Sharing Growth Globally
Over the last 20 years, an extra billion Consumers have joined the world’s population, and rapidly developing nations like China, India and Brazil will increasingly claim a fairer share of the world resources.
And many of the developing world’s people are being encouraged to follow the same path that we in the developed world have. Chinese and Indian TV adverts encourage Consumers to get rid of the bicycles and get cars. China currently only has the number of cars per head as the US had in 1915 but is rapidly catching up and now ranks as the number one global market for Rolls-Royce. In 2005 it had just one drive-through McDonalds. By the end of 2008 it is predicted to have 115. Of course greater mobility and connectivity brings freedom, but do those adverts also tell the story of congestion, smog, greenhouse gas effects, the real costs of motoring?
A study by Professor Haberl of Vienna University in 2006 on the ecological embeddedness of the global economy from 1700 to 2000 concluded that “the efficiency increases in terms of a reduction in resource use per unit of GDP may be beneficial but are certainly not sufficient to result in a reversal of current trends…the developing countries will find it impossible to follow the trajectory the industrial core has followed in the last two centuries”.
The picture and the implications for growth are different for the developed and developing worlds. For those 5bn people earning less than $13,000 it is clear that increasing wealth brings increasing Wellbeing. For those above that level it does not. And the concomitant planetary impacts are not worth those rapidly diminishing returns.
China has a new millionaire a day and yet the vast majority have little hope of improving their standard of living.
This calls for a radically new “contract and converge” approach in which the rich world contracts its footprint while the developing world continues to develop and our per capita footprints converge globally at a sustainable level. That said, in those developing countries there is an urgent need to spread growth equitably. China for instance has a new millionaire a day and yet the vast majority have little hope of improving their standard of living. In already wealthy countries this calls for an end to a fixation on growth and Consumerism, a contraction of our growth and a spreading of a far more equitable access to increased Wellbeing to the world’s poor.
The cake has now been shown to be far smaller than we had assumed it was. It has been shown that we cannot expect to expand it. So the rich need to take far less and the poor need to be given access to far more.
Professor Victor’s LowGrow model examined earlier in this chapter illustrates that a contraction of developed country growth can work for people and planet. Future modelling could start to show how access to needed growth in developing countries can be shared out and how developed countries can grow to a sustainable level and converge with developed countries at a globally sustainable level.
Globalisation rapidly speeds up transactions whilst destroying government’s abilities to maintain a healthy balance between the interests of the rich and corporate and the Wellbeing of all Citizens.
Even in the rapidly developing BRIC countries’ per capita footprints and global warming emissions are still far lower than in the developed world. Countries like China – whilst their emissions are rising fast with their huge economic growth – are at the front-line of any climate change impacts. China is the most per capita resource-poor country in the world. Huge areas are rapidly turning to desert, most of its rivers are ‘dead’ and often do not even flow any more. China has huge reserves of coal and huge population and poverty pressure pushing it to burn that coal. But China will also be badly affected by any global climate changes resulting from burning this coal.
As we have seen from Chapter One on the Perfect Storm, our current form of capitalism does little to increase equitable access to resources and wealth whilst destroying the planet. It is clear from the inequity evidence we described earlier that our current form of globalised, liberalised, free-market economics is neither fair on the planet nor the wide majority of its people.
Our current globalised trading system operates in a way which inevitably favours the rich. Globalisation rapidly speeds up transactions whilst destroying government’s abilities to maintain a healthy balance between the interests of the rich and corporate and the Wellbeing of all Citizens. That is why free trade is always so favoured by powerful countries, companies and capital rich people. When anyone sells something outside their own locality in competition with other selling communities they are likely to increase the relative wealth of their target customers. On a global scale what happens is that wealth thus concentrates ever more in the hands of the already wealthy and poor producers compete with each other to reduce profit margins and remain poor.
It is in the developing world where recent HSBC research found most concern for and engagement with combating Climate Change.
In order to update this faulty operating system, a new set of institutional architecture and rules for commerce, trade and with an equitable distribution to our global “commons” in a new Capitalism 3.0 is needed (as we examine in Chapter Eight). Only this can hope to reduce poverty within the carrying capacity of the planet. And only this can hope to encourage reduced birth-rates in the developing world. At the same time the expected population increases predicted need to be avoided by an encouragement of family planning, women’s empowerment and democratic governance.
Counter to what many people assume, it is in the developing world where recent HSBC research found most concern for and engagement with combating Climate Change. This dispels perhaps the myth that developed countries may as well not bother to change because “China will keep on growing emissions anyway”.
