breakdown and unimaginable human suffering, including starvation, illness, displacement and death.
Or as UN Secretary-General Antonio Guterres so starkly put is a few days ago, ‘we are on a highway to climate hell’ with the option to cooperate or, enter a collective suicide pact, and perish.
Even if my children do not experience the worst of this ‘climate hell’ first-hand, they will see it unfold in parts of the world, including the ‘global south’, most vulnerable to climate disruption.
As parents, we have worked to equip our children with the skills and attributes they will need when their time comes to navigate the adult world, and hopefully help make it a better place: critical thinking skills, a basic understanding of democratic process, compassion and empathy, and self-belief, especially when they hold views different from others.
And as a parent, I can only hope that this will be enough to weather the climate storm ahead.
For a while now, we have been reassured that if we cannot reduce our emissions as much as we need to, offsetting will take care of the rest – mainly through tree-planting. But this is a fairytale – a convenient one for industry and consumers alike. A tree planted now will not be sequestering carbon at anywhere near its peak rate for many years; meanwhile we continue to pump out climate pollution. Forests are also at increasing risk of fire due to a heating climate, or can simply be harvested – wiping out their sequestration capacity. Recently, Climate Commissioner Rod Carr condemned this strategy as ‘plant and pollute’.
But we can just switch our fossil-fuel guzzling habits to other more sustainable energies, and all will be well, right? Not quite, because there is the issue of net energy. At peak abundance, it took something like one unit of energy to produce 100 units of oil, but alternative energy sources – including hydropower, solar and wind – have a significantly lower energy return. Biofuels perform especially poorly – at 3 or less units of energy for every one consumed by some assessments. So producing enough energy to maintain our energy-hungry lifestyles will require a huge expansion of the energy sector, with all its associated environmental costs.
The reality is simple. The continued pursuit of growth is not viable; we cannot continue consuming and throwing stuff away at the rate we are. We are already in breach of multiple biophysical limits – climate being just one – and the technological salvation we have been waiting for is nowhere in sight.
To a growing number of New Zealanders, the way forward is clear. To reduce emissions and our environmental impacts, we must reduce our consumption. Some call this idea de-growth, but this has the obvious disadvantage of sounding like a deficit. In my eyes, this is the wrong way to think about it. I believe that a shift from our obsession with economic growth and its mythical ‘trickle down’ effect, to one where human and environmental wellbeing is central, would be a path to plenitude – of improved wellbeing, time with family and friends, connection with community, time to move, have fun and be in nature.
I grew up in the 1970s. Our family had no car, we walked or biked everywhere, and occasionally took a bus; most of our clothes were hand-me-downs; we grew our own vegetables; if something broke we fixed it; we spent most of our time playing creatively or outside – not with expensive devices. Did I feel deprived or hard done by? No – we had everything we needed for a good life.
I am not suggesting we turn back time and eschew technology, Amish-like, but rather think about what we really need for a good life. When looking back on their lives, few people will regret not having the latest Smart TV or getting that status-enhancing but stress-inducing promotion. Most people will regret things like not spending more time with their kids, or not prioritising their health over work.
Whatever we call it: degrowth, steady state economy, wellbeing economy or ‘new economics’, the time to fundamentally reassess what is important to us, both individually and as a nation, is now. Is it growth, mass consumption, convenience; or is it wellbeing, connection, and time to spend with those we love?