Environmentalists call for groundbreaking economic reform

Posted:  May 23rd, 2011 by:  The Environment Site comments:  0

The US’ National Wildlife Federation (NWF) is not what you would normally call a firebrand organisation.

That’s not to say it’s supine, but it’s probably best thought of as more middle of the road than otherwise.  Founded in the early 1930s by Franklin D Roosevelt, has a membership of 4 million (approximately 13% of US citizens) and publishes some of the most widely read nature magazines in the US.

However a month ago the NWF nailed its economic colours to the mast very firmly and unanimously passed an AGM motion calling upon the US government to abandon GDP as a measure of the economy.

This is huge.  The only other national or international environmental group I know to have called for an end to the use of GDP is Friends of the Earth, and that was over a decade ago.  Not Greenpeace, not WWF.  Not the Sierra Club.

The reason it’s huge is because mainstream environmentalists have long accepted the argument that economic growth is good for the environment.  This is through the notorious trickle down system whereby big money gains by corporations will (through some kind of wizardry) bring about better environmental protection.

Now, one of these organisations has finally stuck it’s neck out and said “er, no”.  This strikes at the heart of the idea that capital growth is per se good for the environment.  And in these days of financial collapse, sustainability and increased environmental protection, this is a big thing indeed.

Why, you may be asking, is GDP such a bad thing?

The answer is because it wants money to be spent and doesn’t care how.  It’s a measure of monetary throughput, not results.  For example, crime is good for GDP.  For every crime which is committed security systems are bought and the police are involved; lawyers, judges and prison officers may also be employed, giving further rise to economic activity.

Think about BP and the Deepwater Horizon disaster and you get the idea.  It was someone’s responsibility to ensure operations were safe, but because that had to be balanced by the drive to maximise financial returns something went wrong.  Ultimately local businesses have been driven to the wall, but I’ll bet my bottom dollar local GDP actually rose because of the cleanup spend in the area.  That’s how GDP works.

As Eric Zencey puts it so well in an article for the Centre for the Advancement of a Steady State Economy, GDP only measures monetary expenditure, nothing else.  So, for example, if you hang your washing outside to be dried by the sun and wind you are being economically inactive.  But if you buy a tumble drier and then purchase electricity whenever you use it you become an economic consumer.  Environmental activity will never be good for the economy unless it generates money, and that’s a bad place to be.

This leads us neatly back to the NWF. To their credit, they didn’t propose a new index for the US to measure its economic activity by.  That’s not their job.  What they have done is pointed their finger at what’s wrong with the GDP system and called for the US government to fix it.

Will the US Government respond?  I doubt it very much.  Allowing a country’s economy to be measured by anything other than monetary expenditure strikes at the very heart of capitalism, and the US is simply not yet ready to do that.

An idea of how damaging GDP alone is can be seen in a 2006 New Economics Foundation / Friends of the Earth analysis of the Happy Planet Index (HPI) (PDF).  This shows that countries such as Tunisia, Yemen and Morocco are leaders in the Middle East and North Africa while economically friendly countries such as Qatar, the UAE and Kuwait are the bottom of the list.

This is not a political statement: it’s simply pointing out that wealth alone doesn’t make the planet happy.

Through the NWF, over 10% of the US has decided GDP isn’t good for the economy … the government ought at at least wake up, listen, and respond.  If they don’t then the economic woes of the US will simply get bigger, because justifying a deficit on the grounds that it will bring greater profit is like me continuing to dig a hole on the grounds that the pile of earth I’m building up will one day be the tallest building in the world.

In other words: it’s stupid.

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