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Growth damages the climate. We need new paths to prosperity

By: Joël Foramitti


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Technological pipe dreams and the fixation on perpetual growth have prevented effective climate policies for decades

"Happiness does not pay pensions", said the Austrian chancellor Sebastian Kurz at the recent World Economic Forum in Davos. The statement aimed to criticize the idea of a “post-growth” or “degrowth” society, which has received increasing attention in light of the climate crisis. The key to protecting the climate would be innovation, claimed the chancellor, while an end to economic growth would mean an end to the welfare state. In short: Protecting the climate - but not at the expense of economic growth. With this position, Kurz and the Austrian government are part of a new political wave dedicated to addressing the climate crisis, but without questioning the endless pursuit of growth that has fueled climate change in the first place. In a similar manner, EU Commission President Ursula von der Leyen framed the European Green Deal as a "new growth strategy" based on better technology.

Technological pipe dreams

Yet to place one's hopes solely in technological improvements is irresponsible. Politicians have been following this strategy for over three decades without coming any closer to a solution – on the contrary: despite technological progress and greater efficiency, global emissions still continue to rise. The growth of the economy as a whole has so far remained coupled to an increase in emission. The dream of green growth thus continues to be a fairy tale. And even if we assume that more growth will be possible without any further emissions, the problem is far from being solved. After all, the target of limiting global warming to 1,5°C is not about keeping emissions constant, but about reducing them to net-zero by 2050. According to the latest IPCC report, today’s technologies can only achieve this if we significantly reduce the overall production and consumption of the economy. Climate policy that effectively reduces emissions is therefore automatically in conflict with the goal of growth. Or to put it the other way around: climate policy that doesn’t confront economic growth will most likely not be effective. From this perspective, it becomes irrelevant whether we are discussing a CO2 price, public investments (Green New Deal), or a direct ban on fossil fuel extraction (like the German coal phase-out). It also makes little difference where we invest our billions or how much we get back later. In any case, we should prepare ourselves for either an overall lower level of production, or for a climate breakdown.

Environmental problem shifting

Of course, it is possible that innovations will offer us solutions that we cannot foresee today. Much hope, for example, is placed in technologies that could remove greenhouse gases from the atmosphere. However, scientists like Kevin Anderson and Glen Peters warn that placing our hopes on such silver bullets represent an “unjust and high-stakes gamble”. It remains unclear what potential such technologies hold, what the side effects would be, and how long it will take to make them operational. Climate-friendly technologies may further exacerbate other ecological and social conflicts. Consider, for example, the land and resource requirements of renewable energies and the modern slavery often associated with the extraction of these resources.  We must therefore broaden our perspective to look beyond just the climate: humanity is confronted with multiple crisis, such as global inequality, massive species extinction, and the loss of soil fertility. Given the few years we have left to prevent ecological collapse, we need a more responsible plan. This is not an argument against innovation, but a warning against hoping for silver bullets to solve our problems. With such a strategy, our chances of overcoming the climate crisis are very low. While it is true that technological change is an essential component of addressing the climate crisis, it is not the only change that we need.

First steps towards a post-growth economy

What we need is a fundamental transformation of the economy to enable a good life for all within planetary boundaries, which forces us to confront economic growth. It is important to note, however, that this is a proposal for rich countries. Many countries must expand their economies to meet the most basic needs of their citizens. If we want to reduce global emissions on the one hand, and give poorer countries some leeway on the other, nations like Austria would have to reduce their disproportionate share of emissions in particular. Similar demands have recently been made by the European Union's Environment Agency; by an open letter to the EU from over two hundred scientists; and by the prominent environmental researcher Vaclav Smil in his new book on Growth. Even the OECD, as well as distinguished economists such as Joseph Stiglitz, Abhijit Banerjee, and Esther Duflo, now criticize the use of GDP as an indicator of progress, as currently the fruits of growth mainly benefit the richest one percent of society. So, what should be done concretely? The first and simplest step towards a post-growth society is to stop seeing growth (in the form of GDP) as a social goal that takes precedence over all other social and environmental problems. According to Tim Jackson, the drive for growth was the motivation behind almost all the governmental mistakes that led to the economic crisis of 2008. Thus, problems often stem not from an actual dependence on growth, but from decision-makers obsession with this metric. Nevertheless, concerns are justified about whether the economy can function without continuous growth. Financial markets might become unstable without growth. Debt bubbles can burst. Unemployment may rise. Moreover, without growth there is less income to distribute, which can exacerbate inequality. But this is not an argument against climate protection, but rather another reason to transform the economy. Kurz’s concern about paying pensions should therefore rather be seen as a critique of a bad pension system. The above examples also show where first concrete steps could be taken. The regulation of financial markets can limit speculation and private debt. Reduced working hours and a job guarantee could combat unemployment. And measures to combat inequality – e.g. through an maximum and minimum income or a financial transaction tax - can help us to distribute our limited resources more fairly. There are further many existing ideas for reforms of the monetary and banking system in order to better finance the welfare state.

Our culture must change as well

Such deep political changes are unfortunately difficult to imagine. They will not be possible without overcoming the massive resistance of those who benefit from the current system. As the "Guardian" has uncovered, the fossil industry has deliberately manipulated and slowed down the debate on climate change over the past decades. Our current democratic system seems to lack the necessary transparency and mechanisms to overcome vested interests. However, there is also resistance from people themselves. Although the majority in principle supports climate measures, concrete lifestyle-changes are heavily criticized. Even Kurz himself said that he would "never refuse a Wiener Schnitzel" for the sake of the climate. But there is no way around the fact that we’d have to accept some changes to our consumption of environmentally harmful products. This means, among other things, less disposable products, less cars, less air travel, and less meat. Popular acceptance of such changes is a basic democratic requirement. To get there, we need new shared ideas about what constitutes a good life. This means to ask ourselves (as a society) some important questions: Which products are essential for our wellbeing, and which ones could we actually spare relatively easily? Is all the waste of today’s economy necessary? And is it really relevant for our prosperity to produce more and more every year? Through such a debate, we might discover that an economy without growth might also have positive aspects: meaningful (and perhaps less) work; more time for friends, family, care, self-realization and democratic participation; more sense of community in our society; and a healthy environment. All this is often neglected in our career- and consumption-driven culture. Fortunately, numerous communities around the world have long been experimenting with more sustainable lifestyles that could serve as an inspiration for wider society.

Step by step

Pursuing a post-growth society is necessary, but anything but easy. It will take fundamental economic, political and cultural changes. Nevertheless, it seems to be the only responsible way forward. The alternative is a devastated planet. Meeting the 1.5° limit is by now extremely unlikely - but every tenth of a degree that we can still prevent will make a big difference in the future. We can only move in the right direction step by step. The first step is to move away from illusory dreams of technological marvels and to openly address the complexity of our challenges. This article was originally published in German at der Standard on February 12 2020. The text was translated to English by Nick von Andrian and Joël Foramitti.

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Joël Foramitti

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