An economy where both people and nature thrive

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In 2016 Tearfund and the St Paul’s Institute held a programme of roundtables exploring global development and the green economy. Barbara Ridpath, Director of the Institute, and I explore inequality and the economy, and the recommendations from the programme in our follow up paper, ‘Going Full Circle:  tackling resource reduction and inequality’.

Look around your office floor or the train you’re travelling in. Can you count eight people? That’s the number of men who own the same amount of wealth as the poorest 3.6 billion people in the world this year. This inequality is extreme and it’s down to a broken economic system.  [Read more…]

Waste of Olympic proportions a potential golden opportunity for the poor

RS77670_BRA_2016_EMB_0060-mdaAs the 2016 Rio Olympics close, Tearfund’s Senior Economics and Policy Associate, Richard Gower, reflects on the potential prizes to be won for athletes and the poor from valuing our waste better.

As pollution tainted Rio’s picturesque setting and the UN advised athletes to spend ‘as little time in the water as possible’, the wider issues – and surprising opportunities – arising from humanity’s waste problem came under the spotlight during the Olympics.   [Read more…]

Getting a Paris climate deal that works for the poorest

Ramesh at COP 21
Ramesh Babu works in partnership with Tearfund in India and is currently at the UN climate change talks in Paris. He has one question on his mind: How do we get an agreement that works for the very poorest people in the world?

There are over 30,000 people charging around the organised chaos that is the negotiating rooms of Le Bourget in Paris all trying to close a global climate deal in the next few hours. I have come with one question in mind: how do we get an agreement here in Paris that works for the very poorest people in the world? Earlier this week I heard from Christiana Figueres, head of the UN Framework Convention on Climate Change (UNFCCC), who has the unenviable task of pulling all of this together into a deal by the weekend. She said we need an agreement which “meets national and local needs, keeps scientific integrity, and promotes prosperity for all”.  It is her words “for all” that resonate most strongly with me. [Read more…]

Expectations Raised: Now it’s time to deliver

Tearfund’s Advocacy Director Paul Cook, continues our series of blogs on the COP21 Paris Climate Summit. 

Expectations were raised and there was an air of hope in the first days of the UN climate change talks in Paris.  Have we finally reached a tipping point for real progress on climate change?  Millions of ordinary people took part in more than 2000 people’s climate marches all around the world over the weekend of 28-29 November . In London more than 50,000 people took to the streets in the biggest climate march the UK has ever seen.   [Read more…]

Dispelling the myth that a rising tide lifts all boats

A rising tide lifts all boats implies that when those at the top become wealthier, this eventually trickles down to everyone and makes society as a whole better off. Do we therefore need inequality in order to release people from poverty?

A new report, ‘Inequality and Growth’, released yesterday from the OECD indicates that the opposite is true, stating that: ‘when income inequality rises, economic growth falls’. The report estimates that rising inequality has knocked up to 10 percentage points off growth in New Zealand Mexico, the US and the UK. Furthermore, the growth which is happening is not inclusive and is only benefitting those at the top. For example between 2009-2011, the incomes of the richest 1 percent of the USA population grew by 11.2% while the bottom 99% of incomes fell.

A UNDP study from 2013 shows that it is possible to increase national income whilst decreasing income inequality, further dispelling the myth that policy makers must choose between inequality and growth. Countries that have moved from lower middle-income status to upper middle-income status, at the same time as reducing inequality during the last 20 years, include Malaysia, Botswana and Mauritius. Although there is still much progress to be made in these countries to continue to reduce poverty and inequality, they are on the right track for more inclusive growth.

According to Forbes, 67 people own the same amount of wealth as the poorest half of the world’s population. As an international development agency, why should we be concerned about the mega rich? Some might say we should only focus on very poor people in poor countries. Being wealthy isn’t wrong itself but the potential of the wealthiest to over consume their fair share and the pressure this creates for others to follow suit  is a threat to humanity’s future as our planet’s resources continue to be further stretched beyond their limits. Furthermore, yesterday’s OECD report states that ‘inequality significantly shapes the opportunities of education and upward mobility of disadvantaged individuals.’ Left unchecked, the gap can continue to widen between the rich and the poor as income inequality creates unfair opportunities between children creating vicious cycles of widening inequality.

Countries like Malaysia, Botswana and Mauritius show us that we don’t need high inequality in order to achieve economic growth. And the countries with the lowest levels of inequality in the world, including Norway and Denmark, are some of the richest in the world. They also score 1st and 4th place in the Legatum Prosperity Index which defines prosperity as more than just GDP including dimensions such as governance and health, however does not include the countries environmental impact.

The OECD’s report concludes that ‘policies that help to limit or reverse inequality may not only make societies less unfair, but also wealthier.’ Therefore, reducing inequalities enables holistic growth where everyone has the opportunity to flourish.