The New Economy
Using the material discussed in Chapters 5-9, it is argued in this chapter that in future we will need to work within the twin constraints of depleting fossil fuels and the need to drastically curtail emission levels. If so, it is probable that global production of primary energy will peak and then start to decrease in the coming decades. However, over the past three decades, there has been a very tight correlation between world gross domestic product (GDP) and commercial primary energy consumption. Global economic growth can probably continue for some time (in line with further rises in primary energy). But it is difficult to envisage economic growth continuing in the face of declining energy availability.
There are thus two reasons for de-emphasising economic growth. First, continued growth (to the extent that it is possible) will further imperil natural ecosystems and environmental pollution. Indeed, we may have already overshot the sustainable bio-capacity of Earth. Our current economic system has clearly failed to deliver on our climate, resource and equity problems. Second, per capita GDP is no longer a reliable measure of human welfare. It appears that we then need a new approach to economics.
Recent ideas such as ‘converge and contract’ and ‘shrink and share’ have been put forward as possible solutions to the problem of equity in dealing with the past, present and the future use of the global commons. It is possible that oil supply difficulties will be the catalyst for wide-reaching changes in the way we live. An additional benefit of such change would be to ease pressures on fossil fuel reserves, and international competition for them. Many will see our proposal as hopelessly utopian, but what is the alternative?
This chapter builds on our critique of purely technological approaches, and argues that we must shift our emphasis from economic growth to the satisfaction of human needs in a world with limited resources and pollution absorption capacity. Just as our economy needs to change, so must lifestyles, and we suggest how our future living patterns, and even our core values, will need to differ greatly from today’s. We do this by examining the changes needed to urban settlements, which now contain the majority of the human population.
KeywordsGross Domestic Product Public Transport United Nations Human Development Index Purchase Power Parity
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