It was seeing a remote region of the Indian Himalayas transform as western influence seeped in from the 1970s onwards that convinced Helena Norberg-Hodge of the destructive nature of conventional development.

Campaigner Norberg-Hodge spent many years in Ladakh in northern India, first visiting in 1975 as part of an anthropological film crew. She was captivated by the place and returned to spend six months of the year there every year for the next 15 years, becoming fluent in the language and establishing NGOs and renewable energy projects to help local people.

Her experiences there made her a vocal advocate for localisation and creating an economic system based on human and environmental wellbeing. In 1994 she organised a conference on the benefits of locally sourced food in London and, decades before the idea of valuing wellbeing over gdp growth became fashionable, she coined the term the economics of happiness. She describes the concept as “society shaping business rather than business shaping society”.

“Having society determine the rules for business is not the same as communism,” she says. “It’s simply that citizens have a vote in how they want to spend their public budget. Do they want to continue on an evermore competitive and global path where there is virtually no accountability? Our work is about rebuilding, actively and consciously, more community and connection to place, shortening the distances that things travel and reducing the CO2 emissions. That’s what we call the economics of happiness.”

Helena Norberg-Hodge. Photograph: Helena Norberg-Hodge

This week, Norberg-Hodge is speaking at the Global Ecovillage Network European conference in Sweden where 450 people are gathering. She co-founded the Global Ecovillage Network in 1991, so that those living sustainably all over the world could learn from each other. The conference has been held every year since 1996, when 50 people gathered at Findhorn eco community in Scotland.

What she saw in Ladakh convinced the campaigner that western development had a negative effect on people’s self esteem. “People were so so at ease with themselves and with the world, and so full of vitality and joy,” she says. “I saw step-by-step how the outside consumer culture was destroying local businesses and jobs, particularly farming. Everything about the local culture became under-valued or – more than that – seen as primitive and backward. I saw how destructive that was for people.”

The health outcome for young children has, she admits, improved, but western-style development has also brought western-style diseases. “Infant mortality was quite high up to about age three, because of extreme cold. But overall people were extremely healthy and there were many people in their 70s and 80s. So this idea that before western medicine we all died at 40 is wrong. And now there’s cancer, heart disease, diabetes, blood pressure, strokes – things that were virtually non-existent before.”

And the influence of western healthcare means that people in Ladakh have lost faith in their own traditional medicine. “They got the idea that the traditional medicine was useless and that only western medicine was worthwhile. People would get their hands on out of date antibiotics and take far too much.” In the early 80s, Norberg-Hodge’s organisation Local Futures started a programme to support traditional doctors by sponsoring their education at the Institute for Tibetan Medicine in Dharamsala.

Although she is critical of conventional development and the accepted notion of “progress” – as she wrote in her much-translated book, Ancient Futures – she is clear that being pro-local doesn’t mean that she is against global cooperation.

And she rejects the idea that localisation is driven by self-interest and nationalism: “When people are more secure they feel happy to identify with, and embrace, difference. It’s when people are insecure, when they’ve been told that they’re worthless and they are struggling to make ends meet, then the prejudice, the fear, the fundamentalism and even terrorism escalates.”

The Global Ecovillage Network, which now lists 10,000 communities in five regions on its website, is an example of focusing on the local but connecting to the global. Norberg-Hodge praises the eco villages as “amazingly successful, considering they are going against the tide. It’s difficult to combine a livelihood with living in that way. The regulations make it difficult. Despite all that, they are growing.”

But Norberg-Hodge acknowledges that living in eco villages is still a small trend, compared to the local food movement which is becoming much more mainstream. “You’re getting farmers markets set up, food hubs, box schemes, urban farms and farm shops. All of that shortening of distances is also happening globally. So it’s very encouraging.”

She sees the UN sustainable development goals as a hindrance rather than a help towards addressing the world’s challenges. “Like so many things now, they sound good,” she says. “But that keeps people asleep. They end up being a type of window dressing and not dealing with the major systemic shift we need to encourage.”

Addressing the underlying economic system, Norberg-Hodge says, is essential for dealing with problems like the loss of species. “Many people believe [species are being wiped out] by overpopulation - it’s not - it’s an economic system, which includes this marriage between technology and money. If we look honestly at how we can prevent the destruction and extinction of species, then localising instead of globalising is very obvious answer. But we have to be willing to step back and look holistically at the impact of the global economy.”

Although national governments and the leadership of multi-national organisations are not much cause of hope, she is cautiously optimistic about the positive steps she sees around the world:

“When you look at it globally, you will find everywhere that there are seeds that are proliferating. They are building those reconnections and preventing the further destruction of biodiversity and cultural diversity. There are these inspiring trends that demonstrate we can reduce CO2 emissions while dramatically increasing meaningful livelihood opportunities for people.”