Low growth: a dangerous idea or a solution to the world’s biggest problems?


London
CNN Business

Conventional economic logic is based on a basic assumption: bigger economies are better, and finding ways to maintain or boost growth is critical to improving society.

But what if growth at best does little to fix the world’s problems, and at worst promotes the destruction of the planet and jeopardizes its future?

This is the extreme message from the “de-growth” movement, which has spent decades on the political sidelines while warning of the need to end unlimited growth. Now that the pandemic has given people in some parts of the world a chance to rethink what makes them happy, and as the scale of change needed to tackle the climate crisis becomes increasingly clear, his ideas are gaining more mainstream recognition — even as anxiety grows. What could be a painful global recession.

For economists and politicians of all stripes, growth has long served as the North Star. It is a means of creating jobs and generating taxes on public services, increasing prosperity in rich countries, and reducing poverty and hunger in poor countries.

But growth frustrators argue that the endless desire for more—larger national economies, greater consumption, greater corporate profits—is shortsighted, misleading, and ultimately harmful. They stress that gross domestic product, or gross domestic product, is a poor measure of social welfare.

In addition, they see an expansion in a global economy that has already doubled in size since 2005 – and at 2% growth per year, it will be seven times greater in a century – making emissions targets essential to saving the world out of reach.

“Innocent growth of 2 or 3 percent per year, that’s a huge amount of growth – cumulative growth, compound growth – over time,” said Giorgos Calis, a senior researcher in growth at the Autonomous University of Barcelona. “I don’t see it being compatible with the physical reality of the planet.”

The solution, according to the de-growth movement, is to reduce the production of non-essential goods, and to try to reduce the demand for items that are not needed.

This non-orthodox school of thought has no shortage of critics. Bill Gates called growth-reducing factors unrealistic, stressing that asking people to reduce consumption for the sake of the climate is a losing battle. And even believers concede that their framework can be politically unsuccessful, given how difficult it is to imagine what weaning from growth would look like in practice.

“The fact that it’s an uncomfortable concept, it’s both a strength and a weakness at the same time,” said Gabriela Cabana, an advocate of de-growth from Chile and a doctoral candidate at the London School of Economics.

However, in some corners, it is becoming less of a ban, especially as governments and industry lag behind in their efforts to prevent the planet’s temperature from rising beyond 1.5°C, after which some of the effects of climate change will become irreversible.

Climate activists, including proponents of downsizing, met in Munich on November 12, 2021.

The United Nations’ Intergovernmental Panel on Climate Change recently noted slowing growth in a major report. The European Research Council has just committed nearly $10 million to Callis and two colleagues to explore practical “post-growth” policies. The European Parliament is planning to hold a conference entitled “Beyond Growth” next spring. European Commission President Ursula von der Leyen is expected to attend.

Even some on Wall Street are starting to pay more attention. Investment bank Jefferies said investors should think about what would happen if the growth slowdown got stronger, noting that younger generations “worried about climate change” have different consumer values.

In the debate about how to avoid climate catastrophe, there is a key point of consensus: If we are to avoid the worst effects of global warming, the world needs to cut annual carbon emissions by 45% by 2030. After that, they must fall sharply and rapidly.

Most roadmaps that lay out a plan to achieve this involve a radical reshaping of economies around clean energy and other solutions to reduce emissions, while promoting new technologies and market innovations that make them more affordable. This will allow the global economy to continue to grow, but in a “green” way.

However, proponents of de-growth question the world’s ability to reduce emissions in a timely manner – and protect delicate and interconnected ecosystems – while striving for unlimited economic expansion, which they argue will inevitably require the use of more energy.

A construction site in Belgrade, Serbia in thick smog on November 1, 2022.

“More growth means more energy use, and more energy use makes it difficult to remove carbon from the energy system in the short time remaining,” said Jason Heckel, a decline in growth expert who is part of the team that received funding from the European Research Council. “It’s like trying to run on an escalator that’s accelerating up toward you.”

Even if energy becomes green, growth also requires natural resources such as water, minerals, and timber.

It’s a concern echoed by Greta Thunberg, arguably the most famous climate activist. She has criticized “fairy tales of non-existent technological solutions” and “eternal economic growth”. And she touched on another point raised by growth-reducers: Is our current system, which has produced rampant inequality, even working in our favour?

This question resonates in the global south, where there are concerns that the green energy revolution could simply repeat current patterns of exploitation and overextraction of resources, but with metals and minerals such as nickel or cobalt – key components of batteries – rather than oil.

‘Love to grow’ is ‘so violent and racist,’ said Felipe Milanese, a professor and under-growth advocate based in the Brazilian state of Bahia, and it has been reproducing indigenous forms of colonialism.

It can be hard to talk about declining growth, especially with growing fears about a global recession, with all the pain of lost jobs and wrecked businesses to suggest.

But advocates, who often speak of recessions as symptoms of a broken system, make clear that they are not promoting austerity, or telling developing countries eager to raise living standards that they should not reap the fruits of economic development.

Instead, they talk about sharing more goods, reducing food waste, moving away from privatized transportation or healthcare and making products last longer, so they don’t need to buy them at regular intervals. It’s about “thinking in terms of sufficiency,” Cabana said.

Cars make their way in New Jersey on April 22, 2022. The United States is the second largest contributor to carbon dioxide emissions.

Embracing de-growth will require a radical rethinking of market capitalism that every society on the planet has embraced in recent decades.

However, some proposals could exist within the current system. Universal basic income – in which everyone receives a one-time payment regardless of employment status – is often mentioned, allowing the economy to reduce its dependence on polluting industries. This is work four days a week.

“When people have more economic security and have more economic freedoms, they make better decisions,” Cabana said.

The latest report from the Intergovernmental Panel on Climate Change – the United Nations authority on global warming – noted that “addressing inequality and many forms of state consumption and focusing on well-being supports climate change mitigation efforts,” referring to one of the biggest reduction targets for growth. . The name of the movement was also checked.

But declining growth is also the subject of significant opposition, even from climate scientists and activists with similar goals.

“People with stunted growth live a fantasy where they assume that if you bake a smaller cake, for some reason, the poorest will get a bigger share of it,” said Bear Espen Stockins, director of the Center for Green Growth at BI. Norwegian Business School. “This has never happened in history.”

Steam and smoke rise from the coal-fired Pelchato Power Plant in Rogwiek, Poland.  The plant emits approximately 30 million metric tons of carbon dioxide annually.

Supporters of green growth are convinced that their strategy can work. They cite promising examples of decoupling GDP gains from emissions, from the UK to Romania, and the rapid rise in the affordability of renewable energy.

Gates, a Microsoft co-founder who has prioritized investing in climate innovations, acknowledges that reforming global energy systems is a daunting task. But he thinks enhancing access to the right technologies can still get us there.

Those underdeveloped know that their criticism is controversial, although in some ways that is the intent. They believe a tougher, more revolutionary approach is necessary given the United Nations estimates that global warming is set to rise to between 2.1 and 2.9 degrees Celsius, based on the world’s current climate pledges.

“Less time [that] Now left, more radical change is needed,” said Kohei Saito, a professor at the University of Tokyo.

Can a growing group agree? In 2020, his book on de-growth from a Marxist perspective was a surprising success in Japan, where concerns about the consequences of stagnant growth have influenced the country’s politics for decades. “Capital in the Anthropocene” has sold nearly 500,000 copies.

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