The Zambian Economist at the Crossroads of Global Business
I do worry that there is this sort of sense that perhaps the energy companies haven’t been investing in these alternative areas. But if anyone knew how to generate energy in a sustainable, cost-effective, scalable way, we would have that answer. The fact that we haven’t done that tells me, and should tell everybody else, that this is a hard problem to crack.
When you look at the disruption being caused by climate change, do you believe the effects are unevenly distributed?
Yes. And this gets at one of my bugbears, which, for better or worse, is economic growth. There’s been massive pushback against growth, against globalization. And I feel more and more like a lone voice on the issue of growth, the importance of growth and not losing sight of the importance of growth. When I say, “Hey, guys, we really do need growth — if we’re not going to expand, this leads to considerable problems,” I get comments like “OK, boomer” on social media.
OK, boomer. Why is growth so important?
At least three reasons. One, living standards. If governments cannot have enough money in their coffers from taxation to fund education, health care, infrastructure and national security, you end up with political unrest. So to my mind, first and foremost, how do you improve people’s living standards? You’ve got to have growth.
The second point is around politics. There’s a lot of research in what we used to call the political science area. One of my favorite papers is on what’s the minimum per capita income in a country to make sure democracy survives. At low levels of per capita incomes, you’re always going to have factions. You’re going to have government bad behavior at certain levels. You need a minimum in order for there to be a middle class to hold the government accountable. We see that even in a place like the U.S. The voter participation rates of people who are earning $30,000 and less are very low.
The third point is just innovation. Look at the problems we’re dealing with. It’s not a surprise that innovation around Covid and the vaccines came from developed economies. We can’t expect poor economies to be thinking about that when they are talking about essentially survivability in the here and now. It’s not going to happen. Innovation and technology in education and health care and life sciences require growth.
Is there a way to still have growth in a way that is equitable and not environmentally and socially destructive?