In this July 2010 TED talk, Tim Jackson, an economist, speaks on economics of climate change…
Tim Jackson – Economist
I want to talk to you today about prosperity, about our hopes for a shared and lasting prosperity. And not just us, but the two billion people worldwide who are still chronically undernourished. And hope actually is at the heart of this.
In fact, the Latin word for hope is at the heart of the word prosperity. “Pro-speras,” “speras,” hope — in accordance with our hopes and expectations. The irony is, though, that we have cashed-out prosperity almost literally in terms of money and economic growth. And we’ve grown our economies so much that we now stand in a real danger of undermining hope — running down resources, cutting down rainforests, spilling oil into the Gulf of Mexico, changing the climate — and the only thing that has actually remotely slowed down the relentless rise of carbon emissions over the last two to three decades is recession.
And recession, of course, isn’t exactly a recipe for hope either, as we’re busy finding out. So we’re caught in a kind of trap. It’s a dilemma, a dilemma of growth. We can’t live with it; we can’t live without it. Trash the system or crash the planet — it’s a tough choice; it isn’t much of a choice. And our best avenue of escape from this actually is a kind of blind faith in our own cleverness and technology and efficiency and doing things more efficiently. Now I haven’t got anything against efficiency. And I think we are a clever species sometimes. But I think we should also just check the numbers, take a reality check here.
So I want you to imagine a world, in 2050, of around 9 billion people, all aspiring to Western incomes, Western lifestyles. And I want to ask the question — and we’ll give them that 2% hike in income, in salary each year as well, because we believe in growth.
And I want to ask the question: how far and how fast would we have to move? How clever would we have to be? How much technology would we need in this world to deliver our carbon targets? And here in my chart — on the left-hand side is where we are now. This is the carbon intensity of economic growth in the economy at the moment. It’s around about 770 grams of carbon. In the world I describe to you, we have to be right over here at the right-hand side at six grams of carbon. It’s a 130-fold improvement, and that is 10 times further and faster than anything we’ve ever achieved in industrial history.
Maybe we can do it, maybe it’s possible — who knows? Maybe we can even go further and get an economy that pulls carbon out of the atmosphere, which is what we’re going to need to be doing by the end of the century. But shouldn’t we just check first that the economic system that we have is remotely capable of delivering this kind of improvement?
So I want to just spend a couple of minutes on system dynamics. It’s a bit complex, and I apologize for that. What I’ll try and do, is I’ll try and paraphrase it in sort of human terms. So it looks a little bit like this.
Firms produce goods for households — that’s us — and provide us with incomes, and that’s even better, because we can spend those incomes on more goods and services. That’s called the circular flow of the economy. It looks harmless enough. I just want to highlight one key feature of this system, which is the role of investment.
Now investment constitutes only about a fifth of the national income in most modern economies, but it plays an absolutely vital role. And what it does essentially is to stimulate further consumption growth. It does this in a couple of ways — chasing productivity, which drives down prices and encourages us to buy more stuff. But I want to concentrate on the role of investment in seeking out novelty, the production and consumption of novelty. Joseph Schumpeter called this “the process of creative destruction.” It’s a process of the production and reproduction of novelty, continually chasing expanding consumer markets, consumer goods, new consumer goods.
And this, this is where it gets interesting, because it turns out that human beings have something of an appetite for novelty. We love new stuff — new material stuff for sure — but also new ideas, new adventures, new experiences. But the materiality matters too, because in every society that anthropologists have looked at, material stuff operates as a kind of language — a language of goods, a symbolic language that we use to tell each other stories — stories, for example, about how important we are. Status-driven, conspicuous consumption thrives from the language of novelty.
And here, all of a sudden, we have a system that is locking economic structure with social logic — the economic institutions, and who we are as people, locked together to drive an engine of growth. And this engine is not just economic value; it is pulling material resources relentlessly through the system, driven by our own insatiable appetites, driven in fact by a sense of anxiety.