Beyond economic growth


By Gord Stewart

“Get out there and head for the mall – it’s your economic duty” was the headline in a comment piece by editor, Liam Dann, in the business section of The New Zealand Herald.

Sustainability consultant Gord Stewart tries to get his economic questions answered

It noted that after cutting interest rates to an all-time low, Reserve Bank governor Adrian Orr was calling for consumers to spend more and businesses to invest more. So Dann urged us on. “Get out there this weekend and have some fun, buy those new shoes,” he exhorted. “You’ll be doing your bit for the economy.”

Being averse to shopping, I dropped him a note instead. Observing that he mentioned Gross Domestic Product (GDP) four times in his column, I asked if he believed in endless growth on a finite planet. I followed with: How would that work? I asked what he thought about ‘flourishing’ rather than ‘growth’ – an approach favoured by noted economist Kate Raworth and other sustainability advocates. And did he support the thesis of her Doughnut Economics book? I received no reply.

So I checked in with the Reserve Bank directly. I asked if ‘spending more’ meant getting out there and shopping as Dann so enthusiastically urged. I asked if the Bank was still an advocate of GDP as a suitable indicator of progress. I wondered if anyone there was reading Doughnut Economics: How to think like a 21st Century economist and, if so, had they taken it to heart?

Within a week I had a reply from a senior communications advisor at the bank. To my question about shopping, there was some economic-speak but no definitive answer. The reply noted “GDP is still a useful metric of economic progress, though its deficiencies as a measure of overall well-being are understood.” Nothing about ‘flourishing v growth’ or Doughnut Econ though.

I wrote back seeking clarifications and, out of curiosity, sent it to Finance Minister Grant Robertson as well. No reply from the Reserve Bank, but, to my delight, I heard back from the finance minister.

He noted: “We are measuring progress against a broad range of indicators, not just GDP… We know that economic growth alone does not guarantee improvements to living standards.” And he said the likes of Raworth’s Doughnut Economics was considered by public sector agencies when formulating advice for Government (noting the Treasury specifically).

Buoyed by this and while I was on a roll – questions-wise – I thought I’d check in with the farming sector. After all, the climate is in crisis, agriculture is our biggest contributor to the problem, and the Zero Carbon Bill had recently passed into law.

Now comes the hard work, but politics as it is, farming is still not being held to account. It will remain outside the Emissions Trading Scheme for now, will bear no costs until 2025, and will initially be charged for only a small portion of total agricultural emissions.

Given this, I wrote to three industry leaders – Terry Copeland, CEO of Federated Farmers; Tim Mackle, CEO, DairyNZ; and Sam McIvor, CEO of Beef + Lamb New Zealand Ltd – asking: Who do you propose should cover the rest of agriculture’s share? Is it fair they should have to do this? No reply from any of them in three weeks, so I followed up. Silence again.

I wrote to Todd Muller, the National Party’s agriculture spokesperson. I noted that a recent UN Intergovernmental Panel on Climate Change report indicated it will not be possible to keep global temperatures at safe levels without a transformation in the way the world produces food and manages land. The report’s proposals include a significant shift toward vegetarian and vegan diets.

Then I asked him: How do you think our farmers should respond to this situation? Will the National Party show leadership for the needed changes? If so, what specific policies and programmes would you implement? He didn’t answer any of my questions, but did recount National’s standard take on climate change.

The current Government appears committed to doing the right and smart things for the economy, for the environment and for the future. But they cannot do it alone.

Attitudes need to change. Success will not come in a world that lauds Black Friday and cheers on ever higher Christmas retail sales. Industry leaders and politicians of all stripes need to get beyond the simple interests of their own constituents. They need to show real leadership in the face of a truly global crisis.

Australia’s bushfires, dust storms and flash floods are a stark reminder of the world we are creating. Heart-rending images of injured koalas and kangaroos are the face of the estimated billion animals burnt to death in the fires. There was no evacuation notice for them.

*Gord Stewart is a sustainability consultant with a background in environmental management and economics

Leave a Reply

Your email address will not be published. Required fields are marked *