Capacity to produce and consume; Rebound Effect; Limiting Factors; Economic Size; Degrowth Policy; Frugal Innovation; Debound Strategies; Multidimensional crisis.

Abstract: The idea of Sustainable Degrowth challenges economic growth. It is also a proposal to reduce the size of the developed economies as a path for sustainability and equity. This article intends to refine the notion of degrowth by clarifying why the idea of reduction of the size of the economy makes sense and what it exactly means. Economy is here understood as the system of production and consumption. Acting directly at the level of emissions, extractions, social problem is bound to fail if we do not take into account the limiting factors to production and consumption. These limiting factors include time, natural resources, infrastructures, money, regulations, satisfaction of needs, awareness and equality and represent different dimensions of what we call the capacity to produce and consume. Some dimensions are more quantitative, others are more qualitative. The size of the economy shall be ultimately related to the limits to production and consumption i.e. with the multidimensional capacity to produce and consume, because the economy transforms and increases its impacts until it reaches these limits. This is what has been described with the macro-rebound effect or Jevons paradox. If the Jevons Paradox does not occur sufficiently (because the filling-up of the capacity to produce and consume is unattainable due to a limit in one of the dimensions) we have economic crises or social crises (e.g. unemployment). It ensues that the only way to solve the multidimensional crisis is with the degrowth of the societal production/consumption capacities, coupled with sufficiency and appropriate efficiency measures. On the opposite, present policies on both local and governmental level are concerned with the increase of the production/consumption capacity. This includes, on one hand, a selection of efficiency innovations that suppress limits to the increase of production and consumption capacity, and, on the other, growth policies that create the framework so that this increase can occur. We propose the combination of frugal innovation i.e. innovations that integrate limits, and degrowth policies consisting of democratic adjustments of capacities at a larger scale so that the macro-rebound is prevented. Adjustments are the completion of the frugal innovation objective at a higher level of complexity. The article suggests practical examples of frugal innovation and adjustment that can be undertaken at micro and macro levels. Using less natural resources can be supported by policies that leave more resources in the ground. Using less cars, producing waste, consuming less energy would be supported by a infrastructure adjustment like a moratorium on road, incineration, fossil energy thermal energy or nuclear plants. Taking time for conviviality would be supported by a reduction of working hours. Earning less and spending less would be supported by finances’ related adjustments going out of the “debt or virtual economy”. Adjustments at the finance level would also imply replacing world currencies by local currencies. A regulation-based adjustment would generally involve an improvement of social, environmental and product quality standards. An adjustment in the area of needs consists of supporting mutualisation, (in housing for example), and sharing throughout the life-cycles of materials by planning reuse and recycling. A key degrowth adjustment dealing with awareness would involve restricting advertising. Finally, inequality adjustment could introduce measures like basic income and more social security in general, and income ceiling to reduce income gaps.