We're on a collision course with the planet. But with public support, that can change.

Smart, activist states could prove as effective at handling the biodiversity crisis as they have at tackling the pandemic

Let’s be honest: few government-commissioned reports make a real difference. Often ministers call on an expert to look into a contentious issue in the hope of kicking it into the long grass, and when a weighty tome duly arrives with uncomfortable recommendations, it is quietly ignored.

It is easy to see how the review into the economics of biodiversity by the Cambridge University academic Prof Sir Partha Dasgupta could be one of those that gathers dust in the Treasury, because it has a tough message. Put simply, Dasgupta says humanity – all 7.8 billion of us – is on a collision course with the planet. Our current economic system is unsustainable and endangers the prosperity of current and future generations.

The review is full of alarming statistics, of which perhaps the scariest is that in little more than two decades, between 1992 and 2014, there was a 40% fall in the stock of natural capital per person. That is the water we drink, the air we breathe, the soil we grow food in, and all living things shared among the global population. This really is capitalism for dummies, because any company that was as cavalier about its inventories of all other forms of capital – its machines, its IT systems, its buildings and its people – would soon go out of business.

Yes, the report notes, there has been growth. Measured by gross domestic product (GDP), the global economy is 14 times bigger than it was in 1950. There has been a massive increase in prosperity but it has come at a “devastating” cost to nature: the extinction of species; the depletion of fish stocks; the destruction of coral reefs; the shrinking of the rain forests. At current levels of consumption, we require an Earth 1.6 times larger than its actual size.

The alarming findings of the Dasgupta review are, of course, the reason why it should acted upon rather than buried away somewhere in Whitehall. It will be less costly to act now than it will be to act later, by which time it may be too late in any case. The question is whether any government, not just this one, is prepared for the radical change needed.

In the past biodiversity, pollution and global heating have tended to move up the political agenda in periods of strong growth and low unemployment. That was true at the end of the long postwar boom in the early 1970s, and again during the late 1980s and early 2000s. Looking after the environment was something politicians did when they thought – wrongly as it turned out – that there was nothing else to worry about. When recessions arrived and the dole queues lengthened, protecting the environment was less important than getting the economy going again.

That will not happen this time. A decade in which the global temperature gauge has risen and weather-related disasters have become more prevalent has meant there is a green element to almost every country’s post-pandemic recovery plan. Indeed, the speed with which Covid-19 brought the global economy to a halt last year has been helpful to those who have been arguing for years that the world needs to be better prepared for existential threats.

That said, it would be a mistake to think that the old tensions between short-term action to boost jobs and the longer-term need for sustainability have entirely gone away, or that consumers are as ready to change their spending habits as they say they are. The row over whether to allow a new coalmine in Cumbria is one example. The surge in airline bookings this summer in anticipation that foreign holidays will be permitted as lockdown eases is another.

What’s more, we are a long way from breaking the tyranny of GDP as a measure of economic success and having a system of national accounting that takes account – as Dasgupta says it should – of what is happening to the stock of natural resources. The growth figures for 2020 will be published on Friday and it’s a reasonable bet that there will be far more media coverage of the biggest decline in annual GDP for 300 years than there was for Dasgupta’s biodiversity report.

Things are changing. During previous downturns the prospect of 500 new jobs would have meant the Cumbrian coalmine would have gone ahead. Now it might not, because approval would complicate preparations for the Cop26 climate emergency summit in Glasgow. Failure to strengthen the international effort to limit carbon emissions would be a disaster.

The issue, though, is not whether there is progress but whether that progress can be accelerated. Here there are a number of possible ways forward. One is to say that the threat to the planet is so serious and imminent that such thing as the burning of fossil fuels or international air travel have to be stopped now or in the near future. Another is to leave it to the markets: governments should stop subsidising the use of fossil fuels but otherwise leave it to the ingenuity of the private sector to come up with the necessary solutions.

A third is the approach advocated by Mariana Mazzucato in her new book, Mission Economy. This takes as its inspiration the announcement by John F Kennedy’s administration in 1961 that the US would put a man on the moon by the end of the decade. Washington announced what the mission was; a partnership between the state and business found ways of making sure it happened.

As Mazzucato freely admits, the Apollo programme was a doddle compared with today’s challenges, because it was essentially a technocratic matter that didn’t require any sacrifices by the American people. It was big science meets a big problem; US citizens were merely spectators.

Tackling the climate crisis is different. Unless governments are going to use dictatorial powers, progress can be made only with the consent of the public. Mazzucato cites the experience of the Australian Labor party, which put the climate emergency at the heart of its manifesto at the 2019 election only to lose because too many voters feared it would result in higher unemployment. Having a vision or a mission is not enough. Having a stronger, more confident, entrepreneurial state is not enough. Fostering innovation is not enough. Engaging with voters matters too.

Much has been written in the past year about how Covid-19 will change everything for ever. This sort of stuff has been said before, and the desire to return to business as usual should not be underestimated. What is true is that the pandemic has illustrated the virtues of smart, activist states as well as demonstrating that there are more important indicators of wellbeing than GDP. The notion that there is no alternative to the status quo – a concept that survived the financial crisis of 2008-9 – has, finally, been exploded.

That’s not to say that the fundamental rethink called for by Dasgupta is going to be easy, because that’s certainly not the case. But the need for change is glaringly obvious, and the opportunity is there too. That opportunity must not be squandered.

• Larry Elliott is the Guardian’s economics editor

10 February 2021

The Guardian