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World requires radical new economic models to fight poverty and mitigate global warming

A new report calls for a radical re-envisioning of current economic models in order to tackle poverty, mitigate and adapt to climate change, and solve other environmental problems. The report was crafted by the New Economics Foundation (NEF) and the International Institute for Environment and Development (IIED) and was supported by The Working Group on Climate Change and Development, which includes a wide variety of well-known groups, including environmental, religious, and anti-poverty organizations.

According to the report: “there is not one model of economic development, there are many. But conventional definitions of development have been largely set by industrialized countries to favor their own economic interests and often imposed on poorer societies, regardless of place or cultural context.”

Entitled Other Worlds are Possible—Human Progress in an Age of Climate Change, the report argues that the current the economic growth-based model—largely imposed by wealthy nations—has unfairly placed high costs and few benefits on the world’s poor. Although natural resources have long been unfairly divided, climate change is now exacerbating the divide between rich nations and poor. And while the United States and Western Europe have largely avoided large climatic impacts so far, these wealthy regions are historically most responsible for the planet’s warming.

Children in Tsianaloka village (Manambolo) in Madagascar. Photo by: Rhett A. Butler.

“Current approaches to economic development are increasing the impacts of climate change on the world’s poor,” explains Dr Hannah Reid, a senior researcher in the climate change group IIED, in a press release by the group. “This report demands a total rethink. It proposes sustainable alternatives that build the resilience of poor communities to face these impacts. Without these changes, the lives of millions in the world’s poorest countries will plummet into a degree of poverty from which it will not be possible to survive.”

One of the report’s writers, Professor Jayati Ghosh from India, argues that a new economic model must encourage less materialism, rather than more. Chilean Professor Manfred Max-Neef, also a contributor, argues that relying on economic growth alone will not solve the world’s poverty problem. He posits future economic models that focus far more on regionalization and localization without ignoring environmental limits.

Although there are many economic models that have been developed to better create a sustainable society aware of ecological constraints and to bridge the growing gap between rich and poor, many economists in wealthy nations seem unwilling to consider any changes.

“‘There is No Alternative’ is one of the most misleading claims of the market fundmentalists, [but] there are actually dozens of alternatives, many of them already being put into practice,” said Duncan Green, Head of Research with Oxfam.

The report urges an economic model based on qualitative development instead of overconsumption to feed consumerism in wealthy nations, a habit which the report argues negatively impacts poorer nations abroad. The report throws out the theory of ‘trickle-down’ economics wherein it is believed that by increasing wealth in the hands of the already wealthy, money will trickle down from the wealthy to the poorer strata of society. Currently the UN estimates that one billion are going hungry.

Men waiting in a desert in China. Photo by: Rhett A. Butler.

While most of the world’s nations have agreed on the importance of tackling climate change, they are not facing up to the fact that current economic models are behind the carbon economy and must be changed if an international climate change agreement is to succeed, according to the report.

“Every government planning to attend the Copenhagen climate summit says they want to stop catastrophic global warming. Yet every government also promotes economic policies that guarantee disaster,” says co-author Andres Simmons, policy director and climate change program director at NEF. “None is steering us genuinely to live collectively within our environmental means. Without new economic development models that chart how to meet human needs within ecological boundaries, any climate deal will be set up to fail.”

Dr. Alison Doig, Senior Climate Change Advisor for Christain Aid, says that while the current economic model has always been based on inequality, “climate change is magnifying the inequalities inherent in our current growth-based development model. This report shows that there are other approaches to development which are both fairer and far less dangerous to the environment on which we ultimately depend.”

Simmons adds that “the challenge is for governments to stop clinging to old, failing economic theory that treats the Earth like a business in liquidation, and people as an inefficient factor of production.”

The members of the Working Group on Climate Change and Development are: ActionAid International, Ashden Awards for Sustainable Energy, BirdLife International, Cafod, Care, Christian Aid, Columbian Faith and Justice, IDS (Institute of Development Studies), IIED (International Institute for Environment and Development), Friends of the Earth, Greenpeace, Green New Deal Group, Medact, nef (new economics foundation), Operation Noah, Oxfam,, People & Planet, Practical Action, Progressio, RSPB, Tearfund, teri Europe, WWF, WaterAid, and World Vision.

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