I recently participated in a Christian Aid debate hosted at the Royal Society on development and the environment. The other speakers were Rt Hon. John Gummer MP (chairman of the Conservative Party's Quality of Life Policy Group), Professor Richard Odingo (vice-chairman of the UN IPCC, from the University of Nairobi) and David Woodward (New Economics Foundation). Here's my speech:
But the New Economics Foundation is committing economic mumbo jumbo. It only stands up when you use bizarre definitions of terms. China has a population of over 1.3bn. Take 1.15bn of them, most of whom live in horrendous conditions. And the New Economics Foundation’s model shows - hocus pocus - that if these 1.15bn people as a group get richer, growth has become less effective at poverty reduction.
The NEF report fails because it counts any economic growth enjoyed by someone earning over $1 a day as a bad thing. Success at raising someone’s income from $1 and 1cent a day to $2 a day counts against growth. If someone’s income goes from just over $1 a day to $10 a day, it’s even worse - according to the New Economics Foundation.
In fact, if you look at separate figures they use in the report, the percentage of the world’s population living on less than a dollar a day dropped from 33% in 1981 to 18% today.
The economist Paul Ormerod has shown that over the past 50 years, world inequality has declined, in particular thanks to the rise of the Asian economies, who were previously very poor.
The truth is not that growth isn’t working, but not all parts of the world are following the policies that will let them harness growth.
Those countries that have become more integrated into the global economy, in other words that have liberalised their trading regimes, have got richer, while those which have remained protectionist, followed state central planning or engaged in civil wars, have stayed poor. As Adam Smith so rightly put it: “Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things.”
China and India have been liberalising - in China’s case it’s been pursuing the largest liberalisation the world has ever seen. Its share of world trade rose from 1.9% in 1990 to 7.3% in 2005. Meanwhile, Africa has remained deeply protectionist - in a world where virtually everyone else has been quickly liberalising. Africa’s share of world trade declined from 3.5% in 1970 to 1.5% in 1999.
So what can we conclude from this?
If we want Africa to get rich, Africa needs more growth, not less. This means - as Christian Aid rightly explains - more energy. It would be a tragedy if we stood in the way of poor countries by limiting their energy use, or by forcing them to use expensive forms of energy.
Economic history shows us very clearly that countries when they go through the early stages of development pollute their environment. Once they get richer, they start caring more about their environment. That’s why the air quality in London today is the cleanest since records began in 1585.
Positive environmentalists believe that action must be taken to tackle climate change. But we believe that in the long run, there is no conflict between growth and protection of the environment.
Going green doesn’t have to mean living in wood huts.
On most measures, the world’s environment has been getting better. Green consumerism has a huge part to play. Over the next thirty years, we should and will move towards clean cars, probably powered by hydrogen. The lowering costs of renewables and the increasing costs of oil will fundamentally change how we view energy.
Solar panels, wind turbines and hydroelectric generation will all help us move away from polluting energy sources - plus geothermal systems and perhaps even bioengineered algae that convert waste into hydrogen.
In the meantime, China has already commissioned 30 new nuclear power stations, and Chinese scientists are the the forefront of new pebble-bed reactors.
More generally, research and development will bring us cleaner technologies - technologies that we can share with developing countries, helping them become cleaner much faster than we did.
Aeroplanes have already been getting cleaner - but there is a long way to go.
Instead of stopping ordinary people from having foreign holidays, as Christian Aid proposes, we should set up a prize fund to reward research into cleaner air travel. But the responsibility for creating a carbonless economy, if that’s the right term, is with the rich countries who can afford it, not with developing countries like India and China.
The responsibility for going green is with us, not them. We should and must take more action to tackle climate change - but let’s not in so doing kick down the ladder and lock the poorest in poverty.
