Warning lights are flas­hing – often silently and unreported

Climate change is only one symptom of an economy that is, by design, extra­c­tive and explo­ita­tive of people and nature. A group of foun­da­ti­ons is nurtu­ring a growing field of acade­mics, inno­va­tors and campai­gners who are chal­len­ging the econo­mic system that is the root cause of envi­ron­men­tal destruc­tion and unju­s­ti­fia­ble social inequality.

Yes, we must take urgent action to reach net zero and beyond — but if we do that within a busi­ness as usual frame, just slightly twea­ked for decar­bo­ni­sa­tion, we will conti­nue to fail future generations.

Plane­tary boundaries

Profes­sor Johan Rock­ström published his ground-brea­king work on plane­tary boun­da­ries in 2009, setting out nine envi­ron­men­tal limits of what the planet can sustain without trig­ge­ring dange­rous, exis­ten­tial consequences.

You might be surpri­sed to learn that on this plane­tary dash­board, climate change isn’t even in the top three areas where safe levels have been brea­ched. Warning lights are flas­hing – often silently and unre­por­ted – on defo­re­sta­tion, nitro­gen and phos­pho­rous flows, and the fastest species extinc­tion rate in human history.

One reason it is hard to get atten­tion for looming envi­ron­men­tal cata­stro­phe is the current crop of emergencies.

One reason it is hard to get atten­tion for looming envi­ron­men­tal cata­stro­phe is the current crop of emer­gen­cies. A nuclear power inva­ding a neigh­bou­ring coun­try crea­tes a threat to global secu­rity not seen since the end of the Cold War. 100 million people are now forci­bly displa­ced world­wide, a grim record high. Russia’s war in Ukraine has also inten­si­fied the spike in energy prices, and caused massive disrup­tion to food supplies. The UN has warned tens of milli­ons could be tipped into food inse­cu­rity with the poten­tial for the problems to last for years and cause famine. Two years into the covid pande­mic, only 16% of people in low income count­ries have recei­ved even a single vaccine dose. The cold-bloo­ded murder of 10 people in Buffalo by a white supre­macist targe­ting black lives was the latest bleak remin­der of persis­tent and grin­ding racial inju­s­ti­ces faced by black, indi­ge­nous and people of colour. The US Supreme Court threa­tens to roll back women’s rights to the 1960s. The pande­mic has deepe­ned exis­ting inequa­li­ties on gender, race and income. Power is concen­tra­ted, and those with the least suffer the most.

These crises are interlinked

These crises are inter­lin­ked, not stan­da­lone — some people refer to the ‘global poly­cri­sis’. At the root of the problem is an economy built on false premi­ses: that GDP growth alone equals success, that markets will solve all our problems, that we are sepa­rate from the natu­ral world and its cons­traints. This econo­mic vision demands more, faster, forever.

Deep down many of us know that the system we have cannot be right. When we think how many resour­ces are used to produce one takea­way cup to hold coffee for 20 minu­tes, or the fast fashion bought, worn and discarded within a year. When we open our eyes to the grue­some reality of ‘modern’ large-scale farming methods, where precious forests are chop­ped down to grow soy to feed cows who them­sel­ves never see the sky, housed in their thou­sands in mega barns. When we think about the lives of the people who clean glea­ming office buil­dings in city finan­cial districts, working multi­ple jobs and strugg­ling to make ends meet. When we look at the child­ren working on rubbish heaps sort­ing mate­ri­als for recy­cling instead of lear­ning in school. When scien­tists raced to create covid vacci­nes, and we failed to find ways to share them to protect those most at risk in other countries.

There is good news. The way our economy works is not deter­mi­ned by some iron law of physics: it is desi­gned by people, and can be chan­ged by people. There is a rich and diverse history of strains of econo­mic thought with diffe­rent assump­ti­ons and analy­sis: comple­xity econo­mics, welfare econo­mics, ecolo­gi­cal econo­mics, femi­nist econo­mics, beha­viou­ral econo­mics and many more along­side the neoclas­si­cal econo­mics which became domi­nant in the last few decades.

Real-life chan­ges

Part­ners for a New Economy (P4NE) was foun­ded in 2015 by four foun­da­ti­ons (Oak, MAVA, Marisla and KR Foun­da­ti­ons). Laudes and Ford Foun­da­ti­ons joined in 2020, and Omidyar Network in 2022. We fund the ideas, people and power to trans­late alter­na­tive econo­mic perspec­ti­ves into the kind of real-life chan­ges that will prevent us reaching tipping points to runa­way climate change and destruc­tion of our home — and instead create a rege­ne­ra­tive economy where nature and all people flou­rish. Ensu­ring that the tran­si­tion makes people’s lives better is essen­tial if we are to build a broad base of support for a new economy.

What does this mean in prac­tice? Let me share some stories.

Back in 2016 P4NE star­ted funding orga­ni­sa­ti­ons working to get sustaina­bi­lity onto the agenda of central banks. The Swiss think tank Coun­cil on Econo­mic Poli­cies (CEP), Profes­sor Mariana Mazzucato’s Insti­tute for Inno­va­tion and Public Purpose (IIPP) and the New Econo­mics Foun­da­tion (NEF) all worked on rese­arch and influen­cing, with Posi­tive Money running public campaig­ning. There has been huge progress on this issue – a green central bankers club (NGFS) was set up and now includes more than 100 count­ries enga­ging in a race to the top. The Bank of England updated its mandate to include support for a net-zero tran­si­tion. Simi­larly, the mone­tary policy stra­tegy of the Euro­pean Central Bank now has an action plan to incor­po­rate climate change considerations.

Shaking up the econo­mic dogma in our univer­si­ties is an important part of seeding a new econo­mic paradigm. 

After the finan­cial crash, on a visit to the London School of Econo­mics, the Queen famously asked why no one saw it coming. Indeed anyone who has ever sat in an Econo­mics 101 class might have wonde­red how it rela­ted to the real world, and what answers it offers to tackle the big issues of our time, from climate change to the cost of living crisis. Shaking up the econo­mic dogma in our univer­si­ties is an important part of seeding a new econo­mic para­digm. Led by Hewlett, some foun­da­ti­ons are joining toge­ther to fund new acade­mic centres. Others inclu­ding P4NE are funding Rethin­king Econo­mics and other networks of students who are mobi­li­sing to change the outda­ted econo­mics curri­cu­lum — and deve­lo­ping a pipe­line of enga­ged young leaders with broad econo­mic perspec­ti­ves who will drive change in govern­ments and business.

Dough­nut Economics

Imagine a dough­nut. The inner circle is the floor of basic stan­dards needed for human dignity – health, food, educa­tion, housing and so on. The outer ring is the ecolo­gi­cal ceiling, repre­sen­ted by the 9 plane­tary boun­da­ries. The goal of our economy – accor­ding to Kate Raworth’s massi­vely successful book Dough­nut Econo­mics — should be to land our society in the dough­nut, meeting human needs within the limits of our planet. Raworth’s Dough­nut Econo­mics Action Lab is putting the theory into prac­tice, working at all levels from local neigh­bour­hoods to cities and govern­ments around the world – inclu­ding Amster­dam, Barce­lona and Mexico City.

Dough­nut prin­ci­ples are being embedded in EU poli­cy­ma­king, with a broad range of indi­ca­tors beyond GDP being embra­ced. The German think and do tank ZOE Insti­tute is working closely with the EU Commis­sion, hosting co-crea­tive work­shops for senior poli­cy­ma­kers and publi­shing propo­sals setting out how they can imple­ment the Dough­nut Econo­mics vision.

The decis­ion to create Part­ners for a New Economy seven years ago was a step into the unknown. The goal is auda­cious – trans­forming our econo­mic system to value nature and people so that all life can thrive. It is also essen­tial when we face exis­ten­tial thre­ats on many fronts. If phil­an­thropy doesn’t take a big picture, long-term view and resource new econo­mic thin­king and prac­tice, who will?

---

This article first appeared in Phil­an­thropy Impact magazine