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Macroeconomics, climate change and 'recomposition' of consumption

Gough, Ian (2015) Macroeconomics, climate change and 'recomposition' of consumption. PRIME. pp. 1-17.

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Abstract

Macroeconomic policy should be evaluated, he says, and devised according to sustainability criteria alongside economic and social criteria. Economic goals whether growth of GDP productivity or competitiveness, should not trump equity/justice or sustainability. But nor should environmental goals trump social goals. The urgent challenge addressed in this PRIME e-publication is to develop a macroeconomic framework that supports ‘eco-social’ policies to pursue both goals simultaneously. Just and sustainable macroeconomic planning should take into account two policy dimensions: the emissions intensity of different items of consumption, and the necessitousness of these items. Ways of measuring both of these are proposed. When personal consumption in the UK is analysed in this way, an awkward policy dilemma immediately appears: almost all necessities are high carbon, while most ‘luxuries’ emit lower than average GHGs. Transport is also high carbon and comprises both necessary spending given current infrastructure and luxury spending. Thus a radical macroeconomic framework needs to endorse and devise new ‘eco-social’ policies to serve both justice and sustainability goals, alongside income redistribution and public social consumption. Three approaches are suggested: taxing high-carbon luxury consumption, variable pricing of high-carbon necessities, and rationing carbon.

Item Type: Article
Official URL: http://www.primeeconomics.org/
Additional Information: © 2015 The Author
Divisions: Grantham Research Institute
Centre for Analysis of Social Exclusion
Subjects: G Geography. Anthropology. Recreation > GE Environmental Sciences
H Social Sciences > HC Economic History and Conditions
Sets: Research centres and groups > Grantham Research Institute on Climate Change and the Environment
Research centres and groups > Centre for Analysis of Social Exclusion (CASE)
Date Deposited: 16 Nov 2015 14:04
Last Modified: 18 Nov 2015 15:38
Projects: ES/K006576/1
Funders: Economic and Social Research Council
URI: http://eprints.lse.ac.uk/id/eprint/64438

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