In recent decades, advances in technology, governance and the market have lifted unprecedented numbers of people out of poverty (the rate of extreme poverty fell from 36% in 1990 to around 8%). 6% in 2018)1 and offered incredible new economic opportunities. But, at the same time, this progress has come at a real cost – growing inequalities (the richest 26 people in the world have the same wealth as the poorest half of humanity)2 and an increasingly dangerous degradation of the natural resource base that supports life on earth and our economies.
This environmental degradation is starting to reverberate and affect economic growth. Left unchecked, there is a real risk of serious impacts on financial stability and the well-being of people around the world. Disasters caused by weather and climate hazards were responsible for thousands of deaths and $ 320 billion in losses in 2017, and the 2018 Special Report of the Intergovernmental Panel on Climate Change (IPCC) titled “Global Warming of 1.5oIt has sounded the alarm on the significant and potentially irreversible risks of climate change. Water stress, occurring when demand exceeds supply, linked to climate change is already contributing to migration, which in turn can lead to conflict and political instability. Today, outdoor air pollution kills around 4.2 million people per year according to the WHO. At the same time, 2.1 billion live without a safe and easily accessible water supply at home, and 4.5 billion live without safely managed sanitation.3
In the past, many viewed environmental quality as a trade-off with economic growth: any improvement in environmental quality came at a cost or slower prospects for economic development. As new clean technologies have emerged and their costs have fallen, it is increasingly clear that many green alternatives can be cost competitive. We can have both a clean environment and robust growth. More recently, evidence has shown that sustained growth actually depends on protecting the environment and that the two must go hand in hand.4 The only viable path for growth is a low carbon, resilient and sustainable path.
The challenge now, we argue, is to accelerate the transformation towards a better, more inclusive and sustainable economy. This is particularly urgent in emerging economies, where growth is advancing the fastest. These countries are designing the cities, energy, food, water and transportation systems of the future. The results lock the paths of growth for decades to come. Globally, we have witnessed an ability to produce and consume more efficiently and with less waste and pollution over the past decades. However, excessive consumption by the rich and growing demand, especially from a growing global middle class, has outstripped efficiency gains. To ensure future sustainability and avoid intergenerational inequalities, we need a much deeper change in the way our economies interact with the environment.
Over the next decade, we have a window of opportunity to effect this transformation, given the major structural changes taking place across the world, including rapid urbanization, a growing global middle class with consumer preferences. changes, shifts towards service-based economies and increasing automation. . The question is: how to seize this opportunity with the urgency necessary to face the global climate and environmental crisis?
We have organized this chapter around four key changes in economic policy and institutions that we believe are necessary to ensure a more inclusive and sustainable future: (1) how to measure economic well-being; (2) how to manage consumption; (3) how to design an effective environmental policy; and (4) how to get government to work well with the private sector and more engaged citizens.
We argue in this chapter that the development of environmental policies today is informed by political and institutional choices that often deviate from the original notions of neoliberalism. Earlier writings on neoliberalism say little about the environment, but we can deduce some key directions or principles: relying on the private sector and the market to solve environmental problems; limit regulation because it distorts the markets; grow now and clean up later (as evidenced by the Kuznets curve); and focus on the privatization of property rights. While some of these principles have played a role in promoting environmental protection at the margins, new models are urgently needed. We are rapidly approaching tipping points, among others, land use change, freshwater use, biodiversity loss and climate change that could irreversibly affect the pathways of humankind’s growth and development.
This work is authorized under a Creative Commons Attribution 4.0 International (CC BY 4.0)