Moving #BeyondGDP - Q&A with Anton Cartwright
On 9 January 2019, the Green Economy Coalition, the Green Growth Knowledge Platform and the Partnership for Action on Green Economy held a High-Level Media Debate on the question, "What makes your country wealthy?" In the lead up to the event, we asked thought leaders to share their insight on new approaches to wealth accounting and the challenges of moving beyond GDP. Here we hear from Anton Cartwright, a green economy researcher at the African Centre for Cities (UCT) and senior associate of the Cambridge Institute for Sustainability Leadership.
1) Why does how we measure wealth matter?
It guides so much of economic policy and private sector behaviour. “Wealth” has become a short-hand for well-being and happiness and in a democratic system politicians have to promise to these. To ignore wealth in this context can be seen as ignoring your responsibility to improve the lives of the people you represent, even if the concept is narrowly envisioned and does not necessarily correlate to actual gains in well-being.
Conceptually, I like Jeroen van den Bergh’s notion of “a-growth” (Ecological Economics 2011) – policies and investments that achieve desirable outcomes “agnostic” of their impact on growth. The challenge involves creating sufficient incentive for investment in these outcomes.
2) What are the benefits and risks of putting a dollar value on nature?
Benefits include the ability (in theory) to impute their value in day-to-day transactions. Transactions that otherwise assume there is no value to the nature that they affect (the “externality” point). In practice putting a value to nature is seldom enough. We need markets or systems that allow us to hold responsible the people and entities causing the loss, and which encourages the prevention of such a loss from occurring in the first place. This systemic change is more difficult. It is also fraught with value judgements that may not hold true in every place or under each circumstance.
3) What do you consider to be the main barriers to moving beyond GDP?
GDP is incredibly convenient and it is universally equivalent when adjusted for purchasing power. Most of the alternatives introduce a degree of subjectivity (people value nature very differently, for example). That is not an insurmountable barrier and there are already examples of policies that include much more than GDP optimisation. Showing countries that have delivered developmental gains at low GDP points (and comparing them to countries that have poor development but high GDP) makes for an interesting analysis.
4) How could moving beyond GDP impact policy, people, and how we do business?
I think of GDP as a proxy for the well-being that most people desire. At times it is a very poor proxy. It could be improved by expanding the definition of ‘productivity’ and the definition of ‘capital’ in the ‘marginal productivity of capital’ notion that drives growth in most economic models. Where capital included the full value of functional ecosystems and productivity factored in human well-being it would alter incentives, change behaviour, and transform the nature of the economy. That is a tricky, but not impossible, thing to do well.
The much-cited risk is that powerful extractive and ecologically damaging companies think they can pay their way out of being held accountable for actions that should not be permitted in the first place, while simultaneously lobbying for low “environmental values”. In reality, the full cost of environmental damage manifests over time and over wide geographical spaces (and has widely varying impacts on rich and poor) and it is simply not possible to monitor, value, and attribute the full cost of ecological damage. For example, we don’t really know the full extent of what happens to humanity and the systems that humanity depends on at mean temperatures 1.5C above the 1850-1900 average, or what happens if white rhinos become extinct.
We can attempt to estimate the full cost of environmental damage based on past experiences and what current environmental circumstances people, systems, nature, and business rely on to survive and thrive. However, environmental and human systems are complex, and most cost-estimates struggle to fully capture what the future consequences or needs will be, or how one change could undermine the whole system. That is why some activities should be subject to legal prohibition.
5) Are there specific countries, companies, or people in this space that you recommend taking a closer look at?
No company or country and few individuals are doing this completely right yet. Some companies (Patagonia Clothing, Interface Carpets, Saint-Gobain glass) are trying new things and pushing harder than others. Many countries, states, and cities are making important changes that need to be accelerated and scaled and we need to accept that some sectors and activities require phasing out, i.e. sunset clauses, establishing an end date that the activity or sector cannot continue beyond.
6) How does your work fit into this larger goal/discussion of moving beyond GDP?
I teach students, practitioners and companies. I write papers, reports, and policy documents that I hope influence decisions and I run an “urbanisation laboratory” in both Tanzania and Ghana for the Coalition for Urban Transitions that links the growth of cities in those countries with economic policy and climate change. I also established the Credible Carbon registry – a social enterprise that links carbon off-sets with poverty alleviation projects in Southern Africa.
The opinions expressed herein are solely those of the authors and do not necessarily reflect the official views of the GGKP or its Partners.