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Plan B – is there an alternative to economic growth? Part 2 – Environmental pressure

The main drivers of these problems are energy, materials and land use. If environmental problems are to be solved in a growing economy, then these drivers have to be decoupled from economic activity at an extremely fast pace, and at a global scale. We haven’t seen that happening in the past. For example, energy use rose only slightly slower than GDP and the correlation between the two is so strong that even economic recessions or slowdowns can be easily identified on the energy graph.

Carbon emissions show almost exactly the same pattern because CO2 emitted per Joule of energy has barely changed in the last forty years. Any decarbonization due to windmills, solar panels and other cleaner technologies has been offset by the increasing share of dirty fuels, such as coal in China. For materials use, a different chart leads to similar conclusions. Plotting per capita materials consumption against GDP for several countries reveals the correlation between economic activity and materials use. The authors conclude that current modes of development both in emerging and already industrialized economies are fundamentally unsustainable.

This is the consensus opinion in science. For land use, this snapshot taken from Jonathan Foley’s TED talk shows where we stand after a couple of decades of global economic growth. The least green and brown areas where agricultural expansion is still possible and the climate is not too hostile are mostly in tropical countries. In fact, cropland has been expanding there by 48,000 square kilometers a year, mostly at the expense of natural ecosystems. Rising demand for food, especially for animal products has been in the background of this change. Consequences are dramatic. Future economic growth can be different. It can be so much greener.

Cleaner technologies and many of the existing environmental initiatives are inevitable for a successful environmental strategy and they can make a big difference. Nevertheless, there are very strong reasons to doubt that green growth is really possible. First, in several cases we are well beyond environmental limits. This means that just stopping the growth of environmental pressure is not enough; we have to sharply reduce it it. With further economic growth this would require absolutely unprecedented decoupling between GDP and environmental pressure.

Climate change is one example. To have a reasonable chance of limiting global temperature rise to 2 degrees by the end of the century, which, by the way, may not be enough to avoid extraordinary intergenerational injustice according to leading climate scientists, so for this not too ambitious goal, the decarbonization of the world economy would have to be faster throughout the next forty years than it has ever been since the Second World War. In other words, we need faster improvement each and every year for several decades than in the years after the oil price shocks, when we had a very strong motivation and many easy opportunities to cut energy use. Second, more than half of the world population lives in countries where consumption is rising rapidly. More than three billion people are moving up the food chain and starting to use more materials.

As a result, demand is skyrocketing, which further increases required decoupling rates. In addition, environmental efficiency is low in most emerging economies, So it is possible that each and every country in the world increases its on efficiency, but the overall global efficiency average goes down, simply because less efficient economies grow faster. Third, most easily available resources have been used up. We are now drilling for oil in Arctic waters, mining minerals that are much less concentrated than a century ago, and converting land for farming that is less productive or more ecologically valuable than existing agricultural areas. For this reason, environmental impacts per unit of production are rising, which is the opposite of decoupling. A fourth concern is that absolute biological and physical limits of efficiency are not too far in certain cases. Further increasing crop yields, for example, has proven to be difficult in several major countries. Limits of energy efficiency will also be a constraint if we scale up efforts to cut energy use. Fifth, there is a huge physical lock-in effect.

Existing infrastructure has been built to be used. Highways, coal-fired power plants and inefficient buildings will not be abandoned overnight, and inefficient city structures will change even slower. A sixth reason for skepticism about the rapid decoupling of environmental pressure from economic activity is inertia in social systems. Changing the habits of individuals and overcoming the influence of vested interests is extremely difficult, which again limits the speed of decoupling. And finally, efforts to solve environmental problems can be accompanied by unwanted side-effects. If you save energy and spend the associated money savings on something else, then the embodied energy of the product you purchased partly offsets the initial energy savings. This is just one of several rebound effects. Besides, it is also possible that the solution to one problem makes the solution to other problems more difficult.

For example, fertilizers increase crop yields but generate widespread pollution that kills marine life. Renewable energies help to reduce carbon emissions but increase demand for metals. And the list could be continued indefinitely. At this point, it may be fair to conclude that the path on which growth is a binding condition is really dangerous. Beyond this path, however, there’s uncharted territory. We see some promising directions, like the reduction of working hours or salary caps, but we don’t really know how to run an economy without growth. Furthermore, we don’t really know how to reduce dependence on growth.

And what’s even more surprising, we are not really trying to find it out. Given that lower consumption could reduce absolute environmental pressure and the required speed of decoupling, plus there is scientific evidence that increasing wealth does not bring happiness above a threshold, this is almost unbelievable. How can we not be thinking about strategies to reduce dependence on growth? How can we assume that sustainable prosperity is always more feasible on a path of relentless growth than finding alternative routes? How can we ignore or rule out options we’ve never understood? Because this is what we are doing right now. Leading economic journals or top economists never question growth.

The environmental strategy of the OECD and the World Bank is just green growth, there is no plan B. In academia, there is no funding for research on growth dependence and choosing this critically important topic may even put your carrier at risk. There is a frightening collective denial in macroeconomics and politics, which hurts people and the planet. We have to change this. Academic, public and policy discussions, as well as local experiments, are needed to understand how dependence on growth could be reduced. The benefits and difficulties of these strategies have to be compared with those of business as usual scenarios in which periods of growth and crisis alternate.

Such a comparison can help us to reflect on our priorities. Take the reduction of working time as an example. This may be one of the strategies to decouple unemployment from growth and to simultaneously reduce environmental pressure, but there are many open questions. Under what social and economic conditions would people prefer to work earn and consume less, while spending more time with their families and enjoying more free time? What incentives would employers need to facilitate this?

What macroeconomic consequences should we expect and is it possible to cope with the difficulties? If we want to answer questions like these, we will. With major projects to explore the many complexities of non-growing economies and the recognition of efforts, we can make it cool to work on these issues. The only thing that can prevent progress is a failure to admit that looking beyond the current paradigm can be useful. This attitude must be challenged.

Governments have to provide funding for research and experiments and we, the people, have to create the social context in which researchers and decision makers are motivated to address these issues. We have to openly question the primacy of growth and those who take it for granted.

We have to appreciate efforts that may lead to alternatives and celebrate successes. And we have to stick to values that go far beyond consumption. Because of course it is a part of human nature to strive for more in a material sense, but it is not the only part. And it depends on our socio-economic systems whether we strengthen one set of values or another. Personally, I’m not only concerned about our relationship with nature because of food security, pollution-related health impacts or environmental refugees, but also because of the promise of a more fulfilling life.

I want a future, in which there is no drilling or mining in priceless natural reserves, in which delegates from poor countries don’t have to cry at climate negotiations, and where families, including children, can have a journey that is as safe as possible. For this, we desperately need a map with more than one path. Thank you.