Climate Goals: Wellbeing Economy

Debate between Clive Betts and Caroline Lucas

Tuesday 30th November 2021 Westminster Hall

[Mr Clive Betts (in the Chair)]

I remind hon. Members of the guidance from the Commission and the Government about wearing face masks when they are not speaking, giving space to other Members and staff, and testing twice weekly with lateral flow tests, either on the estate or at home.

[Caroline Lucas (Brighton, Pavilion) (Green)]

I beg to move,

That this House has considered a wellbeing economy approach to meeting climate goals.

It is a pleasure to serve under your chairing, Mr Betts. I am grateful for the opportunity to debate why the Government should embrace a wellbeing economy if they are serious about meeting their climate goals. Beyond the climate emergency, there are many other reasons to move beyond our current extractive, exploitative and growth-addicted economic system: tackling inequality, stopping the destruction of the natural world and preventing future pandemics, to name just three.

Crucially, the discussions in and around the COP26 summit remind us that those issues cannot be separated and siloed. If we keep decimating the natural world, we will not meet climate goals. If we do not put equality and justice at the heart of climate action, we will not make the shift to a greener and fairer economy. Pandemics, meanwhile, in the words of some of the world’s leading scientists, are

“a direct consequence of human activity—particularly our global financial and economic systems, based on a limited paradigm that prizes economic growth at any cost.”

Many colleagues will be well versed in why GDP growth has always been a terrible measure of a nation’s economic progress—I will not go into the detail now. However, it cannot be overestimated how critical shifting from growth to wellbeing is from a social and equity perspective. As a report by leading economists for the OECD finds, patterns of economic growth have generated significant harm over recent decades. That includes rising inequality, not just catastrophic environmental degradation—which itself hits the most vulnerable the hardest.

I want to focus on the climate imperative of transforming our economic system, and on the wellbeing economy as a specific, practical and positive alternative to economics as usual. I will start by mentioning a recent parliamentary petition that called on the Government to shift to a wellbeing economy and put the health of people and planet first. It has been linked to this debate on today’s Order Paper; I want to thank the many thousands of people who supported that petition. It was started by a young Brighton constituent, Skylar Sharples, and it begins like this:

“We urgently need the Government to prioritise the health and wellbeing of people and planet, by pursuing a Wellbeing Economy approach. To deliver a sustainable and equitable recovery, the Treasury should target social and environmental goals, rather than fixating on short-term profit and growth…Two thirds of the public want the Treasury to put wellbeing above growth. Scotland and Wales are already part of the Wellbeing Economy Governments alliance. As host of the COP26 climate summit, the UK Government should build and champion a Wellbeing Economy—at home and globally.”

That petition did tremendously well to get almost 70,000 signatures. Even though it was not enough to secure a debate via the Petitions Committee, I am very grateful that through the ballot process we were able to hold today’s debate.

In turning to the climate imperative for switching from growth to wellbeing as the purpose of our economy, I will start with the science. If we take the global climate goal of reaching net zero by 2050—leaving aside the injustice and inadequacy of that as the UK’s goal—economic growth is still the elephant in the room. During that same 30-year period, between now and 2050, the global economy is set to nearly triple in size. That means three times more production and consumption than we already have each year. It is enough of a challenge to decarbonise an economy the size of the current one in such a short time span; it will be virtually impossible to do it three times over. If we carry on with growth as usual, then halving emissions by 2030 would require that rich countries like the UK decarbonise their economies at a rate of more than 12% per year. That is more than five times faster than the historic rate of decarbonisation, and about three times faster than what scientists project is possible, even under highly optimistic conditions. The most “successful” rich countries are decarbonising at only around 3.4% a year; the performance of average rich countries is much worse. The gap is huge, and however heroic one’s assumptions are about the potential for decoupling growth from carbon emissions—an argument that I am sure we will hear from the Minister—there is no evidence that there can be absolute decoupling in anything like a fast enough timeframe.

The bottom line is that the GDP figures that we are using to measure economic success are also measuring the rate at which we are barrelling towards climate catastrophe. It is little wonder that the voices around us are saying that we need to end our addiction to GDP growth to tackle the climate emergency. Those voices—from climate scientists and environmentalists to economists, health professionals and business leaders—are becoming louder. I want to give two examples.

There was a recent joint report from the Intergovern-mental Panel on Climate Change and the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services—an intergovernmental body that assesses biodiversity. The report calls for

“a profound collective shift of individual and shared values concerning nature—such as moving away from the conception of economic progress based solely on GDP growth, to one that balances human development with multiple values of nature for a good quality of life, while not overshooting biophysical and social limits.”

That is pretty clear, and it is coming from the world’s most respected scientists.

To take one example from the business world, former Unilever CEO, Paul Polman, recently wrote about the World Economic Forum’s 2021 global risks report, in which four of the top five risks to our economies are coming from the environment—including climate change and biodiversity loss. He said that

“the estimated $300 billion annual cost of natural disasters caused by ecosystem disruption and climate change”

highlights

“the risks of unbridled economic growth. Thinking beyond GDP and short-term profit is therefore essential in order to restore our relationship with the planet and transform our system into a viable one.”

So, wellbeing within planetary limits, not infinite GDP growth, is the new economic goal we urgently need. If the boss of a massive multinational can get that, I have to ask why can’t Treasury, especially when its own Dasgupta review of “The Economics of Biodiversity” made the case so well, too. It reads,

“GDP does not account for the depreciation of assets, including the natural environment. As our primary measure of economic success, it therefore encourages us to pursue unsustainable economic growth and development.”

The Dasgupta review also calls for an

“urgent and transformative change in how we think, act and measure economic success to protect and enhance our prosperity and the natural world”.

Yet the Treasury response to that key recommendation does little more than refer to a review of GDP that was done six years ago. That is not “urgent and transformative change”.

I hope the Minister can convince us today that the Treasury is not as cavalier and complacent as it would appear. Will she confirm that the Government accept the need to adopt new measures of economic success beyond GDP to give climate, nature and collective wellbeing the priority they deserve? What work is taking place on that? It will not be good enough to say that the Office for National Statistics has developed natural capital and wellbeing indicators, because those indicators are not just out of date; they are clearly not being used in policy making, least of all inside the Treasury where GDP growth reigns supreme. It is a bit like claiming that you have adopted a healthy diet because you have some flaccid carrots in the fridge but meanwhile you are chomping down on a box of Mars bars. It does not wash.

Similarly, the inquiry by the Environmental Audit Committee, of which I am a member, into biodiversity and ecosystems concluded:

“Alternatives to GDP urgently need to be adopted as more appropriate ways to measure economic success, appraise investment projects and identify sustainable development.”

So will the Minister today accept that cross-party recommendation and set out a timeline for progress?

The wellbeing economy is not just a brilliant idea; it is already being implemented in the UK and around the world. At local, national and international level—beyond Westminster—the green shoots of a new economic paradigm fit for the age of climate emergency are already emerging. In the short time that I have, it is impossible to mention more than a fraction of the researchers, campaigners, practitioners and others who make up the movement for a new economy, designed to serve people and planet—from community wealth building to the Doughnut Economics Action Lab.

The wellbeing economy is one example. It is being taken forward by the Wellbeing Economy Governments partnership, a collaboration of, so far, five national and regional Governments. In Finland, the world’s youngest Prime Minister, Sanna Marin, heads up a Government who are outspoken on the principle that,

“Economic growth is never an end in itself and well-being is not just an item of expenditure for public finances”.

In Iceland, indicators for wellbeing guide Government decision making. Scotland has a national performance framework centred around wellbeing, and with Greens now in government we can expect even more leadership on the post-growth wellbeing economy. Wales has the first ever Well-being of Future Generations (Wales) Act, a version of which many of us have been championing in this House as well, and New Zealand is home to the world’s first ever wellbeing budget and a Finance Ministry that uses a living standards framework to shape all economic policy making.

Those nations are working together to share expertise and advance a shared ambition to build wellbeing economies. Will the UK join them? If the Minister cannot quite commit to that, will she at least commit to carrying out a major review of what the Wellbeing Economy Governments partnership is doing, and the benefits of the Treasury taking a similar approach, ideally in time for the next Budget to be the UK’s first wellbeing Budget? As a first step, the UK’s first wellbeing Budget could swap the focus on GDP and change it for GDWe, or gross domestic wellbeing, as developed by Carnegie UK. No one is saying that untangling our growth addiction is simple, but we can no longer delay. As the economist Kate Raworth puts it, we need to create

“economies that make us thrive, whether or not they grow”

rather than having economies that grow whether or not they make us thrive.

Drawing to a conclusion, I want to quickly share some views from members of the public on the topic of today’s debate. They were gathered via a survey over the weekend, thanks to the parliamentary digital engagement service. It has had more than 1,000 submissions and shows how severely our current economy is failing on the basics. Hazel, for example, wrote about what a wellbeing economy could prioritise. She suggests:

“Ensuring everyone’s basic needs are met, including any additional needs resulting from disability. Such needs include access to healthy food, safe, warm homes, and access to health care (both physical and mental). Nobody in the developed world should need to rely on food banks.”

Natalie wrote:

“Aiming for constant financial growth cannot be sustained on a planet of finite resources…The health and well-being of our shared planet and all beings who reside here should be our priority. The way and extent to which we care for it and for each other should be key. Wastefulness should be seen as the loss that it truly is. Ecology and economics should not be at odds; the words both derive from the concept of looking after our home.”

The responses are another sign that, far from delivering on the famous “people’s priorities,” as the Government like to say, the Treasury is completely ignoring them by sticking to an outdated and dangerous fixation on economic growth. It is time for global Britain to become a global leader, fit for the age of climate emergency, rather than a laggard in a shift to a wellbeing economy. For the sake of climate justice today and for the lives of future generations, I look forward to the Minister’s response and to working with Members across the House to prove that another economy is not just possible; it is on its way.

[Several hon. Members rose—]

UN Climate Change Conference: Government Response

Debate between Clive Betts and Caroline Lucas

Wednesday 16th January 2019 Westminster Hall

[Caroline Lucas (Brighton, Pavilion) (Green)]

It is a pleasure to serve under your chairship, Mr Betts, and I again congratulate the hon. Member for Cardiff North (Anna McMorrin) on securing the debate. The UK has historically played a leading role in global climate negotiations; for example, it pressed for the 1.5° ambition in the 2015 Paris agreement. However, in the words of the former UK climate envoy, John Ashton,

“Rule one of diplomacy is, walk your talk: otherwise people stop listening”.

The tragedy is that in recent years, the global leadership role that the UK played on the international stage has been undermined by the systematic dismantling of climate policy at home. We have heard some of this already, but since 2010, Ministers have scrapped zero carbon homes; sold off the Green Investment Bank; made it almost impossible to build onshore wind farms; cut off support for solar power; made no progress on phasing out fossil fuel subsidies; gone all out for fracking, which is quite extraordinary given that that is a whole new fossil fuel industry; and in the area of energy efficiency, which is all too often a poor cousin in these debates, we are woefully behind on some targets—for example, retrofitting some of our most energy-inefficient homes. According to the Institute for Public Policy Research, we could be over 50 years late in getting that target sorted.

The impact of those failures is incredibly real, and we have heard from the Committee on Climate Change that once again, the UK is way off meeting its fourth and fifth carbon budgets. “With each delay,” it says,

“we stray further from the cost-effective path to the 2050 target.”

Beyond that, the sad truth is that even if all those policies were still active, it would not be enough. The problem is that our economy is built on the assumption that precious minerals, fresh air, clean water and rare species can magically regenerate themselves in an instant, and that somehow the Earth will expand to meet our ever-expanding use of resources. The reality is that we have stretched the planet beyond its limits and, without a bold reimagining of how our economy works, it will simply not be able to spring back into shape. The UN 1.5° report made clear that we need to cut emissions to net zero by the middle of this century, but the global economy is set to nearly triple in size during that same period. That makes the job of decarbonisation massively greater.

Greta Thunberg, a 15-year-old climate activist, told world leaders at COP24 in December that

“if solutions within the system are so impossible to find, maybe we should change the system itself.”

She was right. Of course, we need massive investment in renewable energy and energy efficiency and a new, clean public transport system, but we also need to think far more boldly about the way we integrate concerns about our natural world in the way we run our economy. Crucially, we need to limit the resources that we all use. Those in the global north who can radically reduce how much they consume and throw away must do so. We must find new and innovative ways to recycle and reuse materials; there is much talk of dematerialisation and decoupling from energy and consumption, but the truth is that there is no example anywhere in the world of absolute decoupling in anything like the timeframes that we will need if we are serious about getting off the collision course that we are currently on with the climate crisis. We have a huge job of work in front of us.

I am really grateful for this debate, and I want to add one last thing: my quick scan of Hansard suggests that over the past year, there has been only one debate in the main Chamber on climate change. That is not good enough. I hope that we can reinvigorate the all-party parliamentary climate change group, and I invite everyone at this debate to join that APPG so that we can be a bigger force in this place for better climate policy.

[Mr Clive Betts (in the Chair)]

We will now hear from the Front Benchers. The Scottish National party and the Labour party spokespeople each have five minutes, and the Minister has 10 minutes.