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Molly Scott Cato Reader in Green Economics, Cardiff School of Management Regeneration How Green Economics Could Transform Wales

How Green Economics Could Transform Wales

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Regeneration. Molly Scott Cato Reader in Green Economics, Cardiff School of Management. How Green Economics Could Transform Wales. Nature is not a place to visit, it is home Gary Snyder. Four Questions. Is energy efficiency enough? What is the role of land in a sustainable economy? - PowerPoint PPT Presentation

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Page 1: How Green Economics Could Transform Wales

Molly Scott CatoReader in Green Economics, Cardiff School of Management

Regeneration

How Green Economics Could Transform Wales

Page 2: How Green Economics Could Transform Wales

Nature is not a place to visit, it is homeGary Snyder

Page 3: How Green Economics Could Transform Wales

Four Questions

• Is 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?

Page 4: How Green Economics Could Transform Wales

Prosperity without Growth?

• Sustainable Development Commission suggested ‘flourishing within limits’

• So far there have been no attempts to categorise and measure different types of consumption and their social usefulness.

Page 5: How Green Economics Could Transform Wales

CO2 intensity of GDP across nations: 1980–2006

Page 6: How Green Economics Could Transform Wales

Carbon Intensities Now and Required to Meet 450 ppm Target

Page 7: How Green Economics Could Transform Wales

Who gains the benefit from land?• Henry George,

Progress and Poverty, 1880

• The ‘single tax’• Site-value tax or Land

Value Tax• At present we are

effectively renting land and labour overseas to provide for our needs

Page 8: How Green Economics Could Transform Wales

Structure of Land Value Tax

• Land Value Tax is levied on the annual rental value of each parcel of land

• Based on unimproved value, so not a tax on capital

• Need a baseline survey of the values of certain types of land and survey of land holding

Page 9: How Green Economics Could Transform Wales

Canons of good taxation practice

• Cheap to collect• Difficult to evade• Should fall lightly on production—sales and

employment taxes discourage economic activity– Discourages speculative land holding, e.g.

Olympic site in Stratford– Encourages active use of land

Page 10: How Green Economics Could Transform Wales

Reasons for taxing land• It is fixed• The proceeds of the

most valuable resource should be shared

• It 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

Page 11: How Green Economics Could Transform Wales

How might this work as policy?

• Could be a change to council taxes and local business rates

• Could be used as a planning windfall tax

• In conjunction with planning policy to build a sustainable, self-reliant economy

Page 12: How Green Economics Could Transform Wales

One Planet Development

• TAN 6: Welsh planning policy for the countryside

• ‘Development that through its low impact either enhances or does not significantly diminish environmental quality’

• OPDs 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’

Page 13: How Green Economics Could Transform Wales

Land reform and food production• ‘A 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 1969-84

• Professor Michael Lipton, ‘Smallholders can spearhead growth’, FT, 20 April 2010

Page 14: How Green Economics Could Transform Wales

Land Reform in Scotland

• ‘A comprehensive economic evaluation of the possible impact of moving to a land value taxation basis’

• Recommendation of the Land Reform Policy Group, 1999

• Glasgow is considering replacing Council Tax with a Land Value Tax

Page 15: How Green Economics Could Transform Wales

What Mervyn King Said

• ‘Unemployment 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.’

Page 16: How Green Economics Could Transform Wales

Projected borrowing(PSNB), 17 Dec. 2009

Page 17: How Green Economics Could Transform Wales

Projected borrowing(PSNB), 21 April 2010

Page 18: How Green Economics Could Transform Wales

97% of money is created as debt by banks: 95% of money transactions have no contact with real

goods Allows people to make a claim on future value

And what he didn’t say

Page 19: How Green Economics Could Transform Wales

• 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

Page 20: How Green Economics Could Transform Wales

The Crises are the Same Crisis Sustainability requires

equality Sustainability requires

financial stability, because debt-free money forces economic growth

Debt requires inequality, because of interest transferring money from poor to rich

Page 21: How Green Economics Could Transform Wales

A Balanced Economy

Page 22: How Green Economics Could Transform Wales

Odious Debt and Audit Committees

• Invented by the US in the 19th century to reject Spanish debts when it conquered Cuba

• Justification to reject Iraq's debts after the 2003 invasion

• In 2005 in Ecuador President Correa invented the idea of the national Audit Committee: 80% of loans rejected

• Greece and Ireland now have Audit Committees• http://topdocumentaryfilms.com/debtocracy/

Page 23: How Green Economics Could Transform Wales

The global trade system is insecure

• A system of energy intensity

• Extended supply chains reduce resilience

• Weakening of community bonds

Page 24: How Green Economics Could Transform Wales

Where are the world’s ports?

Page 25: How Green Economics Could Transform Wales

• ‘the origins of the cataclysm lay in the utopian endeavor of economic liberalism to set up a self-regulating market system’

• ‘previously to our time no economy has ever existed that, even in principle, was controlled by markets’

Challenging our preconceptions

Page 26: How Green Economics Could Transform Wales

Welfare and community• Side by side with family

housekeeping, there have been three principles of production and distribution:ReciprocityRedistributionMarket

• Prior to the market revolution, humanity’s economic relations were subordinate to the social. Now economic relations are now generally superior to social ones.

Page 27: How Green Economics Could Transform Wales

Important changes in welfare• Citizenship becomes the basis of entitlement• The individual would be the tax/benefits unit• The Citizen’s Income would not be withdrawn

as earnings and other income rises• The availability-for-work rule would be

abolished• Access to a Citizen’s Income would be easy and

unconditional

Page 28: How Green Economics Could Transform Wales

Citizens’ Income

• Automatic payments depending on need• Tax-free and without means• Income tax and employees’ national insurance

contributions would be merged into a new income tax

• The tax-free allowance would balance out the Citizens’ Income for higher earners

Page 29: How Green Economics Could Transform Wales

• ‘it is inherent in the methodology of economics to ignore man’s dependence on the natural world’.

• E. F. Schumacher

Schumacher Centenary

Page 30: How Green Economics Could Transform Wales

Find out more

www.greeneconomist.org

gaianeconomics.blogspot.com

Green Economics: AnIntroduction to Theory, Policy and Practice (Earthscan, 2009)

Environment and Economy(Routledge, 2011)