An article by HRH The Prince of Wales for The Times on economic growth and the environment

Over the past few months the world has been transfixed by a series of natural disasters including calamitous floods in Australia, Sri Lanka, Brazil and China. In addition, we are told that last year the Amazon Rainforest – which for so long has sequestered carbon dioxide – in fact emitted more than it stored. Scientists think this means an extra eight billion tonnes of carbon will be put into the atmosphere, which is greater than the annual emissions of the United States of America. Thus, the Earth's most biodiverse ecosystem may have become one of the world’s biggest net polluters. This is all the more alarming because the drought which produced the problem was regarded as a ‘once in a hundred year event’ but was in fact the second such drought in five years……

These may seem remote problems when our primary concern is the strength of the global economy and how Britain, in particular, can continue to climb out of recession. The reality, however, is that all these events have a direct bearing on our economic security. Take the price of coking coal which has risen by up to 70% as a result of the floods in Queensland. Or the hike in food prices, exacerbated by extreme weather conditions leading to the banning of wheat exports by countries such as Ukraine and India. There is a convincing body of opinion which says that such events are likely to increase in severity and frequency. The circumstances will vary, but the social and economic results will be same: inflation, unemployment and for many, poverty.

Is this inevitable? As I will suggest when invited to address the European Parliament today, a solution may lie in developing a deeper understanding of the relationship between economic and environmental resilience. In this way, we may be able to bring about the significant changes in individual and corporate behaviour which, I believe, could stimulate the creation of wealth and jobs while safeguarding our environment. Resilience could and, indeed, must provide the foundation for low carbon growth and prosperity.

I know there is a great deal of debate about the meaning of resilience. I cannot help but think it means an ability to absorb, repel and adapt to external shocks. Without it we have very little, if any, capacity for mitigation and adaptation. If Nature’s own capital base loses its innate resilience then how long will it take for our economic systems to lose their resilience too?

There is, surely, no way round the fact that we have to move away from our conventional model of growth based, as it is, on the production and consumption of high carbon intensity goods. It seems the current economic system, characterised by a catastrophic decline in biodiversity, increased water scarcity and food insecurity, has little hope of securing our prosperity. The challenge is all the more urgent if, as predicted, the world’s population grows to some 9 billion by 2050. We need to meet the challenge of decoupling economic growth from increased consumption in such a way that both the wellbeing of Nature’s ecology and our own economic needs benefit simultaneously.

Decoupling will not of course be straightforward. We need urgently to focus on lowering the carbon footprint and environmental impact of our goods throughout their lifecycle, from manufacturing and distribution to use and recycling. And herein, of course, lies great economic opportunity for industry to develop innovative and profitable low carbon solutions. This will require the public and private sectors to play their part to the full. We must be able to look to the public sector for long term policies that are coherent, consistent with each other and fully implemented. Such a combination would provide the certainty the private sector needs to take the long term investment decisions required for low carbon growth. And, as consumers, each of us has a vital role to play in making informed choices about the environmental impact of the goods and services we purchase and use.

In looking afresh at our economic model, frameworks developed by organisations such as my Accounting for Sustainability project may have some value. For our part, we have taken forward a new way of looking at conventional economics by building a full evaluation of environmental impact into accounting methodology. It has already been adopted by the British Government and is being taken up by many of the world’s accounting standards bodies.

It seems to me that all these approaches will count for little if we cannot achieve what, for many, would seem the simplest of tasks: to recognise and integrate fully into public and private sector decision making the economic and ecological links between the energy, agricultural, water and industrial sectors. In this way we just may have some hope of building a future which is more resilient to ecological and, therefore, economic shocks. Otherwise, I fear, Nature’s bank will go bust and no amount of quantitative easing will fix it.