So, Federica, what has been bugging you this week.
Well, I thought we could stick our teeth
into this debate about whether economic growth is
the enemy of the environment.
All right.
There was this video that caught our attention, that went viral.
We have to overthrow this system which
is eating the planet with perpetual growth.
I mean, since when was GDP a sensible measure
of human welfare.
And yet everything that governments want to do
is to try to boost GDP.
Now people like the OECD or the World Bank are saying,
oh, we're not asking for a lot of growth.
Just 3 per cent a year.
That means doubling in 24 years.
Yeah, we're bursting through all the environmental boundaries
and screwing the planet already.
You want to double it?
Double all that.
Double it again.
Keep doubling it?
It's madness.
We've got to find a better way of measuring human welfare
than perpetual growth.
You know, it's a very striking video.
He makes a very strong argument there.
But I think there's a difficulty,
there's a risk here that we say that economic growth
and sustainability and environment
are mutually exclusive.
That we're sort of saying you can't reduce emissions
while having economic growth.
But there's a really interesting chart
I saw the other day which is showing how economic growth has
changed but also how the energy intensity of that growth
has changed.
So how much energy it takes to produce a given amount of GDP.
We're starting from 1980 and going through to 2017.
And if we normalise all the numbers,
so whatever the figure was in the year 2000
becomes a value of 100.
And GDP globally has come through,
and it is now double what it was, global GDP, in 2000.
However the carbon intensity of that GDP
has been gradually decreasing.
So the amount of carbon dioxide and the amount of energy
that is used to create economic growth
has reduced, and that sort of pulled down
the total fossil fuel emissions.
So fossil fuel usage has risen by much less
than economic growth because the energy intensity of GDP
has improved.
If this energy intensity, the efficiency at which we
grow the economy continue to improve,
you could get to a point where we have growth,
but we are still cutting emissions.
So I just think we shouldn't throw out
the baby with the bathwater and say economic growth is now
suddenly a bad thing.
This chart purports to show that fossil fuels and energy
intensity, that the pace of growth,
of these elements of economic growth
has either slowed or is actually declining.
So everything is rosy.
However, I think that it isn't.
If we look at oil consumption, for example.
OK.
So this is global oil consumption from 1994 to 2019.
We've now hit 100m barrels per day being consumed.
So clearly, if we want to save the environment
we can't carry on like this.
Where I disagree with George Mombiot is that I don't think
it's necessary that we start with overturning the system.
I think we should go back to how the system is measured.
OK.
And I'm not the only one who thinks that.
There is a massive debate amongst economists
in terms of how we measure economic growth.
And some have come up with this idea of green GDP.
So this is environmentally-friendly
economic growth, and it all goes back
to the idea that gross domestic product
and how we measure it is very faulty.
Let's say, for example, when often in our articles
we'll cover quarterly growth and we'll
see the economy this quarter is growing by 0.2 or 0.4 per cent.
This decimal point gives us the idea
that it's a very accurate and precise number.
But there's a lot of uncertainty behind this number, actually.
Let's say there's a natural disaster.
Because of all the reconstruction efforts
that are needed to rebuild a society
after a natural disaster, that also counts as economic growth.
So even though we've lost assets,
there's been destruction, by definition,
that's still counting towards economic growth to the economy.
The output is still there, yeah.
So statisticians have come up with a new measure
for economic growth that is more environmentally-friendly,
that discounts waste, social disharmony, and so on and so
forth.
And that's actually been pioneered
by some Chinese statisticians, and they come up
with a formula for green GDP.
OK now, green GDP, to me, I mean,
it sounds conceptually great, but how does that even work?
How do you calculate it?
Are they going around counting trees being planted,
and polar bears being saved?
How do you calculate green GDP?
And what kind of monetary value can you assign to a river,
for example.
I mean, some people have tried to do that, but let's not
get stuck into this.
I'll show you the formula for green GDP.
It's actually kind of simple.
Almost too simple, which will make us a bit sceptical.
So basically, it's...
we'll just start from GDP as we measure it now
and we subtract from that CO2 emissions, waste, and the money
that we could have made had we converted
that waste into electricity, and we remove also
the natural resources that we depleted when
creating this economic growth.
Cool.
And they've applied this to a couple of countries
to see what difference the real GDP and the green GDP
will make to economic growth.
So I guess this will show us which countries are getting
the sort of dirtiest economic growth,
and which have got sort of the cleanest growth, as you were.
Like the difference between those numbers.
Yeah, I suppose so.
And let's try and make a chart with something
that I used to use in elementary school.
This is in Italy.
Excellent.
Number blocks.
They just extracted GDP growth figures from 2014
from a bunch of countries, and they looked at those measures
for economic growth.
And then applied that green GDP formula.
Let's have a look at a couple of countries.
Now we were going through this, and we thought
Mexico was quite interesting.
So Mexico's conventional GDP growth rate in 2014
was 2.87, so about 3 per cent.
About 3 per cent.
But it's green GDP growth in that same period
was actually a contraction of 3 per cent.
Yeah.
So in fact, it's negative.
So the economy contracted if we consider waste, CO2 emissions,
environmental depletion.
Mexico's economy contracted.
So we're sort of saying they were using
a lot of the fossil fuels.
They were creating a lot of waste,
and they were probably depleting natural resources
to produce that growth.
Now let's look at China.
China grew by 9 per cent.
Actual green GDP...
Dropped to 6 per cent.
Now let's see.
1, 2, 3, 4, 5, 6.
So it came in from 9 to 6 when you factor in those resources.
Let's have a look at the US and the UK.
So the US was going to 4 per cent and came in to 3 per cent.
UK 10 per cent growth in 2014.
Let's do it.
I don't believe this.
OK, but whatever.
This is 10 and then green GDP, it's 9 per cent.
So to be clear here, we have the green GDP,
it doesn't actually mean that our environmental resources
have grown.
This is just a more eco-friendly way
of measuring economic growth in itself.
Now separately, there are efforts to actually calculate
what is called our natural capital, our trees,
and our fish, and so on, but it's still
at a very primordial stage.
And so I guess to bring this back to what George Mombiot was
saying in the video at the start,
the problem we have today is that economic growth, as it's
currently measured, is in tension
with environmental conservation, and generally
when economies grow part of that growth
is coming from resource depletion,
from damaging the planet.
If economists, natural accountants, as it were,
all of these different bodies can come together and create
a new measure, a more ecologically-friendly measure
of green GDP, then we could get to a stage
where countries could be targeting
that green GDP in their growth.
Could be growing, and yet not at the same time
damaging the planet.
So effectively, the ball now is in the court
of the beancounters.
It's up to them.
We need a robust measure that all countries
can agree is a precise and useful measure, but one that
includes, takes into account of the value of natural resources
and waste in fossil fuels.
Let's see what they can do.