Business as usual will not work any longer

From Nick Palmer.

I APPRECIATED Daniel Wimberley’s swansong letter (JEP, 14 October), as he approaches the end of his too brief membership of the States.

While reading his criticisms of what he calls the ‘business party’ or ‘old guard’, I noticed that his letter left out some rather big topics.

What was missing was criticism of the lack of genuine sustainability policies, the true risk analysis of the really big things that will undoubtedly affect Jersey in the future and above all else the old guard’sfailure to communicate to the general public the true nature of the situation we find ourselves heading towards.

While one will find the words sustainability, climate change, peak oil and resource exhaustion in the various White and Green papers published recently, what is missing is a real appreciation of the scale of the problems and the urgency of formulating strategies to cope.

I have been arguing these ideas with Treasury Minister Philip Ozouf on his blog and, while he has conceded the validity of many of my points there is a bit of a sticking point. He thinks that because Jersey appears to be in a better position than most economies, that all we have to do is hunker down, seek growth, get more efficient, cut spending and wait for the legendary green shoots of recovery to turn up.

Jersey’s economy is highly dependent upon the finance industry of which large parts need the international economy to be healthy and growing, which currently it is not.

A serious flaw in current policies from too many of our politicians and advisers is that they see what has been described as a financial meltdown simply as a serious recession and their policies are being formulated on that basis.

If what is happening is actually an unprecedented depression, as Governor of the Bank of England Mervyn King alluded to last week, then even conventional economics prescribes very different remedies for the two fundamentally different situations. If we treat what we are going through as a recession, when it is actually a depression, then we are only likely to make the suffering wider, deeper and longer lasting.

The most serious aspect of this lack of appreciation of the situation is the faith of too many powerful commentators that restoring economic growth will be the cure-all that lifts us out of this hole. Conventional high economic growth over many decades is what has caused the present situation where we are using many essential resources up 40 per cent faster than Earth can renew them.

Most people understand that the result of continuing to spend more than you earn is misery, and that is what attempting to restore conventional economic growth will bring.

I did raise these points in a question at the St Lawrence Senatorial hustings which was not covered in the JEP report, where it became obvious that the majority of candidates simply did not understand the question and certainly did not appreciate the gravity of the situation we face.

So, if we can’t conventionally grow the global economy, which would require ever increasing energy, materials and resource throughout, how can we achieve that often spoken about, but rarely understood, state called sustainability? There is light at the end of the tunnel.

Using the new fields of sustainable or ecological economics and the methods of full cost accounting we can achieve a sustainable or steady state economy which nevertheless allows for continuing economic development that stabilises or reduces the demand for resources.

Leaders need to acknowledge the gravity of the situation we are in and stop acting as if business as usual will work any more.