Economics

How long will the recession last?

Current economic difficulties in America � spreading to other parts of the world � are principally the result of risky mortgage lending. When that problem has been absorbed, economic growth is expected to be resumed.

But will it really turn out like that? Might the recession become permanent? Could it turn out to be a taste of things to come?

The world�s economies are placing increasing pressures on minerals, oil, and other natural resources; on soil, water, and the biological basis of food production; on the atmosphere and climate; and on natural ecological systems generally.

There is bound to be a feedback effect � in which these pressures on the environment and resources result in problems for economies. This has already started. Continuing demand for oil, combined with falling production in some parts of the world, is raising oil prices, now well above 100 dollars a barrel. The use of increasing amounts of land in Asia for industry, housing, and now biofuels, is reducing the amount available for agriculture. The price of rice on world markets � the staple food of the world�s most populous countries - is rocketing as a result. Greenhouse gas emissions are contributing to disruption in weather patterns, which is increasingly having a significant economic impact, for example through flooding.

These and similar trends could create a recession which will be far more long-lasting than the problems currently caused by unwise mortgage lending in the US. The details have been set out many times � for example in the Brundtland Report just over 20 years ago, the Millennium Ecosystem Assessment, and the reports written for the Intergovernmental Panel on Climate Change.

Sustainable development is about preventing this crisis from becoming catastrophic, through the development of economies in much more resource-efficient and environmentally sensible ways.

The SDC gives advice to government about how the UK can play its part in this economic and social transformation.

This is a major change. It won�t be achieved overnight, it won�t be achieved through simple slogans, and it won�t be achieved just through protest and complaining. The SDC is therefore committed to coming forward with constructive and evidence-based advice and policy proposals.

The SDC�s work in economics currently focuses on our "Redefining Prosperity" project. We are looking at the relationship between wellbeing, sustainability, and economic growth � and asking whether we have to choose between these aims, whether they can be combined, and what the implications are - for government policy , businesses, and the public. We have commissioned a series of "thinkpieces" dealing with different issues in this area, held some seminars, and are writing a report.

� The thinkpieces, notes from the seminars, and other material from the project, are now here

There is also an economics component to much of the other work the SDC does.

Publications

Memo on NATA Refresh (2008)
SDC has contributed to the Department for Transport's rethink about how it appraises proposed road and other transport schemes.

Evidence to the Commons Environmental Audit Committee (2006)
SDC contributed to the Environmental Audit Committee�s inquiry into environmental taxation and the economics of climate change.

Evidence to the Stern Review on the economics of climate change (2007)
SDC made proposals on corporate reporting requirements, in response to a consultation carried out by the Department for Trade and Industry (now BERR).

Memo on corporate reporting (2007)
SDC was asked to present evidence to the Scottish Parliament Finance Committee.

Analysis of the Scottish Government�s Budget and Spending Review
Written evidence to support oral presentation to the Scottish Parliament Finance Committee 4th December 2007.

Publications relevant to Redefining Prosperity

Our team

If you have questions about the work of the SDC in this area or would like to contribute, please contact Victor Anderson (Policy Analyst).