There is a conflict of interest at the heart of government decision-making
In 2019, the UK became the first major economy to pass laws making it a legal obligation to achieve net zero by 2050. It was a symbolic moment because achieving net zero is essential to restrict global warming to 1.5°C, a threshold the IPCC argues must not be exceeded to avoid catastrophic impacts of global warming. The last thing you would imagine a government would do is to fund fossil fuel projects, but with 40 such projects in the UK pipeline, that’s exactly what the Conservatives have done. It seems counterintuitive when these projects directly undermine efforts to achieve net zero, but there are reasons for this conflict of interest.
Government decision-making revolves around an underlying goal — achieving economic growth. The yardstick used to measure whether growth has increased is Gross Domestic Product (GDP). The success or failure of governments often hinges on the performance of GDP because it’s directly linked to employment, interest rates, health care, education and infrastructure development.
Increasing GDP means the economy has grown. This often means more companies in business. More companies mean more jobs. More jobs mean more money in people’s pockets. More money in people’s pockets means happier voters. But GDP is a poor measure of social prosperity and doesn’t capture environmental costs. Growth may come at the cost of soil erosion, depleted fish stocks, or increasing greenhouse gas emissions, but seeing as GDP only measures whether output increases, the connection between increasing GDP and environmental costs doesn’t come into the field of vision. Where GDP really comes into its own as a flawed metric is how it impacts human behaviour. As the behavioural economist Dan Ariely argues, “human beings adjust behaviour based on the metrics they’re held against. Anything you measure will impel a person to optimise his score on that metric. What you measure is what you’ll get.”
The introduction of a cough index at a tuberculosis hospital offers a case in point. As TB patients get better, they cough less, so the hospital used the number of coughs per day as a quantitative measure of patients getting better. Small microphones were attached to patients’ beds to record their coughs. The staff quickly realised they were being evaluated in inverse proportion to the number of times patients coughed, so they began prescribing codeine more frequently. Relaxed patients cough less, but this made the patients worse because they weren’t coughing and spitting out the congestion. Regardless of the consequences, staff adjusted their behaviour to optimise their score against the metric.
In just the same way, social success should be focused on increasing social well-being while decreasing environmental costs, but GDP isn’t designed to measure either; it’s a success metric focused solely on increasing output. Seeing as governments live by increasing GDP, or die by decreasing GDP, their behaviour and decision-making are influenced by a desire to optimise this success metric. That’s why the Conservatives are funding fossil fuel developments; it’s why governments around the world subsidise oil and airline companies; it’s why governments don’t ban single-use plastics. These decisions aren’t made to intentionally lock in environmental destruction but to maintain an environment conducive to increasing GDP.
Through the lens of GDP, a government can easily reconcile support for fossil fuel developments, having made achieving net zero a legal obligation. The short-term desire to maintain economic performance outweighs the long-term commitment to decrease emissions because meeting an emissions target by 2050 isn’t a success factor that can impact whether the Conservatives remain in power. This conflict of interest influences all governments and underlies why based on current commitments, the world is on track for 2.7°C of warming by 2100. The Emissions Gap Report 2022 argues there is no credible pathway to achieving the 1.5°C target, and climate disaster can only be avoided by an urgent system-wide transformation. A major step in achieving such a transformation is to change how we measure social success. Change the measurement, and governments will adjust their behaviour to optimise their score, but as long as the scorecard revolves around increasing GDP, we’ll continue seeing counterintuitive decision-making.
