Scottish Futures Forum (SFF) was created by Scottish Parliament to consider future challenges and opportunities, and stimulate debate and understanding on public policy issues. The central theme of the seminar series ‘rethinking wellbeing’ is that for complex problems such as multiple deprivation, population health, climate change and loss of bio-diversity we need to consider the environment, the economy and society holistically and in an inter-related manner. This means breaking down silos to help design effective policies and partnerships.
The seminar on ‘thinking about the economy differently’ was held at the Scottish Parliament building on 15 November 2012 and was chaired by Tim Birley, former senior civil servant and adviser on sustainable development. The session was introduced by Aileen McLeod MSP and SFF Director, who spoke of a need to rethink approaches to wellbeing in order to take account of wider economic, social and environmental measures; thinking in a more joined-up and smarter manner, and not quantifying ‘success’ simply in monetary terms. Following introductions, presentations were given by Professor Dietar Helm CBE, University of Oxford, and Miriam Kennet, co-founder and CEO of the Green Economics Institute.
Professor Helm noted that we intuitively support the notion of a ‘sustainable economy’, but do not ask searching questions about what this means, and what is needed to achieve it. He spoke of a need for a framework/balance sheet that accounts for all assets and liabilities, and which recognises the true cost of maintaining our assets. Using the example of Hurricane Sandy, he illustrated how there was no record of ‘assets’ prior to the hurricane (environmental/natural, human/social capital, etc) but the cost following the disaster is quantified at $60billion.
A method of valuing natural assets (e.g. scarce resources, landscape, rare birds) is to identify the costs to maintain those assets over time. Depreciation needs to be factored, as assets need to be maintained for future generations. We do not properly account for carbon and the consequences of the destruction of bio-diversity and pollution. Cost/benefit analysis informs, but does not make, decisions. Economic growth is not ‘evil’ but a balance sheet needs to include all assets and liabilities, e.g.:
- Manufacturing capital
- Human capital
- Natural capital
- Depletable resources
- Health costs – ageing population
- Welfare payments
- Environmental degradation
- National debt
Speaking of the implications for savings, consumption and investments Professor Helm noted that we are living beyond our means, with unsustainable levels of debt. Our approach has been to invest by borrowing – but loan interest needs serviced, and the capital needs repaid! The UK’s estimated savings ratio (currently zero?) to ensure a sustainable economy is calculated to be 11 to 15% (China’s savings ratio is currently 50%). Our current spend of £10bn (?) on sustaining infrastructure, is a fraction of the estimated £500bn that is properly required.
If we truly want a sustainable economy then we need to understand what we need to do – our standard of living needs to reduce by 20% – are we really prepared to face up to this, or are the societal /political implications too grave?
Miriam Kennet has been credited with creating the academic discipline of Green Economics. She started her presentation by noting that Green Economics had been launched in the Scottish parliament, and complimented Scotland’s approach in pursuing a green energy strategy. She described ‘green economics’ as an economy of doing, sharing and supporting each other; where everyone and everything has economic rights. Major challenges exist in relation to climate change, stopping species loss, preventing poverty, ensuring social and environmental justice, and creating health and wellbeing.
She referred to the Marmot Report which shows the importance of having a good start in life, and the stark inequalities in children’s development between poor and wealthy areas. She also spoke of the need for innovation, and referred to ‘the folly of [economic] growth’, noting the mood across Europe for an end to austerity, and other challenges presented by high youth unemployment and an ageing population. Other practical considerations for the green economy are to end racism and xenophobia, and improve lives. A more democratic approach to managing economies is required – photographs of leading economic bodies (e.g. G7, etc) illustrated the dominance of ‘male’ thinking,
Miriam spoke of the importance of an equal society in which everyone is able to participate, and the need to empower people and make the economy more equal. She stressed the need to change lifestyle and challenge traditional thinking – we need to consider the impact of our purchasing; sustainability can be a driver for a new economy; we need to aspire and have ambition.
A Q+A session addressed a range of issues:
The importance of the banking and monetary systems was noted: Dietar spoke of how bank loans mobilise capital, which in turn drives the economy. Miriam noted alternative less-conventional systems, such as barter and other co-operative models, underpinned by different value sets. Scottish values of ‘fairness’ and social justice were apparent in the discussions.
A question asked: ‘can we increase our quality of life, whilst raising our standard of living?’ This requires a belief system about ‘what is a good standard of living’; ‘what comprises the good life’; ‘how is income distributed to address poverty’; ‘how is inequality measured’; ‘what is a good society’. Dietar spoke of a need not to impose a view on society, or to know ‘the right answer’; but rather to seek a democratic view.
Miriam noted the power of ‘fashion’ to change people’s attitudes and behaviours, and how through making something ‘socially unacceptable’ change can come about relatively quickly. Dietar spoke of a need to ‘shine a torch’ on issues, to truly understand issues and inform debate – we need to be open and honest. There is a gap between where we are, and where we want to be; we need to ‘get real’ about the nature and scale of the challenge.
The concept of ‘user [or polluter] pays’ is not always easy to implement as it may not be clear who the user/polluter is: is it a previous generation; our generation today; our actions; the Chinese [scale of pollution/output]; us for buying Chinese goods and products; who?
Amongst other points raised were: an eco-systems approach operates as a subset of the economy, whereas what is needed is for economic systems to operate as a subset of an eco-systems approach; Norway is depleting natural resources, but thinking ahead through operating a sovereign wealth fund which is setting aside money for future generations.
The panel were joined for the discussion by Jan Bebbington, Professor of Accounting & Sustainable Development at St Andrews University, and Sustainable Development Commission’s Vice-Chair for Scotland before it closed in March 2011. Jan offered some interesting observations about the poor use of economics (and economic arguments) to substantiate decisions .v. the need for informed decision making and taking responsibility for choices. This chimed in light of comments concerning an impoverished debate leading up to the 2014 referendum – and the need for a meaningful debate about the sorts of values and belief systems that we want to actively promote as a society (and the sorts of places we are creating – what is sustainable development?!).
The Chair Tim Birley summed up by noting common threads running through the presentations and discussions in relation to promoting a sustainable economy: a need for radical innovation; the daunting scale of the challenge that needs to be addressed – globally and by the individual; the need to ‘shine a torch’ to enhance understanding and inform decision making; a need for honesty and a better feel for what we need to do.
The first seminar in the ‘rethinking wellbeing’ seminar series was on ‘Rethinking the environment’ which took place on 19 September 2012. This seminar, chaired by Tim Birley, looked at how it is that we treat the environment as a separate category when it is integral to sound business and to the quality of individual and community life. It examined the environment as a resource for wealth creation and wellbeing for the people of Scotland – and argued that the environment is a vital part of re-building the economy as well as significantly impacting on our health as individuals and as a community. Tom Crompton, Change Strategist at WWF looked at the ways in which the environment features in decision making, at values and decisions. Professor Chris Spray, Chair of Water Science and Policy at Dundee University explored ecosystem services and local governance. The report is available here and the full transcript here.
The third seminar in the ‘rethinking wellbeing’ seminar series will take place on 20 February 2013 and will focus on society and feature presentations from Judith Robertson, Head of Oxfam in Scotland and Professor George Morris. Advance booking is possible by contacting email@example.com
A more detailed report of the event will be available shortly.