Russel Norman

The big question

by Russel Norman

Jeanette decided to put the big question to Michael Cullen in the House today. He decided to avoid answering it, which is understandable because it’s a scary question but it can’t be avoided forever:

Jeanette Fitzsimons: When the [Finance] Minister’s goal of sustained economic growth runs into conflict with the Prime Minister’s goal of becoming the first truly sustainable nation in the world and he has to choose between continuous growth and genuine sustainability, which will be the Government’s priority goal and why?

Hon Dr MICHAEL CULLEN: I think the member makes a false dichotomy. New Zealand, for example, has a very poor record in terms of output per unit of energy consumed. We are clearly capable of substantially increasing productivity growth, while at the same time addressing the sustainability issues that the Prime Minister has outlined. Indeed, in the longer term one suspects that, for New Zealand, increasing the level of economic growth will require attention to be paid to those sustainability issues—if for no other reason than international marketing considerations.

To be fair to the good doctor, he did gently nudge the critical question of whether you can delink growth in GDP from growth in resource use by talking about increasing units of output (of GDP) per unit of energy used. But even here, if you become 2% more efficient in your energy use per unit GDP, but increase your GDP by 4%, you are still using more energy so he didn’t really address it.

I’ve said it before and I’ll say it again: the question of whether you can delink GDP growth from growth in resource use is the question that defines our age. It is not optional that we decrease our absolute resource use, but what does that mean for GDP growth?

The market system, as we’ve known it, is dependent on exponential GDP growth to maintain its stability. Yet in our lifetimes growth in GDP has been closely linked to growth in resource use and, on a finite planet, infinite growth in resource use is impossible. So either we will find a way to delink GDP growth from growth in resource use; or we find a way to make our market system cope with flatlining or declining GDP; or there will be some kind of crisis.

It’s a funny position we find ourselves in. Just as the social democrats (Europe), labourists (UK, Oz, NZ) and new dealers (US) of the 1930s and 1940s had to save capitalism from its own destructive tendencies by introducing a range of modifications and interventions on the market system, so now the Green Parties of the world find ourselves in possibly a similar position.

The best of the old social democrats like Michael Cullen are too locked in the old paradigm to understand it, and the sectional interests like the business roundtable and employers federation are too narrow to see it, but we have to intervene on the market system to place a price on resource use and pollution so that we can save the planet. And in the process we will quite possibly save the market system from its natural tendency to destroy or consume all resources leading to its own demise as well as the demise of the planet and all of us living on it.

Published in Environment & Resource Management by Russel Norman on Tue, March 27th, 2007   


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