You ignore that part of the news where newsreaders talk about the FTSE 100 or the CAC40 or the DAX. Those economic indicators which are meant to have some kind of bearing on our lives. Perhaps once upon a time, there was some significance but it’s hard to tell anymore. The numbers go up, they go down, and we live our lives. It doesn’t really mean anything for anyone not working for a hedge fund or trading company. However, if in addition, the newsreader was to state what that meant for the social and/or environmental factors related to you and your family, you would probably start to care. If the newsreader then said that a 2.5% growth in GDP would create an increase in rates of asthma attacks due to an increased level of pollution over the next few years, or areduction in the quality of green spaces available or as may well happen, increase in the level of seismic activity due to fracking, that may well garner your attention.
Increasingly finance focused publications such as The Economist and the FT are paying more attention to the fluffy side of things. The FT even has its own Climate Change section. With giant companies such as Unilever, PPR (now known as Kering) and Kingfisher placing increasing emphasis on environmental and social aspects of their business operations, journalists increasingly have to find and comment on that link between business and the triple bottom line.
A recent article in the FT highlighted the key role that climate change is going to play in the insurance industry. As seas warming causing the increase in frequency of “once in a generation” storms, the insurance industry is warning buildings located in certain areas already prone to flooding will become uninsurable in the not too distant future.
Low lying areas such as the Netherlands are already adapting their flood defences for the upcoming problems however; it is areas such as Miami, FL and the various crowded areas in New York/New Jersey and London that seem incapable of heading the warnings, both by the industry and by nature. Building on flood plains has never been a good idea.
The issue at hand here is that despite the scientific consensus that supports anthropogenic climate change, the lexicon around the economy has remained the same. It still comes down to growth. It matters not what the quality of that growth is – what difference does it make if growth comes from military spending or health and education spending? Nor does it seem to matter whether or not the growth from that wealth is being distributed fairly with middle class wages stagnating while banks and bankers rake in record profits and bonuses. I am not a banker basher since it’s not their fault that they can do whatever they want. That’s a political and self-governance issue.
If governments, enterprises and conglomerates were to, for example, take on a wider definition of the term growth to include social and environmental elements, they would be able to agree on the best policies to deal with inundated town centres, job creation and many other factors that are right now being simply dealt with by budget cuts. Nicolas Sarkozy has a stab at it with the Happiness Index, even David Cameron dabbled in it. Recently Michael Porter, who developed the concept of shared value, presented his Social Progress Index. Papers like the Economist and the FT need to open their minds and see the need for reframing the economic landscape into one that is inclusive and maintains life for everyone – not just the incredibly wealthy.
The Post Carbon Institute has written a much more in depth article about it in August 2011.
GDP: ‘measures everything except that which is worthwhile’ – Bobby Kennedy, University of Kansas, March 18, 1968