Iceland and the Wellbeing Economy

Professor Tim Benton

Right, good afternoon, ladies and gentlemen. Lovely to see so many faces. Lovely to welcome our distinguished guest. Just a few housekeeping things to start off with. I’m Tim Benton. I am a Research Director in Energy, Environment and Resources here. Long-term interest in thinking about how we can measure economic growth in a sustainable way. So, I am very pleased to be here. This meeting is on the record, so, anything that is said can be reported. It will be livestreamed. Please put phones on silent, but feel free to tweet. The #CHEvents, if you tweet that will be nice. So, let’s get going, then.

So, I think in the decade following the financial crisis, has led to a lot of questions being asked. Owners of half the world’s wealth can fit in a small bus these days, yet, 800 million go to bed hungry each night. Like it was in the news today that actually, half – a third of the – no, 13 million people have the same wealth as six people in the UK. Inequality has been increasing; we’ve had declining mental and physical health, environmental breakdown, our kind of means of every day, hallmarks of our era, and this disaffectation is really starting to have political resonance, and not seen since the Second World War. And as President Xi once said, a couple of years ago in Davos, “The relentless pursuit of economic growth is partly at a route of many of these issues.”

It is so embedded as an ideology that sometimes we forget it’s an ideology itself. And I remember once, about a decade ago, when I started working across Government, being given a primer 101 by somebody in the Treasury, who said – effectively, he said, “Stop worrying about the food system,” ‘cause that was my thing, “stop worrying about the food system, it’s actually a good thing that if we have a food system that creates environmental damage and makes people ill, because if we didn’t, we would lose jobs and the National Health Service, and we’d lose jobs doing the environmental clean-up, and GDP would shrink, so therefore, it’s a good thing to do.” So, we’ve got something from beyond that level of thinking, and thankfully, things are moving on.

Recently, the OECD Secretary General said, “We need to build a more intelligent economic system, a new economy focused on human health and happiness. And so, I’m really happy today to introduce Katrín Jakobsdóttir, the Prime Minister of Iceland, who is also a Chatham House 2019 Prize nominee; a very select group. Thank you very much for coming. One of the real leaders in this new way of thinking economically, and I spend a lot of my time talking to people around the world about sustainability leadership, and thinking about a more inclusive economic model, and it’s always, Iceland’s doing it, or Denmark’s doing it, or Sweden’s doing it. So, it’s really important to recognise that leadership is important. Leadership is hugely important for us all, ‘cause none of the advanced economies, the big advanced economies are going to shift, unless they can see that it is possible to do it in a painless way. So, the Prime Minister will share insights into her government’s approach, personal political motivations for embarking on this Wellbeing Economy Project. Thank you very much, Katrín [applause].

Katrín Jakobsdóttir

Well, dear Chair and dear guests, it’s a real honour to be here and thank you for the kind invitation. Now, last August I went on a remarkable journey back home in Iceland. Together with Mary Robinson, former President of Ireland and a group of Artists, Scientists, and Climate Activists, I hiked up the mountain Ok, in Western Iceland. Surrounded by patchy snowfields, the small crater lake on the top of the mountain is astonishingly beautiful, but that beauty quickly fades in the eyes of anyone who knows what was there before and why it is no longer there. The group was there to bid farewell to Ok glacier, which is no longer a glacier, admissible testimony of the irreversible impact of climate change. Surely, glaciers in Iceland have advanced and retreated through centuries. Natural fluctuations in temperature are a known fact, but the current development is a different story. It’s a direct result of human behaviour.

Dismissing the rate of climate change as just another natural fluctuation is not only wrong, it’s only – also dangerous. It ignores scientific warnings by downplaying the historically recent, but massive impact humans have on the planet, and the concern over the disappearance of Ok is not rooted in an urge to an everlasting natural status quo, but Ok and other Icelandic glaciers serve as visual thermometers. A local manifestation of a global issue that will bring enormous changes to human habitats and livelihoods.

Most of the earth’s nearly 200,000 glaciers may soon belong to history books. Disrupting water supply for a large part of humankind, resulting in sea level rise that threatens coastal communities across the world. In Iceland, it will definitely affect our energy systems, which are based on hydroelectric plants. But the melting of glaciers is just one part of the picture. Climate change brings not only one catastrophe, but many and the fact that we live on one planet, means that none of us can avoid the consequences, even if they will hit us unevenly, at least to begin with.

The Paris Agreement provides the framework and the shared goals, but more is needed than what was accomplished with the initial pledges. There is no alternative to transnational solidarity and no justification for continuing to pursue self-serving and narrowminded national interests, in the face of the climate crisis. But action for climate protection cannot be guided solely by green remedies or by individualised policies. It has to take into account social considerations, as we are run, for example, from the gilets jaunes movement in France and similar unrests in other parts of the world.

The poor are more likely to be at this place, due to climate change. They are also more likely to be hit harder with inconsistent or contradictory climate change policies, and poverty, we must remember, is both racialised and gendered. This speaks to the need for social and economic reforms, as well as and as a part of targeted action to halt climate change. This is, in my opinion, the most challenging task of today’s politics and brings to the forefront the urgency of transformative ideas. It has prompted calls on both sides of the Atlantic for a Green New Deal, seeking inspiration from Franklin Roosevelt’s 1930’s New Deal, and from social projects in Europe, in wake of the Great Depression and after World War Two. And this includes, for example, the NHS, social housing in France, and the Nordic Welfare models, all of which were big and bold ideas, designed to serve the common good.

Today’s Politician’s cannot necessarily count on the political appetites for transformative programmes to counter the climate crisis. Climate change denialism as a part – as a political strategy has been taken up by some Populist movements in Europe, with considerable success. Simultaneously, international and multilateral collaboration is being undermined locally and globally. This trend is not only a key obstacle to target action against climate change, it also poses a threat to universal human rights, in which women and minorities tend to be first in the firing line. We see that women’s bodies are being repoliticised in countries where that debate should have been over decades ago, and previous victories on women’s reproductive freedom are under threat. Racism and xenophobia are on the rise, and hate speech against minorities has been justified on the premise that everyone should be entitled to their opinion.

Mindful of the history and the legacy of Chatham House, I wanted to highlight this international development, which is by some, seen as a reaction to unfettered financial globalisation, by others as the general weakening of liberal democracy and by yet others, as something entirely different. Discussions of root causes may prompt disagreements, and surely they are many and diverse. But such disagreements cannot serve as an alibi from taking action to counter this development.

Globalisation has brought wealth to some areas and to some people, but taken it away from others. The same pattern is evident with the incorporation of new technologies, as the so-called Fourth Industrial Revolution transforms jobs, education and life, it cannot be left to the Populists to bring hope to those who are or feel left behind. This speaks to the need to restructure the economy, not only to tackle climate change, but also to address inequality.

Now, 50 years have elapsed since Robert Kennedy made the point that GDP measures everything, except that which makes life worthwhile. An Icelandic Poet actually said famously that “Having sex with your wife does not count in the GDP, but having sex with a prostitute does.” So that should really make us think. Economics is still centred on the measurable and quantifiable. Growth is considered not only essential, but also positive, and that’s just natural, because we tend to think about growth in these natural surroundings as something very positive. But we need to think about how is it achieved and what does it cost?

Despite the considerable and well-documented shortcomings of the GDP centred approach, this is still the main barometer of economic and societal success. And now we come to the Wellbeing Economy Governments Project, but my government has joined a group of countries, among them are: Scotland, New Zealand, and other countries, that hope to form new economic thinking for the 21st Century, within the context of the United Nations Sustainable Development Goals.

The project entails not only an analysis of the drawbacks of the existing economic model, but also a commitment to building an alternative future, focusing on wellbeing of current and future generations. The network is committed to shaping a vision for enhancing wellbeing and inclusive growth, and one of the main goals is to ensure that economic policy supports collective wellbeing. That is how happy and healthy a population is, not just how wealthy a population is. Approaching quality of life, not from just a monetary measure, but from a wellbeing perspective.

Now, Iceland is doing well, when judged by classical measurements for economic and social performance, even if the economy is producted – is predicted to contract by 0.2% this year, before returning to growth next year. We are a small country, so we are very dependent on how our big companies are doing, so therefore, you can say that our economic history is full of fluctuations, when we look at the last century. With an annual average growth of more than 4% from 2012 to 2018, unemployment is currently under 4%. Iceland has the highest male employment rate in the world, and the female employment rate is higher than the employment rate of men in other OECD countries. And, first and foremost, we can owe that to progressive childcare and parental leave policies. But while income inequality is lower in Iceland than in any other OECD country, poverty has not been eliminated.

The 2008 banking collapse strained the welfare system of the country, the search in house prices has brought difficulties in many families, especially of lower incomes. There are challenges to be met in the Icelandic education system, which holds the key to the wellbeing of future generations. Now, my government is currently working on numerous projects that, in the long-term, will ensure greater wellbeing in Iceland.

Our main project has been to invest significantly in social infrastructure, healthcare, welfare, education. An ambitious action plan is being implemented to respond to climate change. Heading for carbon neutrality at latest by 2040, hopefully, earlier. The strategy consists of 34 initiatives, ranging from a carbon tax, to food security, from wetland recovery projects, to a government fund to support climate friendly technologies and innovation.

While Iceland has adopted renewable energy for electricity and heating, it still lags behind on clean energy for transport, and thus, it has been decided to ban the registrations of new vehicles that are driven by non-renewables by 2030, and effectively, this will lead to the end of imported gasoline and diesel cars in Iceland.

As part of the Wellbeing Economy Project, my government has developed 39 indicators to track the progress. These indicators include economic, environmental, and social factors, and are compatible to all the wellbeing indicators published in other countries, and by international organisations, such as OECD. A wellbeing budget is in the works. New Zealand has already embarked on such budgets, utilising the expertise from gender budgeting, but Iceland adopted that first, in 2010.

The starting point is building wellbeing into the next five year fiscal policy statement, to be published next spring. A number of priorities have been identified and each category offers measurable indicators. This includes the very quantifiable reduction of carbon emissions, but another example, not so easily measurable, is, for example, mental health. Even if Icelanders ask the other Nordic countries, rank amongst the happiest people in the world, for example, according to the World Happiness Report, public health authorities have expressed concerns over the frequency of depression.

Icelanders, for example, use more antidepressants than the neighbouring countries, and major depression is more common. By adopting robust strategies to improve mental wellbeing, the aim is to reduce the rates of depression and hopefully, decrease the reliance on antidepressants. This involves improving accessible mental health services and strengthening prevention, including through sports and arts. Other wellbeing goals, for example, secure housing, better work-life balance further support is aim, and I could also mention dropout from the education system, which we can see is very closely tied to mental health.

But the Wellbeing Economy Project demands new thinking. It consists of many of the same key ingredients that are manifested in proposals on Green New Deals on both sides of the Atlantic. And in fact, this means redefining priorities and values and aim for that delicate balance of the economy, environment, and society that we have been talking about ever since the Brundtland Report on Sustainable Development, which actually has always been a very clear political goal for me, personally. When I first entered politics, I ran for the local Council of the City of Reykjavik, that was in 2002, and I can still remember talking to a full room of students about sustainable development, in 2002, and I could just see everybody fall asleep in front of me.

But this is changing, and I think, you know, today when I meet Icelandic students, they are very much aware of what sustainable development is all about, and they urge me to take it further and move faster. And as you said, in your description, that I would share some of my political and personal motivations for embarking on the Wellbeing Economy Project, and I don’t know if any of you attempted to hear specifically said stories, but I feel obliged to reflect on it.

So, I was born in 1976 and when I was a kid, the nuclear threat was really the thing. In Iceland, there was actually published a central telephone directory, and in – on the last pages of that directory was actually guidelines on what to do if you are hit by a nuclear bomb. So I read that a lot, when I was a kid. So I was really obsessed by the possibility of a nuclear war, but also by the nuclear winter that would follow, if I would manage to go down to the basement and escape the nuclear bomb.

It wasn’t only the concept of the bomb or the war that was terrifying, it was also the devastation and the environmental degradation that we might suffer in the future. And when actually, my father showed me the film Terminator too early for my own good, actually, I also got really obsessed by the leaking of artificial intelligence and nuclear weapons, and sometimes I think about that also today.

The solution to the nuclear threat was disarmament, the non-proliferation of nuclear weapons, and more importantly, passivism, which was my entry into politics, and it wasn’t until much later that I realised the devastation and environmental degradation could be brought up on the planet without wars. And today, we are faced with that reality more blatantly than ever before. So, this was really my first political consciousness that was the nuclear threat, but I was also very lucky to grow up in an Icelandic block of flats in the City of Reykjavik, where I got to know all sorts of people, and I think the reason that I have stayed in politics, is that I love people and human interactions. And because, in a block of flats you learn any – everything about diplomacy that you need to really know. So, I think, when we think about ourselves in this context and realise that the world that our grandparents grew up in is so very different from the world we are living in now, and think about our grandchildren and how the world will look like for them and the challenges they will have to encounter, I think it’s very – I think it’s a very important exercise for every Politician, because our eternity is really marked by an election term, and in some countries, these can be very short. So, I think it’s very healthy for Politicians to think a little further ahead and ask ourselves, what are we going to say to our grandchildren, if they ask, “Why didn’t you save the planet?” I really don’t want to respond, “Because we rather decided to save capitalism as we knew it.”

So, the Wellbeing Economy Project is an attempt to do the right thing, in challenging times. I am strongly committed to it, and I believe that this network can actually deliver key ingredients to the development of Green New Deal concepts, in Europe and beyond. Thank you very much [applause].

Professor Tim Benton

Thank you very much. It is really lovely to meet somebody who walks the walk as well as talks the talk. One of the mantras of the United Nations Sustainable Development Goals, this badge that we, coincidently, are both wearing today, is the world we want. And I often get criticised implicitly or explicitly, in some circumstances, by talking about the risks that we face and not enough about the positive vision for the future. So, what would your positive vision for the future be, in terms of what would it feel like? So we’ve got the Sustainable Development Goals, 17 goals, 169 targets, if we achieved all of them, what would it feel like? What sort of economic model would we have, and I know that’s quite a complex question to try tackling, but equality, gender equality, age equality, everybody would have good living standards, remove all of the threats, food security, preventative healthcare and not curative healthcare, how would that actually work?

Katrín Jakobsdóttir

Well, yeah. Well, I think, actually, the Nordic Welfare Model is really a very good case study on how these models can work, because there we have the highest equality in the world. But also, what we have seen, its very good results. When it comes to the economy, we have a very strong welfare system, very strong education system, strong focus on research and innovation, so I think, when we think about is it possible really, to think about all these concepts of environment, economy, social issues at the same time? I think absolutely so, because I think it’s actually – and what we have, all our research that we are seeing now, even from IMF, OECD, rather traditional institutes, they are showing us that more equality actually improves the economy, as well as being the right thing to do.

And same can be applied, because you mentioned gender, gender equality. What we have seen in Iceland, for example, through the high participation of women in the workforce, it’s actually that it’s doing good things for the economy, but to have that high participation, we need the correct social structures. We need universal childcare, shared parental leave, etc., to be able to do this.

Professor Tim Benton

Brilliant. Now one of the things that is often said to me is, “Give us the positive vision.” You’ve just given us the positive vision, and then people say, “Oh, well, we can’t get there because there’s too much entrenched power relationships,” and I’m curious as to how you would, or you are, or have, tackled this in Iceland? And you say, “We’re going to ban new registrations of diesel cars,” what do people, who drive diesel cars, say?”

Katrín Jakobsdóttir

Yeah.

Professor Tim Benton

“Yes,” “No,” “I love the idea, but no”? Or paraphrasing the question in another way, what would you say to someone like Donald Trump about disrupting entrenched power relationships and actually moving towards the situation to realise this? ‘Cause it’s not the vision, it’s the pathway.

Katrín Jakobsdóttir

Yeah.

Professor Tim Benton

That’s often the stumbling block.

Katrín Jakobsdóttir

Well, when we announced our plans in Iceland about the ban of new diesel and gasoline cars in 2030, I thought now everybody will become very angry. So, I’m still waiting for that, because we announced that plan a year ago and what has happened is that we are seeing an increase in the sales of electric vehicles. We are seeing more investment in public transport. We are seeing more investment in the new craze in Iceland, our electric bicycles. So, people were really ready for this act. So we haven’t even legalised the act yet, it’s just been announced, but we are seeing this trend really happening among the public in Iceland, because people are very ready to do this. But we have a good history of that. You know, I mentioned the heating through geothermal in Iceland. This was something that really – in 1990 everybody were like, “This will never happen. It can’t happen,” and 20 years’ later, it has happened, and so…

Professor Tim Benton

So, why is that, when, in France, the gilets jaunes thing was very much pushback against changing my lifestyle, and the whole kind of Tumpyness of the world is about people feeling threatened, not from adopting a positive vision, but having the slightly negative world that we live in at the moment taken away, in some way, shape or form? So…

Katrín Jakobsdóttir

I’m not going to promise you that, you know, everybody’s going to be so positive in Iceland forever. I can’t promise that.

Professor Tim Benton

Please do.

Katrín Jakobsdóttir

But I think it might be an important point there that the current government is a government of very different parties, from the right to the left. So maybe that changes a little bit, the discussion. It doesn’t become as polarised as when you have such clear divisions within the political system, when we are actually forced to co-operate with different parties. It changes the political discussions, so I would say that actually, the climate discussion in Iceland has been positive and forward looking and what we’re seeing is really an urge to do more than we are doing.

Professor Tim Benton

And so, does that come, that positive nature of the discussion, does that come from the point of view that you’re starting from a more equal basis, rather than the situation as in the UK, as I said earlier, where a small number of people fit in the dark, and then the same wealth as a third of the country? You know, where you have that…

Katrín Jakobsdóttir

Yeah, of course.

Professor Tim Benton

…huge inequality, than those that are in the – are entrenched in the power relationships are really quite powerful, and that might not want to let go. Whereas you probably don’t have that same disparity in Iceland.

Katrín Jakobsdóttir

But even though, as I mentioned our income equality is the best among the OECD countries, and we’re happy about that, of course we are not perfect. And one of the things that we have talked about is, how can we actually adjust our actions to fight the climate crisis, to be sure that they are not more difficult for the poorer people in society. Of course, when you think about, for example, changing over to electricity, right now the situation is that those who have more money can buy electric cars; it’s more difficult for those who have less money. And that’s why we’re also investing in public transport, also investing in infrastructure for bicycles, etc., to make sure really, that people are also being able to make that switch of energy, in spite of their economic situation.

Professor Tim Benton

The final question from me and then I’m – we’ll open the floor up, so think of the questions that you can ask, and we’ll have some roving mics. Final question from me is, ‘cause we often get to that and I had it in a meeting this morning, “Oh, well, the UK’s just a small nation,” what is it that you’re – yeah, seems like a bloody big nation to me.

Katrín Jakobsdóttir

Yeah, to me, it looks like a rather big nation, yes?

Professor Tim Benton

What is it that your small isolated island, in the North Atlantic, can show the rest of the world, because you’re not going to deal with climate change by decarbonising cars in Reykjavik? Where do you think the lessons are to be learned for, not necessarily the Trumps of this world, but the other rich nations, the OECD countries, who are all, in some way, shape or form, battling with this and seeing it too complicated?

Katrín Jakobsdóttir

Well, I think, as I mentioned, you know, the climate crisis cannot be challenged, accept through international collaboration and through multilateral collaboration. And there, it is important also, for small countries to do their bit, even though I know that what we are going – you know, if we are just the only ones doing it, it won’t change everything. But for us, a small country, international collaboration has proven, you know, it has proven its value very much, because we sense that, for example, we actually have a stronger voice within that context. And what we see also, is that people are interested in what we’re doing, because you can share experiences between big and small. And you know, we are just 350,000, which is extremely small, but still, we are doing very interesting things, when it comes to, for example, carbon binding, recovering wetlands, growing forests, using in our innovative technologies to bind carbon in the rocks, etc. So I think – I really think in these issues, size doesn’t matter, and if we want to achieve results, we need to be all aboard, really.

Professor Tim Benton

Thank you very much. Right, let’s open the – I’m sure there are going to be quite a few. Let’s take batches of three. I can see one, two, three in the middle, then we’ll go over there, and then over there. The lady at the front, lady behind, and gentleman behind.

Trisha de Borchgrave

Hello, Trish de Borchgrave, I’m a Writer. Thank you so much for being here. I wanted to get your thoughts on a controversial issue in a way, which is nuclear energy, which is, you know, what we’re looking to as the transition in that 24/7 baseload to be able to make the transition to renewables. Nuclear energy, though, you know, there is plenty of evidence to know that there are very bad health effects to low dose radiation over the years, this is still very controversial. Everyone’s rushing now to build plants. I think there’s about over 50 plants in the world being built. This is still connected to military technology, as well, in countries such as Turkey and Saudi Arabia, and lots more are building. What are your thoughts on nuclear energy, in that role?

Professor Tim Benton

Thank you. If you can just pass the microphone behind you, and then, when you’ve finished, pass it straight behind you.

Rele Caruso

Hi, I’m Rele Caruso. I work for Mayor of London, Kensington, which doesn’t really necessarily make any different at this point. But my question is, how would – do you think, though, the changes implemented over the 20 years that you’ve been, like, linked into politics, have been in the way of a discourse or actually your way of packaging, especially in terms of renewable energy? So, if you want to make a change, do you think, is it going to be cultural, and it’s a long-term change, or is it the way you talk and implement politics at the local level? Thank you.

Professor Tim Benton

Thank you. Straight behind you.

Gunnar Jacobsen

Gunnar Jacobsen, an Icelandic person working in London, so, I just wanted to follow up on what Professor Benton mentioned earlier and on the path, because – and what is it that you discuss with other foreign leaders, when you are, sort of, trying to nudge the change? Because if you follow news quite closely, then it seems like we are, sort of, swinging more and more into a Populist, where there’s the, sort of, the fabric of society is breaking up more than we’re seeing, sort of, the coherent path forward. And when I, sort of, talk about the Scandinavian and the Nordic way, most often the common answer is that, oh, it’s a small region, homogenous, very easy to do what they’re doing there, which I don’t think it is easy, but it’s still, that’s the common answer, it’s quite different. I used to work in the US for 20 years, and now, sort of – how do you discuss that with other foreign leaders? Sort of, how do you change that discourse and dialogue on that topic?

Professor Tim Benton

Thank you very much. So, nuclear, the cultural bottom up, top down, and then pathway? Katrín, yeah, want to give those a go?

Katrín Jakobsdóttir

Thank you. Well, nuclear energy, of course, we in Iceland, we don’t have any experience of that. So, it’s really hard for me to give any advice on that. What we are really thinking about, which might prove relevant for your question, is that we have been a country that have been – we have been using hydroelectric power from our big glacier rivers, and then geothermal energy, and we have thought this is really enough. But what we are seeing now is more interesting smaller solutions. Wind energy, for countries other – maybe not situated in the same place on the earth as Iceland, solar energy. So what we have been thinking about, and I think should be something also for bigger countries to think about, are smaller solutions than these huge plants. Because we also have to think about, and one of the things that we have been thinking about in Iceland is our really, energy independency. What effect will, for example, when we look into the future, the fact that if the glaciers will retreat more, which will affect our energy system, what solutions are we going to build, and then we need to think about more diverse solutions. So this is really my take on this, but of course, I can’t really be the judge of nuclear energy, because we don’t have any experience of that in Iceland.

Now a little about change and I think it’s a very good question, because how often I hear that in politics, nothing ever changes. You hear that also, I gather, and maybe you think that also, nothing ever changes, and maybe we…

Professor Tim Benton

Things are changing so fast I can’t keep up with them.

Katrín Jakobsdóttir

Yeah. Well, you can just keep on talking about Brexit. That doesn’t change and – sorry.

Professor Tim Benton

We weren’t going to mention Brexit.

Katrín Jakobsdóttir

No, I know. We’re not going to mention it again. But how the impli – when I think about, for example, and I can take an example I mentioned earlier about universal childcare and shared parental leave from Iceland. What has really happened is, from the early 90s we have seen dramatic change, through both local communities, the City of Reykjavik really going first in implementing universal childcare for everybody, for children, relatively young children, and then, by the government at the time, which implemented the ideology of shared parental leave, so that actually, mothers and fathers shared the nine months that they have. And my government is actually now – actually, we are discussing a new legislation from my government about having that leave for longer, up to 12 months. And this has actually made the dramatic change that the values of society have changed drastically. That fathers are taking more active part in the bringing up of their children. We are seeing more participation of women in the labour force. So, I should think that this change has really happened from late 80s, early 90s, now it’s 2019 and we are seeing a dramatically changed society. And it began because you are thinking, where does it come from? It began all by – from – it came from the grassroots. It came from the women’s movements, that actually entered politics. First affected the local communities and then government level. So, there we are really seeing change coming, from the bottom up, but really, spreading out when it comes political policy. And because you wanted some positive news, being a Politician, you often think, what am I doing here, you know? Sometimes you just, kind of, lose hope, but then you think about political policies that have worked and you can see that, for example, with this example.

And the last question was about yes, how do I talk to other foreign leaders? It’d a very good question, too. Well, obviously, we see a lot of polarisation in today’s politics, and less understanding maybe. Of course, I’m so new in the job, so it’s difficult for me to judge personally, but it is – from the outside it looks like a clear tendency of increased polarisation, not just within societies, but also, between different countries. But my method really, is just to talk about the issues that are very dear to my heart, even though I know I’m meeting people who are very – disagree very much with me because you can see that – we have a saying in Icelandic that the stone, when it always gets hit by the raindrop, it will finally form a hole. It takes a lot of time, and Politicians need to be patient, too, so I use every opportunity I get to raise the issues I find the most important ones, even though nobody in the room sometimes agrees with me.

Professor Tim Benton

I know that feeling. Right, we’ve got five over here. So, let’s try, one, two, somebody put her hand down. One, two, three, four, five, let’s try. Can you keep them concise and introduce yourself when you give the – get the microphone.

Alexander

Hello, my name is Alexander. I am Russian and I’m from King’s College London. Thank you for your speech, and I mean, I have a question. I’m working on a question. So, we know in basic economic theory that there are needs and there are wants, and I would say that there are countries that have satisfied their needs and now they can satisfy their wants. Like, countries in Scandinavia and many countries in Europe, but also, there are countries that are still trying to satisfy their needs, for example, I know China, millions of people in China, Russia, and African countries, and well, it’s also obvious that the question of climate change is a collective problem, yeah? It requires collective action, but my question is, should there be equal demands from both developed countries and developing countries, when addressing the problem of climate change?

Professor Tim Benton

Thank you. Gentleman in the blue jumper, front row.

Michael Weatherhead

Thank you. I’m Michael Weatherhead from the Wellbeing Economy Alliance. Firstly, thank you, Prime Minister, for your commitment to the WEGo partnership. My question is that I think that WEGo partnership countries are going to be exemplars and a lot more countries are going to be looking towards you in the future at how to do things. To move quickly to a transformation of the economy, it needs to be a just transition. Which parts of the Icelandic economy do you think might act as a barrier, and how are you planning to overcome that? Thank you.

Professor Tim Benton

Brilliant question.

Nick Stigler

Again, thank you. Excuse me. Nick Stigler, thank you very much for your very positive thinking and contribution. But one remark that you made concerned me. It was talking about the banning of diesel and petrol cars, and you said, “Well, electric cars will be more expensive, but for those who can’t afford them, well, they can take the bus or go on the bike.” Don’t you see that as discriminatory?

Assam

Thank you very much, Prime Minister, for the speech. My name’s Assam. I’m a PPE student in King’s College London, as well. My question is, essentially, at what point does a country decide to pursue a Wellbeing Economy? The reason being, so, for example, it’s been shown, according to the Copenhagen Consensus, that the most profitable thing to do is to, for example, feed children, so they can stay in school for longer, in terms of the return. So, when we’re pursuing a Wellbeing Economy, for example, do you see this as something that provides the foundation for further economic development, or is it such that this is a strategy that can only be employed by a country that is at the end of its development stage, and well developed? Thank you very much for your thoughts.

Professor Tim Benton

And then finally, in this block. Lady at the back.

Asha Herten-Crabb

Hi, sorry to add to your list. I’m Asha, I work with the Centre for Feminist Foreign Policy, so it’s really thrilling to hear you talking about all these things that we still feel like we’re dreaming of. I also come from a public health background and within the health community, the main thing is that ultimately, the people in the department or the Ministry of Health don’t have the purse strings. And I wonder how you practically deal with the challenge of power sharing within your domestic departments within your government, and whether that has required a lot of negotiation and change? Thanks.

Professor Tim Benton

What a great question. Thank you very much, indeed. Right.

Katrín Jakobsdóttir

Yes.

Professor Tim Benton

You don’t have to tackle them all.

Katrín Jakobsdóttir

Yes, of course.

Professor Tim Benton

Or you can group them.

Katrín Jakobsdóttir

I will try, and we might group them. First just by your comment on discrimination, it’s a very good comment, because I think what I was trying to say is that it’s important that people have a choice between different ways to travel between places. And in Iceland, for example, we have a core public transport system, which is actually increasing in equality, so we’re really forcing people in to buy their own vehicles, which is also, even though they’re all electric, not good for the environment. But obviously, we’re still in the transition period where electric cars are more expensive than other cars. So that is also creating a problem. One of the things that we are now planning is to have tax reductions on electric vehicles to make them as expensive as other cars, but at the same time, even though they would be as expensive, I think it’s important to have that choice of transport. So that was really what I was saying, to try to increase the choice of transport for people, so you are not just forced into having – to spend all your money really, on a car, which is something that’s – can be quiet difficult, if you’re not that well off.

About really, the developed – developing countries, and there are two questions, really, concerning that, and I think we’re really at a point, concerning your question, and also yours, where those countries who are still, you can call developing, they can’t go through the same processes that other countries have gone through. They really need to take a leap really over a lot of development in western countries, for example, in the last century. But I think they can and I think they are doing it, and what we are seeing is a lot of innovation coming from counties, when it comes to new energies: solar energies, geothermal energy.

You mentioned China, actually, Iceland is working in China. Icelandic companies are working in China, building geothermal – using geothermal for heating. So I think we have to take into considerations, but I think it’s possible that not all countries are going through the same processes at the same time as we have seen historically. And I think actually, the Fourth Industrial Revolution is going to help us in doing that, really by making some of the changes, if we also use it wisely to make some of the changes faster than we have seen.

However, and concerning the Wellbeing Economy is that something that you can only do if you’re already rich enough to do it? Well, I think all countries have their public budget, and wellbeing is also about how you prioritise that budget. How you really organise your taxing system. How you organise your budgeting and what you’re going to prioritise. And I think you can always have those – that strong emphasis on wellbeing, even though you aren’t really at the end of your economic development, as you mentioned. Because I think it’s really, also about prioritisation, how – and how we really think about what you’re doing.

I remember when we implemented gender budgeting in Iceland, people thought it was a little bit silly to think about public budget from the aspect of gender. Why should we decide which roads to build, from the aspect of gender? Well, when you think about it, not just with your gender glasses, but also from the point of view of children, for example, they will tell you, okay, you have to fix this road because we’re driving one hour to our school and it’s really affecting our life, our quality of life. So they would have a very different prioritisation than someone else. Somebody who was working in some other sector. So I think this is really about prioritising, also.

Now, about the barriers, and that’s a very good question, and I’m not sure I can give you a concrete answer. But what I sense is that there is a very strong tendency – right now what we have actually experienced, in the last two years in Iceland, is that after really saying that we are going to achieve carbon neutrality, we are entering on this road of wellbeing, we have got a very positive answer from the private sector. We have individual sectors: agriculture, fisheries, actually placing their own goals. We are going to achieve carbon neutrality at this point. Our biggest energy company, which is actually public, was saying, “We are becoming carbon neutral in 2025.” They were actually declaring that yesterday. So, we are getting a positive response, but obviously, when it comes to carbon neutrality and this idea of a sustainable development, a plan that’s really about the Sustainable Development Goals, which are our guidelines in the Wellbeing Economy. We are seeing companies implementing SDGs, so I’m not sure I can say what are going to be the barriers, but obviously, for example, heavy industry is faced with barriers, when it comes to carbon neutrality. But they have also made their pledges, but it’s going to be more difficult for some companies than others. We are very much aware of that.

And of last about the purse strings. Well, of course in Iceland it’s a bit – a little bit different because we have coalition governments, so, usually here in the UK you have one-party government, sometimes coalitions. Obviously, you have something to share about that, when you have coalitions, but…

Professor Tim Benton

I’ll start talking about fishing.

Katrín Jakobsdóttir

And – but that changes a little bit the power structures. Also, just to have a coalition, and when you look at Iceland’s political history, often it was considered essential that the Prime Minister and the Minister of Finance came from the same party. So, the Prime Minister wouldn’t have to, you know – so then, the Minister of Finance, would be the bad guy and the Prime Minister could be the good guy. So, this is traditional Icelandic politics. But this hasn’t been the case in the last decade, where we have had Ministers of Finance and Prime Ministers, for example, coming from different parties. So, that obviously changes a little bit the powershift within governments. And what we have done is that we have a Minister on our committee on the public budget, where we have all the Party Chairs at the table, where we take, really, the decisions about the big lines in the public budget. So I recommend coalitions. I don’t know how you’re going to do it.

Professor Tim Benton

Thank you. We’ll bear that in mind.

Katrín Jakobsdóttir

So, I don’t know how you’re going to do it in one party governments, but you need to have some different aspects at the table to take the good decisions, I think.

Professor Tim Benton

Thank you for that advice, Prime Minister. On this block I can see Walt and at the back and then a third person over there and then yeah, we might have time for another quick round of questions. Walt.

Walt Patterson

Walt Patterson, Chatham House. Following on from your last comment, in the UK – I love the idea of a Wellbeing Economy, but we have, in the UK, part of the government called the Treasury, and I think I would be delighted if you were able to give us any hints on how you manage to persuade the people who handle the finances in your government, to talk to our Treasury, about what a Wellbeing Economy might look like. Because at the moment they have no idea.

Matthew Oxenford

Hi, I’m Matthew Oxenford, Economist Intelligence Unit, Iceland Analyst, and I’m actually asking a similar question, from a very different angle. I agree that the Wellbeing Economy is, sort of, the direction that things are heading, and you’ve said that the issues with GDP are as old as Bobby Kennedy back in the 60s. But at the same time, even when you’ve talked about, and just in this speech, how good Iceland’s doing and performing economically, for your citation is 4% economic growth over however many years. So how do you square the more traditional measures of economic success, like GDP, which are obviously not going away, with these new metrics that you’re trying to pilot?

Professor Tim Benton

Thank you, Matthew, and then there was one final one over here, and see if we can squeeze in one last one later on.

Member

Thank you so much for speaking to us. You mentioned the Fourth Industrial Revolution and when you’re planning for an economy and a society of tomorrow, to what extent do you consider what the reality might be for a post-work society, where a lot of the jobs that are being replaced, might not be worth protecting? And how do you structure an education system, when you’re not preparing people to work, when you’re preparing them to contribute in a different way?

Professor Tim Benton

Thank you very much. Katrín.

Katrín Jakobsdóttir

Yes. Oh, well, I don’t know what advice I can give you about your Treasury. I just say again that it’s very important, in my opinion, to have these different views at the table, and I think that has served us quite well in Iceland, really. Not just in coalitions, but with the Parliament of many parties that join forces in these issues.

Now, it’s a good question about the GDP, and obviously, we are still using GDP and we’re going to continue to use that as one barometer. But how are we going to balance it, is really your question, with the other indicators that we’re implementing? Is GDP always going to be the most significant one? And I think this is going to be something that will take some time to adjust, but I think as soon as you actually have something else in your budget, and just the employment rates, GDP, just the economic measures really, and start asking the questions, how is really, the balance between home and work, for example? Which is one of – you know, when Icelandic people – actually, one of the things that we did while – when we were forming these indicators is that we actually made a poll and asked people, what do you think is most important for society? And what do you think is most important for you personally? And we’re going to reflect that in the government’s work. And when people were asked about these things, they mentioned health. Both women thought about themselves personally and for society, and then, actually, the balance between work and home was one of the most important ones that people mentioned. Connections with other people, and that is one thing that is difficult to measure. How do you measure that, really, the connections between other – between the different people in your society?

So, I think that because I’m an optimist, that when you have all these indicators working, it will change, really, the balance so you have the GDP, but you cannot just get by, by just talking about the GDP and the economic factors. But first, you need to implement the other indicators. It’s going to – in the end, it’s going to take some years, really, to find that balance. Yeah, we’re just starting now this spring, so we will just have to see. You will have to have me back here in five years’ time…

Professor Tim Benton

We’d love to.

Katrín Jakobsdóttir

…and see what will have happened, because I think it’s going to be quite a work of balancing these indicators.

And then about the Fourth Industrial Revolution and the future. We have actually meta-analysed this about that, how it would affect Icelandic society, and it will definitely affect the majority of jobs, and it will affect the traditional jobs of men, more than the traditional jobs of women. We have been analysing our education system on what we need to focus on, and it’s very interesting to see that when you look at international institutions saying what is going to be important in the future? And I’m specifically happy about this, because I served as the Minister for Culture and Education and when we implemented a new curriculum, and actually, the key pillars of that curriculum score pretty high, when you see what measurements are considered now as the most important ones: creativity, the power to innovate, really, having literacy, not just be able to read a text, but having this wide literacy. So I was very happy about that, but I also noticed, and that actually is connected to the thing I was saying about being connected, is that emotional literacy, I think it’s called, emotional intelligence I think it’s called in English, is scoring very high now. Something that we haven’t really been thinking about in our traditional education system. So, yes, we are thinking about the education system and the workplace, and we are going to see changes in Iceland.

Is it going to meet – is what – you know, are we going to work shorter hours, or are – or is work simply going to take changes and become different? You know, are we just going to be doing different things and 50 years’ time than we are doing now? Would any man have thought that they would become a Computer Programmer 100 years ago, or a Zumba Teacher? I don’t know, probably not. So maybe work is going to change, but what we have done, also, is we have placed in the Parliament a future committee, and I hope it’s going to be a standing committee in the Parliament that is actually trying – going to try to analyse this. And you know, take really, the big questions about these things like working hours and a new world, really.

Professor Tim Benton

I think as time is going on, I’ll take Chair’s privilege and ask a final question, which is a follow-up question to the one over there.

Is the kind of key issue in a sense to take a gendered view of politics, because New Zealand, Scotland, yourselves, it can’t be coincidental you all have female Prime Ministers, and I was struck reading this, a speech you made, or is on the way around some of the traditional more family orientated ways of thinking are effectively not the macho, we must have this fastest road to shift these goods, and that’s a macho kind of outcome, rather than they are, how can we build a social cohesion sort of outcome that comes from thinking more as a social being rather than a competitive being, which might characterise the difference, some of the gender differences? So would the answer to Walt’s question about the Treasury be to have a…

Katrín Jakobsdóttir

Female.

Professor Tim Benton

…female Chancellor or at least somebody who is much more not a competitive economic growth mathematical kind of male gendered, sort of, view of the world? Is that – am I going too far the other way?

Katrín Jakobsdóttir

No, no, absolutely…

Professor Tim Benton

Am I being too gendered in the opposite way?

Katrín Jakobsdóttir

No, absolutely not. It’s very important what you’re saying there, and I think my experience is that it’s very important to have not just both, but all genders at the table, because it really – it just affects the way you think. You know, you just talk differently and you think differently, when you just have women or just men at the table. So you get different decisions made when you have that, and it’s not enough just to have one woman at the table, because that doesn’t change anything. You need to have that balance that here we are, and what we have actually achieved in Iceland, when it comes to gender equality, is also because women have shown solidarity, in spite of all their political opinions. They have actually said, “Okay, I’m to the left, you’re to the right, you’re to the centre,” but some things we can actually unite about, when it comes to women’s rights, etc.

It was actually – and we have seen that sometimes happen in Parliament, that women from very different parties show that solidarity in Parliament, when it comes to these big issues. So, I think it’s very important to have both men and women and all genders at the table, because you get just a different set of decisions. And I think actually, it’s easier to be a man and make those decisions with women at the table, because then you don’t have to be as macho.

Professor Tim Benton

Well, on that note, I think that’s a very nice summing up. Thank you so much for coming. Thank you so much for inspiring us.

Katrín Jakobsdóttir

Thank you for inviting me.

Professor Tim Benton

And I just hope Boris Johnson is listening. Thanks very much [applause].