What does a sustainable economy look like?

Hayley Stevenson  - Associate Fellow of SPERI & Senior Lecturer in Politics, University of Sheffield

Let me now set out what each of the three visions or discourses have to say for themselves as pithily as I can.

Radical Transformationism reflects a post-growth vision of a sustainable economy.  Environmental sustainability is understood to be incompatible with continuing economic growth.  Even if it were possible to reconcile these goals, we should rethink our commitment to growth-based economies since they produce inequalities that have social and environmental costs.  To mitigate inequalities, governments ought to pursue redistributive policies, such as agrarian reform, fiscal transfers, progressive taxation and other forms of public spending.   Capitalism is unviable and we ought to pursue alternative systems based on sharing and cooperation.   Insofar as market-based economic relations persist, these should be localised.  Small-scale economies are inherently better for both people and the environment.  They allow people to have greater control over the environmental resources on which their well-being depends. A radical shift is needed because, despite decades of talking about sustainable development, the global economy is certainly not becoming greener.  The idea of protecting nature by pricing it is both dangerous and undesirable: it’s just too important to be left to the whims of the market.

Cooperative Reformism stresses the importance of governments, business and civil society cooperating to sustainably reform the economic system we have.  The suggestion that we need to abandon capitalism and growth-based economies in order to live sustainably is unrealistic and unnecessary.  Environmental sustainability and economic growth can be compatible if the costs of degradation are appropriately reflected in market prices.  Continued improvements in technology and efficiency will allow us to increase GDP, profits and jobs while still reducing pollution and preserving ecosystems.  Moving towards a more sustainable economic system requires a concerted and collaborative effort in which everyone contributes to reducing their impact on the earth.  Everyone consumes, often on an unsustainable scale, so everyone has a responsibility to reduce their individual impact.  Transitioning to a sustainable economy will have costs and these won’t automatically be distributed evenly, so we need to explore opportunities for fair burden-sharing. This might involve transferring technology to assist developing countries in moving away from fossil-fuel technologies.

Statist Progressivism makes happiness and well-being the main measurement of progress, rather than GDP.  Wealthy countries in particular need to move away from a system in which economic growth is pursued as an end in itself.  We can transition to a fair and sustainable global economy without further growth, and the state has a leading role to play in moving us in this direction.  This will involve eliminating subsidies for environmentally damaging activities; investment in new clean technologies; reducing the standard working week to share the benefits of employment more widely and reduce consumption; and potentially taking responsibility for moving workers out of unsustainable jobs and assisting them in moving into fair and sustainable work.  This new economy may still be a capitalist one, but would involve considerably greater state intervention and steering, including redistributive policies to reduce inequalities.  Putting a monetary price on nature can facilitate good policy-making.  This may sometimes involve market mechanisms, but we should be cautious about commoditising nature and opening it up to trade.

There is evidently, then, no single way of imagining a sustainable economy.  The role of the state, the viability of capitalism and growth, the desirability of pricing nature: all are contested.  Adopting broad concepts like ‘sustainable development’ allows us to paper over these tensions and disagreements.  But that is really all that it does.  Given that many indicators of environmental quality have continued to decline over nearly three decades of policy-making in pursuit of ‘sustainable development’, a more fruitful task for governments and international institutions would surely be to reflect openly on the key existential issue, which is to decide around which of these visions the planet can genuinely sustain itself in the decades ahead.