Build better, greener global economy after the pandemic: Stiglitz

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Paris (AFP)

As usual is not an option once the world emerges from the coronavirus pandemic, according to the Nobel prize in economics, Joseph Stiglitz, who wants new climate-laced indicators to measure growth beyond the blunt instrument of GDP.

Questioned by AFP, Stiglitz said the debilitating effects of COVID-19 years in the world provided governments with an opportunity to forge a green recovery with a new focus on fairness.

“And it shouldn’t be just going back to where we were,” he said.

“The GDP does not take into account inequality, lack of resilience, or the lack of durability. What we want to do now is to lead the economy in a direction that reflects all of these concerns. ”

Stiglitz, a Nobel prize winner for economics in 2001, who has served as a senior advisor to the World Bank and Bill Clinton in the White House, has long argued that the gross domestic product is much too large extent.

A decade ago, he co-chaired a commission convened by the French government has recommended the adoption of a new approach encompassing the metrics of sustainability and a ” green GDP “.

“We pleaded for a dashboard,” he told AFP, ” We pointed out that if we had better measures, we would have had a better idea of the damage that the 2008 crisis was doing. ”

Today, “the most important indicator is the impact of greenhouse gas emissions,” Stiglitz said.

“What we have learned more about the multiple manifestations of climate change, in terms of, for example, of the way it will have an impact on extreme weather events. What we have learned, it is the complexity of climate change itself. ”

Stiglitz is not alone in demanding a break with the past as the world strives to overcome a pandemic that has killed more than 450 000 people and infected at least eight million dollars, according to a count by the AFP.

– No spare wheel’ –

Stops, caused by the epidemic have led to a decline in the growth rate and mammoth government bailouts in a number of countries, particularly in Europe and the united States.

Some of the rescue packages have to be tied with ropes demanding companies to focus on their investment plans, on the strategies of fight against climate change. A master plan was unveiled Thursday by the International Energy Agency and the International Monetary Fund.

The project aims to stimulate the growth of GDP by 1.1 percentage points, to “save or create” nine million jobs, and reduce CO2 emissions by 1.5 billion tons in each of the next three years.

IEA Executive Director, Fatih Birol, said world leaders had a “once-in-a-lifetime” to restart their economy and fight global warming at the same time.

But these objectives continue to pull against each other, Birol acknowledged, stressing that the lessons learned from the global economic crisis triggered by the 2008 collapse of the U.S. real estate market.

Stiglitz, who has criticized the laissez-faire policies that led to 2008, said that the current crisis has once again exposed to the short-sighted thinking.

“We have created an economy without spare wheels, no extra hospital beds, we have not made preparation for a pandemic, we don’t have to do a lot of things that would have enabled us to respond to the pandemic,” he said.

“It’s not that we could have prevented it, but we could have a much more resilient economy, more and more able to answer this question. ”

Stiglitz said that there were grounds for hope today, in particular in the European Union, of which the executive is pushing a five-year “Green Deal” as part of a strategy to achieve “carbon neutrality” by 2050.

But the plan remains the hostage of other financial pressures, such as the leaders of the EU are arguing over a coronavirus recovery plan worth € 750 billion ($843 billion).

The 2050 goal is “achievable” and ” very positive “, Stiglitz said.

“But it’s not enough to have this aspiration. You actually start to spend money. And, of course, the pandemic is a big boost to start spending the money. ”

Stiglitz said he supported the proposals by the European Commission and by US, presidential candidate, Joe Biden, to impose a tax on carbon-intensive goods from abroad.

“I think it is something that needs to be implemented. Of course, it would have to be used in a non-protectionist way, ” the economist said.

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