Editor’s Note: This article is part of a regular section in Solutions in which the author is challenged to envision a future society in which all the right changes have been made.
From New Zealand’s position now in the year 2050, in a state of strong sustainability, it is clear that its citizens were quite unready in 2009 to embrace the concept of sustainable living and the changes required to achieve it. Modern historians have marvelled at the fact that the 2008 general election scarcely mentioned the subject, despite the substantial evidence of imminent, unprecedented change. The drivers of major change that had been identified soon appeared in 2008, some with much more severity than had been envisaged.
The world economy fell into a deep recession. This recession was triggered initially by the turmoil in the money and credit system that began in 2007 and 2008, then snowballed into major declines in aggregate demand and international trade. Political unrest in several major nations and blocs spurred recession further and resulted in multiple regional conflicts. The economic forces supporting globalization weakened markedly.
As this happened, some of the basic assumptions about global economics began to change. Investors realized that they could not expect global economic growth to resume and, hence, that the prices of securities would in the future have little or no growth component. In the mid-2020s, money supply processes became regulated when commercial banks lost the privilege of creating the national currency and money supply as profit-making loans. This function reverted to the reserve bank, which acted in the national interest, and money itself reverted to its traditional role of facilitating the exchange of goods and services. Driven by the imperative to follow the requirements of a steady state economy, fiscal and other legislative changes were well under way by 2025, imposing substantial taxes on the use of nonrenewable resources and, at the same time, reducing the rates of direct sales, income, and company taxation. These changes were the first major steps in the shift to the new economics.
Through all of these events and continuing thereafter, sensible decisions were made in New Zealand whenever they were needed. With the benefit of hindsight we now know that if any of the key actions had not been taken or had been unduly delayed, our recent history would have been one of much greater confusion, chaos, and hardship. There would have been a substantial collapse in human well-being in this country, together with irreparable damage to our ecological systems.
New Zealand’s economic output fell markedly and its dependence on international trade was drastically reduced. Consequently, principles of regional and local self-sufficiency were introduced. The years between 2009 and 2020 were very difficult—globally and in New Zealand—as the entrenched economic and governance systems struggled to cope, with deteriorating degrees of success.
As the severe inadequacy of the traditional approaches to economics and governance became apparent, movements in civil society began to question, with rapidly strengthening influence, the viability of the institutions involved and the validity of the principles upon which they were based. Advanced development of the Internet had (and still has) great power in ensuring the connectivity of people who were now more physically separated. The Internet facilitated the rapid spread of transformational initiatives that began in civil society, then acquired strong political interpretations in northern Europe and germinated quickly in New Zealand. The relative simplicity of government in this small country made the changes easier to implement.
In this gradual but insistent process, the traditional ideologies and institutions of economics and governance were rejected because they were failing and were replaced by alternatives. The people who led these changes are now greatly respected. At the time, the chaotic global situation did not support optimism, but these people had hope and vision, together with personal resilience and a commitment to find a path through the morass. Of course, those who were still engaged with the traditional approaches tried strenuously to maintain them, but the evolving changes eventually prevailed. They were quite different from any previous approaches to political economy.
As a result of the reforms brought about by this movement, New Zealand is now strongly sustainable within its sovereign territory and possesses substantial influence in other countries that are on a similar path. New Zealand achieved these results because the country embraced the following six enabling conditions:1
- New Zealand limits emissions into the atmosphere, discharges into waterways and the ocean, and chemicals in the soil to levels within the assimilative capacities of the relevant ecosystems.
- New Zealand regenerates and grows natural and social capital to sustain the health and resilience of its people, their institutions, and the whole of nature.
- New Zealand substitutes renewable resources for nonrenewable resources wherever feasible, and uses these as efficiently as possible. Nonrenewable material resources are stewarded within closed cycles that maintain their quality, and nonrenewable energy resources are used at a rate that is no greater than the rate of investment in their replacement by renewable energy sources.
- New Zealanders are broadly and deeply eco-literate and have a strong human-Earth relationship. Through education, they know that people are part of nature and ecosystems and understand that what they do to nature they do to themselves.
- Strong sustainability understanding is deeply embedded in all of New Zealand’s governance, economic, legal, and educational systems, and in all applications of these systems.
- New Zealand imports only from countries and regions that have produced goods according to strongly sustainable criteria and refuses to benefit materially from unsustainable practices offshore. All of New Zealand’s exports are produced by strongly sustainable processes and practices.
Alas, the way to full global sustainability is still very much in the balance. Scientists believe that catastrophic global warming tipping points and runaway climate change have been averted, but they are not certain. Global ecosystem degradation has been huge. Very turbulent climatic patterns persist and will do so for decades to come. New Zealanders have shaped their communities and lifestyles to adjust to this situation.
As we felt the painful impact of economic and ecological meltdown on a day-to-day basis, we were finally able to see what had gone wrong. It wasn’t our good intentions and it wasn’t that we didn’t have enough information. Maybe there was too much denial and complacency. But our biggest problem was a lack of imagination. Our public and private institutions were too busy keeping the economy going and never really tried to address the environmental crisis. There were true leaders—creative artists, inspiring teachers, visionary thinkers, innovative engineers, forward-looking people in business and government, young activists—but they could not, by themselves, bring about the necessary change.
When the citizens of New Zealand realized that their institutions lacked the necessary imagination and leadership, they decided to make changes themselves. That made all the difference! Institutions are like ecosystems, living systems with forces of stability and forces of change. If institutions follow short-term, economic interests, they will emphasize competition, stability, and material growth. If they follow long-term, ecological interests, they will emphasize cooperation and change.
Governance structures needed to reflect the strong sustainability model: economy nested within society and society nested within ecology. We identified issues-based units and associated governance structures with regional, river basin, and local layers of governance.
However, the way forward remained unclear, even after New Zealanders widely accepted the necessity of sustainability. The democratic institutions—governments, political parties, the media—remained fixated on economic growth and, as a result, sustainable development had not been accepted as part of the global market ideology. The market had displaced both democracy and sustainability.
Fortunately, we in New Zealand strongly felt that both concepts were absolutely indispensable and that one could not be realized without the other. The concept of democracy had to be reformulated and grounded in commonly accepted principles of freedom, equity, and justice. To these principles, we added strong sustainability. Our efforts pointed to the blind spot of democratic decision-making: our political leaders accepted responsibility only for the here and now, not for the there and then.
As the various governments of the day had no sense of urgency and never admitted their own ineffectiveness, it was left largely to civil society to initiate and organize change. In New Zealand—as in most other countries—citizens, not governments, took charge. As a consequence, far-reaching governance reform became inevitable.
Within this new political context, the long-term issues relating to the Māori—especially the settlement of historical treaty claims and issues relating to lands, foreshore, and seabed—were resolved to the satisfaction of all citizens.
Once we asked the question about how democracy and sustainability could go together, we had a healthy debate on fundamental values. While some people were only ever concerned with increasing their wealth, most New Zealanders knew that market ideology had profoundly failed us and looked for a new arrangement between the public, the state, and the economy. Given the fundamental importance of sustainability, it became increasingly clear that any such arrangement had to be based on values and principles.