The global economy must undergo a radical transformation to prevent planetary disaster, according to the UN Secretary-General, António Guterres. In a recent interview with the Guardian, Guterres emphasized the need to shift away from the current economic model that prioritizes GDP growth, as it fails to account for the true value of the environment and the detrimental impact of pollution and waste. This approach has led to a crisis of climate change, biodiversity loss, and increasing inequality.
Guterres argues that the existing accounting systems, which focus solely on GDP, are driving the planet towards disaster. He highlights the irony that destroying forests and overfishing, for instance, contribute to GDP growth, despite the long-term environmental and social costs. Instead, he proposes a new economic framework that measures success beyond financial gains, prioritizing human well-being, sustainability, and equity.
The UN has taken steps to address this issue, hosting a conference in Geneva titled 'Beyond GDP' in January. This gathering brought together renowned economists, including Nobel laureate Joseph Stiglitz, Kaushik Basu, and Nora Lustig, to develop a new set of economic indicators. The goal is to create a more comprehensive dashboard that goes beyond GDP, considering factors like human well-being, sustainability, and equity.
A report published by the UN group last year emphasized the urgency of economic transformation in the face of global shocks, such as the 2008 financial crisis and the COVID-19 pandemic. These events have been exacerbated by the 'triple planetary crisis' of climate change, biodiversity loss, and pollution. The report also highlights the impact of rapid technological change on labor markets and the widening inequality gap.
Prof. Basu, co-chair of the UN group, points out that nations' obsession with GDP growth has led to the neglect of ordinary citizens' well-being and sustainability. He argues that the current system rewards a few at the expense of the many, leading to hyper-nationalism, inequality, and polarization. Prof. Lustig agrees, stating that GDP was never intended to measure human progress but remains the dominant benchmark.
The UN's initiative comes on the heels of a report warning that current economic models are flawed and could lead to a global economic crash due to their failure to account for climate shocks. This has sparked a growing debate among academics, civil society, and policymakers about creating more sustainable and equitable economic structures. This includes exploring post-growth initiatives like doughnut economics, well-being economics, and steady-state economics, as well as the degrowth movement, which advocates for a planned reduction in harmful production in richer countries, focusing instead on socially beneficial sectors.
Jason Hickel, a political economist and degrowth proponent, supports Guterres' call for a shift beyond GDP. However, he emphasizes the need for a deeper system change, including democratizing control over production to prioritize what is produced and for whom. He argues that the dominance of GDP is a result of the capitalist structure, which must be fundamentally addressed to create a more sustainable and equitable future.
