To the first of this new Oxford Martin School series of events on the Dasgupta Review on the economics of Biodiversity.
My name is Katherine Hepburn. I'm professor of Environmental Economics and director of the Smith School of Enterprise and the Environment.
And to kick off this event series, we have none other than Professor Partha himself, the author.
Or perhaps I should say lead author. It was a team effort.
I'm sure he's the first to say, but, but certainly the lead intellect and the brains and the engine behind what is what is a meaty 604 page review.
So welcome.
It's a particular pleasure for us to have you with us here in Oxford Digitally Pathways, reminding me that it is almost two years to the day.
It was the 16th of May 2019, when we invited to come to Oxford to set up these initial thinking on what such a review could contain.
And of course, when you're thinking about your research agenda, it evolves and changes and grows,
and we were just reminiscing or at least reflecting on the fact that actually what has emerged is,
well, really a hugely substantial body of work,
a rethinking in some ways of economics with an awful lot of valuable textbook material in here to so students out there.
You might want to read the review very closely. Now, for many of you, so palpable need no introduction.
And he holds a kind of guru like status.
So you won't mind me saying within economics, there will be people here who read an awful lot of what you've written,
but there will be people who don't have a comment. Dog-eared copy of dust sculpture with sticky yellow notes all over it.
So let me just do a quick introduction, said Arthur was appointed professor of economics at the University of Cambridge in 1985,
served as chairman of the faculty from '97 to 2001, and he's won awards and prises too numerous to list, including, of course, his knighthood.
Research wise, perhaps more importantly than the prises in the accolades,
the intellectual contribution has been vast part of his PhD thesis, and sixty eight was centred on economic growth and population.
And in a way, the nice thing about this body of work is that it comes back around to those big questions, actually.
And if you're obsessing about how many children to have or if you're still wondering whether having three was OK by the planet, in my case,
reading partner is perhaps not likely to resolve all of your inner demons,
but it'll make you realise there are more ethical and social dimensions to the question that we previously thought.
His work has covered welfare, development, economics, technological change and, of course, environmental and resource economics.
And I might, in passing note, work on the theory of games as well.
I've taught some of his work on the condo, say Paradox used a nicely apply, lightly applied to Brexit actually in recent years.
So we're delighted to have you here. It's a great distinction and in fact of all of your distinctions,
I'm going to finish by saying perhaps your your most significant distinction is that you had the excellent taste to marry a psychotherapist.
As I have to. So we're going to get onto this is not a big formal lecture.
Father insisted that that you didn't want to listen to him drone on.
I think we might have disagreed on that point, but we're going to make it very engaged.
And so there's a Q and a box on the bottom of your screen.
So do type in questions as they appear to you.
But what I wanted to start was just to say, Well, sit out what I thought.
In some ways, the most important messages of the review have been and and check in with support himself and see what he thinks.
So if I were to highlight six messages, the first is and these are really significant.
We are in an extinction event currently. It may not feel that way in the human lifespan, but when you look at the data on a geological timescale,
we are currently in an extinction event and we need to kind of wake up to that.
Secondly, it's because our demands on nature far exceed the supply of nature.
Speaking as economists and so our demand needs to fall or and or supply needs to increase.
Thirdly, the key failure the failure to understand is the failure to do something about it.
A key failure here is institutional and doing more of the same sort of things in the hope that we're going to solve this problem.
A series of related environmental biodiversity related problems actually won't work.
We need some quite radical interventions at this stage.
Fourthly. A key plank is that we need to start getting prices into into nature.
We need to value nature properly. Now this is a hotly contested, highly emotive and debated area on ethical grounds, on pragmatic grounds.
I'm sure there will be questions about it and we'll discuss it together over the course of the next hour.
And then lastly, I'm going to say that one of the things I took away from the view is that the the prices
that we would hope to guess that are politically feasible probably won't be enough.
And indeed, there are other externalities here other problems, market failures that need to be addressed and what we're going to need to do,
and there's no one better than profit to actually think this through is to recognise the social nature of our preferences
and understand how those preferences can be shifted towards more environmentally friendly kinds of preference or goals.
And we also need to rethink our technological and innovation systems so that we get more nature friendly innovation.
So it's not just pricing its preferences as well and innovation recognising, of course, that all three of those are connected.
So I think that's enough for me. That's what I took away in terms of the high level key messages.
Do you think that's a fair summary? Yeah, I think that's a fair summary.
That's a very good one. More than fair. And which of them do you think in terms of if you had a magic wand and you could wave it and just say,
I want these few things to change because if it is a fair summary, wearing an extinction event, what we've done isn't enough.
What has to happen from here? Well, I think just a multiplicity of things and they have to be rooted from very local.
Items, individual decisions, small communities, villages, right,
and then up through to the national governments and international institutions as well.
And I've tried to show how that can be done. It has to hang together.
So we're looking at the multiplicity of problems operating at different scales and different speed.
So there are local, regional and so forth.
Up to the top. So it's we need a lot. So what I've tried to do is the the essentially to study the inequality between demand and supply,
the one which you which you articulated a minutes ago and decomposed the demand in to the factors that make for it.
And on the right hand side, that is true of the inequality, the supply side,
the goods and services that the biosphere produces for us and we enjoy it.
And the decomposition tells me the kind of parameters that need to be shifted.
And of course, as you know, the way I decomposed it, borrowing from the work of natural scientists,
a population per capita use of nature, a production of goods and services and a critical thing,
an efficiency parameter, a parameter with which records the efficiency with which we convert nature's goods and services into final products.
And so, of course, the rest of the review takes on each of the items and sees how to think about what kind of policies could be generated,
what believe changes in our belief are required in order in our practise in order
to push down the demand as you are pulling down the demand as you were suggesting.
And of course, more on the technological side would be the right hand side of supply.
The investment in nature and so forth.
So I count, it's not a it's. OK.
Another way of putting it to expand on it is to say that in the economics of biodiversity, although that's the title.
It's really not the subject.
Pretty much a few months after I started working on that, you realise that what I was grappling with was the economics of the entire biosphere.
That's the the ultimate subject of study. So that's what it is about.
Biodiversity is a characteristic of ecosystems. It's not the ecosystem itself.
It's a characteristic of the future.
So the what we don't have in the economics of this in the review is a simple measure like, say, carbon concentration in the atmosphere.
You might think I would have said, let's start with biomass.
Is, after all, carbon content. Of of a of the of the outcome, some terrible that you see, but we don't go that route.
Instead, the basic building blocks our ecosystems and of course,
they range in size and meaning it's a contextual thing and the goods and services that the processes that underlie the ecosystems produces.
So that's where it's heart of the matter. And it's very much like, you know, the way economists to think of it.
You have stocks of capital. These are ecosystems that produce goods and services flows.
These are durable goods, but they can be appreciated.
So you get a picture of how you might be able to influence both the demand and reduce the demand and increase the supply.
And and how long do you think we have before we really have to get on top of this
challenge of reducing demand on nature and on ecosystems and increasing supply?
I mean, how long is it before we start to see really suffering the consequences of the degradation of nature and biodiversity losses?
Or would you say we're already there, we're already seeing it? Well, the one level, of course, we've been seeing it.
That's a small scale level for a long time. Villagers go under in Africa, South Asia, Latin America.
So much of the distress migration we see is arising because their local ecosystems
got degraded to the point where they can't support themselves and to try and move.
But the neighbours don't want them either, because they are. They also are poor.
They can't be welcoming. So in some sense, we're seeing the the effects of biodiversity loss.
If you want to put it that way and say ecosystem productivity, loss, not so much biodiversity loss.
But we've seen that and we have to think now move up to scale it up and see what might lie ahead for the global community.
OK. Of course, the speed is varies, there are many, many processes that work.
Carbon climate regulation is only one of the many services that nature provides.
Nitrogen fixation is one. Decomposition of waste is another, pollination is a fourth and so forth.
The multitude of those, they're all working in tandem at different speeds,
and they are interconnected like any good you know, of economics with how these are interconnected.
But the critical thing in my judgement is that what I learnt from the sciences is that they are complementary to one another.
They're not substitutes. And that makes that comes to the point you just made, which is how close are we to a problem, a global problem?
It's hot. Of course, I can't say with it. It won't be tomorrow. It won't be in five years time.
It won't be in 10 years time. But unravelling can take place slowly.
But you know, parts of the structure superstructure fracture. We are seeing aspects of it in climate.
Because that's more visible experience, all of that biodiversity loss.
Same things happening that to the wetlands get degraded.
The coastal fisheries get degraded. Dead zones, those are all symptoms of fractures of our system.
So, you know, it's not a question of the whole humanity going under, but this is a crisis situation.
There's no question about it. The gap between demand and supply is increasing.
It's large already, it's increasing. And this is coming from a variety of studies in Earth sciences, ecological sciences,
environmental sciences and a few contributions by economists as well.
They're all converging to the to the understanding that there is a big gap and it's increasing.
And this can't go on because these systems are very non-linear.
So the fracturing that takes place, I'm using the word fracture advisedly because these are not linear systems.
Mm-Hmm. So you can shift thumbs-up parts and shift to different regimes like it's a dead zone is an example of that large dead zone and say,
in the Gulf of Mexico, that's what it is. So it's something we ought to attend to as fast as possible in my judgement, and what does that mean?
It completes complete, complete this response with thought that.
The the review essentially ends by suggesting that it can only be done if we citizens.
Engage with the issue. It's no good simply saying, you know, it's government's job, it's not their job,
their job is to respond to us and unless we get excited about it and feel concerned about our descendants now, if only we could.
If you think of two weeks ago when there was the suggestion of the European league.
Football League. And if you saw the speed with which citizens responded to it with such ferocity that extremely rich people were stymied.
Within two days. If only we could.
Channel, that kind of emotional energy. To a problem which really is serious.
And of course, we would make some progress. Mm-Hmm. And you think one of the reasons that this is so difficult that, you know,
we don't see European Super League sort of passion aroused and action taken is that I hate to use the boiling frog metaphor,
or not least because it's wrong. I gather folks don't fail to jump out of increasingly warm water because the
non-linear narratives in the system at least a kind of regional and global scale,
we're not quite seeing them dramatically hit us with multiple breadbasket failures and famines and so on.
Yet, you know, we know they're coming. But until you can see them and tangibly taste them, it's a very abstract.
It's very conceptual. It's it's, you know, it's the sort of problem that appeals to a mind like yours and mine.
I dare say precisely because it's difficult and complex, but it's not straightforward for the average football fan, perhaps to understand.
But on the other hand, everybody gets nature and they love nature, and they want nature to be protected.
So I'm struggling to get my head around,
whether in some ways this is a harder or an easier problem to get people excited about compared to climate change, which is very abstract.
I mean, compared to protecting nature, which people do understand. What do you think?
I think you're absolutely right. This is a very good question. I don't know the answer to it.
Your garden might be flowering very well, even when things are going awry in the Amazon basin and they are doing the right there.
So you would need to observe it. So there is an issue of being conscious, of aware of what's going on.
And as always, the effects of it are going to be felt.
Unevenly and as always, you know, there is an iron law in economics, which is the poor get hurt first.
And then and go the rich, we rich, we are fortunate to be affected.
So if if the poorer the Canaries in the mineshaft.
And actually, I have a colleague who says that the amphibians are the canaries in the mine shaft here, and they're not doing very well either.
How do we get the rich to realise that and to observe that when the poor aren't doing so well, when the frogs are dying off their necks?
That's a hard question. Yeah. The trouble is that because of the multiplicity of causation in our in social sciences,
we would put the loss of ecosystem productivity right at the bottom of the heap as an explanatory device for poverty.
The first port of call is bad governance. That's why they're poor or there's a civil war.
That's right. But that's, of course, proximate. You might want to ask why there is a civil war.
Is there a battle for resources is going on? But we don't tend to do that.
We have some simpler criteria, some proximate causes.
For sure, governance is bad, but the lack of good governance may mean something deeper.
And in the context of the review, of course,
I focus attention on the productivity side of nature because it's these are prime asset on the basis of which farmers, fishermen, you name.
It depends. You make the point there that we've really got to think hard about and trace back to the underlying drivers of things.
In that case, the underlying drivers of poverty and maybe pressure on nature leads to resource scarcity,
which leads to conflict, which leads to civil, which which leads to poverty. But let's Maranhao on a pose you perhaps a deeper question.
What are the under? If nature is the underlying driver of some pressure on nature, the underlying growth of some of these social problems water.
What's the underlying driver of the pressure on nature and in particular you've you've spent decades thinking about population,
and it's a question that is frequently asked at Oxford Martin School events.
I daresay events all around the world, there are just an awful lot of us now that humans,
I mean, we're getting on towards eight billion numbers of ever rising.
You've thought about this possibly harder than almost anybody else in any other economist I know.
How do we how should we think about population as a driver of the pressure on nature?
And what can we do? Do we want to be doing one child policies?
Do we want to be intervening in people's fertility and productivity choices?
You've written an awful lot on this. We'd love to hear some of your thoughts.
Well, but being liberal is the final port of call in command and control goes out,
saying, All right, so there are many other preliminary things to do,
given the fact in view of the fact that the subject is essentially ignored by economists, sort of kind of a taboo subject.
The only way to find it a democracy person who cares about democracy is there.
They're not influential. By the way, I I work with demographers so well, what can we do about it?
Well, first of all, I think one of the things that really bothers me is for us, the is the fact that we,
when economists have built models of human motivation, which are egoistic, is we only it's a supermarket view of life in the supermarket.
We think about what our needs are, our family needs.
And if we don't, we don't ask ourselves how much of our family needs have been influenced by what others are doing.
And why do I go for cheese of a particular type, if that is it because my neighbour eats it, but 60 where I'm going to eat?
I think anthropologists and sociologists abundantly clear with a great deal of evidence of including historians,
by the way that our preferences are socially embedded.
But we look around, we are influenced by what others do.
So there these are models of coordination.
You know, you can have multiple outcomes, and some of the most successful family planning programmes have made use of it,
of having women come together as groups as opposed to individuals.
So it's not much point in asking a person, what would your ideal family size be?
It's smart way of asking the question would be what would your ideal family size be?
Should all your neighbours have two children? What would your ideal family size be?
Should all your children, all your neighbours have three children and so forth?
OK? And the suggestion is it'll be a monotonically increasing response.
OK, so in that kind of a world, you're actually not giving up liberty.
What you're doing is providing allowing an avenue where people discuss these matters in rational way.
So designing family planning programmes in which it has huge mileage if you include, first of all,
to have them done some 220 million women in their reproductive ages do not have access to modern family planning,
so it's been really a neglected field, both in government and don't.
Donor countries are less than one percent of aid from the EU goes into family planning,
and the recipient countries regard family planning as a sort of it.
They talk about empowering women, but when it comes to empowering their own bodies, so to speak, it doesn't seem to have much weight.
So that's what a whole class of areas where we could really bring to bear making choices richer for people and that would bring population down.
So that's the first port of call I would hope for. And there's a lot we have experienced.
I mean, there were countries which spent money on family planning for South Korea, Taiwan after the Second World War.
Look at them now and compare them with the Philippines, for example, because the differences.
So that's extremely important. Having said that, there is a one final observation I'll make, but it doesn't colour the review,
largely because I see the last port of call that I would go for would be command and control for obvious reasons.
But ask ourselves the following question if the demand exceeds supply, as you know,
in the sense that you mentioned the demand for goods and services, nature's goods and services,
then there are externalities associated with reproduction,
just as there are externalities associated with consumption, energy consumption and so forth.
We are happy with the latter parts of it that we have to discuss the last kind of externality.
That's what the economics of climate change is all about.
But we are not very happy to think about the externalities that reproductive behaviour is causing for the future, for example.
Okay. Now, if that is the case,
if there are externalities economies we have a worry is the language of rights becomes tenuous because you're think one right against another?
And if there are serious external effects, then you know the language of rights really going to get health.
And therefore it's, you know, it's not.
Let me put it this way, even a good liberal could think that command and control is not completely out of bounds to me to think about,
because after all, we have command and control over many things in my life. You can't, you can't.
You know, you're you're banned from beating me up, for example.
You know where you can relax, you're not allowed to do that, right?
It's hard digitally anyway, but you see what I mean.
There's a heck of a lot of constraints that we are imposed on us because we
voluntarily agreed to forego those liberties and there because of these externalities.
Well, we enjoy the right not to be punched as we walk down the street. You want to do some shopping?
Absolutely. So if we reframe this not as a kind of issue of rights, but as an issue of externalities,
which then brings to bear all the classic economic tools is a conclusion that you would want to be taxing having children.
Yeah. Well, you know, the truth is extremely difficult question to answer because, you know,
there are poor people who are having it, so I wouldn't go that route for the moment anyway.
Really go the route of technology in the sense of giving information to people.
Mm-Hmm. Available tools for controlling their own lives.
I think all the all the evidence to just go a huge way if you can bring, say, for example,
the fertility transition in Africa in 20 years time rather than 40 years time,
that will be a huge contribution to to to the future of Africa, if you like for African people.
Yeah. You mentioned the importance of empowering women over their own bodies, and we speak as to men, obviously.
But I would. Is it not also the case that just empowering women generally increases the opportunity cost of having children and reduces the,
you know, the the narrow individual incentive to have children?
And in addition to family planning in addition to these other interventions.
Is not gender equality a key driver, perhaps, of environmental protection?
Well, that's for sure. I think so. Absolutely. Yeah, yeah.
But this is a particularly cheap crude.
That's why I've been emphasising it because family planning is nothing as expensive as as the education education,
because education requires a huge number of complementary investments,
not just not just schoolrooms buildings, but teachers who show up every day and children.
I know there'll be many people listening in who are probably just punching the air and saying, finally,
a conversation about population and the environment because there's an awful lot of our community who think this needs to be discussed much more,
much more openly and honestly. So the review will be very welcome.
And it's it's going it's massively oversimplifying to say this, but I think thinking through the population dimension is one of the key things.
I think that we will take away from this review and it's entirely appropriate given given it's you who's written it.
So and they're already some of the questions in the Q&A are more on population, which we'll get to soon.
Thank you to all of you who've been surveying questions and answers as a slightly intimidating list in there.
I actually still have five areas of my own to discuss with policy,
but I think I'll curtail them in the spirit of sharing the time with with the the wider community here.
I just before I do that, though, I just like to tap into two more areas, one around preferences and one around technology.
Because if we think about how economists often approach environmental problem like this, where there's an analogy,
you seek to price it, you know, we know that that's one of the core messages is let's price carbon for climate.
Let's prise nature that get some people up in arms.
George Monbiot is tuning in. I'm sure he'd be aghast and appalled, but other people say, Well, we just need to do it.
But then there are those who say, Well, we do need to do it, but we're not doing it very well. What are the other levers?
Because it's not going to be enough pressing nature and the other levers are shifting how people think about make sure that preferences,
that consumption decisions,
as well as their fertility decisions, and also thinking more deeply about the space of greener technologies, nature friendly technologies.
So in this kind of I don't want to make it a horse race because these interventions are complementary.
They're part of a portfolio. But how would you describe the the balance, the roles,
the respective importance of interventions around shifting people's preferences and consumption decisions and how to do that?
Part one, I guess the question and part two, where are the great hopes, technologically speaking,
is it feasible for us to kind of innovate our way out of some of these crises?
Well, that's tough. The the answer to the last question is no.
I think the idea that technology will come to our rescue is deeply flawed.
But many of these problems are not technological, it's really societal. And so that has to be taxed.
I've come to this sequence of questions that are embedded in the discussion that you just had.
First is, I think it's misleading to talk about pricing nature.
We don't do that in the review. That's not what's.
In fact, the first chapter has a longish box in which we say that the idea of valuing nature as a whole,
the biosphere in order to earn $3 billion dollars a year of service.
That's what the nature is. What is rubbish? Because there was no nature, we would be all dead.
So I think so that's a gross underestimate of infinity.
Yeah, that's a gross on the stoop. That's if that's so.
But that's what I think comes to one's mind.
And when one says, if we're talking about prices and the economics of biodiversity, then that must be what you mean.
You don't mean that what you mean is changes now. Of course we are pricing it, everybody.
Ask a farmer he or she owns a piece of land.
I mean, to say that the person doesn't actually price it or doesn't recognise its price or and so forth is just an affront to life.
I mean, no, this is crazy. So the issue is not pricing.
The issue is that the price is wrong. That it doesn't go with the common good,
the idea in economics is to try and build a society in which the incentives individuals and communities have are consistent with the common good.
Bringing about the common good. That's what we mean by accounting practises or shadow prices.
That's the whole idea of it. OK, so that you can decentralise, you can let people do.
But it will be guided by these prices, which are another way of saying that there constraints they're feasible.
Sets will be so defined that they choose in accordance with the chosen and the sustainable world.
In this case, we don't have to be very sophisticated with closing.
The gap is let's let's stick to the idea of closing the gap between demand and supply.
OK, so the question is, can you run through with the accounting prices or shadow prices through the entire discussion,
through the entire body of institutional reforms that you want to consider?
The answer is no. And the reason is that you do need quantity constraints.
You do need regulations. Regulations mean this.
You can't do this. You can't do that. And the reason again is it comes straight from economics, but really good, sophisticated economics,
which is that these are non-linear systems, so threshold of sitting out there.
There are huge uncertainties to whether the fresh rules are. That's true.
And the third is that not everybody knows the same things.
Some people who are living in the ecosystem know the ecosystem downside more better than the regulator.
And these three things together, and you have a non-linear pricing system,
huge nonlinearity will mean an extreme think in terms of quality constraints.
So protected zones. We think about them, we say, let's keep 30 percent of land and sea spray.
Well, that's that's quantity constraints. They are not you're not allowed to go in that right.
The problem that is going to be what happens to the rest of the 70 percent. Suppose we do have 30 percent, somehow imagine that we all agree.
So we have a problem with the 70 percent and that 70 percent is what I suppose.
Much of the review is concerned with. So that's the second point I'd like to make.
The third point is really it's all. I think there's a huge information gap and we've covered that a bit before.
When you asked as to whether. The economic the economics of biodiversity loss is something that you really can't not.
And the my guess is that it would be painful process.
We have to all of us have to keep on working honestly as far as possible to educate the public to not in terms of the science necessarily,
but to make them aware that, ah, we are gone, gone down the wrong route.
And I think we economists have a lot to answer for. And it was quite explicit about periodically I criticised my own profession when I say economics,
it's the practise makes a subject just fantastic, amazing that we've got.
But we really have made a mess of things by creating models of growth and development in which nature doesn't appear at all.
Mm-Hmm. Mm-Hmm. Well, with some exceptions, including you from the 70s, but but yeah, not not in that sort of granularity or in the mainstream.
The main journals, the journals, I think these points are well made. I'm going to move us to the Q&A.
This is a policy. We've been running these events for a while at the office are not in school.
Many of them,
I haven't been in an event where I've had 30 questions lined up at this stage with an with an awful lot of commentary on many of the questions.
The number one question voted up 14 times from Cassandra is about the shift away, notes the the importance of shifting away from GDP.
And she observes that there seems to be, in the review,
a kind of call for a shift away from traditional capitalism without explicitly saying the C-word.
But she asks, What's the what's the viable alternative? And is green growth, which is still growth that's surely unsustainable in the long run?
Is this a point? And others further down the list of asked similar questions on similar similar themes?
We can't keep growing forever. So what is the model that is going to replace the model that we have currently now?
Of course, I may not necessarily agree with all of the premises in these questions, but they're very good questions.
Well, thank you very much. The Chapter four star review has some star chapters, by the way, where I've kept the technical side of things.
And of course, there are technical side things, old boxes.
But of course, star is the one which has the prototypical growth and development model model of economic positive economic possibilities.
Use the word growth and development any more economic possibilities in which nature is absolutely central in.
If I want to describe it picturesque, I would say it's the human economy is embedded within nature in the way we live in our home.
It covers us. So no matter how what wonderful furniture you may have, how many lovely pieces of art you have, are you, whatever possessions you have,
all come up will be disturbed will be useless if the roof falls apart, if the floor sinks and so forth.
So the model has that. That's the other thing.
The model has,
which really creates the limitations of economic growth as we know it is the fact that you have traces of public activity from source to think so.
It takes the material balance very seriously that all the waste we produce has to
be then recycled and the recycling is done by Mother Nature for the most part.
And if you stretch that service too much, then other things get that.
So the idea that it's this is biodegradable, it's fine.
It's not fine because the amount of biodegradable and the amount of refuse you throw into the system exceeds its capacity.
Then, of course, other things go wrong. So the model has that, OK, what would it be?
Suppose just you have a thought experiment where you've created an environment in which we we have closed the gap between demand and supply,
let's say, which is the minimum requirement for sustainable development, by the way.
I mean, obviously that then what will the world will look like?
I don't know. And I think it would be wrong to speculate because they are so decentralised in the world we live in is that we
understanding the world we live in is we can't predict people are going to respond to the what we can do it best.
As an economist is to try and provide the environment in which people can choose and choose well, aligned with the common good.
And here the common good simply is the simple stuff, which is reduce the income and impact inequality, inequality and inequality and inequality.
So that's a very minimal requirement. How do we what kind of technological change will take place?
I don't know. All I do know is it won't be rapacious of nature.
Unlike the technological change that we have experienced over the past 200 years,
largely because nature has been free, so entrepreneurs are put to economise on nature.
It's the cheapest thing on Earth, so you go for technological change.
New technologies which are rapacious,
which which economise on the more expensive factors of production that will not happen in this world that we are imagining just now.
So we don't know what kind of technological, what kind of lifestyle will choose to have.
But we also adapt and we'll also invent ways of living, which are good for us in a very different price structure.
So that view, I think at best, we economists can do, rather than speculate as to whether this will mean growth must be zero and by gosh,
we don't know what will be there to look forward to.
We just need channel our activities in such a way that will I'm sure we'll do the best we can until we will discover new ways of doing things,
and I don't think we can. We can speculate on what they will be.
That's there is a thread through economics that goes back a long way that you
you're part of this kind of golden thread from John Stuart Mill through to Cains.
And the review that, without necessarily speculating on the details,
is that this is kind of kind of another way of engaging with Cassandra's question that we will
need to get to a stage where we are less obsessed about getting on and more focussed on.
I think the art of living perhaps was Mitchell's expression. And economic possibilities for our grandchildren.
Use different language and your point.
Martha seems to me to be completely correct that in such a world,
whether we're whether we're still growing the value of goods and services that humans provide one another,
we'll definitely be in a stationary state of material flows where those flows are sexualised,
where the demands placed on nature for returning the resources that we take from the biosphere back to the biosphere
are way lower because we've designed the way in which we're using those resources in a completely different fashion.
For instance, the Oxford Martin School has a programme on the future of plastics,
is looking at the possibility of taking a very limited palette of monomers that naturally return to nature once we're done with them.
There's a big ask and we're not there yet, so, you know, don't get too excited, but I think that's the that has to be the vision.
And I guess perhaps we're agnostic, you know, in the medium term, whether that means growth or not in the developed and rich countries.
But what about this question of growth for the poorest?
If you're in the bottom billion, you desperately want greater prosperity.
How do we manage to deliver that? Because we have to.
We want to. It's the right thing to do and avoid the impact inequality getting more unequal.
Very good question again.
But think now of if I come back a try and not give a direct answer for a good reason because we want to go to the if you like,
the bottom of the barrel to see what's going on.
And one of the things that the review points to is the fact that this mispricing of natural capital, not nature, but natural capital.
Has resulted in huge transfer of wealth. From the poorest countries to the richest countries, because inputs from there are underpriced.
And since the inputs from there are primary goods, I'm not talking in loose terms now, primary products, timber and so forth.
If they're underpriced because the they're not priced adequately, they're.
Below social, the social cost in there, in there, in those countries, then of course, that's wealth transfer.
So when we're really in the in the name of free trade or open trade opening up of trade,
we've actually done a huge disservice to the poorest countries.
And again, this is not it's not a story of exploitation, by the way.
They didn't know. We didn't know. Or at least we know nobody.
People pretended they didn't know that there was a transfer going on because there was the wrong pricing mechanism.
Okay. So of course,
they need help because that's saying you want to raise their standard of living in terms of the provision in goods like food and food clothing,
you know, that goes out saying. And that would mean that once again, there's a temptation to say we have to give up things that are in.
The point is, I just don't know how it'll just how the imaginary world we were just discussing a few minutes ago where we
have close the gap between the demand and supply so that you have completely different pricing structure.
It may happen and it's not happening in one go. Maybe 10, 15 years or so, even if that happens,
even then that world will be one where it's hard to know in advance what our living standards are going to be, what the living stuff.
But we do know they are living standard of the poorest would be better because
they won't be giving up their wealth in the way they're doing at the moment. Not for sure.
We are giving them. There is aid going on, there is foreign aid that's not to be discounted,
but it is striking to me that we economists have sold the idea of globalisation without
asking the price structure in which globalised under which globalisation takes place.
We really haven't. And I think the price structure that I'm concerned with, of course, is the price of natural capital.
Yeah, you in part, answered Jackson's question here about, you know, where why not start with the rich?
Because actually, we're the ones imposing the main resource burden on nature.
And you know, we often talk about and the question I just ask you is how do we manage to elevate the prosperity of the billion poorest?
And you've given a good answer, I think, partly to Jacqueline's question as well.
Actually, if we priced natural capital correctly, then that would go part of the way towards helping to lift those billion out of poverty.
But they're just to just to push the point a little bit further. I think Jackson probably is partly happy with that answer.
Are there not other things that we in the rich countries should be taking more serious?
You should be doing more proactively to help at the one, on the one hand, elevate and lift up, increase the prosperity of the bottom billion.
As Paul would described, the billion poorest and also protect our natural capital is the responsibility, not with us.
Well, yeah, but it's also equally argued the responsibility is for the leaders of those countries, and they haven't been led all that brilliantly.
And I think polite in polite society, we do not talk about the that governments that exist in the poorest parts of the world,
but every time you pick up the newspaper, you find somebody who's been running the place for 50 years, 40 years.
It's a routine and we gloss over it because you know what's to say that?
But they're adults and it's their societies. So it requires effort on both sides.
No question about it. And I think but I think there was a part of your question have to do with green investment and green growth.
Let's keep the growth side out of it because we don't know what it is that we are looking at.
It's not GDP, that's for sure. We're looking at wealth, wealth, inclusive wealth, wealth that includes natural capital as a stock.
So we're talking about growth in that of possibly. And there it seems to me that it's.
The weakness has been the classical economists thought of a stationary state, you're quite right.
As far as I know, I'm not an expert on the history of economic thought by any means.
But as far as I know, they they didn't have nature in it.
Nakano had land, but it was indestructible and of different grades.
That's for sure, and they didn't have technological change. OK, that's in the art of living, as I say.
But yes, we have smart technological progress in the way that we would conceive of it.
Yeah, right. Exactly. Absolutely.
What we've taken away from that in the post-war models of growth and development has been the technological change in
the in the sense that you just now pointed out without asking without the other ever and not having nature in it.
That's skewed the discussion completely because every time you talk about natural capital, it's one of those technological progress.
And that's what we used to be little the early literature on on, on the finite Earth,
and they have the equipment to counter in the way I think you and I do.
Hence, the review. Well, I would personally love to spend more time on this question.
I think it's really vital. Actually, technological change isn't enough to solve the problem, but yes, it's certainly not sufficient.
But some of it, I think, is necessary as well, for sure, addressing people.
That's another long discussion and we're already running out of time.
So I'm going to pick up the other top two for the moment in terms of responsibility, responsibility, lying with the rich world in particular.
So question from Andy here about the responsibility of the UK government in particular and Her Majesty's Treasury.
So his question specifically is do you think the Treasury will implement the recommendations of your review in full?
And if not, can we do it ourselves?
And of course, not all of your recommendations and not even the majority of them were for the Treasury itself, but all the same.
I think you get the gist of the question. Yes, of course.
It's impossible for me to say because at the moment, the Treasury's preparing the response, it's a part of the protocol response to the review.
And when that's prepared, we'll get a sense of how much they would be willing to absorb or feel they can absorb, absorb.
But let's make it clear. Many of the review's recommendations are ones which over which one country has very little leverage.
So one of the recommendations that I'm really keen on is the creation given that we have Cop 26,
Cop 15 coming up the creation establishment of an international transnational organisation like the World Bank I Amendment,
which were created after the war. We have now another crisis situation, a really serious crisis.
And if we could be magnanimous and imaginative enough to have a constitution create an institution which monitors and manages these open resources,
the Global Commons Global Common Public Goods.
After all, the World Bank and IMF were designed to produce public goods.
Those were international public goods, global public goods and actual stability or development, as the case may be.
So that's not something that the Treasury can command best if it feels it's a good idea.
Maybe the government will suggest it and work towards it.
But you know, it's it's something that has to be agreed upon and accepted and easy tactically by many countries.
But the reason the recommendation has some attraction, at least even at the first cut,
is that it could be revenue generating because it would be charging.
It would create a charge for using the open oceans, for example, for transport or for fishing and so forth.
And we might be able to use some of it to subsidise those countries which are sitting on some of the biggest,
largest global public goods, but they are within national jurisdiction.
Like the rainforest. Tropical Rainforest Economics tells us that they ought to be compensated by the rest of us for protecting them.
And of course, all this requires something beyond me to even imagine the discussion of that sort.
But that's the logic that drives you in that direction.
So and that kind of thing, the government can do it much other than perhaps hopefully they will think it's a good idea.
Then there are many small things, for example, the suggestion that we move to a system of national accounts which are like balance sheets.
That's something I think we would be, except my guess is going that direction.
Many countries are moving in that direction. And what the review does is to really articulate it properly thematically.
And it's the third, which is I think it may well be that we will find out the greening of national
income expenditure accounts in Treasury and other departments at the same time.
One of the recommendations is that we shouldn't be only concerned. We shouldn't delegate only the Department of the Environment.
With this class of issues. Every project should be screened for its impacts on the nature of pretty straightforward, cost-benefit analysis.
It's just that there's a missing items and the Treasury's as.
It's as good a place to stop that as in the Bank of England and so forth.
So I can't say in advance, but if there is a whole range of recommendations that will be made and let's just see,
I hope very much they will find them to be attractive.
I think with wonderful, I can't resist saying that on your first on the big one on the new organisation,
I think there are few people there better equipped to talk to that one than in your Randerson,
of course, who leads the United Nations Environment Programme,
who will be joining us next in this series on the desk to review on the 20th of May in two weeks time.
So I will put that specific recommendation to Inger and see what she has to say.
Those of you listening in can tune in on the 20th and we'll continue a mediated
discussion between parts ending up on the accounts question that leads me rather nicely,
and I'm very conscious of time, but there is a heavily upvoted question here from Tim on this.
It's a question you will know and love if we're pricing things.
How do we avoid just reducing nature to yeah, which is irreplaceable source of life correctly,
in Tim's words, into a set of tradable figures on balance sheets and income statements?
And do we therefore need to just. Forget about this pricing and economics agenda, because we're just mischaracterising nature.
Some people would even say it's that characterisation of nature that is causing the problems in the first place.
Well, the I should say that the brief period that could spell it out, the view is, I think,
fairly explicit when I talk in terms of the wealth estimates it includes, there will be lots of items, but there will be no prices placed.
So then what happens? Well, you offer stock figures for the stock.
So the if you can't, if you can't price worthless, you will remember what we are studying.
Let me come back to this because from the beginning,
these wealth accounts are accounts which are showing you the change in wealth over time as you move from one year to another.
Okay, so the absolute value of wealth doesn't have much of a meaning.
Its comparisons which have a meaning, you are asking Are we are we leaving behind a country which is wealthier today than it was yesterday?
Because that's what you asking is a change you're measuring. All right. And you're saying, Well, not everything can be priced fine.
Those that are not, you provide quantity. Estimates how much of forest cover, what's the status of the wetlands that we inherited last year?
How are we leaving it this year? So the national accounts will have quantity statements, description,
descriptive statements about the quality of the capital that we're leaving behind.
Okay. So if there is a problem with valuing something either because it's difficult or because you find it insulting to do it?
And insulting of nature to do it. Never mind. Keep them and stop this sacred growth.
You don't price the state sacred growth. You say we mismanaged the sacred groves this last year,
the healthier state than they were before, or are they in the worst states and the worst state?
What's going on? Why are we desecrating a sacred grove?
Let me put it that way to you. That's the way the accounts should be provided. In other words, the idea is that if you care about something.
Then display that care, and what we economists can do is to provide the grammar with which you can do that
to make it comparable set of statements so you know what the trade-offs are.
They come back to something that I've been mentioning in my talks recently in India.
The Ganges is a holy river. I mean, it's about as holy as it can be.
She's a goddess. OK? Five 600 million people live in the Gangetic plain into Gangetic Plain, and it's one of the most polluted rivers on Earth.
Now you've got a balancing act you needs and wants to poor people, Trump the fact that it's a holy river,
and yet of course, we have ways of trying to come to terms with these contradictions at once.
If you ask, as I did once a great scholar, how do you reconcile the fact that this is our holiest river and we but we just,
you know, we treat it so badly, so it doesn't matter. She doesn't mind she it.
She can't be effective. She's the goddess. Oh, that's a very good answer, because in our lives, we have this kind of conflict all the time.
Think of the as long as you were growing up, you are sure you neglected your parents sometimes.
And that's about as all your thing as you can be, and then what do you say?
Well, I've been busy. They will understand why I didn't call.
I used to do that routinely in my life. My parents were alive.
They feel awful about it, but they were. But you have to live with it.
So I think we ought not to become too precious about this. National nature matters to us for a variety of reasons.
There means as well as they are and they're their source of our our our inner life.
Fine. Account for that. Keep that in mind.
But your records ought to have those thoughts in them.
And that's what national accounts should be. Yes.
And we're not pretending for a minute that they capture the full values, religious values, spiritual values, all the other values of nature.
Keep a tab on that. That's the main thing that will that is a great place to end.
I think both on the potential of economics and of the limitations fundamental of economics to help deal with this problem.
But I think we've made a very big step forward with this beastly document.
It's a fine achievement of triumph and achievement. Thank you for everything you've done for the profession on this review and for joining us today.
It's been a real pleasure for me. I apologise to all of you numbering well over 30 of you who asked questions that were not able to be answered.
We clearly needed at least another hour. We've thought it's not that surprising, to be honest, but if you enjoyed this,
do come along and join us on the 20th with, you know, Anderson, the head of United Nations Environment Programme,
and then Professor Dame Henrietta Moore and versus to Charles Godfrey, the director of the Oxford Mountain School,
will be in conversation on the 3rd of June and again in this series on the Dasgupta Review on rethinking planetary prosperity.
Are we measuring what we value? Well, thank you very much.
I want to have the last word, if I may, which is, first of all, to say thank you so much for inviting me.
It's always a pleasure to chat with you. I've known you since you were a graduate student,
so you know that the other thing I want to say to the audience is that in a way, Cameron's being deceptive.
He was on my advisory panel. So he's pretty responsible for the review.
OK, thank you very much for all your help with it. It's my pleasure.
Thank you.