Molly Scott CatoReader in Green Economics, Cardiff School of ManagementRegenerationHow Green Economics Could Transform Wales
Nature is not a place to visit, it is homeGary Snyder
Four QuestionsIs energy efficiency enough?What is the role of land in a sustainable economy?What is the role of money in a sustainable economy?Should we create jobs or livelihoods?
Prosperity without Growth?Sustainable Development Commission suggested flourishing within limitsSo far there have been no attempts to categorise and measure different types of consumption and their social usefulness.
CO2 intensity of GDP across nations: 19802006
Carbon Intensities Now and Required to Meet 450 ppm Target
Who gains the benefit from land?Henry George, Progress and Poverty, 1880The single taxSite-value tax or Land Value TaxAt present we are effectively renting land and labour overseas to provide for our needs
Structure of Land Value TaxLand Value Tax is levied on the annual rental value of each parcel of landBased on unimproved value, so not a tax on capitalNeed a baseline survey of the values of certain types of land and survey of land holding
Canons of good taxation practiceCheap to collectDifficult to evadeShould fall lightly on productionsales and employment taxes discourage economic activityDiscourages speculative land holding, e.g. Olympic site in StratfordEncourages active use of land
Reasons for taxing landIt is fixedThe proceeds of the most valuable resource should be sharedIt leads to efficient use of land and means it is not left idle
Reduce the concentration of land ownershipCan work with planning system to influence land use
How might this work as policy?Could be a change to council taxes and local business ratesCould be used as a planning windfall taxIn conjunction with planning policy to build a sustainable, self-reliant economy
One Planet DevelopmentTAN 6: Welsh planning policy for the countrysideDevelopment that through its low impact either enhances or does not significantly diminish environmental qualityOPDs should, over a reasonable length of time (no more than five years) provide for the minimum needs of the inhabitants in terms of income, food, energy and waste assmiliation
Land reform and food productionA large majority of studies show that smallholders in developing areas produce more per hectare than big farmers.The land reforms of the 1950s in Japan, Taiwan and South Korea were followed by rapid growth in farm output. So were land reforms in West Bengal, India, in 1969-84Professor Michael Lipton, Smallholders can spearhead growth, FT, 20 April 2010
Land Reform in ScotlandA comprehensive economic evaluation of the possible impact of moving to a land value taxation basisRecommendation of the Land Reform Policy Group, 1999Glasgow is considering replacing Council Tax with a Land Value Tax
What Mervyn King SaidUnemployment is up, businesses have closed, and the direct and indirect costs to the taxpayer have resulted in fiscal deficits in several countries of over 10% of GDP the largest peacetime deficits ever.Of all the many ways of organising banking, the worst is the one we have today.
Projected borrowing(PSNB), 17 Dec. 2009
Projected borrowing(PSNB), 21 April 2010
97% of money is created as debt by banks:95% of money transactions have no contact with real goodsAllows people to make a claim on future valueAnd what he didnt say
The lubrication of a fully functioning economy is the most basic role
But it is incompatible with the role as a commodity in international speculation
The Crises are the Same CrisisSustainability requires equalitySustainability requires financial stability, because debt-free money forces economic growthDebt requires inequality, because of interest transferring money from poor to rich
A Balanced Economy
Odious Debt and Audit CommitteesInvented by the US in the 19th century to reject Spanish debts when it conquered CubaJustification to reject Iraq's debts after the 2003 invasionIn 2005 in Ecuador President Correa invented the idea of the national Audit Committee: 80% of loans rejectedGreece and Ireland now have Audit Committeeshttp://topdocumentaryfilms.com/debtocracy/
The global trade system is insecureA system of energy intensityExtended supply chains reduce resilienceWeakening of community bonds
Where are the worlds ports?
the origins of the cataclysm lay in the utopian endeavor of economic liberalism to set up a self-regulating market systempreviously to our time no economy has ever existed that, even in principle, was controlled by marketsChallenging our preconceptions
Welfare and communitySide by side with family housekeeping, there have been three principles of production and distribution:ReciprocityRedistributionMarketPrior to the market revolution, humanitys economic relations were subordinate to the social. Now economic relations are now generally superior to social ones.
Important changes in welfareCitizenship becomes the basis of entitlementThe individual would be the tax/benefits unitThe Citizens Income would not be withdrawn as earnings and other income risesThe availability-for-work rule would be abolishedAccess to a Citizens Income would be easy and unconditional
Citizens IncomeAutomatic payments depending on needTax-free and without meansIncome tax and employees national insurance contributions would be merged into a new income taxThe tax-free allowance would balance out the Citizens Income for higher earners
it is inherent in the methodology of economics to ignore mans dependence on the natural world.E. F. SchumacherSchumacher Centenary
Find out morewww.greeneconomist.org
Green Economics: AnIntroduction to Theory, Policy and Practice (Earthscan, 2009)
Environment and Economy(Routledge, 2011)
Source data for individual nations taken from EIA 2008, Table H1GCO2, World Carbon Dioxide Emissions from the Combustion and Flaring of Fossil Fuels per Thousand Dollars of Gross Domestic Product Using Market Exchange Rates. World carbon intensity is calculated using total emissions data in Table H1CO2 in the EIA database and worldGDP data (at constant 2000 prices, market exchange rates) taken from IMF (2008) data available online at: www.imf.org/external/pubs/ft/weo/2008/02/weodata/index.aspx**Bramhall, R. (1999) Land Value Tax, in Scott Cato and Kennett (eds.), Green Economics: Beyond Supply and Demand to Meeting Peoples Needs (Aberystwyth: Green Audit).http://www.sustecweb.co.uk/past/sustec13-1/land_value_taxationrichard.htm*Green and fiscal support for LVT are at odds*Banking: From Bagehot to Basel, and Back Again, The Second Bagehot Lecture, Buttonwood Gathering, New York City, 25 October 2010*PSNB projection a year ago: beginning of huge borrowing is clearly located in autumn 2008Public Sector Net Borrowing: how much the government is expecting to have to borrow in the relevant time period.*By the following spring we were on a completely different axis.**Money is inequitable and also puts pressure on the planet. Once it is created people have to work and exploit resources to make the goods to catch up. This is how economic growth works and why we are destroying the planet.The crises are the same crisis*Land has real value; finance does not. http://www.statistics.gov.uk/downloads/theme_economy/BB09.pdf
*Polanyi, K. (2001),The Great Transformation (New York: Beacon Press), pp. 31, 45*