Policy Proposals to Move from Quantitative to Qualitative Economic Growth
A detailed roadmap for moving from quantitative to qualitative growth, and thus to find solutions to the global crisis that are ecologically sustainable and socially just, is beyond the scope of this Briefing. A few steps that seem to be critical are the following:
• Models of qualitative growth need to be formulated by multi-disciplinary teams, compared, and promoted in business, government, and the media. Accordingly, these sets of broader social/environmental indicators now need to be adopted. This will require political will, public pressure, and education of media editors and reporters.
• Tax systems need to be restructured by reducing taxes on work and raising them on various environmentally destructive activities, so as to ‘internalise’ and incorporate all such costs into prices in the market place. Such ‘green taxes’ are being adopted in many countries. They should include a carbon tax and a petrol tax, which can be gradually phased in, while offsetting them with reductions in income and payroll taxes. In shifting taxes from incomes and payrolls to waste, all pollution as well as carbon and non-renewable resources will gradually drive wasteful, harmful technologies and consumption patterns out of the market. This will raise the shareholder value of companies producing green alternatives.
• Beyond tax shifting, companies need to reassess their production processes and services to determine which ones are ecologically destructive and thus in need of being phased out. At the same time, they should diversify in the direction of green products and services. As new accounting protocols are adopted which fully account for social, environmental, and governance factors, companies are being steered toward these more sustainable products, services, and practices by their investors, including socially-responsible mutual funds, pension funds, labour unions, civic groups, and individual investors.
• Reforming international finance and monetary systems is still urgent. The G20 Summit in London, 2 April 2009, included debates about how to curb excessive leverage, risk-taking, pay and bonuses; and how to regulate speculation in currency markets ($3 trillion traded daily) and credit derivatives ($683 trillion now outstanding,16 as compared with global GDP of only $65 trillion). These new rules need to be global by agreements – the only way they can work in our globalised financial system. The UN members, the G192, agreed with most of these reforms in their summit at the General Assembly in New York, June 2009.
The G192 is now a more democratic group than the G20, and both are rendering the G8 obsolete.
• All these reforms will often involve shifts of perception from a product orientation to a service orientation and ‘dematerialising’ of our productive economies. For example, an automobile company should realise that it is not necessarily in the business of selling cars but rather in the business of providing mobility, which can be achieved by, among many other things, producing more buses and trains and by redesigning our cities. Similarly, countries, and especially the United States, should realise that fighting climate change is today’s most important and most urgent security issue. The Obama Administration should reduce the Pentagon’s budget accordingly, while increasing funds for diplomacy mitigating climaterelated threats to global security and building the new ‘green’ economy.
• At the individual level, a corresponding shift of perception will turn from finding satisfaction in material consumption to finding it in human relationships and community building. Such value shifts are now promoted by many civic groups as well as by some television series, such as ‘Ethical Markets.’ A proposal to alter the favoured tax status for corporate advertising across the board aims at reducing advertising in a fair manner without jeopardising the rights of free speech."