Nick Clegg announced that the UK wants to measure how quickly natural assets are being lost by recording them as part of GDP. The UK will be the first country in the world to force major companies to measure their carbon footprints. More than 1,000 companies have to measure and report their greenhouse gas emissions so they realize how much they are polluting. The plan is that these companies will stop polluting and start looking for more sustainable ways to form a business.
This is all part of a concept called GDP+, where all countries have to start measuring their natural capital. The main goal is that countries start thinking about more than their material wealth. They will also need to reveal their natural wealth, like rainforests, clean rivers and fresh air. They can put a value on precious resources like forests so they understand what it means when they start chopping them down. Because keeping them would boost the GDP of the country.
GDP shows the growth of a country, but when we think about it, it only shows a little part of a country’s welfare. The GDP doesn’t take into account the quality of the growth, like the natural environment needed for a future prosperity. And an average environmental degradation costs the world around 9 per cent of GDP every year.
So GDP needs to have a broader look, it should be a measurement for individual countries to measure what is important, like the forests, so countries can make informed decisions.
Clegg spoke at the Rio Earth Summit where world leaders came together to discuss global issues on sustainable development. He said that Britain will lead the way for other countries by forcing their businesses to act first in measuring their carbon footprint. And this is the first step to managing the greenhouse gases that create global warming.
Hiding greenhouse gas emissions isn’t a good way to lead a business. Reducing them is has many positive outcomes. Not only for the planet but also for the business, they can save money on energy bills and attract companies with their green reputation.
The treasury plans to bring a ‘green tax’ in next year as part of the Carbon Reduction Commitment. But this will be a burden for lots of companies. Ian McCafferty, CBI Chief Economic Advisor, said that measuring carbon is useful for companies, but taxing carbon makes companies uncompetitive with companies abroad and less attractive for foreign investors. So he want the plans for the Carbon Reduction Commitment to be scrapped.
Starting from April 2013, the businesses listed on the Main Market of the London Stock Exchange will have to start the carbon reporting. In 2015, they will be reviewed and ministers will then decide if they want to extend the program to all large companies.
The EEF, representing UK manufacturers, complained that Mr Glegg should have thought about the impact on the home economy before announcing all these new regulations internationally. British businesses already have to cut carbon and reduce greenhouse gases by 2025 under European regulations.
Glegg also believes that investing in renewable energy is the best way for the UK to boost their economy in the future. For example he wants to boost the energy subsidies on green technology like wind energy.
The UN Rio+20 summit will probably not be as spectacular as the last Earth summit in 1992, where a large number of global agreements to tackle climate change were made. Now they want to decide on new sustainable development goals like switching to renewable energy and cutting pollutions. But environmentalist say that the summit is too weak to force actions. There is also some anger because David Cameron didn’t attend the summit himself but sent Clegg.
The idea of putting a price on nature has been protested against by many, including Sarah Reader, campaigner from the World Development Movement. She said that putting a price on nature allows multinationals and governments to buy the right to destroy landscapes without having to feel guilty because they paid for it. She said that ecosystems should be protected by law.