System-shifting steps towards a new global economic system

Robert Costanza, Professor of Ecological Economics, University College London, and Till Kellerhoff, Program Director at The Club of Rome and Earth4All Project Coordinator

We are in a race of tipping points. We are exceeding biophysical planetary boundaries and the climate is fast approaching irreversible tipping points that could give us a world human civilization has never experienced. Climate change is however only the most obvious one: we find ourselves in the midst of the 6th mass extinction. Since 1970, the wild population has witnessed a troubling decline of 70% and one million species now face the imminent threat of extinction in the next few decades. 

In addition to that, social capital is eroding due to runaway inequality and political polarisation. People around the world recognise that life is not getting better. Levels of anxiety, depression and burnout are skyrocketing across the Western world. Full-time employees unable to pay rent, people turning to precarious gig work with little protection to make ends meet, and employers cutting staff and increasing workload have become normal in this system that extracts natural resources, energy, and time.   

The root cause of these crises is our societal addiction to an outdated economic paradigm based on the single-minded pursuit of GDP growth at all costs. It’s a paradigm that claims that all people want is more income and consumption with no limit, the market economy can grow forever, massive inequality is justified to provide incentives and to promote growth, and efforts to address climate and other environmental problems must not interfere with growth. GDP in this context has been misinterpreted as a reliable indicator of progress.  As far back as 1934, one of the main architects of GDP, Simon Kuznets, famously said “The welfare of a nation can scarcely be inferred from a measurement of national income as defined by the GDP”, In 1968, Robert Kennedy pointed out that GDP “measures everything except that which makes life worthwhile”.   

Thus, GDP was never designed to measure societal wellbeing since it only measures marketed production and consumption, conflating positive and negative outcomes. It also says nothing about the distribution of income, unpaid work, or damages to the environment. Continuing to misuse GDP as a policy goal is driving our societies toward an unsustainable future that benefits an increasingly small fraction of the population while impoverishing the vast majority. 

All of these things must be considered in any attempt to measure true societal wellbeing. But how do we get there? Considering the rapidly closing window of opportunity to secure a livable planet for all, it is urgent to implement transformational policies, that can lead us towards a new global economic system that puts the sustainable wellbeing of humans and the rest of nature as the top priority. 

One recent attempt to chart the course to this sustainable wellbeing future is the Earth4All initiative co-convened by The Club of Rome. Earth4All explores two basic scenarios for the future out to 2050. The “Too little too late” scenario looks at business as usual, continuing trends of increasing inequality, climate disruption, and decreasing wellbeing even though GDP continues to rise. However, we can achieve a “Giant Leap” scenario by investing in five turnarounds focused on poverty, inequality, empowerment, energy, and food. These turnarounds could ensure a sustainable, prosperous, and equitable wellbeing for humans and the rest of nature and serve as “leverage points” in shifting towards a wellbeing economic system.

Donella Meadows described leverage points as “places within a complex system (a corporation, an economy, a living body, a city, an ecosystem) where a small shift in one thing can produce big changes in everything.” 

The goals of Earth4All, backed by a series of concrete policy solutions, are the following: 

  1. Ending poverty. All low- to middle-income countries to have reached a minimum income threshold of USD 15,000 per person per year.  
  1. Addressing gross inequality. The wealthiest 10% should take less than 40% of national incomes.  
  1. Accelerating gender equity globally to improve wellbeing and contribute to stabilising population growth by 2050. 
  1. Transforming the food system to regenerative and sustainable agriculture and providing healthy diets for people within planetary boundaries. 
  1. Transitioning to clean energy on a “Carbon Law” pathway of cutting fossil fuels and other greenhouse gases by half every decade to reach net zero emissions by 2050.

Implementing those turnarounds will necessitate substantial investments, primarily driven by expansions in public expenditure. Therefore, a crucial element of the agenda should involve imposing higher taxes, particularly on the immensely wealthy individuals and large corporations. Additionally, it is vital to deal with the luxury consumption of the ultra-rich to effectively reduce carbon dioxide emissions and minimise wasteful consumption. 

However, this is not a blueprint. Solutions will look different in different places, but we believe that it is crucial to take a holistic view and be aware of the systemic nature of our current problems.  

It is absolutely essential to consider the social and environmental factors together. It is often claimed that we are all in the same boat in the climate crisis. That’s not true. While globally the top 10% richest people are responsible for over half of the greenhouse gas emissions, the poorer half of the world’s population contributes almost nothing to it. 

And while it is mainly a wealthy minority that is responsible for the greatest damages globally, the consequences are most felt by and evident to the people in the low-income countries. Societies need to question the extent to which rising inequality can be tolerated. In addressing the climate crisis, it is imperative to ensure appropriate redistribution and compensatory measures, making sure that those responsible for polluting bear the costs of necessary transformations. 

However, we need to be aware that the vested interests in maintaining the current system, including billionaires, the fossil fuel sector, big pharma, defense, and industrial agriculture will continue to fight to prevent the transformative changes needed. To overcome our societal addiction to the current system will require a broad consensus and movement of movements around the shared goal of sustainable wellbeing for humans and the rest of nature.  

People often fear that making these transformations will require sacrifice and lower wellbeing. The reverse is actually the case. It is a sacrifice of our global wellbeing to continue down the Too little too late path, while the Giant leap can substantially improve the lives of everyone on Earth and the biodiversity and ecosystems on which we all depend.

What are your thoughts on this? React and engage via Twitter @Earth4All_ or submit a blog post for consideration to 

This article gives the views of the author(s), and not the position of Earth4All or its supporting organisations. 

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