Defining sustainable and qualitative growth Sebastiano Sabato - - PowerPoint PPT Presentation

Defining sustainable and qualitative growth

Sebastiano Sabato Observatoir ire social européen (OSE)

Ter Munk working group: Qualitative growth – a focus on social partners

ACW, Zaal de B Bond, , Leuven 12 and 13 November 2013

CONTENTS*

1. A working definition of ‘Sustainable and Qualitative Growth’ (SQG): main elements and implications. 2. Dimensions, indicators and policies for Sustainable and Qualitative Growth. 3. The European Union and Sustainable and Qualitative Growth

*Sabato, S., Natali, D. and Barbier, C. (OSE)(forth.), A Model for Implementing Sustainable and Qualitative Growth in the EU , CES Research paper.

1. . A working definition of SQG: main ele lements and implications

A definition of sustainable and qualitative growth: «a growth model in which the achievement of quantitative objectives (such as GDP growth and competitiveness) is compatible with the improvement of the wider set of qualitative dimensions which characterise the well-being of the present generations, without compromising the opportunities of the future ones” Based on the main findings of the debates on “Sustainable Development” and “Well-being”.

A working definition of SQG: main ele lements and implications (2)

a) SQG implies putting the objective of enhancing GDP growth into a wider picture. It’s thus necessary to identify

• ther dimensions and objectives which may be valued by

individuals and societies. DEBATE ON SUSTAINABLE DEVELOPMENT (United Nations): Three pillars of sustainable development:  Economic development;  Social equity;  Environmental protection;

A working definition of SQG: main ele lements and implications (3)

‘Key themes’ for sustainable development (UN 2007):

A working definition of SQG: main ele lements and implications (4)

DEBATE ON ‘WELL–BEING’ 2 broad components of well-being: (Stiglitz, Sen, Fitoussi Commission, 2009) 1) Economic well-being (Living standards):

More emphasis on other measures (‘beyond GDP’) providing a more realistic account of material living standards (e.g. Net domestic product or national disposable income). More attention to the contribution of govenment -provided non- market services (e.g. education and medical services). More attention to measures other than production, notably by taking a ‘household perspective’ (households income, consumption, wealth). Emphasis on distribution: average figures of income, consumption and wealth are incomplete. Income measures should be broadened to capture some non-market activities performed by households.

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2) Quality of life (a range of factors that influence what we value in living, reaching beyond its material side):

A working definition of SQG: main ele lements and implications (6)

b) SQG emphasises the time dimension (need of seriously taking into account medium and long-term consequences of present choices). ‘Sustainability’:

• “Sustainable development is a development path that […] meets the

needs of the present without compromising the ability of future generations to meet their own needs” (Brundtland report, 1987).

• The well-being of future generations is linked to the stock of capital

(natural, physical, human and social capital) that the present generation will pass on to them (Stiglitz et al. 2009)

A working definition of SQG: main ele lements and implications (7)

c) SQG implies a careful understanding of the interrelations among different dimesions and objectives (in the short as well as in the long- run):

• Identifying and addressing trade-offs;
• Exploiting synergies.

Looking ‘inside GDP’, i.e. to look at the modes of production and consumption as well as at the goods and services produced by our economies, and to invest in those which enhance standard of living and quality of life for the present generation (quality) without compromising the possibilities for the future generations (sustainability). “Goals for more growth should specify more growth of what and for what” (Kuznets 1962)

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d) The concrete definition of the contents of an SQG strategy (and its implementation) requires a collective reflection on dimensions and

• bjectives to be pursued and a democratic decicion-making process

involving different levels of government (international organisations, the EU, national governments, local communities) and a variety of actors (political parties, social partners, civil society organisations, ‘experts’ ). This is important for different reasons:

• Choises have implications at various levels (from the international context

to people’s everyday life);

• Different individual and political preferences about dimensions and
• bjectives to be privileged;
• High commitment needed for managing and accompayning changes.

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e) Implementing an SQG strategy requires the availability of accurate, timely, and easily understandable indicators for assessing progresses and identifying interrelations (synergies and trade-offs) between dimensions/objectives. Main challenges: Lists of indicators or synthetic indicators? Accounting for the present situation and its sustainability. Capturing subjective features ( e.g. quality of life). Need for reliable, complete, comparable, and timely data …work in progress (academic community, international organisations)…

2. . Dimensions, indicators and policies for Sustainable and Quali litative Growth

A definition of sustainable and qualitative growth:

«a growth model in which the achievement of quantitative objectives (such as GDP growth and competitiveness) is compatible with the improvement of the wider set of qualitative dimensions which characterise the well-being of the present generations, without compromising the

• pportunities of the future ones”

Dimensions, indicators and policies for Sustainable and Qualitative Growth (2)

Dimensions and indicators for SQG (Eurostat database; OECD 2011 )

Dimensions, indicators and policies for Sustainable and Qualitative Growth (3)

Dimensions, indicators and policies for Sustainable and Qualitative Growth (4)

Policies for SQG Enlarging our perspectives: social and environmental policies, constraints

• r opportunities for (present and future) growth?

Preservation and improvement of natural, physical, human and social capital should be considered as a precondition for growth: “Lasting economic prosperity depends on long-term investments in public goods such as ecosystems, education, health and social cohesion. Within this strand of thought on sustainable growth, human capital is at the centre of attention” (Sommestad, 2012) Social policies, a ‘social investment approach’. Environmental policies, a ‘green growth approach’.

3. . The European Union and Sustainable and Qualitative Growth

a) The EU Sustainable Development Strategy (2001 – 2006 – 2009). b) The European Commission ‘GDP and Beyond’ initiative c) Europe 2020, a proxy of a SQG strategy? Objectives: promoting ‘smart’, ‘sustainable’ and ‘inclusive’ growth. Dimensions/ targets:

• Employment: - 75% of the 20-64 year-olds to be employed.
• Climate change and energy sustainability: - greenhouse gas emissions

20% lower than 1990; - 20% of energy from renewables; - 20% increase in energy efficiency.

The European Union and Sustainable and Qualitative Growth (2)

Education:

• reducing the rate of early school leaving below 10%;
• at least 40% of 30-34 years old completing third level education.

Poverty and social exclusion:

• at least 20 million fewer people at risk of poverty or social exclusion.
• 7 ‘Flagship initiatives’ related to smart, sustainable and inclusive

growth. Is this sufficient? What is the effective relevance/integration of environmental, social dimesions in EU economic governance? European semester (Annual growth survey, Country specific recommendations) / Stability and Growth Pact. Fiscal consolidation measures and enhanced surveillance on national budgets.

Thank you for your attention!