The global economy must be radically transformed to stop it rewarding pollution and waste, UN secretary general António Guterres has warned.
Speaking to the Guardian after the UN hosted a meeting of leading global economists, Guterres said humanity’s future required the urgent overhaul of the world’s “existing accounting systems” he said were driving the planet to the brink of disaster.
“We must place true value on the environment and go beyond gross domestic product as a measure of human progress and wellbeing. Let us not forget that when we destroy a forest, we are creating GDP. When we overfish, we are creating GDP.”
For decades, politicians and policymakers have prioritised growth – as measured by GDP – as the overarching economic goal.
But critics argue that endless, indiscriminate growth on a planet with finite resources is driving not only the climate and nature crisis but increasing inequality.
Guterres said: “Moving beyond gross domestic product is about measuring the things that really matter to people and their communities. GDP tells us the cost of everything, and the value of nothing. Our world is not a gigantic corporation. Financial decisions should be based on more than a snapshot of profit and loss.”
In January, the UN held a conference in Geneva titled Beyond GDP attended by senior economists from around the world – including Nobel laureate Joseph Stiglitz, leading Indian economist Kaushik Basu and equity expert Nora Lustig.
The trio are part of a group set up by Guterres that has been tasked with devising a new dashboard of measures of economic success that takes “human wellbeing, sustainability and equity” into account.
A report published by the group late last year argued that, as the world wrestled with repeated global shocks over the past two decades, the need for an economic transformation had become increasingly urgent – from the financial crash of 2008 to the Covid-19 pandemic.
It said those events were exacerbated by the “triple planetary crisis of climate change, biodiversity loss, and pollution” and, in addition, warned that rapid technological change was upending labour markets and exacerbating growing inequality.
Prof Basu, who co-chairs the UN group alongside Lustig, said: “Nations are so locked into the game of beating other nations in terms of the GDP metric, that the wellbeing of ordinary citizens and sustainability are getting ignored.
“If all the new income accrues to a few individuals, and the GDP grows, all citizens are expected to cheer. This is feeding hyper-nationalism, inequality and polarisation.”
Prof Lustig said GDP had never been “designed to measure human progress, yet it remains the dominant benchmark of success.”
“Economic growth can coexist with poverty, exclusion, violence, and serious violations of human rights – outcomes that remain largely invisible in conventional economic accounts … The group’s aim is not to replace GDP but to complement it, helping governments and the public assess whether development is truly improving human wellbeing, advancing equity, and safeguarding sustainability now and for future generations.”
The UN initiative follows a report published last week that said current economic models are fundamentally flawed because they failed to account of the impact of climate shocks such as extreme weather disasters and tipping points, and could crash the global economy.
These concerns come amid a growing debate in academia, civil society and policy circles about how to create economic structures that are compatible with greater equality and sustainability. These include green Keynesians or green growth advocates to post-growth initiatives, including doughnut, wellbeing and steady-state economics. Others are pushing for degrowth, which emphasises a planned reduction in damaging and unnecessary forms of production – specifically in richer countries – in favour of focusing on socially beneficial parts of the economy such as care, renewable energy and public transit.
Jason Hickel, a political economist, author and key proponent of the degrowth school of thought, says these ideas are gaining traction. He pointed to a recent survey that found 73% of nearly 800 climate policy researchers around the world support post-growth positions.
He said that while he backed Guterres’s call to move beyond GDP, by itself that would not be enough. “A deeper system change is required. Specifically, we need to democratise control over production, which can enable us to change what we produce and for whom.
“The dominance of GDP is not an accident, it occurs because GDP measures what is valuable to capital. It is the structure of capitalism that ultimately must be overcome.”
