Environmental factors must be included in GDP, say scientists
A new paper to be presented to government ministers at a meeting of UNEP in Nairobi, says that countries must move beyond tracking economic growth using measures of gross domestic product (GDP) and incorporate environmental and social dimensions into a new measure of wealth if they are to avoid an escalating series of climate, biodiversity and poverty crises. The group will also call for the removal of fossil fuel subsidies, worth an estimated $409bn a year globally, as well as the end of support for traditional transport and agricultural methods that do not account for their environmental costs. Subsidies that often only benefit the better off. Caroline Spelman has said the UK will work to secure an assurance that all businesses and governments begin work to incorporate natural capital into their accounting practices, GDP+, at the Rio+20 conference later this year.
Governments warned failing to account for externalities will make climate change harder to manage
20 Feb 2012
That is the view of 20 former winners of the Blue Planet Prize, sometimes dubbed the “Nobel Prize for the environment”, in a new paper to be presented to government ministers at a meeting of the UN Environment Programme (UNEP) in Nairobi, Kenya, later today.
“The immense environmental, social and economic risks we face as a world from our current path will be much harder to manage if we are unable to measure key aspects of the problem,” the paper says.
“Green taxes and the elimination of subsidies should ensure that the natural resources needed to directly protect poor people are available rather than via subsidies that often only benefit the better off.”
The call comes after UK environment minister Caroline Spelman last week said the country will work to secure an assurance that all businesses and governments begin work to incorporate natural capital into their accounting practices, a metric she called GDP+, at the Rio+20 conference later this year.
Similarly, former US vice-president Al Gore argued last week that ignoring the social costs of oil, coal and gas would be an even bigger mistake than the over-valuing of sub-prime mortgages, which plunged much of the world into financial crisis.
The scientists also recommend that creating markets for biodiversity and ecosystem services would help break the link between consumption and environmental destruction.
They warn that without action, the costs of climate change, already projected at five per cent or more of global GDP, could one day exceed global economic output.
“The current system is broken,” said Bob Watson, chief scientific adviser to the UK Department for Environment, Food and Rural Affairs (Defra), in a statement. “It is driving humanity to a future that is… warmer than our species has ever known, and is eliminating the ecology that we depend on for our health, wealth and senses of self.
“We cannot assume that technological fixes will come fast enough. Instead we need human solutions. The good news is that they exist but decision makers must be bold and forward thinking to seize them.”
Green campaigners have long argued that measuring economic activity using GDP often fuels environmental destruction, noting that investment in the clean up operations required after an oil spill will often result in a boost to GDP.
In related news, the UN announced last week that over 10,000 organisations, including 7,000 businesses, have pledged to make sustainability principles part of their strategy and operations, under its voluntary Global Compact initiative.
It reported that while over 3,000 organisations have been expelled from the programme since it launched in 2005, the initiative is still on target to sign up 20,000 business participants by 2020.
- Gore: ignoring carbon risks repeat of sub-prime mortgage crisis
- UK to lead on green accounting at Rio+20
UK to lead on green accounting at Rio+20
Caroline Spelman sets out UK’s ambitions for upcoming sustainability summit
09 Feb 2012
Environment minister Caroline Spelman today identified “transparent and coherent sustainability reporting”, resource efficiency and promoting green growth as key elements that the UK delegation will look to insert into the negotiating text.
This could involve a commitment to move to GDP+, a measurement that moves beyond basic economic activity to consider other factors contributing to sustainable growth, such as natural resource depletion or social wellbeing, Spelman said at an event in London.
Spelman predicted the effect of the GDP+ measure would be to “mainstream” sustainability into every decision governments and businesses make.
“We want to advocate corporate accounting for sustainability, so that is right across the private sector, enabling investors and shareholders to understand if the company [they are] investing in is making an effort to take sustainability seriously,” she told reporters after her speech.
“In terms of government accounting, we want our own government to take account of natural capital and we want our statisticians to calculate the state of the nation more widely.”
She also confirmed the UK plans to establish a committee reporting to the chancellor on the state of natural capital in England, intends to embed natural capital in the country’s accounts by 2020, and has created an Ecosystem Market Task Force – in conjunction with the private sector – to develop new green goods and services.
Spelman said this expertise will offer huge opportunities for UK businesses to share green expertise overseas and expand into new markets.
“We believe you can drive significant greening if you take proper account of the value of natural capital in your government accounts,” she told reporters. “We will be urging British business that advocate accounting for sustainability to go [to Rio] and share the way that they do it.”
The zero draft text for the summit, entitled The Future We Want, has already been circulated, but Spelman said it “lacks focus and ambition” and is “missing some important elements”.
She said the UK wants to see “a clear commitment to sustainable development and green growth”, and a reduction in “harmful” fossil fuel subsidies. Meanwhile, the creation of Sustainable Development Goals (SDGs) on “linked challenges”, such as food security, water security, and access to energy, are “an absolute priority”.
These SDGs would extend beyond the UN’s Millennium Development Goals (MDGs) to eradicate hunger and poverty, and promote environmental sustainability, added Spelman.
She also said the summit must have genuine outcomes and “be a workshop, not a talking shop”.
“This government is determined to see Rio +20… deliver outcomes that will make a real, lasting difference to the economy, to the environment and to our well-being,” she said.
“Governments can and must provide the framework for green growth… But the private sector and civil society have a major role to play in delivering the green economy through trade, innovation and investment.”