E3G

Environment and Business in the 21st Century

By Tom Burke

Dealing with this environmental agenda may not have seemed easy at the time but compared to the agenda that is now coming to dominate the environmental debate it really was. In the 21st century we must face the hard politics of the environment.

The agenda is different: climate change, deforestation, water availability, biodiversity loss, fisheries collapse, soil loss. The need to tackle these issues is not so obvious. Fishermen are still arguing that there are plenty of fish in the sea. Former chancellors will still tell you there is no need to do anything about climate change.

If you do act on this agenda, there are many more losers than winners. It is not immediately obvious what policy tools and institutions are needed. The media has great trouble getting a clear focus on the complex trade-offs involved and has no easy way of dealing with problems where the villains and the victims are the same people.

Needless to say, we have made little progress in solving these problems and while that might, at first sight, look to have let business off the hook my argument this evening is that the business community will pay dearly for this failure as the century progresses.

The agenda of the hard politics of the environment might also be called the sustainable development agenda. I know of no concept more prone to produce definitional constipation than sustainable development. I am quite content with the original Brundtland definition – development which meets the needs of today’s generation without undermining the capacity of future generations to meet their needs.

Put operationally this means finding the ways to provide rising real incomes to some 8 billion people without collapsing the ecological foundations of the economy – croplands, rangelands, forestlands, freshwaters, the atmosphere and the ocean.

Let me take a moment here to set sustainable development in its historical context. The phrase is rather more than a fashionable arrangement of words, though that is often overlooked, even by it most active promoters.

From about the middle of the 18th Century there was a sustained debate, predominantly within Europe, about how to make the economy grow. As the industrial revolution gathered pace under the stimulus of the Napoleonic wars and the subsequent prolonged period of peace the answer became clear.

If individuals are freed to pursue their own self-interest, the interests of all will be enhanced and the economy will grow.

As a formula for increasing economic growth, there is no doubt that this argument was correct. As this liberal doctrine gained hold, economies did indeed grow rapidly. But as they grew they let loose an avalanche of change. It soon became apparent that economic growth disrupts social ligatures.

The complex, multi-dimensional relationships of relatively stable communities are replaced in the creative destruction of capitalism by the simpler, transactional relationships of the cash economy. Cultural bonds with their complex patterns of mutual rights and obligations are replaced by economic bonds based simply on the ability to pay. This is undoubtedly more efficient. It is not necessarily more stable.

Margaret Thatcher never quite understood that you cannot have both an accelerating expansion of economic opportunity and a return to Victorian values. The corrosive effect of rapid economic growth demolishes precisely those culturally rooted implicit rules which expressed Victorian values.

In the 19th Century rapid economic growth led, then in Europe, as it does now globally, to very rapid social change. This social change, unmediated by any attempt to ameliorate its impacts on the welfare of large numbers of people, led to growing political instability which threatened to undermine the engine of the economic growth driving the change. It is worth recalling that by 1848 Marx had already written the communist manifesto.