WORK PROGRAMME

Ecological macroeconomics

 

 

Central to the PASSAGE work programme is the goal of forging new understandings of the macro-economy.  The work has its roots in Prof Jackson’s seven years as Economics Commissioner for the UK Sustainable Development Commission, his leadership of the SDC’s Redefining Prosperity Programme and the publication of Prosperity without Growth – economics for a finite planet – a surprise, if controversial best-seller when it was first published in 2009, now translated into 17 languages around the world.

 

At the heart of Prosperity without Growth is the call for a new ‘ecological macro-economics’: an understanding of the dynamics of the modern economy that can also incorporate the reality of ecological and resource constraints.  A critical challenge for the new approach is the need to ensure economic stability even as relentless growth in consumer demand may be attenuated.

 

The work draws on a wide range of theoretical and conceptual approaches – including ecological economics, post-Keynesian economics, modern money theory, and investment allocation.  Tim Jackson has been working closely with other economists – in particular the Canadian economist Peter Victor – to develop a suite of system dynamics models capable of describing a national economy. The overall Green Economy Macro-Model and Accounts (GEMMA) framework is being calibrated first for the UK and the Canadian economies, using data from the System of National Accounts. Additional case studies will be developed as the framework progresses.

 

GEMMA is designed to include not just the structure of the real economy, but also to make a proper account of the ecological constraints under which the economy must operate. In addition it seeks to integrate a fully stock-flow consistent (SFC) description of the financial economy within which the real economy must operate.

 

GEMMA and associated system dynamics models allow the team to explore key economic relationships, for instance between consumption, savings and investment, between the private and the public sector, between enterprise and households, in an ecologically constrained economy.  Prof Jackson and the team will also explore the role of productivity and work, the structure of sustainable financial markets, the potential for community-scale investment, and the role of different ownership structures in a green economy.

 

WORK PROGRAMME

Foundations for sustainable living

 

 

For more than a decade, Prof Jackson and his team have been at the forefront of research on the relationship between consumption, lifestyle and sustainability. From 2003-2005 he held an ESRC research fellowship in sustainable consumption. In 2006 founded the Research Group on Lifestyles, Values and the Environment (RESOLVE), based at the University of Surrey. Funded by the ESRC for almost six years, RESOLVE achieved international acclaim as a pioneer of research on sustainability lifestyles. Since 2011, Tim has been leading the Sustainable Lifestyles Research Group (SLRG), again hosted by the University of Surrey and funded by the Department for the Environment Food and Rural Affairs (DEFRA), ESRC and the Scottish Government.

 

Over the period of this decade of research, RESOLVE and SLRG have offered new understandings of the interplay between modern lifestyles and the demands of sustainability. A multidisciplinary team of researchers have been concerned both with understanding how behaviours and practices are constituted and also with exploring how they change over time.

 

A robust exploration of these questions calls on us to address both social psychological variables (values, goals, attitudes, motivations, cognitive functions) and structural factors (institutions, infrastructures, systems of provision). In addition, the goal of sustainable living requires a sophisticated approach to governance (in a broad sense) and a clear understanding of change processes.

 

During the PASSAGE project, Prof Jackson will be working to synthesise the extensive body of research accumulated over the last twelve years and to write an accessible book on the foundations for sustainable living.

WORK PROGRAMME

Transforming Finance

 

 

In the wake of the financial crisis of 2008/9, it has become clear that the existing financial system has failed. Aside from creating financial instability, existing institutions have failed to provide for long-term investment in the assets on which prosperity depends. Working with a variety of partners, PASSAGE will explore the transformation of financial markets to deliver sustainable investment.

 

The concept of sustainable investment emerges as a priority from any analysis of sustainability and prosperity in the green economy. It is clear that investment must play a different role in the macro-economics of the green economy than it has played conventionally.  Specifically, investment in the green economy needs to be targeted at low carbon technologies and infrastructures, resource productivity, the provision of social goods and public spaces and the protection ecosystems.

 

In short, investment must be re-framed. In place of the profit-driven short-term speculative behaviours that led to the crash, investment in the green economy must focus on building, maintaining and protecting the assets on which future prosperity depends.

 

A number of research aims emerge from this. These include the following questions: How should financial markets be reformed to serve the green economy? What new savings and investment vehicles are needed to facilitate the sustainability? What is the role of community-based savings and investment vehicles and different ownership structures (eg mutual, community or employee ownership) in this transition?

 

In practical terms, the research will draw extensively on the ecological macroeconomics developed in the GEMMA framework. It will also be informed by key collaborations with financial sector stakeholders and activists.