Pavan Sukdev, Chief Executive, GIST Advisory ServicesThank you Pavan for taking the time to speak with the ITC Environment Blog. We are here at the OECD in Paris for an event on Green Growth. Can I begin by asking you how useful a concept you think green growth is?
Green growth is useful in that it allows us to talk about how growth should benefit the world’s poorest – the bottom billion.
The harsh reality is that GDP growth (the conventional measure of growth) measures nothing. It measures nothing of real relevance in the context of development and poverty. It just measures in aggregate the value of goods and services produced in the economy. If you want development it doesn’t matter what the total value is. What matters is what poor households consume in terms of what is produced.
We should ask if we are looking to make growth more sustainable in terms of the bottom decile or quartiles. There are two considerations. Firstly, whose growth are we talking about? And who suffers when it declines? In the West, when GDP drops no one is dying. What matters is the bottom 10% and their levels of consumption. A 1% decline in GDP results in 20 million people falling below in the poverty line.
There is also a link to trade – when Western consumers reduce their expenditure the incomes of poor household affected by drop in demand. If we buy less flowers for our girlfriends this month for example, the Kenyan farmer will earn less money and so have less to meet his or her basic needs.
You have spoken in the past about the economic importance of nature to developing countries, about its “hidden value”. How is biodiversity important as an economic asset?
Natural capital is the single largest development asset in developing economies according to World Bank figures. In the developed world it is human capital. If you have recognition that this is the case, then why are we not looking for better ways to manage it, improve its yield and conserve it?
These are the issues that are kind of missing. Unfortunately, we are getting enamoured or lost in this chase for growth without fully understanding what sort of growth we are talking about, whose growth and for what purpose.
When the time came to implementing these concepts of alternative measures of growth, in terms of creating frameworks on the ground, it became impossible to get funding. Without funding we can’t expect developing countries to develop these new ways to measure sustainability.
You also speak of the world living beyond its carrying capacity. How do you see the future for life on earth in this respect?
We are in deep trouble because we are approaching planetary boundaries in terms of climate change and biodiversity loss
What do you see as our best hope for us to live within these?
Unfortunately, there isn’t one best hope. We need to hope that corporations and their leaders in this direction will find followers – that is one big hope. We need to hope that politicians that reorient their thinking to the development paradigm that matters and that is GDP for the poor.
People themselves will recognize that consumption spending on quality is more important than quantity. That it is not important to change your car every six months or year.
We need to hope for all of these things happening. If anyone of them doesn’t, then we won’t have a sustainable economy.
Do you have any thoughts on the principle of “Common but differentiated responsibility”? – the tension between developing countries who state their primary responsibility is to reduce poverty through growth, and developed countries who already are rich but want to see mitigation of emissions in the developing world.
The main message here is that different strategies are needed. Different courses for different horses.
The developed world needs to reduce its ecological footprint and move “down” to a sustainable footprint. In developing countries, the challenge is different: it is about ensuring higher well-being especially for the disadvantaged, whilst maintaining a path of low –carbon growth. Also improving productivity in agriculture, fisheries and forestry as these are still important components of the incomes of poor households.
Measured in terms of ecological footprint, most developing countries are still well within per-capita carrying capacity of the planet (i.e. under 2 global hectares per person). Most developed nations however are at 2 to 5 times the earth’s carrying capacity.
Thank you again Pavan for taking the time to talk to ITC
It’s my pleasure.
This week, the TEEB Coalition for Business published a report entitled Natural Capital at Risk – The Top 100 Externalities of Business’