Ecology and Equity – The Economics of Sustainable Inclusion

 

As Labour prepares for the next General Election it will come under diverging pressures on how to address both the glaring wealth inequalities and the risk of climate breakdown. Some of the avenues that look like solutions would actually make things worse. This short paper explores some of the pitfalls Labour needs to avoid.

Specifically, it looks at the different approaches taken by those advocating a Universal Basic Income (UBI) and those pushing the case for Universal Basic Services (UBS). In both instances, the paper looks at the extent to which either approach connects to the climate emergency staring us in the face.

Introduction

In 2018, Britain’s Defence and Security services commissioned Limits to Growth researchers to address the 3 big challenges that lie ahead; the unsustainable gaps between rich and poor, our utter unpreparedness for climate shocks and the likelihood that industrial economies are on a trajectory towards zero growth.[1] Even the Financial Times has joined in, saying that rigged capitalism is failing and needs a makeover.[2] In reality, the crisis is far bigger than this.

The latest UN report[3] on climate change points out that oceans are heating up , altering their chemistry so dramatically that it threatens seafood supplies, fuels cyclones and floods, and presents profound risks to hundreds of millions of people living along the coasts. The moment calls for systems change not a makeover.

People and planet

The critical starting point involves a political recognition that poverty alleviation and climate stability cannot be separated. Tackling poverty, on its own, will not avoid climate breakdown. Tackling climate, without the poor having a stake in the process, will not get past the politics of short-term populism. One big problem is that, to date, the two issues have barely been connected. This dichotomy can be seen in the different directions of travel opened up in the debate between Universal Basic Income (UBI) and Universal Basic Services (UBS). This isn’t a nuanced debate. At its core lies a bigger choice between universal individual rights and collective universal obligations. Labour needs a grown up conversation about the difference.

The argument favouring UBS was probably best outlined by UCL’s Institute for Global Prosperity[4]. One of its key proponents, Paul Mason, put it in a nutshell –

“If you’re an Uber driver or a security guard or an Amazon fulfilment centre worker, a five or ten percent pay rise is less important than a transport system that is cheap and gets you to work on time. And above all, housing, energy and water bills you can afford.”[5]

To this, co-author of the UBS report, Jonathon Portes added –

“The UK economy is astonishingly good at generating jobs, but too many of these jobs are low quality and insecure, with no scope for career development. A key motivation behind the Universal Basic Services proposal is to shift the balance of power in the labour market by reducing the costs of a basic standard of living.”[6]

This probably goes to the core of Labour’s concerns about a society increasingly held hostage by rentier interests. Pushing up basic income levels changes little if these are hoovered up by spiralling costs of access to basic services.

However, none of this addresses the climate crisis already overtaking conventional economics. It is this climate crisis that holds the most profound implications for Labour’s whole approach to a Green New Deal.

The UBI side of the argument has been no better. Since 2013 there have been over 1,000 learned articles and research papers making the case for a Universal Basic Income. None made any real connection with climate change; only 8 tangentially addressed food security or consumption patterns.

This isn’t to say there is a lack of environmental interest amongst UBI advocates. Most studies have simply assumed that income guarantees can be expected to have positive environmental impacts, at least when UBI is set at a subsistence level. The trouble is that even those trying to make a Green/Sustainable Economics case for UBI have done so largely on a presumptive basis. Of the pilot/demonstrator UBI projects set up – in Namibia, Madhya Pradesh (India), Brazil, Finland, Livorno (Italy), Uganda, Spain, Canada, Kenya and Iran – few considered environmental impact in their design.

It fell to Oxfam to flag up the risk that, on their own, poverty alleviation strategies might even accelerate environmental degradation –

“…poverty alleviation that is achieved without considering environmental consequences would push the biosphere beyond the limits necessary to sustain human civilization as we currently know it.”[7]

Obligation or Entitlement

Much of the literature relating to UBI rests on presumptions about universality of entitlement. But not all participants in UBI pilot schemes shared this view. The strongest contrasting perspective was offered by Canada’s First Nation Tribes.

Ontario’s North Shore Tribal Council (NSTC) – made up of 31 First Nation Tribes – argued that a Basic Income Guarantee would undermine their collective institutions and indigenous culture. In a 2017, an NSTC report cautioned that such an approach merely represented a shift from one form of dependency to another,”[8] adding

“… It has also been of concern that the welfare system is rooted in western ‘individualism’, which runs counter to and has negatively affected First Nation’s as communities and the holistic ‘Anishnawbe way’ of living (p. 2).”[9]

From an Indigenous perspective, the belief was that poverty alleviation required investment in community resources and capacities rather than individual funding. As a result,

“… Many First Nations [recently] began a process of shifting the focus of their social assistance programs precisely from individualised hand out to community-based hand up.[10]

At its harshest, some members of the Tribal Council described the concept of basic income paid to individuals as just another form of colonialism. From a much more individualised western perspective, this takes some digesting; especially for those who have put a lifetime into arguing the case for a universal basic income. It is, though, an approach that sits more comfortably within the conceptual framework of a Green New Deal.

Although most UBI pilot projects have been based on the principle of unconditional entitlement, there have been exceptions. The biggest of these – probably the biggest of all projects – is Brazil’s Bolsa Familia welfare programme.

By 2015, some 48 million people had benefited from the programme. It provided a cash transfer, limited to impoverished families, on condition that their children attended school and took preventative health care steps such as vaccinations.

Subsequent monitored research[11] suggests the programme met all these goals – increasing preventative healthcare service use, improving health and nutrition, increasing school attendance, and helping reduce poverty. But it did not pass the test of unconditionality, and by limiting it to those at the extreme end of the poverty scale, it actually contained a built-in disincentive to work.

Since 2011, however, those in the Bolsa Fámilia programme were entitled to receive additional payments if they enrolled into the Bolsa Verde extension programme. Within this, people agreed to undertake environmental training schemes, take part in forest revitalisation projects and exclude themselves from environmentally damaging activities such as clear-cutting. By 2018 there was abundant evidence that this had become a real driver of behavioural change; with less rainforest being cleared and the additional income compensating for any lost agricultural production.

Effective as this may have been, any conditionality sits at odds with the purist notion of a universal basic income. The more pragmatic (and perhaps principled) question facing an incoming Labour government is “What sort of approach is needed to avert climate breakdown?” It is a Herculean challenge.

Labour’s Green New Deal

Delivering climate stability requires the biggest peacetime mobilisation in human history. To do so, Labour will have to revive the notion of active citizenship. A Green New Deal offers the clearest platform for doing so. Much of this will be more industrious than industrial; requiring large scale mobilisation of whole communities in planting the 2.4 billion new trees Britain needs within the next decade or replicating Rotherham’s ‘Rivers of Flowers’ or Paris’ vertical gardens’ programmes to bring nature back into urban localities.

Meeting UK climate/carbon reduction targets will involve racing into a more circular economics. A Universal Basic Services approach is more consistent with this approach than UBI but, as Clive Lewis’ Shadow Treasury Working Group identified, every element of Labour’s programme will need to have its own carbon budget/carbon reduction targets to adhere to. You cannot deliver this scale of transformation without universal obligations being re-connected to universal entitlements. As Greta Thunberg repeatedly warns, when the house is on fire, we all have to help put the fire out.

One of the key advantages of ‘circularity’ thinking is that it is also rooted in Labour’s commitment to create jobs, re-skill the workforce, reduce carbon consumption and re-use finite resources. Increasingly, this is being referred to as a new ‘economics of limitarianism’. What it doesn’t do is play to traditional notions of economic growth, expanding production and globalised trade. The need to cut annual carbon emissions at a rate of over 20% a year puts paid to any notion that today’s crisis is one we can simply shop our way out of.

Transformative/climate economics, however, needs to become the antithesis of austerity politics. It will involve doing more with less; living in smarter, lighter ways. Clothing manufacturers can already produce a pair of jeans using only 1 litre of water (rather than the several thousands conventionally used). Zero carbon homes standards can radically reduce household energy consumption. More localised food systems can reduce ‘food miles’ by up to 90%. National recycling programmes, à la Norway, already demonstrate an ability to recycle 95%+ of plastic containers. And ‘smart’ local energy grids can massively reduce generation and transmission losses in the transition to a 100% clean energy future.

In conclusion

These approaches have to become central to Labour’s Green New Deal thinking. Labour can deliver a genuinely transformative Green New Deal through an extended climate-based approach to Universal Basic Services. Doing so through a more unconditional (and individualised) UBI approach would be much more problematic.

Alan Simpson

A postscript on ‘consumption’

A number of recent studies found that the environmental impacts of nations consistently rise with per capita income[12]. Income has also been found to be the main determinant of greenhouse gas emissions on an individual and household level.

“This income effect is so strong it tends to statistically overwhelm pro-environment behavioural change, even for those who self-identify as eco-conscious (Ivanova et al., 2018)[13] This implies that it is not how we consume that determines the bulk of our personal environmental impact, but how much we consume.”[14]

Of all the criticisms of UBI, this is probably the easiest to address. A sustainable climate future cannot be premised on the the poor remaining poor and under-nourished. Climate physicists recognise that the poorest need to increase their consumption, if only to become active participants in climate solutions. The most substantive savings would come from reducing the carbon-footprint of lifestyles enjoyed by the rich, not from short-changing the prospects of the poor.

Lessons from the history of Europe’s Slow Towns and Slow Food movements demonstrate that these are also the most effective routes for reducing the carbon footprint of food production, consumption and distribution … at the same time as raising nutritional standards for the poor. The critical (political) conclusion to be drawn is that the climate problem is more rooted in globalised, just-in-time, food supply systems, than in the desire of the poor to access a decent diet.

  1. Understanding the ‘New Normal’— The Challenge of Secular Stagnation, APPG on Limits to Growth, July 2018, http://limits2growth.org.uk/wp-content/uploads/2018/07/AETW-Policy-Briefing-No-1-digital.pdf
  2. ‘Why rigged capitalism is damaging liberal democracy’, Martin Wolf, Financial Times, https://www.ft.com/content/5a8ab27e-d470-11e9-8367-807ebd53ab77
  3. Choices made now are critical for the future of our ocean and cryosphere — IPCC, https://www.ipcc.ch/2019/09/25/srocc-press-release/
  4. Universal Basic Services, the Institute for Global Prosperity, Oct 2017, https://www.ucl.ac.uk/bartlett/igp/news/2017/oct/igps-social-prosperity-network-publishes-uks-first-report-universal-basic-services
  5. Universal Basic Services, Four Months On, Feb 2018, https://www.ucl.ac.uk/bartlett/igp/news/2018/feb/universal-basic-services-four-months
  6. Universal Basic Services, Four Months On, Institute for Global Prosperity, Feb 2018, op cit.
  7. Raworth, K. (2012). Oxfam Discussion Papers, A Safe and Just Space for Humanity.
  8. North Shore Tribal Council, NSTC. (2017). An Indigenous Lens on Basic Income. (Cited in ‘Universal Basic Income and the Natural Environment: Theory and Policy’, Timothy MacNeill & Amber Vibert, Basic Income Studies, 2019, Social Sciences and Humanities, University of Ontario Institute of Technology, 20180026)
  9. NSTC, 2017, op cit
  10. NSTC, 2017, op cit, p2
  11. ‘Poverty and shared prosperity in Brazil: Where to next?’ – Báez J, Rodilla A, Sharman A & Viveros M, World Bank, June 2015
  12. ‘ Does income growth relocate ecological footprint?’ Ecological Indicators, 6(2), 707–714. Aşıcı & Acar, 2016; ‘Ecological footprint and real income’: Panel evidence from the 27 highest emitting countries. Ecological Indicators, 77(1), 166–175, Uden, Salhuddin, Alam, & Gow, 2017
  13. ‘Carbon mitigation in domains of high consumer lock-in’, Global Environmental Change, 52, 117–130.(Ivanova et al., 2018).
  14. ‘Universal Basic Income and the Natural Environment: Theory and Policy’, p4, Timothy MacNeill & Amber Vibert, Basic Income Studies, 2019, Social Sciences and Humanities, University of Ontario Institute of Technology,

 

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