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Bookmark and ShareProfessor Wangari Maathai is a Nobel Peace Prize winner, founder of the Green Belt Movement and author of The Challenge for Africa.

Members of the Green Belt Movement plant trees on an eroding hillside in Kenya.

In Other Worlds are Possible, the latest report from the Working Group on Climate Change and Development, the the coalition asks how the global economy should be reshaped to enable human development in a carbon constrained future. A post-carbon society and addressing climate change mean much more than constraining carbon usage. While Africa is rich in resources, her people are poor; to counter this poverty, Africa needs to develop. For development in Africa to be successful, we need to ensure the right conditions in society that facilitate respect, equity and sustainability.

Current economic models create wealth at the expense of the environment and so we need to rethink how we develop. The current model from the industrialised countries which develops through the use of fossil fuels as the driving source of energy cannot be sustained. We must find a balance to improving our quality of life while not undermining the environment, and therefore the capacity of our species and other forms of life to continue. This can be controlled by investing in renewable sources of energy low in carbon – solar, wind, hydropower; sources of energy that will help us to develop without sacrificing the environment.

I wrote The Challenge for Africa to encourage Africans and others to think beyond the current economic model which is dependent on resources from the rest of the planet. The fact that humanity’s current use of resources is outstripping the planet’s ecological capacity should give all of us a reason to pause. It is simply not sustainable for the rest of the world to mine, log, drill, build, dam, drain and pave in a rush to achieve the standards of living of the industrialised countries, which themselves depend on massive resource extraction in the global South. In so doing, they could encourage the growth of sustainable industries that provide good employment in well-managed cities and towns – not crowded filthy slums with virtually no infrastructure that blot too many African cities and too many African lives. Africans, like citizens in other regions of the world, can also work to reduce their dependence on fossil fuels and to harness renewable energy sources to industrialise in a way that provides work for the millions of Africans migrating to cities, and allows some of those currently practising subsistence agriculture to move off the land.

The challenges facing agricultural communities throughout Kenya are mirrored throughout Africa and many of the poor countries in the global South. In these regions, concern for environmental issues is treated as a luxury. But it is not: protecting and restoring ecosystems and slowing or reversing climate change are matters of life and death. The equation is simple: whatever we do, we have an impact on the environment; if we destroy it, we will undermine our own ways of life and ultimately destroy ourselves. This is why the environment needs to be at the centre of domestic and international policy and practice. If it is not, we don’t stand a chance of alleviating poverty in any significant way. Nor will we create for the African people a continent where security and progress can be realised.
For the many reasons that have been articulated, there is a real need to develop a funding mechanism that will not only help industrialised and developed countries to address climate change, but also developing ones.

As major polluters, the industrialised countries have a responsibility to deal with climate change at home, but also to assist Africa and the rest of the developing world to address climate change. They are in a position to share their technical know-how to reduce vulnerability and address adaptive capacities. Mechanisms ought to be established – quickly – to raise steady and reliable funds for the prime victims of the climate crisis, who will be poor and rural, very young, and, more often than not, female. And many of them will be African.

One way to ensure that African countries are more self-reliant and competitive is for industrialised nations to transfer technology – with a priority on green technologies – to those nations that are technologically less advanced. Industrialised countries should accept the moral duty to assist Africa and other poor regions to find alternative and renewable sources of energy – such as biomass, wind, hydropower, and solar – and enable the global south to participate in the carbon market so Africa can develop industries based on renewable energy sources. But African countries themselves should also invest in science and technology. Global investors have ploughed billions into new wind, solar, and other alternative energy initiatives. But those funds were almost wholly concentrated in the industrialised countries, along with some in China, India, and Brazil. Almost none of this investment is coming to Africa, despite the continent’s vast energy poverty and abundant sun and wind. Africa’s challenge lies in making herself a relevant beneficiary of these resources.

This is an edited extract from Wangari Maathai’s essay in Other Worlds are Possible, the sixth report from the Working Group on Climate Change and Development.

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Bookmark and ShareAndy Wimbush is nef‘s Communications Assistant and blogmaster.

The good news:

  • An inventor has developed adjustable glasses which could bring better vision to a billion of the world’s poorest people: Josh Silver, a professor of physics at Oxford University has created glasses with lenses that can be “tuned” by the wearer using small knobs, eliminating the need for prescriptions or specialist equipment. Silver’s idea is stirring example of how simple technological interventions can sometimes be the most elegant. Small is beautiful after all.
  • A campaign has been launched to encourage people in the rich world to donate 10% of their money to help the poorest people in the world. Once again proving that there are academics who venture beyond the ivory tower, moral philosopher Toby Ord (again, from Oxford University) has pledged to give away a third of his £30,000 a year salary this year, with 10% year on year after that. His new website – Giving What We Can – allows visitors to enter their post-tax earnings, to see where they rank in the global rich list, which is adjusted for Purchasing Power Parity. It then calculates the number of lives that could be saved or school hours bought with your donation, and suggests a handful of very effective and targeted aid agencies to support. Of course, at nef we believe that there won’t be a way out of global poverty unless we very quickly put a stop to climate change, and introduce fundamental changes to the global financial system. But working to change the economy shouldn’t stop us from donating to save lives here and now.
  • There is still a chance of a climate deal at Copenhagen. Less than a day after Barack Obama announced that he didn’t think there was enough time to secure a global deal on climate change mitigation at the UN COP15 in Copenhagen, Chinese president Hu Jintao and Obama issued a joint statement promising to press for a deal next month.

The bad news:

  • Peak oil is closer than we thought, due to deliberately distorted figures, according to a senior official at the International Energy Association. The Guardian reports that the whistleblower has accused the USA of forcing the IEA to “underplay the rate of decline from existing oil fields while overplaying the chances of finding new reserves”.
  • The average global temperature is likely rise by 6°C by 2100 if no action is taken according to an international study from the Global Carbon Project. Mark Lynas, who compiled scientific research on this subject for his Royal Society prize-winning book Six Degrees, writes that amount of warming would “cause a mass extinction of almost all life and probably reduce humanity to a few struggling groups of embattled survivors clinging to life near the poles.”
  • Lord Griffiths perpetuates the myth that inequality is somehow ‘good’ for us.The Conservative peer – who is also the vice-chair of investment bank Goldman Sachs – tried to justify the bonus culture of the City by telling an audience that “inequality is a way of achieving greater opportunity and prosperity for all”. Richard Wilkinson, of the Equality Trust, provided a rebuttal, while nef‘s own research in The Great Transition shows that inequality could cost the UK alone up to £4.5 trillion over the next forty years, because of the social problems it causes.

Bookmark and ShareVeronika Thiel is a researcher and project manager on nef’s Access to Finance team.


reposessions

The topic of the day is unemployment. At the moment, more people in the UK are unemployed than they were before Labour came into power. Not a nice reflection on the track record of the current Government. Why were so many jobs lost? Of course, the financial crisis. Always the financial crisis. However, looking at the types of jobs that are lost, many of those would have been low-skill jobs in the service sector that are expendable when the going gets tough. Demand for dry cleaners, office cleaners, caterers and sandwich sellers disappears quickly when the people demanding these services (i.e. those working in financial institutions) find themselves out of a job as well. So, all we have to do is make sure these financial wizards get their jobs back, so that those caterers and cleaners can get back on track, right? Wrong. What the crisis very clearly shows is that a lot of the employment created through the bubble was fleeting, just as the billions or even trillions of pounds that have now vanished into thin air. The jobs were not embedded in the real economy, the manufacturing of goods or the provision of services that we all need every day – for example good quality child care. Instead, people worked hard for measly incomes, were mostly unable to save, and loose the few assets they have, e.g. cars (which are often needed in order to get a new job). At the same time, they can’t honour credit commitments any more, meaning they are frequently over-indebted – or have already applied for personal insolvency. The latest stats show another increase in this
number.

So what we need to do as part of the recovery is create jobs that allow people to build greater resilience against such crises in the future. There is little point in having millions of people relying on the hire and fire jobs that are so dependent on the economic cycle. In addition, people need help in building savings, skills and aspiration – now more than ever. However, as we discovered in recent research, many efforts to build assets and thus to improve crisis resilience are eroded during the current crisis. Governments across the EU are cutting back social support to the unemployed, and cancel grants to organisations that seek to help people in dire straits. Instead of nurturing the efforts of aspiring entrepreneurs and savers, there is little to no effort to help people help themselves. Particularly in the UK, asset erosion is happening on a large scale. Banks repossess houses at the earliest possibility instead of trying to find a solution with the client. Even worse, debt is sold off to debt collection agencies that sometimes use threats and psychological warfare to recover money, with an added fee on top. Credit card companies often refuse negotiations with debt advice organisations and insist on immediate payments. None of these practices are challenged by Government. Everything plays second fiddle to the financial institutions – it’s for them to get their books back in order, and the quickest way of doing this is to get rid of bad debt. In the long run, this practice entrenches existing and new poverty.

Our research found that organisations such as Toynbee Hall and Fair Finance see a huge increase in demand for their services. Scarily enough, many of the people now seeking advice and help are those that were considered well-placed in society: low- and middle-income families with a house and a steady income. Despite this increase in demand, not a penny of the stimulus packages has been allocated to these and other organisations to meet the increased demand. The consequences: bankruptcy and hardship. Poverty and destitution. This will cost a lot more in the future to rectify than investing in advice and support services now. The overwhelming majority of people wants to work and is seeking work – but they have to have the ability to do so. An undischarged bankruptcy, homelessness and a pile of debt and worries will not be helpful to this end.

Our report thus calls on the Government to support asset building efforts and to recognise how helpful they can be in helping people through tough times. Asset building should be part of mainstream politics, not a niche as they are now.

It is always better to make people self-reliant rather than having to feed them in times when money is tight. Cutting budgets for asset-building activities now is the worst way of going about it.

Bookmark and ShareJosh Ryan-Collins is a researcher in the Business, Finance and Economics team at nef.

Financial crisis

After the storm: what will replace the neoliberal consensus?

The financial crisis which erupted almost two years ago has led to the biggest shake up in economic policy since the Oil Crisis of the 1970s.  Neoliberal economics lies in tatters, with the UK Conservative party dismissing the notion of the ‘utility-maximising rational actor’ as a fantasy and Martin Wolf of the FT pronouncing the end of the dream of global free market capitalism.  The question is what will come next.

Sadly, there are few signs of a new approach which takes seriously the ‘triple crunch’ of the financial, environmental and energy crises.  Rather, governments are turning back to tried and tested state-led growth strategies to reflate national economies, pumping liquidity into credit markets and creating new or bringing forward existing public spending plans.  In other words, there has been a return to post-war Keynesianism – the doctrine that the state could and should regulate the market and step in to boost demand whenever required.   This thinking lies at the heart of Obama’s $787 billion fiscal stimulus package, as well of those of Europe and China.   China is embarking on what is possibly the biggest Keynesian experiment in history, with the government attempting to create a welfare state virtually overnight so as to maintain demand as well as pumping billions of yuan into mainly state owned industries, as Newsnight’s Paul Mason recently revealed.

Aside from the fact that the proportion of this new funding that will be spent upon green investment is rather small (very small in the case of the UK), there are bigger questions about whether this whole approach will prevent another, bigger financial crisis and  help us move towards to the low carbon, low throughput ‘steady-state’ economy required to prevent catastrophic climate change.

As Walden Bellow, the Phillipino intellectual and activist, points out in a recent article, today’s crisis requires us to move beyond Keynesian demand management at the national level to address global problems of inequality, overproduction and over-consumption.  For Bellow:

“The challenge to economics at this point is raising the consumption levels of the global poor with minimal disruption of the environment, while radically cutting back on environmentally damaging consumption or overconsumption in the North.  All the talk of replcaing the bankrupt American consumer with a Chinese peasant engaged in American-style consumption as the engine of global demand is both foolish and irresponsible.”

These are issues nef has addressed in our interdependence reports but currently they are not even on the ‘any other business’ agendas of the  finance ministries of the world’s great powers.  Rather, we are seeing a return to a ‘Growth as Usual’ policy which flies in the face of global inequalities and serious attempts at a transformation to a low carbon economy.   It is about time that economists began to look at some of Keynes’ less well known policies, such as that economies should be primarily concerned to consume only what they are able to produce, outlined in his essay on  “National Self-Sufficiency“.    Globalisation, in particular the globalisation of capital flows, is a major part of the reason we are in this mess – a bit of de-globalisation  will be required to get us out of it.

Bookmark and ShareAndy Wimbush is nef‘s Communications Assistant and blogmaster.

Rich ListI never really bother reading those Rich List supplements that turn up in the newspaper every six months or so. But I can easily imagine the kinds of people who populate its ranks. They’re the mega-rich: the people who never need think about money. The footballers, business tycoons, movie stars and media barons. The figures attached to their names are so large as to be meaningless to me. I have no idea what I would buy with the kind of money they have at their disposal.

In fact, they have so much money that they probably wouldn’t even notice if they had to part with a sizeable sum. That’s the argument you often hear when people are getting upset about the amount of tax they have to pay. “Why don’t they tax the mega-rich?” they cry, “Tax the hell out of the top percentile, and leave the others alone.”

Now the Rich Lists you get in the papers usually feature about 100 people. Which isn’t a lot when you consider that there are seven billion of us on this crowded little planet. So what would a rich list look like if it included everyone? Where would you or I rank in the global leaderboard of wealth?

If you’re curious – and willing to shake some of your opinions about who to tax – then enter your income at The Global Rich List. Hat tip to Jeremy at Make Wealth History.

Bookmark and ShareAndy Wimbush is nef‘s Communications Assistant and blogmaster.


On Monday, nef and our friends at Compass, hosted an alternative summit to propose and develop new ideas for a new economics, a new politics and the social movements that will bring those things about. Attendees were united in their belief there can be no turning back to the failed policies and ideologies that created the crash and the looming climate change disaster. We heard from a range of thinkers and activists, including Jon Cruddas MP, Will Hutton, nef‘s Andrew Simms and Stewart Wallis, Compass’ Neal Lawson, and Richard Wilkinson and Kate Pickett, authors of the wonderful new book The Spirit Level.

We also received the following video address from Jayati Ghosh, Professor of Economics at Jawaharlal Nehru University in New Delhi. We now bring it to you – a much wider audience – here on the nef blog:

Bookmark and ShareEilís Lawlor is the acting head of the Valuing What Matters team at nef


Amid the economic gloom, it is taken as a given that the state of the economy will surpass all other priorities at the ballot box. But as the American election demonstrates, the relationship between a person’s economic position and their voting preferences is not nearly that straightforward.barack-obama1

The principle of representation is at the heart of the type of democracy which we in the UK share with the United States. In theory, it’s meant to prevent elites from acquiring and maintaining power: it ensures that the legislature mirrors the nation’s constituents.

In practice, however, it doesn’t always work that way. It’s not unusual for people to vote for candidates who are quite unlike themselves, but who they think will represent their interests. I doubt that many people who elect the current Conservative Party front bench would aspire to join their clubs or their social circle. At other times, we vote – in good faith – for candidates who subsequently let us down. When small shopkeepers voted for Margaret Thatcher in their droves, they probably didn’t expect her to unleash a wave of deregulation that would culminate in one of the most concentrated business sectors in the world.

But nowhere has the link between class and voting preferences been as successfully eroded as in the US. The unholy alliance between economic neoliberals and social conservatives means that people will regularly vote against their own material interests for cultural, religious and patriotic reasons. So while 63% of voters said that the economy was their top concern this did not necessarily translate into a vote for the person, or party most likely to represent their economic interests.

Democracy is problematic for elites when 60% of the electorate earn less than $70,000. It’s not that the relationship between income and voter preference is inverse, the very rich also veer towards the Republican Party. It was only amongst minorities – where race played a greater role – that this asymmetry was turned on its head

The Republican base of poor white Southerners stayed loyal to a party that has cut taxes for the rich and eroded their healthcare and benefits and shunned Obama’s more progressive tax plan.

As well as capturing the language of human dignity and freedom, the right claim a monopoly on morality and national pride however narrowly defined. Hence, guns, God and abortion trumped jobs, insurance and a mortgage even during a month in which another quarter of a million swelled the ranks of the unemployed. This is fiendishly clever because it undermines the saleability of a more equitable system to the very people it should benefit thereby shifting the goalposts further rightward. Whether Obama’s consensus approach can reach those that reject their own economic representation remains to be seen.

Bookmark and ShareEilís Lawlor is the acting head of the Valuing What Matters team at nef

Results may not have been as bad as expected but still made for dismal reading in last week’s OECD report on inequality. At a time when the rewards of the rich are being called sharply into question, the UK still has one of the highest levels of income inequality in the developed world and social mobility is static. The rate at which inequality has widened is slowing, which is not the same as the gap narrowing. What we already knew has been confirmed: the proceeds of the global economic boom that is now unravelling have gone disproportionately to the already wealthy.

Any equalisation of incomes, however small, is to be welcomed but the media coverage of this missed the most salient point of the report: the gap between rich and poor has grown in more than three-quarters of all OECD countries over the past two decades. Have we and our media become so complacent with wealth accumulation in the hands of the few that this is considered positive, or are we just desperate for some good news?

Read the rest of this entry »

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nef employees blog in their personal capacity. The opinions expressed here do not necessarily reflect those of the new economics foundation.