Rio+20 and responsible capitalism: opportunities for Labour

We cannot rely on the market to create sustainable growth.

Next week, world leaders will meet in Rio de Janeiro to discuss how the global economy can tackle the joint challenges of global poverty reduction, social equity and environmental sustainability. The United Nations Conference on Sustainable Development marks the 20th anniversary of the 1992 Earth Summit: hence the popular short-hand, "Rio+20".

For environmentalists, Rio+20 is one of the most significant events to happen for a generation. But that's precisely the problem. As long as it remains the preoccupation of the green movement, Rio+20 will deliver only a fragile consensus that will ultimately fail.

The natural environment is fundamental to supporting and supplying the basis of economic value. Yet we do not consider the protection and enhancement of the natural environment is a strategic economic priority. Part of the reason for this is because our conventional model of economic growth values short-term return and wealth creation, rather than long-term productive wealth. While we may increase GDP in the short term, our conventional approach to economic growth can actually reduce a nation’s wealth.

Ed Miliband recognised these limitations in a speech to the Social Market Foundation last year where he told the audience that rules that encourage wealth creation focus on "short-term returns not the productive creation of long-term value". A major consequence is that resource consumption and the loss of ecosystems are treated as a benefit rather than a cost. And communities, co-operation and equality are undervalued in favour of creating conditions to maximise consumption.

An important challenge for Labour is now to translate Ed Miliband's vision for a "new economy" into a shared understanding of exactly what we want, and need, from the economy - and to be clear about the measures that will ensure that this can be achieved sustainably.

For many years there has been a lively debate about how the transition to a "green economy" will happen. However, no one has successfully managed to align the green economy with the everyday priorities of people, business and politics. Nor has anyone managed to set a pro-growth agenda that is also clear about the long-term productive value of a sustainable economy.

Most would agree that our expectations for the economy include job creation; competitiveness; the fair distribution of resources and wealth; fair and affordable access to food, water and energy; and enhanced biodiversity and ecosystem services. While these outcomes are complementary, much of the debate about our economic future has hitherto traded one aspect against another: green groups have one priority, business another, politicians another still.

Rio+20 provides a valuable political focus to continue work already underway on how Labour can address this. A question that the party might seek to answer is how we embed the three pillars of sustainable development - economic, social and environmental - into policy-making so that they become a natural by-product of the economy's total activities.

This would create huge economic opportunities for the UK - new green technologies, sustainable innovation, sustainability skills and sustainable investment products - all of which will also be instrumental in assisting emerging economies with the transition to a green economy.  

The Labour Party has a strong track record on the green economy. The world’s first Climate Change Act and the Climate Change Committee; the 2005 Sustainable Development Strategy with its recognition of the concept of environmental limits; the Sustainable Development Commission; the Commission on Environmental Markets and Economic Performance and the Low Carbon Industrial Strategy are all good examples of the Labour government's successes.

The party's approach in government was based on an understanding that policy and regulatory intervention is necessary to correct the market failure of un-priced environmental costs and benefits - thereby reconciling the free market economy with environmental sustainability. It understood that a strong and robust economic-environmental policy framework would also encourage finance and investment in low-carbon, resource-efficient business operations and supply chains.

Green conservatism of the sought advocated by David Cameron is flawed in this respect as it fails to reconcile the free market economy with environmental sustainability. It relies heavily on "environmental stewardship", which typically values the natural world only in terms of its contribution to human well-being. It leave the environment detached from and irrelevant to the wider economy.

As Chancellor, George Osborne has resurrected the age-old argument that we need to choose between economic growth and the environment - despite stating in 2009 that he had "always considered this to be a false divide" and that "economic growth and environmental sustainability can go hand in hand". He is the cheerleader for the outdated view amongst Tory MPs that the free market alone can satisfy the long-term needs of the economy.

For the reasons Miliband identified in his speech to the Social Market Foundation, an over-reliance on free markets - and their short-term priorities - is not a viable response to the challenges we face.

He has therefore been absolutely right to distinguish between "productive" and "predatory" capitalism. If it can underline the links between economic and environmental sustainability, Rio+20 will represent a valuable opportunity for the party to develop further examples of how it would tackle predatory capitalism.

It’s a chance to challenge the limitations of Tory economic orthodoxy. Most importantly, it’s a chance to start thinking about how the next Labour government can deliver long-term growth and sustainable wealth creation, while at the same time improving human well-being, creating jobs, ensuring fair and affordable access to resources such as water and energy, reducing inequalities, and tackling poverty.

Danny Stevens is an independent environmental policy and political consultant and a Labour councillor in Hackney.
 
Tristan Stubbs works on climate change and development policy at the Overseas Development Institute.

Terena indians dance around a Brazilian national flag during the opening of the Green Games as part of the UN Rio+20 environmental summit. Photograph: Getty Images.
Getty
Show Hide image

Everyone's forgotten the one issue that united the Labour party

There was a time when Ed Miliband spoke at Momentum rallies.

To label the row over the EU at Thursday’s Labour leadership hustings "fireworks" would be to endow it with more beauty than it deserves. Owen Smith’s dogged condemnation of John McDonnell’s absence from a Remain rally – only for Corbyn to point out that his absence was for medical reasons – ought to go down as a cringing new low point in the campaign. 

Not so long ago, we were all friends. In the course of the EU referendum, almost all of the protagonists in the current debacle spoke alongside each other and praised one another’s efforts. At a local level, party activists of all stripes joined forces. Two days before polling day, Momentum activists helped organise an impromptu rally. Ed Miliband was the headline speaker, and was cheered on. 

If you take the simple version of the debate, Labour’s schism on the EU appears as an aberration of the usual dynamics of left and right in the party. Labour's left is supposedly cheering a position which avoids advocating what it believes in (Remain), because it would lose votes. Meanwhile, the right claims to be dying in a ditch for its principles - no matter what the consequences for Labour’s support in Leave-voting heartlands.

Smith wants to oppose Brexit, even after the vote, on the basis of using every available procedural mechanism. He would whip MPs against the invocation of Article 50, refuse to implement it in government, and run on a manifesto of staying in the EU. For the die-hard Europhiles on the left – and I count myself among these, having run the Another Europe is Possible campaign during the referendum – there ought to be no contest as to who to support. On a result that is so damaging to people’s lives and so rooted in prejudice, how could we ever accept that there is such a thing as a "final word"? 

And yet, on the basic principles that lie behind a progressive version of EU membership, such as freedom of movement, Smith seems to contradict himself. Right at the outset of the Labour leadership, Smith took to Newsnight to express his view – typical of many politicians moulded in the era of New Labour – that Labour needed to “listen” to the views Leave voters by simply adopting them, regardless of whether or not they were right. There were, he said, “too many” immigrants in some parts of the country. 

Unlike Smith, Corbyn has not made his post-Brexit policy a headline feature of the campaign, and it is less widely understood. But it is clear, via the five "red lines" outlined by John McDonnell at the end of June:

  1. full access to the single market
  2. membership of the European investment bank
  3. access to trading rights for financial services sector
  4. full residency rights for all EU nationals in the UK and all UK nationals in the EU, and
  5. the enshrinement of EU protections for workers. 

Without these five conditions being met, Labour would presumably not support the invocation of Article 50. So if, as seems likely, a Conservative government would never meet these five conditions, would there be any real difference in how a Corbyn leadership would handle the situation? 

The fight over the legacy of the referendum is theatrical at times. The mutual mistrust last week played out on the stage in front of a mass televised audience. Some Corbyn supporters jeered Smith as he made the case for another referendum. Smith accused Corbyn of not even voting for Remain, and wouldn’t let it go. But, deep down, the division is really about a difference of emphasis. 

It speaks to a deeper truth about the future of Britain in Europe. During the referendum, the establishment case for Remain floundered because it refused to make the case that unemployment and declining public services were the result of austerity, not immigrants. Being spearheaded by Conservatives, it couldn’t. It fell to the left to offer the ideological counter attack that was needed – and we failed to reach enough people. 

As a result, what we got was a popular mandate for petty racism and a potentially long-term shift to the right in British politics, endangering a whole raft of workplace and legal protections along the way. Now that it has happened, anyone who really hopes to overcome either Brexit, or the meaning of Brexit, has to address the core attitudes and debates at their root. Then as now, it is only clear left-wing ideas – free from any attempt to triangulate towards anti-migrant sentiment– that can have any hope of success. 

The real dividing lines in Labour are not about the EU. If they were, the Eurosceptic Frank Field would not be backing Smith. For all that it may be convenient to deny it, Europe was once, briefly, the issue that united the Labour Party. One day, the issues at stake in the referendum may do so again – but only if Labour consolidates itself around a strategy for convincing people of ideas, rather than simply reaching for procedural levers.