Arnold Schwarzenegger has the answer to tackling the climate emergency. Don’t hype the economic damage, he says, just say we need to “terminate pollution”.
It may seem odd to pick the former bodybuilder and actor turned Republican politician as someone with the answer to the most important issue of the 21st century. But Schwarzenegger’s focus on pollution as California’s governor, and that of his successor, the Democrat Jerry Brown, means that since 2008, by wide agreement, the Golden State has enjoyed the longest economic expansion in its history, while also cutting emissions.
The contrast with other parts of the world – including much of the US, where climate change is discussed in the gloomiest terms, and usually as a massive cost to businesses and households – is stark.
When it comes to debating climate change, the key argument is not “the economy, stupid”, or the decline in biodiversity. The answer is to focus on pollution and its impact on everyone’s health.
To illustrate the point, Ipsos Mori found in a poll of public attitudes, timed to coincide with Earth Day last Friday, that concerns about climate change were beaten into eighth place by “not having enough money”, fears of terrorism and the threat of crime. Top of the list, in a poll covering 31 countries and 23,577 adults aged 16 to 74, was the subject “your health and your family’s health”. This suggests that if climate action can be linked to wellbeing, the campaign to reduce emissions is on to a winner.
That’s not to say that economics cannot play a role in convincing households that the way we make and sell goods and services needs to change. One important reform would be to the way the state and economists report on the “success” of economic policies, and especially economic growth.
The Treasury, the Bank of England and the Office for Budget Responsibility all measure economic success based on growth in the Office for National Statistics’ measure of national income – gross domestic product (GDP).
There has always been a problem with a gross measure of national income because it fails to distinguish between useless, and in many cases destructive, activity, and the manufacture and sale of things that benefit society.
Critics argue that GDP fails to account for the degradation of the environment caused by economic activity. This month, MPs on the environmental audit committee said greenhouse gas emissions should be published alongside quarterly economic growth figures to help measure the UK’s progress towards net zero goals. In letters to the chancellor, Rishi Sunak, and the UK’s national statistician, Sir Ian Diamond, the committee warned that the narrow scope of GDP means it “fails to acknowledge other indicators such as environmental statistics and social capital”.
This demand signals an advance on previous efforts to create a dashboard of measures that includes biodiversity loss and the degradation of the landscape. Such dashboards can create a blizzard of seemingly contradictory figures, encouraging the Bank, Treasury and OBR to continue focusing on GDP, if only because it remains the most popular shorthand for economic success – if not economic health.
More radical is the proposal from the Cambridge economist Sir Partha Dasgupta, who recently reviewed the issue of climate change and policymaking for the Treasury. He said in a report last year that GDP encouraged the pursuit of “unsustainable economic growth and development” by not taking into account the impact on natural assets.
Dasgupta has been in talks with the ONS since his report was published to change the way GDP is calculated. Instead of a dashboard, he wants a single “net” measure that takes into account the emissions created to generate growth. Emissions are relatively easy to calculate and there is a vast amount of literature showing how to do it. Net domestic product, or NDP, would then become the basic measure of economic success, because only when the “depreciation of assets” is taken into account can we judge whether we have made progress.
On 12 May, when the ONS publishes the latest GDP figures, it will reveal plans “for projects feeding into the creation of a measure of inclusive income”. But when the planet is frying and pollution is increasing, the timetable is likely to be far too slow. Years could pass before there is any tangible reform.
The ONS – like the Bank, OBR and Treasury – is a natural follower, not a leader. As if trapped in an episode of Yes, Minister, each asks the other to go first. Maybe they would be under more pressure to junk GDP in favour of NDP if more people accepted Schwarzenegger’s message that emissions create pollution – and pollution is bad for their health.
