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| Sunita Narain: In search of the right growth model | | We need new economic indicators to measure prosperity in an inclusive and carbon-liable world |
| Sunita Narain / New Delhi Sep 26, 2011, 00:43 IST |
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In June next year world leaders will gather in the joyful city of Rio de Janeiro to mark the 20th anniversary of the 1992 United Nations Conference on Environment and Development (UNCED) — the Earth Summit. It will be 40 years since the Stockholm conference, when the question of the environment first caught global attention. At Stockholm, developing countries were uncertain — Indira Gandhi, India’s then prime minister, was the only leader from this part of the world to attend the meet. The developing nations were just feeling their way to articulate what the environment meant for them, how their development would need resources and how their growth could lead to pollution. Ms Gandhi’s famous phrase “poverty is the biggest polluter” has been interpreted in many ways. At Rio in 1992, the same set of countries decided to put its foot down: they asserted their right to sustainable development.
The United Nations Conference on Sustainable Development, or Rio+20, comes at a crucial time in global affairs. A possible double-digit recession in the US, the financial crisis in the euro zone, and peaking oil prices — everything is provoking a serious rethink on the current growth model. What are the interconnections between this model, built on consumption for wealth creation, and the challenge it poses to sustainability? We know today that an underlying cause of the financial strain is dependence on cheap loans or cheap production to induce consumption, to fuel growth. The world has not been able to design an affordable or equitable growth model that meets the aspirations and purchasing abilities of people across the world. There are limits to such growth, a fast-growing world is learning. It is not possible to emulate the lifestyle of the already-industrialised without compromising the future survival of the Earth. Such limits will require the world to share the Earth, so that growth can be afforded and remains sustainable for all.
How should the planetary blueprint look like? First, we need new economic indicators to measure prosperity in an inclusive and carbon-liable world. It is being increasingly accepted that the current method to measure economic progress in terms of gross national product does not provide the right signals for valuing growth, just and sustainable. Bhutan has adopted gross national happiness to indicate a way to measure well-being outside of wealth. In 2008, responding to concerns about the inadequacy of current measures of economic performance, French President Nicolas Sarkozy set up the Commission on the Measurement of Economic Performance and Social Progress. The choice of the economic measure is important, let us accept, for it makes the world assess economic performance and social progress in a new light. But what are the “right” indicators that will value the next-generation, low-carbon development paradigm?
Second – and this is a no-brainer – the world must buy into the demand for a global framework for equal rights and entitlement to global atmospheric space for all, which will, in turn, create conditions for limits on consumption and production. The world’s atmospheric budget must be shared. Such sharing, it is important to note, will create the right conditions for critical and important economic choices related to changes in consumption and production patterns. Such acceptance of limit has to be a key economic-political driver the world over. If we can’t put it in place, there will be no real incentive to move away from the current unsustainable economic growth model.
Third, can we all convert to green energy? For that, do we have the guts to build a global feed-in tariff mechanism? It is well understood that the transition to low-carbon growth will require massive investment in new renewable technologies, as also in distribution systems, which could reduce the cost of transmission, minimise losses and make societies more resilient. The challenge is compounded: majority of households globally remain energy-deprived and energy-insecure. The world has to find affordable and sustainable energy options. It is also clear the South has the opportunity to leapfrog into new energy solutions, for it has still not invested, completely, into the fossil-based energy systems that threaten Earth. The transition to a low-carbon energy future can be paid through a global feed-in tariff mechanism, which would incur the differential cost of generating more expensive energy-using renewable technologies. Many countries have adopted domestic feed-in tariff regulations. Germany, where consumers of energy are relatively wealthy, requires power utilities to pay the differential. In India, where energy insecurity and energy costs are already high and consumers are poor, the approach is to bundle cheaper energy with more expensive energy to bring down prices. These approaches will offer the options for the future.
But that is not enough. Global leaders have to stand up for some “inconvenient messages”, which challenge the current business-as-usual model. In Rio, all leaders should take a bus, to say they want a car-free world. And they must say it clearly. Change the game. That is what we want. We are not waiting.
sunita@cseindia.org
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