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Towards an Ecological Macroeconomics Peter A. Victor and Tim Jackson 2012 Annual Institute for New Economic Thinking Conference Berlin 14 April 2010.

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Presentation on theme: "Towards an Ecological Macroeconomics Peter A. Victor and Tim Jackson 2012 Annual Institute for New Economic Thinking Conference Berlin 14 April 2010."— Presentation transcript:

1 Towards an Ecological Macroeconomics Peter A. Victor and Tim Jackson 2012 Annual Institute for New Economic Thinking Conference Berlin 14 April 2010

2 Outline Ecological economics Three major crises The dilemma of growth Beyond decoupling GEMMA - green economy macro-model and accounts

3 FirmsHouseholds Bio-physical Cycles Economic Cycle

4 Billion tonnes Global Materials Extraction 1900 to % 700% F. Krausmann et al Ecological Economics 2009 Crisis 1

5 Excessive Burden on the Environment: Transgressing Planetary Boundaries J. Rockstrom et al Nature, October 2009 Crisis 1

6 Income per capita by Income Grouping (constant PPP2005 international $) Crisis 2

7 71% of the world’s people live in countries where income inequality has been increasing since the mid 1990s Crisis 2

8 Crisis 3

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10 Innovation leading to increased labour productivity if inadequate economic growth unemployment up consumption down tax revenues down deficits up public expenditures down loan defaults up investment down lower economic growth The dilemma of growth

11 Global Footprint Network Global Ecological Footprint World biocapacity Number of planets Year OVERSHOOT - depletion of natural capital The dilemma of growth

12 The dilemma of growth World GDP (constant $) and CO 2 emissions

13 Beyond Decoupling Source: Prosperity without growth, Tim Jackson, 2009) x 130 improvement

14 Towards an Ecological Macroeconomics K. Raworth, 2011 A safe and just space for humanity Can We Live Within The Doughnut?

15 LowGrow Canada Can we have full employment, no poverty, fiscal balance, reduced GHG emissions without relying on economic growth? Managing without growth

16 ‘Business as usual’ GDP per Capita GHG Emissions Poverty Unemployment Debt to GDP Ratio

17 What happens if we eliminate increases in all sources of economic growth? (starting in 2010 over 10 years) Consumption Investment Government Trade Population/labour Productivity

18 A no growth disaster GDP per Capita GHG Emissions Poverty Unemployment Debt to GDP Ratio

19 A better low/no growth scenario How? Stable population and labour force Carbon price Reduced net investment Balanced trade Shorter work year More generous anti-poverty programs GDP per Capita GHG Emissions Unemployment PovertyDebt to GDP Ratio

20 Real Natural Towards an Ecological Macroeconomics

21 Financial Real Natural Towards an Ecological Macroeconomics

22 GEMMA (Green Economic Macro Model and Accounts) Is economic growth required in advanced economies to maintain high levels of employment, reduce poverty, and meet ambitious ecological and resource targets? Does stability of the financial system require growth in the 'real' economy? Will restraints on demand and supply in anticipation of or response to ecological and resource constraints, cause instability in the real economy and or financial system?

23 Expectations/Uncertainty

24 Progress to date Design almost complete (in Stella and Excel) Initial data sets for Canada and UK assembled Model development and testing under way First scenarios expected this summer

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