Economic Growth and Environmental Limits

Jim Shannon Excerpts

Wednesday 10th July 2019 Westminster Hall

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

I beg to move,

That this House has considered economic growth and environmental limits.

It is a pleasure to serve with you in the Chair, Mr Hosie. I am grateful for the opportunity to debate economic growth and environmental limits. It is, of course, a huge subject, covering why and how our current economic model, which puts GDP growth above everything else, must change fundamentally, fast. I will focus on the environmental imperatives for that, especially the climate and biodiversity crises, and set out practical steps that I hope the Treasury will adopt.

It is crucial to note, however, before going into the environmental detail, that the Treasury’s obsession with GDP growth is also undermining social and economic progress for the vast majority of UK citizens. GDP is an incredibly poor metric for measuring wellbeing or social cohesion. For example, people becoming unhealthy can actually have a positive effect overall on GDP, as revenue from associated healthcare boosts growth. Similarly, the extraction of oil and gas pushes GDP up, while pushing us closer to the precipice of climate breakdown.

I, of course, acknowledge that Government Departments have goals other than economic output. The Office for National Statistics in particular is doing some important work on wellbeing statistics as part of their “Beyond GDP” programme. There is also the ONS/Department for Environment, Food and Rural Affairs project that seeks to incorporate UK natural capital into the UK environmental accounts by 2020. All of that is welcome, but it is all at the margins. The ONS website is unequivocal about the priority. It says quite clearly:

“Gross domestic product (GDP) growth is the main indicator of economic performance.”

GDP therefore still trumps everything, remaining the primary objective across Government, especially for the Treasury.

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Lady on introducing the debate, and on her hard work in this House on the environment and climate change. Although I certainly like to check on GDP and other financial aims, does she agree that the measure of success cannot be GDP alone? It must equally be based on the happiness and health of our constituents.

[Caroline Lucas]

I thank the hon. Gentleman for his intervention and kind words. As he says, the purpose of Government should surely be to promote happiness and health, yet we have a perverse obsession with GDP growth, which can often go up even when happiness and health are going down. That obsession must end if we are to secure a safe space for humanity, and if we are to live within environmental limits, or planetary boundaries, to use an alternative term.

I will not be surprised if the Minister takes issue with me on that, arguing that the UK has embraced so-called green growth, perhaps citing the clean growth strategy. Leaving aside the fact that there is nothing clean or green about the Government’s support for rampant airport expansion, road building or fossil fuel subsidies, the essential point is that even so-called green growth rests on the assumption that economic growth can be decoupled from environmental harm fully and fast enough. I will make the case this afternoon that that is a false assumption.

Just yesterday, a new report from the European Environmental Bureau exploded the myth of absolute decoupling. The study looked at a range of factors—materials, energy, water, greenhouse gases and so on—and found that there is no empirical evidence for an absolute, permanent, global, substantial or sufficiently rapid decoupling of economic growth from environmental pressures, either now or in the future. In other words, it is time to move from efficiency to sufficiency. As the report concludes,

“Although decoupling is useful and necessary, and has occurred at certain times and places, ‘green growth’ cannot reduce resource use on anywhere near the scale required to deal with global environmental breakdown and to keep global warming below the target of 1.5°C”.

The transgression of environmental limits has dangerous consequences for all humanity. That was pushed into the spotlight by the UN global assessment of nature—the so-called Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services. If ever there was a mouthful that was designed to make it hard to know what anyone was talking about, that is it; we should call it a report on nature.

Regardless, it found that 75% of all land and almost half of all marine and water ecosystems have been seriously altered by human activity. It found that 1 million animal and plant species are now threatened with extinction. That is a horrendous number—significantly greater than at any other time in human history—and poses a severe and direct threat to not only those species but human wellbeing in all regions of the world, especially those least responsible for the damage that is causing it.

The report identifies the growth of the global economy, and specifically the growth of material consumption in affluent nations, as one of the major driving forces behind those trends. It is unambiguous about the need to move away from endless consumption and GDP as a key measure of economic success, stating that we must steer

“away from the current limited paradigm of economic growth”

and

“shift beyond standard economic indicators such as gross domestic product”.

I am keen to emphasise that, although Greens have long been leading the political debate on the environmental and social case for ditching GDP growth as a measure of progress, that argument is finally moving into the mainstream. Cross-party collaboration is incredibly important too, and I am delighted that 20 MPs have signed my early-day motion on the report from the intergovernmental panel. My early-day motion calls on the Government to

“urgently show global leadership in developing and advocating alternatives to GDP and in the transition to economies that, rather than being divisive and degenerative by default, are distributive and regenerative by design.”