'Treasury wrong to abandon resource review'

Published: 5 March 2013 at 11:15

Research by Anglia Ruskin’s Global Sustainability Institute shows risk to economy

Experts from the Global Sustainability Institute at Anglia Ruskin University have questioned the apparent decision by the Treasury to abandon plans to measure the economic impacts of resource shortages and climate change.

According to the Financial Times, plans for a Whitehall review were supported by senior government economists in the departments of Energy & Climate Change (DECC), Environment, Food and Rural Affairs (DEFRA) and Business, Innovation & Skills (BIS) after being discussed last year at a meeting of the National Security Council.

However, emails released under a freedom of information request by Friends of the Earth suggest that the review – to measure the effects on global economic growth including that of the UK – was eventually shelved by a senior figure within the Treasury.

Anglia Ruskin’s Global Sustainability Institute produced a report earlier this year for the Institute and Faculty of Actuaries which showed that resource constraints will, at best, lead to a steady increase in energy and commodity prices over the next century.

In the worst case scenario, the report found that constraints on precious resources could see pensions wiped out, lead to a serious, long-term decline of the global economy, and even trigger civil unrest.

The authors examined the current situation and projections for a range of resources including oil, coal, natural gas, uranium, land, food, water and metals.  The research found that the evidence for resource constraints is significant but is not currently factored in to decision-making by politicians, economists and business leaders.

A copy of the report is being sent to the Treasury but in the meantime Dr Aled Jones, Director of the Global Sustainability Institute, has questioned the decision to seemingly abandon the review.

Dr Jones said:

“The apparent recent decision by the UK Government to not investigate the risk to UK economic growth from national and global resource depletion and climate change warrants a full explanation.
“Within the Global Sustainability Institute we are building a model that will allow us to explore how country responses to these challenges, as outlined by recent studies from the World Bank, OECD, McKinsey and the Institute and Faculty of Actuaries, may have significant impact on economic growth and political fragility.
“We would be delighted to work with the UK Government and the Treasury to further explore these potentially serious impacts that need proactive policy to ensure the worst impacts on the UK economy are not borne out.  It is not possible to decouple the UK economy from the rest of the world as recent events have so clearly demonstrated.”