Economic growth or tackling climate change?

On September 16, the Guardian published a letter signed by Utrecht University’s Richard Lane and 237 other academics that called for a radical shift in European policy away from economic growth. This was timed to coincide with a conference at the European Parliament on this theme. But why might the development of post- and degrowth economies be necessary for ecologically and socially sustainable futures?

Both the letter and conference were focused on the necessity and possibility of reorienting EU and member state economies towards ecologically and socially sustainable futures through the development of post-growth or degrowth economies. But what does this mean? The terms post- and degrowth are designed to signify the necessity to both a critique of the ideology of economic growth and to hypothesise possibilities for radically transforming our economies towards global sustainability.

A continued focus on economic growth

As Dr Lane puts it, we live in a world characterised by the continued focus on economic growth at all levels, from the political prioritisation of GDP growth at the level of the Nation State, the EU’s Stability and Growth Pact, to the UN’s 2030 SDG 8.1 target to sustain growth ‘in accordance with national circumstances and, in particular, at least 7 per cent gross domestic product growth per annum in the least developed countries’. But this focus on growth faces five inconvenient facts that were highlighted at the European Parliament conference.

FIVE INCONVENIENT FACTS ABOUT ECONOMIC GROWTH highlighted at the European Parliament conference

First, even if we set aside the requirements for material throughput and environmental pollution, continued compound growth is simply an untenable idea.

Second, the actual effects of the compound growth that many countries have seen since the middle of the 20th century - the period of the so called great acceleration - have resulted in the destruction of the environment at an exponentially increasing rate.

Third, there is no evidence, either historical, from modelling or via global material flow analysis of the absolute decoupling of material use from economic growth. The relative decoupling that has been observed is accompanied by rebound effects and in large part due to simple geographical burden shifting.

Fourth, at current carbon footprint levels, avoiding disastrous climate change is simply not compatible with economic growth. Moreover, current global climate targets and policies that assume continued growth are developed on the basis of pathways and scenarios built upon unrealistic assumptions about negative emissions technologies.

Fifth, we are nowhere near decarbonising our energy supply. To date, the vast majority of renewable energy has been additional to increasing fossil fuel supply. This shift is in large part contingent on reallocating direct and indirect public subsidies - highlighting not just the importance of technological innovation, but of political power. In a Europe where Germany appears determined to reorient its economy around cars and coal, prospects under the current model of growth appear increasingly bleak.

Reorienting economies around the provision of welfare and happiness

Shifting to post-growth economies will not be easy, but neither does it simply mean economic recession. According to Dr Lane “economic growth is not natural - indeed it has a very specific and readily traceable history obscured only by the political centrality of an increasingly challenged economic orthodoxy. Nor for the world’s developed nations is it necessarily desirable.” As he puts it: “reorienting economies around the provision of welfare and happiness through demand and consumption reduction may appear to some as a pipe dream, but better this than our current end-of-pipe nightmare”.