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Comment: Resolutions for a new economic model
January is a time when many people measure such things as waistlines, alcohol intake and fitness levels, and realize it’s time to make some lifestyle resolutions.
While others are going low-carb, Canadian political leaders should go low-carbon and start measuring some other metrics as well to slim down environmental risks and reduce ecological scarcities.
As Canada Research Chair in sustainable community development at Royal Roads University, I am exploring more sustainable development pathways. Along with my team, we brought together more than 100 researchers, practitioners, civil-society leaders and policymakers from across the country to participate in a workshop in the spring of 2012. Our objective was to look at what is working and not working with our current economic model based on growth, and there was unanimous consensus on what Canadian decision-makers need to act on.
We need to expand our measures of progress from a simple growth metric, the king of all indicators, the gross domestic product (GDP), to human well-being.
The evidence is very clear that the present economy based on perpetual growth, rising levels of debt and continuing ecological deficits cannot continue.
Former British cabinet minister Chris Huhne recently advised that the U.K.’s economic growth strategy will not work unless the government pursues green growth by investing in industries such as energy efficiency and clean energy.
Here are some New Year’s resolutions for creating a sustainable economy.
1. Happiness counts: Measure well-being
Bhutan’s Gross National Happiness (GNH) already measures human happiness and well-being as the principal scorecard for national success. The GNH has also inspired or influenced similar initiatives at all levels, from towns and cities, such as Seattle in the U.S., to state-level governments, such as Assam, India. Canada could adopt a national indicator of well-being as the predominant indicator of human progress, measuring things such as child poverty, greenhouse-gas emissions and old-age support ratios.
While often accepted as a measure of well-being, GDP does not account for the full costs of production or consumption, ignoring many negative externalities, the cost of which will be borne by future generations.
2. Create a low-carbon incentive
Redirect incentives and subsidies for things such as fossil fuel production toward long-term investment. For example, instead of limiting barrels of crude extracted by accessible deposits of petroleum, limits should be based on the capacity of the atmosphere to absorb the CO2 from burning petroleum.
Embed an estimated cost of carbon into all public financing to create disincentives to fund projects that contribute to increased climate change. Implement accounting practices that value current and future natural resources equally.
3. Go small or go home
Create a re-localization of the economy, using the principle of subsidiarity: Management is best handled by the smallest, most decentralized local authority possible instead of always using the top-down approach. The movement toward a smaller, slower and more local state of affairs is already starting to happen, with the slow-food movement and the 100-mile diet movement offering excellent examples.
4. Target waste
Develop ambitious targets to reduce greenhouse gas emissions and policy development focused on eliminating waste, including virtually zero waste from production processes by 2020 by all levels of government.
5. Create green loans
Use innovative financing and market strategies for investment in renewable energy, energy efficiency and the green economy. These can be developed by a financial leaders’ working group, including leaders from the country’s business schools. The development of green revolving loan funds by municipal governments is another critical first step.
6. Support co-operative business enterprises
This would build greater local economic diversity and social innovation and increase community resilience. The co-operative system has over a billion members worldwide, and within Canada, 17 million members, with new co-operatives emerging in alternative energy and virtual health care. We recommend exploring co-operative models for managing public utilities and infrastructure as well.
The future competitiveness of this country is reliant on a rapid implementation of sustainable community development. Like the gym membership to remove additional post-holiday weight, creating a sustainable economy requires commitment to changing the way we now do business. Business leaders and proactive governments should start their New Year’s Eve resolutions now to get in better economic shape.
Ann Dale is Canada research chair in sustainable community development at Royal Roads University.