Cashing in on a hole in the sky: David Nicholson-Lord argues that green economics should replace Adam Smith

THE ADAGE that every cloud has a silver lining is even truer now that the sun is shining. This month saw the start of an alliance between Boots and the Cancer Research Campaign to promote 'sensible sun behaviour'. Until August, the Play Safe in the Sun campaign will be setting out its stall in Boots stores from Brighton to Belfast, handing out balloons, stickers and advice from a consultant dermatologist. The benefits for the Cancer Research Campaign are obvious: extra money for research. But what's in it for Boots?

Here's a clue. There are five 'play safe in the sun' guidelines and at least three involve buying something: sunhats, sunglasses, suncream. Who sells sunglasses? Why, Boots does - in fact it is offering customers discounts if they trade in their old ones. Boots also sells suncream, and is involved in a row with Superdrug over the lucrative sun-protection market. This is worth pounds 110m and Boots has about 47 per cent of it: there is talk of price wars, plagiarism and injunctions.

The hidden factor in all this is the gap in the ozone layer opening up 20 miles above our heads and letting in carcinogenic radiation. Skin cancer rates in the UK are double those of 20 years ago, and although lazing on foreign beaches is still largely to blame, the ozone factor is catching up fast. In the US alone, accelerating ozone loss could cause an extra 200,000 skin-cancer deaths over the next 50 years.

Profit margins on suncreams are about 50 per cent and the market is growing at around 4 per cent a year. Suncreams with a high protection factor make up 70 per cent of it. From a purely business perspective, holes in the ozone layer are exceptionally good news.

Boots calls its campaign a 'public health education initiative'. Is it? Or is it just an imaginative marketing exercise: the Skin Cancer Roadshow? Should we congratulate the company for its flair, or criticise it for exploiting a worldwide health crisis?

There is another, more serious, objection. When the Treasury does its sums, that portion of the pounds 110m sun-protection market arising from worries about UV radiation will be added to gross national product and will count as economic growth. Thanks to the hole in the ozone layer and the skin cancer epidemic, we will all be that little bit richer. As a way of measuring progress, this is clearly a nonsense, since the quality of our lives will undoubtedly be poorer. Fortunately, some economists are developing a better way of assessing growth.

The green magazine Resurgence devotes its current issue to an exploration of environmentally friendly ways out of recession. In July increasing criticisms of Gatt will be pulled together in a book that argues for a 'new protectionism' - a reversal of the global extension of the free market (Tim Lang and Colin Hines, The New Protectionism: Protecting The Future against Free Trade, Earthscan). And later this year the New Economics Foundation, a group of 'green' economists, will produce the UK's first index of sustainable welfare, a form of alternative GNP measuring progress since the Fifties, not only in income but in areas such as health, education, diet and environmental quality.

Is there a pattern to these developments? First, they signify that the environmental movement, two decades after Schumacher's Small is Beautiful, is evolving a coherent critique of conventional economic theory. Second, they represent a perception that both Keynesianism and monetarism have run into the sand, and that an economic 'revival' based on some hybrid of the two is likely to founder. Third, they are a response to the accelerating pace of planetary degradation - global warming in particular.

Equally important, they point to a small breathing-space in history. Inflation is at its lowest for 29 years, the UK may be emerging from its worst post-war recession. What better time to pause and reconsider?

The green economists do not work for banks or appear nightly on television. Many have periods of political orthodoxy behind them - time spent with institutions such as the World Bank, the Cabinet Office, the US Office of Technology Assessment, which served both to depress and illumine. But since their wisdom is unconventional, they are, by definition, largely unknown to the media, and thus to the public.

They do not present fully-costed alternatives. What they do offer are some challenging ideas to remove the stigma - indeed the concept - of unemployment, to take us beyond stop-go cycles into an era of economic sustainability. Some ideas, such as taxing the unimproved value of land or phasing out benefits and pensions in favour of a universal citizens' income, are not new. Others are overtly 'ecological', such as the proposal to replace income tax, VAT and company profits tax with taxes on energy, raw materials and, more interestingly, currency transactions.

Taken together, they envisage a more labour-intensive future where the distinction between paid employment and other kinds of work - from which much of the social and psychological damage of unemployment flows - disappears.

The global free market, however, emerges as one of the villains. To a generation nourished on the idea that unlimited free trade is a good thing, this may be hard to accept. It rests on the assumptions that, first, cash relationships are invading and destroying areas of community life in which they have no place; and second, far from being a benevolent 'invisible hand' - Adam Smith's phrase - the market is blind to the environmental and social destruction it causes.

Hence the global cash economy is a game that only the rich and powerful can win. Just as people's lives and jobs in the West rely increasingly on distant organisations - supermarket chains, multinational companies - so Third World countries tempted into the market by succulent images of Western life find themselves caught up in a spiral of cash crops, international debts and ruinous IMF 'structural adjustment' programmes.

Which brings us back to Boots and the gross national product. In the post-war era, GNP has been transmuted from being a purely statistical tool into a national political goal. Unscrambling it promises to be an exercise both cathartic and revelatory. An index of sustainable economic welfare developed in the United States, for example, shows that while the sum total of economic activity, measuring both 'good' and 'bad' expenditure, has continued to increase, improvements in welfare levelled off in the late Sixties and since 1979 have declined. In other words, we have lots more suncream, sunglasses and sunhats - but we can't really enjoy the sunshine any more.

(Photograph omitted)