New Economics Foundation

ORGANIZATION NAME:New Economics Foundation

SUMMARY:NEF will build a comprehensive new macro-economic model for the UK predicated on respect for planetary boundaries and global equity of resource use. Principally designed to catalyse the transition to a low carbon, high well-being future economy, the model will be developed through rigorous economic analysis over three years.

PROBLEM SPACE:Our current economic model is intrinsically linked to the systemic and interdependent crises facing the world: resource depletion, environmental degradation, economic inequality and insecurity. Currently no holistic alternative exists and if we realistically hope to solve the threat of irreversible climate change, a new economic model must be built.

SOLUTION:Initially aimed at influencing UK policy, the purpose of the project is to enable policy-makers to explore different paths to a sustainable, high well-being future which preserves sufficient employment and provides the necessary public goods, putting the economy into a state of ‘dynamic equilibrium’ (or, in Herman Daly’s (1977) terms, a ‘steady-state’). This requires a very different set of starting assumptions to normal economic models, namely ecological constraints, well-being, social justice and the need for global equity rather than economic growth at any cost.

The model is in phase one of three. We have brought together a world class team of economists and a working conference in October 2010 in London to set the framework for the model. We will launch a new economics commission to validate the development of the model in 2011, and we are running a major concurrent campaign (the Great Transition campaign) to garner mass public support for its application in the UK.

The project is anticipatory of future trends, including pre-empting the economic and human implications of inevitable adaptation to and mitigation of the impacts of climate change. Our ambition is that the model becomes a comprehensive, feasible and adaptable solution to the underlying and interdependent economic, environmental and social problems of postindustrial economies and that its impact is decades-long.

It is now clear that the current economic system cannot deliver on the universally desirable goals of social justice and environmental sustainability and this failure, combined with the current economic crisis, is the inspiration for beginning to design a new economic model now. There is no evidence to support the mainstream presumption that growth can be sufficiently ‘decoupled’ from environmental impact through more efficient use of resources. Continued global economic growth is impossible if we recognise real environmental limits.