Our Position Paper on:
C
I
M
O
N
O
C
E
GROWTH
IN A NUTSHELL
Governments use Gross Domestic Product (GDP) to measure economic
growth. GDP shows how much is bought and sold but doesn’t measure
the things that matter most to a healthy society. Obsessively pursuing
GDP growth leads to political decisions that hurt people and the
planet. We must stop chasing growth at any cost. Instead we need
to ensure our economies support a decent quality of life without
damaging the environment.
THE FACTS
1
The income gap between
the richest and the poorest
in the UK is getting bigger.
A type of measurement
called the Gini coefficient,
which measures income
inequality, is at its highest
since the 1970s.
2
Nobel Prize-winning
economist, Joseph Stiglitz
says: “GDP tells you nothing
about sustainability.” Even
Simon Kuznets, dubbed the
inventor of GDP, says: “The
welfare of a nation can
scarcely be inferred from a
measurement of national
income.”
3
Surveys show Britons and
Americans feel no happier
than they did 50 years
ago, despite decades of
economic growth. Once
it reaches a certain point,
there’s no evidence that more
GDP improves our wellbeing.
THE PROBLEM
Most governments make economic growth a top
priority. They do this because they believe that
without growth, what we produce can’t keep up with
demand. And because of technological gains that
replace workers – such as automation and robotics
– we need growth to create new jobs. In addition,
growth is needed to raise taxes to spend on public
services. Growth, as measured by GDP, has become
our way of measuring the success of a government’s
policies.
However, our current economic system already
depends on using up vast quantities of natural
resources, causing widespread pollution and
damaging our environment. Carbon pollution is rising
because of our economic activity, increasing the risk
of devastating climate change. The price of natural
resources is steadily increasing as more countries
industrialise and
place a heavy
demand on
increasingly
limited
supplies. More
growth could
exacerbate
these problems.
WHAT WE THINK
off. It would be easy
to get lost in arguing
whether economic
growth is good or bad.
Instead we should
focus the debate on the
steps needed to build a
greener society in which economies can be
better managed.
We need to manage our economies in new
ways that deliver good quality jobs and
public services while not harming the natural
systems we rely on. A healthy economy
should meet people’s needs but also protect
the environment that sustains us. The UK
economy isn’t doing that. Inequality is getting
worse, and we continue overshooting safe
environmental limits.
Friends of the Earth thinks that:
n
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GDP doesn’t reflect a nation’s health. GDP
doesn’t measure what matters most to our
society. It doesn’t take account of impacts
on the natural world and doesn’t attach
any sense of good or bad to the activity it
measures. If your house burns down and
you have to pay to build another one, that’s
good for GDP.
GDP needs putting in its place. Pursuing
GDP at all costs doesn’t benefit our society.
It leads to policies like the promotion of
fossil fuels, more consumption, high levels
of personal debt and rampant inequality.
We need to adjust our priorities and use
GDP alongside measures of personal and
environmental wellbeing.
Economies shouldn’t be built on
ransacking the environment. Whether
an economy is growing or not, it is
unsustainable if it relies on using up limited
resources and polluting our world. We
need to switch to renewable energy and
use resources more efficiently. We need to
leave fossil fuels in the ground.
We must focus on the big picture. Growth
can be a successful route out of poverty for
poorer countries, while unmanaged slowing
of economic growth in richer countries (a
recession) causes misery for the least well-
n
Growth doesn’t have to be dirty. There
is no inherent reason economies can only
grow by causing environmental damage
or only be clean if growth stops. We need
to rise to the challenge of creating clean
economies, whether our economy is
growing or not.
KEY REFERENCES
Friends of the Earth’s global energy pathway:
www.foe.co.uk/blog/climate-change-hope
Friends of the Earth, A plan for Clean British Energy. Powering the UK
with renewables – and without nuclear:
www.foe.co.uk/sites/default/files/downloads/plan_cbe_report.pdf
The European Commission’s Beyond GDP initiative:
ec.europa.eu/environment/beyond_gdp/index_en.html
Friends of the Earth Europe’s report on how four resources are used
in economic policy and practice:
www.foeeurope.org/conference-report-four-footprints-policy-practice-110214
FOLLOW
@powellds Senior Campaigner, Economics & Resource Use, Friends of the Earth
To give us feedback please visit: www.foe.co.uk/feedbackcomment.html
riends of the Earth Trust, a registered charity. www.foe.co.uk
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May 2015, 2241