So, Federica, what has
been bugging you this week. Well, I thought we
could stick our teeth into this debate about
whether economic growth is the enemy of the environment. All right. There was this video that caught
our attention, that went viral. We have to overthrow
this system which is eating the planet
with perpetual growth. I mean, since when was
GDP a sensible measure of human welfare. And yet everything that
governments want to do is to try to boost GDP. Now people like the OECD or
the World Bank are saying, oh, we’re not asking
for a lot of growth. Just 3 per cent a year. That means doubling in 24 years. Yeah, we’re bursting through
all the environmental boundaries and screwing the planet already. You want to double it? Double all that. Double it again. Keep doubling it? It’s madness. We’ve got to find a better
way of measuring human welfare than perpetual growth. You know, it’s a
very striking video. He makes a very
strong argument there. But I think there’s
a difficulty, there’s a risk here that
we say that economic growth and sustainability
and environment are mutually exclusive. That we’re sort of saying
you can’t reduce emissions while having economic growth. But there’s a really
interesting chart I saw the other day which is
showing how economic growth has changed but also how the
energy intensity of that growth has changed. So how much energy it takes to
produce a given amount of GDP. We’re starting from 1980
and going through to 2017. And if we normalise
all the numbers, so whatever the figure
was in the year 2000 becomes a value of 100. And GDP globally
has come through, and it is now double what
it was, global GDP, in 2000. However the carbon
intensity of that GDP has been gradually decreasing. So the amount of carbon dioxide
and the amount of energy that is used to
create economic growth has reduced, and that
sort of pulled down the total fossil fuel emissions. So fossil fuel usage
has risen by much less than economic growth because
the energy intensity of GDP has improved. If this energy intensity,
the efficiency at which we grow the economy
continue to improve, you could get to a point
where we have growth, but we are still
cutting emissions. So I just think we
shouldn’t throw out the baby with the bathwater
and say economic growth is now suddenly a bad thing. This chart purports to show
that fossil fuels and energy intensity, that
the pace of growth, of these elements
of economic growth has either slowed or
is actually declining. So everything is rosy. However, I think that it isn’t. If we look at oil
consumption, for example. OK. So this is global oil
consumption from 1994 to 2019. We’ve now hit 100m barrels
per day being consumed. So clearly, if we want
to save the environment we can’t carry on like this. Where I disagree with George
Mombiot is that I don’t think it’s necessary that we start
with overturning the system. I think we should go back to
how the system is measured. OK. And I’m not the only
one who thinks that. There is a massive
debate amongst economists in terms of how we
measure economic growth. And some have come up with
this idea of green GDP. So this is
environmentally-friendly economic growth,
and it all goes back to the idea that
gross domestic product and how we measure
it is very faulty. Let’s say, for example,
when often in our articles we’ll cover quarterly
growth and we’ll see the economy this quarter is
growing by 0.2 or 0.4 per cent. This decimal point
gives us the idea that it’s a very accurate
and precise number. But there’s a lot of uncertainty
behind this number, actually. Let’s say there’s
a natural disaster. Because of all the
reconstruction efforts that are needed to
rebuild a society after a natural disaster, that
also counts as economic growth. So even though
we’ve lost assets, there’s been destruction,
by definition, that’s still counting towards
economic growth to the economy. The output is still there, yeah. So statisticians have
come up with a new measure for economic growth that is
more environmentally-friendly, that discounts waste, social
disharmony, and so on and so forth. And that’s actually
been pioneered by some Chinese statisticians,
and they come up with a formula for green GDP. OK now, green GDP,
to me, I mean, it sounds conceptually great,
but how does that even work? How do you calculate it? Are they going around
counting trees being planted, and polar bears being saved? How do you calculate green GDP? And what kind of monetary value
can you assign to a river, for example. I mean, some people have tried
to do that, but let’s not get stuck into this. I’ll show you the
formula for green GDP. It’s actually kind of simple. Almost too simple, which
will make us a bit sceptical. So basically, it’s… we’ll just start from
GDP as we measure it now and we subtract from that CO2
emissions, waste, and the money that we could have
made had we converted that waste into electricity,
and we remove also the natural resources
that we depleted when creating this economic growth. Cool. And they’ve applied this
to a couple of countries to see what difference the
real GDP and the green GDP will make to economic growth. So I guess this will show us
which countries are getting the sort of dirtiest
economic growth, and which have got sort of the
cleanest growth, as you were. Like the difference
between those numbers. Yeah, I suppose so. And let’s try and make
a chart with something that I used to use
in elementary school. This is in Italy. Excellent. Number blocks. They just extracted GDP
growth figures from 2014 from a bunch of countries, and
they looked at those measures for economic growth. And then applied that
green GDP formula. Let’s have a look at
a couple of countries. Now we were going through
this, and we thought Mexico was quite interesting. So Mexico’s conventional
GDP growth rate in 2014 was 2.87, so about 3 per cent. About 3 per cent. But it’s green GDP growth
in that same period was actually a
contraction of 3 per cent. Yeah. So in fact, it’s negative. So the economy contracted if we
consider waste, CO2 emissions, environmental depletion. Mexico’s economy contracted. So we’re sort of
saying they were using a lot of the fossil fuels. They were creating
a lot of waste, and they were probably
depleting natural resources to produce that growth. Now let’s look at China. China grew by 9 per cent. Actual green GDP… Dropped to 6 per cent. Now let’s see. 1, 2, 3, 4, 5, 6. So it came in from 9 to 6 when
you factor in those resources. Let’s have a look at
the US and the UK. So the US was going to 4 per
cent and came in to 3 per cent. UK 10 per cent growth in 2014. Let’s do it. I don’t believe this. OK, but whatever. This is 10 and then green
GDP, it’s 9 per cent. So to be clear here,
we have the green GDP, it doesn’t actually mean that
our environmental resources have grown. This is just a more
eco-friendly way of measuring economic
growth in itself. Now separately, there are
efforts to actually calculate what is called our natural
capital, our trees, and our fish, and so
on, but it’s still at a very primordial stage. And so I guess to bring this
back to what George Mombiot was saying in the
video at the start, the problem we have today is
that economic growth, as it’s currently measured,
is in tension with environmental
conservation, and generally when economies grow
part of that growth is coming from
resource depletion, from damaging the planet. If economists, natural
accountants, as it were, all of these different bodies
can come together and create a new measure, a more
ecologically-friendly measure of green GDP, then we
could get to a stage where countries
could be targeting that green GDP in their growth. Could be growing, and
yet not at the same time damaging the planet. So effectively, the
ball now is in the court of the beancounters. It’s up to them. We need a robust measure
that all countries can agree is a precise and
useful measure, but one that includes, takes into account of
the value of natural resources and waste in fossil fuels. Let’s see what they can do.