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Response by President Higgins to Danny McCoy’s Presidential Address at the 175th Session of the SSISI

Thursday, 21st October, 2021, Áras an Uachtaráin

This evening we have heard from the President of the Statistical and Social Inquiry Society of Ireland, Danny McCoy his paper, entitled ‘Sustainable Development: Still  The Challenge for Irish Policymakers’. It was a tour de force.  It revisited a previous ground-breaking paper of his from almost 30 years ago, one for which he was awarded the Society’s prestigious Barrington Medal, and, may I add, this was at a very young age!

30 Years of Sustainable Development

As I revisited that excellent paper from 1992, I was more than a little depressed to consider how little progress has been made in the last three decades on the topic of sustainable development and, in particular, climate action.

The late 1980s and early 1990s had given way to sustainable development becoming a mainstream concept thanks, among other developments, to the influential 1987 report of the World Commission on Environment and Development, or ‘Bruntland Report’ as it is commonly known, named as it is after its chairperson, the then-prime minister of Norway.

That report made what was a seminal contribution to the ecological discourse. As well as providing the modern three-pillared definition of sustainability, it also grounded the concept of sustainable development in intergenerational terms:

“Humanity has the ability to make development sustainable to ensure that it meets the needs of the present without compromising the ability of future generations to meet their own needs”.

Academics, such as David Pearce from University College London and Frank Convery from University College Dublin, were to the forefront of the environmental economics debate, offering suggestions as to how sustainable development might be operationalised for environmental policy, making the case that the environment was ‘under-valued’ by mainstream economics in economic evaluations, such as cost-benefit analysis, and proposing that environmental assets, or natural capital, be considered just as important as other endowments, resources, in our capital stock.

The 1992 United Nations Earth Summit in Rio de Janeiro, at which I was present as part of the team making a documentary entitled ‘Seven Days to Save the World’, was a milestone and a moment of hope, created as a response to emerging crises. The belief and hope was that UN member states could cooperate together internationally on development issues relating to sustainability, such issues being global in impact were too big for individual member states to tackle in isolation.

The conference had its contradictions. Organised by Maurice Strong for the UN, the Business Council for Sustainable Development enjoyed full participation rights alongside Member States. Its foreseeing Vice-Chair Mr Agnelli believed that if capitalism was to survive, it had best run with the unstoppable concept of sustainability!

On the other hand, I recall interviewing indigenous peoples on a Greenpeace boat while at the Earth Summit in Rio. They had no direct presence. Indigenous peoples and those in Small Island Developing States remain among the most vulnerable to the impacts of climate change. Indigenous peoples like those I met in 1992 have been shamefully excluded from direct representation at international conferences on climate change and biodiversity.

It is at the recent World Summit of Indigenous Peoples and Nature at the International Union for the Conservation of Nature’s World Conservation Congress in Marseilles that they had for the first time direct representation. “Recognition” was, I recall, the word invoked time and again by indigenous leaders during the conference, an event which ran alongside the Global Diversity Conference held in Marseilles last month.

Rio was useful in mainstreaming and capturing sustainability concepts, yet it is so disheartening that so many of the agreements made in Rio have not been realised regarding such fundamental issues as fighting poverty and cleaning up the environment. And while much has occurred since then, both in Ireland, at the EU level, and internationally, including a series of annual UN Conferences on climate change, some of which have proved more successful than others, as well as the UN 2030 Agenda and Sustainable Development Goals, we now find ourselves on the precipice of environmental disaster, ecosystems collapse and runaway biodiversity loss. Delivering on the United Nation Sustainable Development Goals is now a first-order moral issue for our very survival.

Limited Progress on Decarbonisation

The decoupling of greenhouse gas emissions from economic growth in Ireland has been significant, as Danny McCoy has noted in his Presidential Address. It is a gain, but it can hardly be a source for much self-congratulation. Gross Domestic Product in Ireland, as we know, is a volatile statistic, prone to enormous fluctuations resulting from the significant presence of multinationals, whose profits, subsequently repatriated, are included in this measure of national income, distorting, as it does, Ireland’s true wealth.

Ireland’s trend of decoupling emissions from economic activity is less impressive when measured against Gross National Product (which nets out repatriated profits) or Gross National Income (which adjusts domestic incomes for taxes paid to the EU and for subsidies received from the EU), both of which are alternative measures of true economic activity.

A zero-carbon economy and society requires moving to an economic and indeed community model that is restorative and regenerative by design, and that aims to keep materials, components, and products in use for as long as possible. The challenge to go further by halving emissions within a decade and to achieve net zero carbon within the next 30 years is daunting, but I agree with Danny McCoy in his assertion that the technological progress of the last 30 years does, inter alia, offer us some hope.

A techno-centric perspective must form part of the response to our global climate challenge, yes, but ultimately it is as a society, all of us as responsible citizens, who must adapt our lifestyles in terms of consumption, behaviour and production, so that we live more sustainably. We must respond and change.

Danny McCoy’s conclusion that, while the economic and social progress of Ireland in the last 30 years may have been inconceivable from the vantage point of the early 1990s, available evidence, however, points to a failure on the part of our society and, I would add, importantly, our policy leaders, to grasp the opportunity with sufficient and courageous urgency, from the perspective of having used the time wisely to address the climate challenge. 

However, I am anxious to offer today a positive contribution to the debate, and I must attempt to avoid the temptation to fall into any Adornoesque sense of despondency. For example, while however late, it is heartening to see the legitimacy of neoliberal market fundamentalism – that is, near exclusive faith in the efficiency of markets, in the superiority of markets over government intervention, in the ability of markets to self-correct, and in the market’s ability to deliver political freedom – now being challenged by even those international organisations in whom trust was perhaps naively or, worse still, calculatedly, placed by nations for the achievement of communal welfare. Such organisations – the OECD is at the vanguard perhaps – are now seeking a new approach.

Paradigm Shift Needed

Multilateral Bodies seem to have accepted that we need a fundamental and radical paradigm shift, not just in relation to economics, but in terms of our very way of living. New ideas are, thus, now required and, even more, their communication to citizens – ideas based on equality, universal public services, equity of access, sufficiency, sustainability. New ideas are fortunately available in the form of practicable suggestion for an alternative paradigm of social economy within ecological responsibility, but they must find their way on to the public street.      They must find their way on to the curriculum in the places where economics is being taught.

Thankfully, we now have a richer discourse than perhaps we did a decade ago at the last point of crisis, owing to scholars such as Ian Gough, Mariana Mazzucato, Sylvia Walby, Kate Raworth, Peadar Kirby, and many others who advance ecologically sustainable and socially progressive alternatives to our destructive, failed paradigm.

This scholarship suggests the real, emancipatory potential for a new, recovered political economy, and I have called for some years now on third-level institutions, both in Ireland and abroad, to ensure it is taught and, thus, for it to be available to inform policy.

Even at the most basic level, I believe that failure to facilitate a pluralism of approaches in teaching economics is a deprivation of students’ rights, leading, as it does, to a narrow, blinkered and distorted education in economics and the wider social sciences. Students are entitled not only to pluralism in what is taught, but to be able to find intellectual and practical fulfilment in the engagement with ideas, ideas that will in turn be an influence on the options in advocated policy and their life contribution.

As to the new paradigm, consideration of a new ecological-social paradigm, based on economic heterodoxy, recognises the importance of resiliency, the limits of the world’s natural resources, as well as acknowledging the role that unrestrained greed has played in creating the climate crisis.

The suggested new paradigm emerging from the best of the new writing offers a better connection between economics, ecological sustainability and ethics. It asks us to reflect on how unrestrained, perhaps even championed, greed, and a lack of respect for the earth’s natural resource limits has brought us to this state of ecosystems collapse as we continue in the Anthropocene era.

It recognises the depth of the change that is required and it goes further, envisaging a more equal and moral society, one in which the State is seen as a provider of quality universal services for its citizens, services that are seen as an investment in society rather than a burden.

It is beginning to achieve a consensus in parliaments that new policy instruments – eco-social policies – which underpin such an economic paradigm will be necessary. These new directions in policy must simultaneously pursue both equity and social justice as well as sustainability and sufficiency goals within an activist, innovative State, with substantial public investment and greater regulation and planning.

Investment functions of social policy must be enlarged, therefore, to become more closely integrated with climate action investments.

The important role that investing in nature can play in achieving a more sustainable, resilient, and healthy world must be recognised by governments. All of this also offers a much more active, participatory, fulfilling version of society that one where citizenship is defined as licence to insatiable consumption. 

State’s Role

Just as the most effective welfare States in the world promote universalism as a core principle, an effective eco-social paradigm requires a universalist mindset. This is fundamental as a compass, as are additional, targeted measures to mitigate against any regressive impacts of decarbonisation policies on lower income groups, or cohorts who will be impacted most adversely by the shift to a low-carbon economy and society (such as, for example, those losing jobs resulting from the closure of legacy industries).

Just Transition

In Ireland this will mean a just transition must be achieved for those impacted by the closure of unsustainable carbon-intensive electricity production, for example, who must be offered re-skilling opportunities to enable them to find suitable jobs in other areas, such as the green economy, or upskilling opportunities that can achieve sustainable incomes in other parts of society. A model for such a just transition has been made available to us by the National Economic and Social Council, whose 2020 Report (No. 149) provides a framework within which the transition to a new political economy may be a just transition.

Participative decision-making models, such as that advocated in The People’s Transition, TASC’s recent report, views climate action as an enabler of local development, giving people and communities ownership of the transition to zero-carbon societies, and enhances public support for a just transition by tackling inequality and raising standards of living through the delivery of climate solutions. Policies that promote real regionalism can also be central to a just decarbonisation. 

Mazzucato and others, who have provided frequent, insightful contributions to publications such as The Economist, Social Europe and elsewhere during the pandemic’s unfolding, have proposed that any firm-level financial assistance provided to recapitalise major companies in the wake of Covid-19 should be conditional on a ‘greening’ agenda for its receipt.

Such a suggestion is both a useful and reasonable contribution as we all seek to forge ahead with advocating an eco-social paradigm which now represents our best hope for a sustainable future and the most authentic demonstration of inter-generational solidarity.

Out of respect for those who have suffered greatly, in particular owing to the pandemic with which we struggle, those who have lost their lives and indeed the bereaved families, we must not drift into some notion that we seek to recover what we had previously as any sufficient resolution—that we should regard it as sufficient response to what now we face, that we merely revert to the insecurity of where we were before, through mere superficial adjustment of fiscal- and monetary-policy parameters. That would be so wholly insufficient to the task now at hand.

We have to do better. We must exit the paradigm that has failed, envision and give substance to the alternative. A brighter horizon must be put forward which offers opportunity and hope, that carries an intellectual energy informed by a shared moral purpose born out of our interlocking contemporary crises.

New Social Contract

We also need, it has been suggested by a diversity of scholarly and spiritual thinkers and writers, a new social contract. Minouche Shafik, in her recent book, What We Owe Each Other, presents a compelling case that a more generous and inclusive society would also share risks more collectively.

In a nod to Amartya Sen’s Capabilities Approach, such a society would broaden opportunities, and ask citizens to contribute for as long as they can so that everyone can fulfil their potential. Shafik identifies the key elements of a more generous social contract, one founded on solidity, solidarity and harmony, one that recognises our interdependencies, supports and invests more in each other, to build a more inclusive, cohesive society together.

Discount Rates in Economics

A statistical issue of relevance to sustainable development is that of time preference. It is a notion in economics, and economic evaluation specifically, that seeks to capture the trade-off between consumption today and consumption in the future.

Many environmental economists have warned for quite some time now that the discount rate – the rate at which society is willing to trade off present for future benefits – has been set too high in economic evaluations, thereby favouring short-term projects, including in environmental policy, to perform better in cost-benefit analysis than those with a longer time horizon, which includes so many projects that deal with climate change mitigation.

Empirical evidence suggests that humans tend to value immediate or near-term resources at higher levels than those acquired in the distant future. If we have any sense of inter-generational justice, then surely it follows that we have a moral duty to protect the interests of future generations, ensuring some level of intergenerational equity by preventing the present generations from ignoring the long-term environmental and other consequences of present-day economic activity.

Social discounting, so prevalent in influential cost-benefit analysis, can almost entirely devalue the economic and social impact of even catastrophic environmental events occurring outside a 50-year time horizon. For example, the present value of a catastrophic event occurring 50 years from today would be valued at less than 1 percent of its future value (assuming a 10 percent discount rate).

Thus, the setting of discount rates that are too high, or arbitrarily selecting discount rates to meet short-term political goals at the expense of longer term priorities, can have harmful long-term consequences, resulting in adverse selection and a form of myopic political economy that pays scant attention to the needs of future generations or objectives that go beyond a short-term political cycle, and is incompatible with an eco-social paradigm of which I have spoken.

All of this demonstrates the distinction between political economy and the limitations of raising an analytical instrument to the level of a sufficient theoretical approach in policy.

The opportunities, as Danny McCoy’s paper outlines, from both economic and technical advancement, along with an educated generational behavioural response, still provides the prospect, albeit in a limited timeframe, to achieve the goal of just sustainable development. Indeed, as he so rightly points out, it is through human ingenuity and solidarity that every anthropogenic problem can be tackled.

We have no other option available to all of us as global citizens now, but to make radical shifts towards a decarbonised existence if we have any hope of avoiding the bequeathment to current and subsequent generations of a hostile, volatile and threatened planet. Unless we collectively take action to prevent catastrophic climate change, together with a real commitment and transfer of resources towards assisting communities to prepare for, and adapt to, changing climates, population flows, driven by climate shifts, will take place in a context where old and emerging conflicts that will undoubtedly be exploited by those seeking to invest diversity with fear, hate, exclusion and dehumanisation.

Our basic morality as humans suggests that it is unforgivable that another 100 million people be destined for extreme poverty by 2030 should we fail to honour the commitment to tackle climate change effectively. The need for collective action addressing the climate crisis becomes more evident every month. The defence of previous generations that ‘we did not know’ is no longer available to any of us.

A sense of justice, not only for now, but for the future, requires that the capacity and power of our residual sense of a shared humanity be invoked to give us the energy to reconnect our lives through a balanced relationship between ecology, ethics, economy, culture and a lived experience of fulfilment.

The time to act is now. The longer we wait, the more we intensify and perpetuate the injustice of climate change, and we run the risk of correctly being regarded by future survivors of our planet as having been in collusion with what led to the destruction of the lives and environments of some of the most vulnerable peoples of our human family and the biodiversity on which our planetary life depends.

May I conclude by congratulating again the SSISI for its contribution to Irish society over the past 175 years, and may I once more congratulate Danny McCoy who was so foretelling, prophetic even, all those years ago, and today, for his excellent Presidential Address which, being consistent in his case, represents a clarion call for us all to do so much more, and with greater urgency, to ensure that we achieve a just and sustainable future for all our global citizens on this shared, vulnerable planet.

Ár mbuíochas leat, Danny.

Beir beannacht