Devolution, sustainability and GDP convergence: Is the Welsh agenda achievable?

The Welsh Assembly Government has a constitutional duty to promote sustainable development. The devolution settlement does not, however, empower the Assembly to deviate from UK tax rates, while the Assembly Government has itself adopted ambitious gross domestic product growth targets. Here, the paper considers notions of sustainability and it attempts to place the Welsh agenda within those conceptual approaches. It then discusses the significance of the absence of tax variation as an instrument for generating relative sustainability gains. In particular, it examines the regional relevance of the 'double-dividend' argument that governments can substitute efficient environmental taxes for inefficient labour-market taxes. Finally, it considers the implications for sustainability of promoting quality of life, or happiness, achievement above the gross domestic product as the main goal of policy. The lessons drawn should be of relevance to other semi-autonomous regions.