This is crucial if we want to tackle climate change and avoid the mounting social problems associated with the rise of economic inequality. The Great Transition provides the first comprehensive blueprint for building an economy based on stability, sustainability and equality.
This report argues that nothing short of a Great Transition to a new economy is necessary and desirable, and also possible. Business as usual has failed. Yet prime ministers, finance ministers and governors of central banks are still running around – perhaps a little less frantically than they were – trying to allay fears and convince us that this is not the case.
The genie is out of the bottle though, and it is hard to see how it can be put back in.
The financial crisis exposed deep flaws in the approach to economics that has dominated policy-making for a generation. It turns out that letting markets rip does not always lead to the best outcomes for societies. Government intervention, far from being inherently inefficient, turned out to be essential to prevent system-wide collapse. A return to blind faith in markets to deliver a future of endless, rapid growth is impossible to imagine now.
The world is warming. The atmosphere cannot absorb the levels of CO2 being pumped into it for much longer without triggering irreversible climate change. The majority of the planet’s ecosystems are being pushed to breaking point. Our ‘footprint’ in the developed world has grown too heavy, and we are showing no signs of our being able to tread more lightly.
Measures of life satisfaction in developed countries are flat. Overwork for many combines with widespread worklessness for others. Set alongside those who have far more than they need are those who do not have enough. Falling social mobility sees these patterns repeated from one generation to the next, while unsustainable levels of debt affect all parts of society. As real incomes have fallen, many have had to take on debt to fund the essentials of life. For the more affluent, status-driven consumerism, often fuelled by debt, is the norm.
We think that there is an alternative; one where we live within the limits of the natural world and more fairly with each other, locally, nationally and globally; where we focus on the things that really matter, applying our core human values to what is really valuable. We estimate that the measures proposed in this report would create up to £8.65 trillion of environmental and social value in the period to 2050.
This won’t just happen. It requires us to rethink much of what we have taken for granted. As the well-off consume less, headline indicators such as GDP will have to fall by as much as a third, but we can grow ‘real value’ at the same time. By 2050, this increase in value would far exceed the fall in GDP, which is a very poor measure of ‘progress’ in any event. Rapid decarbonisation that moves toward global fair deal limits will avoid between £0.4 and £1.3 trillion in environmental costs. A progressive redistribution of incomes to reach Danish levels of equality will cut the costs of inequality-related social problems and increase social value by £7.35 trillion.
By sharing our resources more equally, by building better communities and a better society and by safeguarding the natural environment, we can focus on the things that really matter and achieve genuine and lasting progress with higher levels of well being. Taken together this would amount to what we have termed the Great Transition.
Please down-load the full Great Transition report, via the New Economics Foundation website