Green growth, based on technological change, is necessary but not sufficient for effective, timely, climate mitigation. It must be supplemented by reducing the material consumption of the rich countries.
In developing strategies for the economic recovery from the Covid-19 pandemic, we are faced with a major challenge: how to re-establish an economy with (almost) full employment while rapidly cutting greenhouse gas emissions to avoid substantial, possibly irreversible, climate change. Because of the reduction in global GDP during 2020, annual global greenhouse gas emissions are at least 4% per cent lower than in 2019. But, returning to conventional economic growth will tend to drive up emissions, as more people spend more money on more goods and services.
The latest Scientists’ Warning to the World lists a variety of options for modified or new economic systems with low-carbon emissions. They range from small reforms in the existing neoliberal economic system to radical restructuring. The present article explains the strengths and limitations of two economic systems from this spectrum, green growth and steady-state economy (SSE), and the process of degrowth to an SSE.
Green growth
This approach, sometimes called ‘ecological modernisation’, is driven by government policies to encourage growth in low-polluting economic activities such as energy efficiency, efficient industrial processes, renewable energy and recycling of materials. Recommended policies include regulations to increase the energy efficiency of buildings, appliances and industry; government funding of green infrastructure such as transmission lines and public transport; and environmental tax reform including carbon pricing. This approach is compatible with the existing economic system that involves continuing economic growth.
However, it’s based on the assumption that economic growth can be decoupled from environmental impacts. While such decoupling is occasionally observed in rich countries over short periods, these are the exceptions rather than the rule. Global greenhouse gas emissions and resource use were increasing consistently prior to 2020, despite improvements in efficiencies in the production and use of energy and materials. Even services excluding tourisminvolve underlying biophysical consumption, i.e. the use of energy, materials or land.
Green growth is politically acceptable in Europe and many countries and states, but almost certainly forecloses the option of a smooth transition to a climate in which global heating is limited to 1.5 degrees C above the pre-industrial level, the aspirational Paris target. Global average temperature has already risen by over one degree and even to limit global heating to 2 degrees C will be a major challenge. Climate scientists estimate that, if we return to the pre-pandemic rate of global emissions, we could burn through the remaining carbon budget for 2 degrees by the early 2030s.
Clearly, while economic activities emphasizing green technological change are necessary, they are not sufficient, especially when time is of the essence. Therefore, some economists (here, here and here) and other scholars have proposed economic systems that involve transitioning to a steady-state economy (SSE) while striving for full employment by other means than growth.
Steady-state economy
Proponents of an SSE argue that continued growth in the rich countries is environmentally destructive, exhausts natural resources, fosters inequity based on exploitation and doesn’t generally improve wellbeing. Originally proposed by economist Herman Daly in the 1970s, SSE is a stable economic system that operates within ecological bounds with no growth in the consumption of energy, materials and land, and with a stable population. However, it is compatible with growth in wellbeing, social equity, supportive communities, the arts, hiking and other non-material things that make life worthwhile.
Its feasibility is supported by a growing body of research published in peer-reviewed journals and books. Environmental economist Peter Victor used a macro-economic model of the Canadian economy to generate scenarios showing that it’s theoretically possible to have a prosperous economy (including full employment) with low emissions, without increasing GDP. Australian scientist, Graham Turner, obtained similar results by using a biophysical model of the Australian socio-economy.
Both researchers found that, in scenarios where a freeze is imposed on growth, either economic or biophysical, and no other supportive policies are implemented, a large fraction of the population becomes unemployed, as expected. But, when a range of policies are implemented to foster new jobs and share them around, then an SSE with low unemployment, less poverty and reduced GHG emissions is possible.
Supportive policies, additional to those for green growth, include a shorter working week; stabilised population; investment in ‘green’ infrastructure; expansion of health care, social services and education; and possibly more local manufacturing in place of some imports.
De-growth
Some scenarios for transitioning to an SSE involve de-growth, a reduction in consumption in biophysical terms. Some proponents argue on environmental and social justice grounds that a socio-economy based on grassroots communities is preferable to the existing centralised system. They typically support the growth of localised eco-communities, voluntary simplicity and partial self-sufficiency including micro-grids and local food production.
People who envisage a significant role for governments in driving de-growth recommend the following policies additional to those listed for green growth and SSE: limits to the total global resource uses, more democratic decision-making, reform of government institutions, land reform, stricter limits to the powers of corporations, removing artificial scarcities, decommodifying public goods and expanding the commons. Attention is also needed to the role of the present financial/banking system in driving economic growth.
Targeted policies for de-growth
The vast majority of environmental impacts, including carbon emissions, come from consumption by the relatively rich fraction of the world’s population. Specifically, the world’s top 10% of income earners are responsible for about 45% of global emissions, while the bottom 50% emitters contribute 13% of global emissions. The environmental impacts of the rich come indirectly from their savings and investments as well as their direct expenditures on consumption.
Specific additional policy options for targeting excessive consumption in rich countries, while fostering social justice, include progressive taxation to discourage very high incomes, environmental tax reform in which the revenue raised is returned equally to all adult citizens (e.g. carbon fee and dividend), inheritance taxes, job guarantee, fair minimum income, ban on political donations combined with publicly-funded elections, and serious action against corruption.
Conclusion
Green growth, based on technological change and environmental policies, is the least difficult pathway politically, but on its own cannot achieve a safe climate. This would become feasible if green economic activity is supplemented by de-growth to an SSE, but resistance by vested interests to such a pathway is likely to be formidable.
Dr Mark Diesendorf was originally a physicist who expanded into interdisciplinary research on energy and sustainability. Previously he was Professor of Environmental Science and Founding Director of the Institute for Sustainable Futures, University of Technology Sydney. Currently he is Honorary Associate Professor in the Environment & Society Group in the School of Humanities & Languages, UNSW Sydney. Web: https://research.unsw.edu.au/people/associate-professor-mark-diesendorf. Mark is the lead author of ‘The Path to a Sustainable Civilisation: Technological, socioeconomic and political change’ (Palgrave Macmillan, 2023).
Comments
4 responses to “Economic Recovery from Covid-19 while mitigating Climate Change”
Thank you, Cameron and Ted, for responding to my article. Collapse of civilisation is indeed a possibility, Cameron. Because modern economies are so complex, unstable, non-linear in their dynamics, and depend on ‘just in time’ delivery of ‘goods’, such a collapse could be disastrous, in some ways just as damaging as a nuclear war. However, collapse isn’t certain and so we must keep struggling for a better future.
Ted, I understand the mathematics of exponential growth and respect your commitment to promote abandoning affluence. But once exponential growth (or any growth) ends, your argument for a reduction in consumption by a factor of 20 collapses. Complicated modelling, with many unknown variables, would be required to estimate the average level of rich-country consumption needed for ecological sustainability in general. And the average level takes no account of the distribution of consumption.
Estimates of the maximum level of sustainable consumption are less uncertain for limiting global warming to 2C, provided a tipping point into irreversible climate change isn’t crossed. Research (incomplete though it is) by many, including myself, suggests that we don’t have to return to subsistence societies to become sustainable. Indeed, a world of Dancing Rabbit Ecovillages could have greater environmental impacts, especially in terms of land use, than a global steady-state industrial socio-economy based on modern ‘green’ technologies. Also, the extent to which such ecovillages depend on industrial society is unclear.
I agree that changes in values and culture would greatly assist the transition to sustainability. However, such changes usually take several decades at least, and we don’t have much time left.
I think you are quite right Cameron; this society is incapable of solving the big problems…there isn’t time and the many problems are too big and difficult. We are in for descent to terminal breakdown. The possibility of getting through to a sane new world depends on how effectively we can get sufficient numbers to realise that a sustainable and just society has to be based on simpler lifestyles and ways within zero-growth needs-driven economies.
When the challenges to achieving a sustainable society are laid out, as Mark has done here, it seems pretty clear that we will not be able to change the direction of our civilisation quickly enough to avoid a whole host of negative consequences, climate change being just one.
This is why I think that some form of collapse is the most probable outcome for our future (where collapse is defined as a rapid loss in complexity). We are entering/have entered what James Howard Kunstler’s calls the ‘Long Emergency.’ John Michael Greer provides a good theoretical model (Catabolic Collapse) to describe how the future could unfold in such a scenario, which expands upon Joseph Tainter’s thesis in ‘The Collapse of Complex Societies.’ Greer’s analysis suggests that on average it takes 100 – 300 years for a civilisation to collapse (i.e collapse is a process not an event). Given the hyper-complexity of our current version of global civilisation I would not be surprised if we managed to complete the process somewhat quicker.
It is highly unlikely that government or corporations will do much to prevent a collapse, to many vested interests as noted by Mark in maintaining the status quo for as long as possible. Which means that the most effective responses will come from the bottom up by individuals, families and communities.
Mark has given a good outline of the way the discussion of the global sustainability predicament is finally attending to the absurdity of pursuing economic growth. But there are a couple of points that I think should be added and stressed. Firstly most contributors to the discussion fail to make clear just how huge the degrowth would have to be if we are to achieve a world that is sustainable and just. If you take estimated footprint and resource use figures it is easy to show that present rich world per capita rates of consumption are around ten times those that could be spread to all the world’s likely 2050 population. If you assume continued growth in rich world GDP the multiple rises to around 20. This means the degrowth would have to be so great that it is not just a matter of reducing consumption within the present affluent-industrial-centralised- urbanised-consumer-capitalist society; it could only be achieved by radical transition to very different economic, political, social, and above all cultural systems. Only in highly self-sufficient and self-governing local economies can the consumption rates be got right down, eliminating most transport, energy, sewage, packaging, waste removal, commuting etc costs.
Thus the second point is that the big global problems cannot be solved unless there is an enormous transition to very different values, whereby people are content to live far more materially simply and derive life satisfaction from non material sources. Many in the Ecovillage and Transition Towns movement are showing the way; Dancing Rabbit Ecovillage in Missouri has resource consumption rates around 5% of US averages.
Obviously such goals would be flatly rejected by most people today, but the task is to work hard at raising awareness that unless they are eventually seen to be necessary we are in for a lot of trouble.