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Austerity squanders capacity for renewable energy, clean water and sanitation

Council of Canadians chairperson Maude Barlow has Tweeted:

That paper argues, in part, that, “While living below our economic potential we are living above the means of our finite raw materials and produce excessive CO2 emissions. The win-win response is to reduce our CO2 emissions and our over-consumption of finite raw materials by utilising our free productive capacities to expand renewable energies and redesign our production, as far as possible…”

Interestingly, it calculates “the global costs of under-using our productive resources, i.e. the economic losses caused by austerity policies, to be at least US $2.3 trillion a year. In the Eurozone the annual costs of austerity are estimated at 580 billion Euros.”

And it notes, “By employing even a part of the 200 million global unemployed and implementing a better degree of utilisation of available real capital, we can increase our economic potential to make significant investments in the transformation of our energy consumption away from burning finite climate-destabilising fossil fuels to tapping the full potential of renewables. This would also allow the restructuring of our production-systems to optimise raw material use loops based on ‘Cradle to Cradle’ design systems. Food security, energy shortages, the right to clean water, sanitation and education needs could be met through the utilisation of our fallow economic resources.”

How to finance the initial new employment? “Alongside targeted taxation and self-financing public sector borrowing on the private finance markets (when nominal growth lies over nominal interest) we recommend introducing the possibility of interest- and amortisation-free borrowing from the central bank. As long as such new money creation is linked to higher additional production through new employment, any inflationary dangers can be contained.”

To read the complete policy brief, please click here.

Barlow is a Councillor with the Hamburg-based World Future Council.

Further reading
Class warfare: An economic primer
Class warfare: Successful economic strategies
Class warfare: The U.S. economy
‘Harper at Davos – A Road Not Taken’ by Robert Chernomas
Susan George on austerity and how to win the class war
10,000 protest in Brussels against TTIP, austerity
Stiglitz disagrees with Harper’s austerity drive