The world is facing a severe yet unusual economic crisis. A combination of inflation and probably stagnant growth (known as stagflation) or even recession means that the potential policy solutions are not straightforward.
And this is in the midst of an ecological crisis – not just climate change, but also biodiversity loss and the overuse of natural resources. If we continue to ignore these things, particularly at a point when we are thinking about the structure of the economy and how it works for us, then we risk another decade passing and a missed opportunity to address these crises before it is too late.
This, then, is a perfect moment to be thinking about how we structure the economy around the ecological crisis in a way that reduces inequality and improves people’s quality of life.
Some kind of growth is necessary in order to deliver better prosperity for people on lower incomes. A wage-led recovery – boosting people’s pay packets – would address the fact that people on lower incomes find the cost-of-living crisis most difficult, and would also lead to an increase in demand for goods and services (aggregate demand).
But if we are just creating demand for things that are environmentally harmful, then we are not moving forward. We are going backwards.
Our Demanding Change by Changing Demand series explores whether we can reshape the nature of economic demand to benefit people and planet by asking: 'demand for what?'
- An economic turning point – Andrew Pendleton (Deputy CEO and Director of Strategy and Advocacy) outlines why this is a once-in-a lifetime opportunity to challenge the status quo.
- Let them drive Teslas – Larissa Lockwood (Director of Clean Air) and Andrew Pendleton explain how we can break free from our dependency on fossil fuels to get around.
- Wellbeing and the psychology of consuming less – Natasha Parker (Head of Post-consumerism) looks at how, after our basic needs are met, we can pursue happiness without overshooting planetary boundaries.
- Global justice – shifting the scale of consumption – Economist Jo Michell considers whether a debate on the economics and politics of constraining consumption is overdue.
- The point of turning – Andrew Pendleton asks how can we seize this moment of change to work towards a more sustainable, equal and caring economy?
At a time when the government is looking at ways to stimulate demand, promoting the right kind of demand is key. This is an opportunity for the UK to become a clean, green, humane economy that provides for its citizens and also plays a critical role in the future decarbonised, nature-friendly world that all nations have to work together to create.
This is a complicated debate, but it needs to be had. This series is really just the start.