Pre-Budget Report 2008: Green fiscal policy in a recession - Environmental Audit Committee Contents


Supplementary Memorandum submitted by Professor Tim Jackson

  Q1.  There is considerable detail on this in our forthcoming report. But the short answer is that a government campaign to address consumption would have to do two things. The first is to redress the systematic bias towards consumerism. The second is to provide the opportunities for people to flourish in less materialistic ways.

  Redressing the consumerist bias will mean curtailing signals (including advertising) that promote unproductive, status driven positional consumption and ensuring that government's own messages are consistent in relation to consumption and the need to consume less. At the moment of course this is very difficult for Government to do because of the assumption that consumption growth is essential for economic stability. But in a longer-term better thought through strategy, this consistency of message will be an essential part of government's role in achieving sustainability.

  Providing the capabilities for flourishing means investment in public spaces and infrastructures, support for community-based resources and the strengthening of social goods and services. There is more detail on this in our forthcoming work. Suffice it to note here that there are clear opportunities for stimulus investment here, particularly in relation to public investment in social infrastructure.

  The "ecologically sustainable" level of consumption should be established according to principles laid out some time ago by Herman Daly that refer to a "constant stock of capital that can be maintained by resource throughputs (and emissions) that remain within ecological limits". Establishing those limits—as the UK has done for carbon emissions—is a vital first step in figuring out a sustainable level of consumption. The next step is to develop the capacity to understand the macroeconomic implications of an economy constrained in this way. Again, this point is developed more fully in our Prosperity report.

  Q2.  Jonathon's point, and I agree with it, is that within the existing model, we rely on growth to maintain full employment and to furnish growing revenues for increased public spending. When liberal market economies collapse, the biggest hits are to jobs and to public sector revenues. These things both matter. Both are essential to providing people with capabilities to flourish. In our prosperity report we identify this as "the dilemma of growth". Neither is easy to solve but there are some mechanisms for redressing the structural reliance on growth and addressing the impacts of recession. Essentially these mechanisms come down to the question of fair shares: sharing the available work and national income in ways that protect the most vulnerable and promote social wellbeing. There is more detail on this in our Prosperity report, but there is also a lot more work that needs doing—by Treasury and others—to get from points of principle to a workable low-growth economy. Clearly, however, this demands active policy that goes beyond the dogma of free market economics. Hopefully at this point in time our eyes are open wide enough to accept this point. It should be noted, though, that planning for low-growth is very different from negotiating unplanned collapse. What we're seeing at the moment is the abject failure of plan A (assumptions of continued growth) and the blinding realisation that there is no plan B.

  Q3.  Again a lot depends on how this happens. In some ways, Jonathon was making an obvious point that when investment stalls, it is difficult to fund the investment in technological and infrastructural changes that is essential to achieve the transition to a sustainable society. It's become very obvious that in fact, when economies collapse it is essential for government to intervene, particularly through public investment and spending. The point here, and I know that Jonathon agrees wholeheartedly with this, is that this provides a unique window of opportunity to target that investment and that spending towards things that we know are needed to put us on a path to sustainability. As I hoped to make clear in my oral evidence, these investments offer clear returns to society not just in terms of reduced carbon emissions, and better lives but in economic terms as well. As such they are much better places to put our money than in blind fiscal stimulus to promote blanket increases in undifferentiated high-street spending.

February 2009



 
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