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The world is in a ‘polycrisis’ – and these countries want to end it by going beyond GDP

BusinessEconomyThe world is in a 'polycrisis' – and these countries want to end it by going beyond GDP
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“The need for a new economic model has never been clearer,” Scotland’s First Minister Nicola Sturgeon told CNBC. “Which I think is why we are seeing such a growing interest in welfare economy approaches here in Scotland and around the world.”

Jane Barlow – Pa Images | Pa Images | Getty Images

LONDON – For a small but growing network of countries, the world’s best-known metric of economic health is no longer fit for purpose.

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Led mostly by women, Finland, Iceland, Scotland, Wales and New Zealand are all members. Wellbeing Economy Partnership of Governments, The alliance, which is expected to expand in the coming months, aims to transform economies around the world to deliver a shared good for people and the planet by 2040.

This means abandoning the idea that percentage change in GDP is a good indicator of progress, and instead reshaping economic policy to provide a quality of life for all people in harmony with the environment.

“The need for a new economic model has never been clearer,” Scotland’s First Minister Nicola Sturgeon told CNBC. “Which I think is why we are seeing such a growing interest in welfare economy approaches here in Scotland and around the world.”

Encouraging other policymakers to consider a welfare-focused economic approach, Sturgeon said that many global crises, such as climate emergency, biodiversity loss And this survival crisis“Raise fundamental questions about what we value – and what our economy is really about.”

Sturgeon said: “Building a happy economy is a huge challenge for any country at any time, and the current crisis we are facing is making it even more difficult – but they also underline that we need to do this.” Why the need to make change urgent.” “We’ve made progress over the past five years, but we still have a lot to do.”

I often say that we need to move away from power, profit and patriarchy to people, planet and prosperity.

sandrine dixon-declave

co-president of the club of rome

In the past few months, New Zealand published its first National Welfare Report; european union Recognized the need to move to a welfare economy; and the World Health Organization launched An initiative that calls for wellbeing at the center of economic recovery.

Australia, Canada and Costa Rica are among some of the countries that have teamed up with the Wellbeing Economy Governments Partnership in recent months, and “post-growth” advocates believe it is only a matter of time before More countries adopt the Wellbeing Movement. , A post-development society is one that resists the demand for continued economic growth.

‘Building an aircraft while in flight’

Dominic Stephens, the Treasury’s chief economic advisor in New Zealand, hailed the country’s first welfare report as a “historic moment”, saying it aims to provide lawmakers with a bigger picture of what life is like in the South Pacific nation . ,

“We want to look beyond GDP to understand progress, but we don’t have a single measure of well-being – so we need to look at a range of indicators and evidence to understand progress in this broad sense,” Stephens told CNBC. needed.”

“It helps us all understand where New Zealand is doing well, where we are falling behind and how well-being is experienced differently for different people in our country.”

In findings published on November 24, the report highlighted a wide and growing gap between the well-being of older citizens and younger citizens, with older citizens doing better on a range of metrics.

Led mostly by women, Finland, Iceland, Scotland, Wales and New Zealand are all members of the Wellbeing Economy Governments Partnership.

Fiona Goodall | Getty Images News | Getty Images

The Treasury identified three primary areas in need of reform: mental health; educational achievement; and housing affordability and quality.

Stephens said that while the report will not be the final word, it is now up to New Zealanders to assess the extent to which they are concerned about those issues and take the necessary action to address them.

“We don’t have a silver bullet on how to get Wellbeing reporting done well in New Zealand,” Stephens said. “Different countries have taken different approaches. We are in some ways building the plane because we fly it.”

“With more and more countries trying different approaches to integrate wellbeing analysis into policy, this means there are more opportunities for New Zealand and other countries to learn from the experiences of others,” he added.

‘Limits to Growth’ – 50 Years

The gathering momentum for the transformation of the current economic system has come half a century after the Club of Rome’s think tank published its cornerstone.limits of developmentReport good.

The 1972 book warned that the planet’s resources would not be able to support exponential rates of economic and population growth and would therefore collapse before the end of the century. Broadly speaking – and following a swift reaction to their dire predictions at the time – the world has gone the way the book’s authors predicted.

academics and economists told CNBC that a Ultimatum from the world’s top climate scientists On the dangers of exceeding 1.5°C of global warming – a critically important temperature threshold which is more likely to take a dangerous turn Underlines the need to end the obsession with development at all costs.

Sandrine Dixon-Declave, co-chair of the Club of Rome think tank, said, “If they didn’t realize 50 years ago that we needed to shift already, I think now is the time because we facing a multiple crisis.” CNBC via telephone.

The term “polycrisis” refers to crises that occur in multiple global systems and are entangled in such a way that they cause more damage than the crises that occur in the aggregate.

Dixon-Declave said, “Not only is our planet sick of unsustainable development scenarios because we have moved far beyond healthy use of natural resources, but our people are increasingly getting sick, and our youth are earning less and less money.” Have been.”

When asked if this meant she believed there was no alternative to a welfare strategy, Dixon-Declave replied, “Yes, absolutely. I often say that we need to separate people from power, profit and patriarchy, need to move to the planet and prosperity.”

How important is GDP?

US Senator Robert F. Kennedy once said that a country’s GDP measures everything “except what makes life worthwhile.”

Critics of GDP, which represents the total value of goods and services over a specific time period, argue that the indicator is misleading because it measures “the good, the bad and the ugly” of economic activity and calls it all good.

For example, GDP does not take into account unpaid work, nor does it distinguish between economic activities that contribute positively or negatively to the health and well-being of people and the natural environment.

I think it just shows our lack of imagination. We cannot even imagine such an economy which is better than development.

katherine trebek

Co-founder of the Wellbeing Economy Alliance

In the UK, Rishi Sunak, in his first speech as prime minister, said that his predecessor Liz Truss was not wrong in wanting to improve economic growth in the country. “It’s a Noble Purpose,” Sunak Said Outside Downing Street on 25 October.

Three months ago, Keir Starmer, leader of the opposition Labor Party Said Britain needed three things to fix its broken social contract. “Growth. Growth. More Growth.”

“I think it just shows our lack of imagination. We can’t even imagine an economy that is better than growth,” said Catherine, co-founder of the Wellbeing Economy Alliance, a network of academics, businesses and social movements. Trebek said.

“At best we can put some nice adjectives in front of development – ​​sustainable development, green development, inclusive development, shared development – ​​but we are almost not allowed to entertain the possibility that a growing economy is the recipe for the 20th century,” she said. couple.

“High-income countries have got enough overall, but there are huge disparities within the richest countries. So, what they need to do is think about how to share and cherish those resources,” Trebek said.

Why poor countries want rich countries to foot their climate change bill

“I use this phrase they need to recognize that they have arrived. The development work is done and they now need to move on to another project which is about making themselves at home.”

Trebek described welfare economics as a “picnic blanket term” that covers movements such as “Downfall,donut” economics Or circular and regenerative models rather than alternative policy.

“I feel there is a deep moral obligation [on high-income countries] Because they are taking more than their ecological fair share, which is clearly saying that countries around the world that do not have enough to meet the basic material needs of their citizens are effectively going to live there, Trebek said.

“It’s really about saying, how do we live fairly on this one finite planet?”

‘GDP is not the way to measure wealth’

UN Secretary-General Antonio Guterres recently described it as a “massive public relations machine running into billions to shield the fossil fuel industry from scrutiny”.

Sean Gallup | Getty Images News | Getty Images

UN Secretary-General Antonio Guterres also recently joined the chorus voicing calls to abandon GDP as an indicator of the world’s economic growth, instead imploring policymakers to move to a circular economy.

It refers to an economic system that is based on reusing and repairing materials to extend the life cycle of products as long as possible and moves away from the world’s current “take, make, throw away” model.

“We need to change course – now – and end our senseless and suicidal war against nature,” Guterres said. Said at a major international environmental meeting in early June.

“We must place the right value on the environment and go beyond GDP as a measure of human progress and well-being,” Guterres said. “We should not forget that when we destroy a forest, we are creating GDP. When we catch more fish, we are creating GDP. GDP in the world There isn’t a way to measure prosperity in its current state.”

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