Evidence is in: Green Policies Improve Economic Performance

tree with climate knowledge

Short-term thinkers who put quarterly profits above all else consistently argue that caring for the environment destroys business. They are wrong. The evidence keeps growing that planet (and people) friendly policies encourage economic growth while also forcing companies to increase their efficiency. It’s a win-win for businesses and the planet.

An Italian team of economists have concluded that by taxing companies, and individual behaviours, that damage the environment create great success for the planet and profits.

Green taxes, or taxes levied on businesses and individuals in order to promote environmentally friendly practices, had the largest impact on multifactor productivity, though De Santis and her colleagues wrote that green taxes need to be paired with complementary redistributive policies, such subsidies and grants for companies transitioning to environmentally friendly practices, in order to avoid damaging productivity.

“What is clear is that you have to face this increasing environmental policy stringency, and as a firm, probably the best is if you try to create this win-win solution so it’s passed through an improvement in technology,” De Santis said.

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UK: Uber Drivers are Employees not Individual Entrepreneurs

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Uber drivers in the UK will now get better treatment from Uber thanks to the courts ruling the company can’t as robustly exploit their drivers. The way drivers get gigs and subsequently paid by the company structurally mean the company has control all aspects of the process, which means the drivers are workers since they actually have no control over key aspects of the job. This is a blow against Uber which skirts the laws in multiple countries and this decision in the UK will resonant throughout the entire gig economy.

The court considered several elements in its judgement:

  • Uber set the fare which meant that they dictated how much drivers could earn
  • Uber set the contract terms and drivers had no say in them
  • Request for rides is constrained by Uber who can penalise drivers if they reject too many rides
  • Uber monitors a driver’s service through the star rating and has the capacity to terminate the relationship if after repeated warnings this does not improve

Looking at these and other factors, the court determined that drivers were in a position of subordination to Uber where the only way they could increase their earnings would be to work longer hours.

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The Argument to Shrink the Economy Keeps Getting Stronger

The idea that we can eventually decarbonize our economy to keep it growing has been talked about for decades; sadly we’re far away from a carbon neutral economy and even it we did achieve such an economic system we still need to shrink it. What makes a “good” economy is up to us since we create the rules and laws around economic practices. Currently we designed our economic systems to be inherently unsustainable since it’s based on growth for the sake of wealth production. Instead we can make economic systems that favour environmental protection, economic equality, or any other good idea.

Regardless, we can start making more people aware that we need to shrink, rather than grow, the economy.

Green growth, Hickel concludes, is an ecologically incoherent â€œfairy tale.” If this seems harsh, consider what the ecomodernist position asks us to believe. The current system requires annual growth of roughly 3 percent to avoid the shock of recession. This means doubling the size of the economy every 23 years. The economy of 2000 must be 20 times larger in the year 2100, and 370 times larger in the year 2200. The green growth position rests on the assumption that this can go on, basically forever, because innovation will “dematerialize” the economy. Yet 2000 was the first year that, according to experts, humanity used more energy and materials than the safe limit. And the growth economy, far from dematerializing, remains geared toward expanding future markets for extremely materials-heavy products like Tesla cybertrucks and Apple iPhones. Comparing this to a fairy tale is, if anything, too generous, since children’s stories usually involve some kind of moral lesson applicable to the real world.

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Accelerating the Circular Economy

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The COVID-19 pandemic has negatively affected economies from the local to the global and we can rebuild our economy using old destructive methods or rebuild it in a way that future generations can benefit. Everyday there are more calls to reshape our economic systems to respect the environment more while increasing profits, and we can. The circular economy is all about both local profits and global environmental protection. Over at the World Economic Forum they have outlined a few ways we can speed up our shift to a more sustainable economic structure.

2. Transforming consumption

A step further along the value chain, Transforming Consumption addresses the reality that we currently consume 1.75 times more resources each year than the Earth can naturally regenerate, and we are on course to more than double resource use by 2050. Here, innovators are working to conceptualize new models of circular consumption, including product-as-a-service, product-use extension (e.g. repairs, secondary marketplaces), and sharing platforms. Algramo is a Chilean start-up whose omni-channel, cross-brand platform technology enables brands and retailers to sell goods to consumer using smart reusable packaging for the lowest possible prices. Algramo’s packaging distribution system incorporates Fourth Industrial Revolution technologies to enable innovations such as their patented Packaging as a Wallet technology and IoT-connected vending machines. It is estimated that converting 20% of plastic packaging into reuse models presents a $10 billion opportunity, making rethinking packaging both a significant business priority in addition to having environmental imperative.

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A Feminist Economic Recovery Plan for Canada

The economy isn’t performing too well right now thanks to years of thoughtless growth followed by the hit of COVID-19. The people most hurt by the COVID-19 crisis are the most vulnerable. It’s been widely reported on how women have lost a lot of gains made in the workplace as the “traditional” household roles are now being put back on them. We can do better, and we know how to do better than this.

The previous decade of growth was made at the expense of the environment and people’s wellbeing, the current reboot of the economy doesn’t need to be thoughtless. This time around we can generate economic growth that includes everybody.

YWCA Canada and The Institute for Gender and the Economy at the University of Toronto’s Rotman School of Management have partnered to create a Feminist Economic Recovery Plan for Canada, which proposes a new path forward for Canada’s economy – one that focuses on changing the structures and barriers that have made some groups more vulnerable to the pandemic and its fallout than others. The report highlights 8 pillars for recovery with a focus on supporting the care economy, investing in social infrastructure and supporting women-owned businesses.

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