Is There Life Beyond Economic Growth?
Endless consumption is destroying our hopes of a liveable planet. Let’s try something else.
When Greta Thunberg attended the United Nations Climate Action Summit last week, and chastised world leaders for believing in “fairytales of eternal economic growth”, she was right to do so.
The problem, as it so happens, is that economic growth depends on resource use and carbon emissions. And no technological innovation is likely to change that anytime soon.
At the moment, the goal of the Paris Agreement is for countries to limit their carbon emissions so that global warming does not rise above pre-industrial levels by more than 1.5 °C. This is because any rise in temperature beyond this threshold poses serious risks. Mass thawing of the artic’s permafrost, food insecurity and severe heat waves to name a few.
Doctor Samuel Alexander, a research fellow for the Melbourne Sustainable Society Institute, notes the fundamental tension here. In order to adhere to a “carbon budget”, developed countries would have to reduce their emissions by 8–10% each year. This, he maintains, simply cannot be achieved by using cleaner, more efficient forms of energy.
In no uncertain terms, he states that “significant emissions reductions will require us to use considerably less energy.”
There are a few reasons why this is the case. First is the fact that we are not substituting old forms of energy for newer ones. Instead, as noted by the environmental scientist Giorgis Kallis, we are adding renewables on top of dirty forms of energy like coal and oil.
The UK economist Nicholas Stern (as cited by Alexander) also found that a decarbonization of more than 3–4% was incompatible with economic growth. And the correlation between GDP growth and greenhouse gas emissions remains strong in countries like Canada, India and most of the developing world.
But economic growth is not merely responsible for increased emissions. Soil depletion, overfishing and deforestation are the predictable results of our relentless commitment to global capitalism. Worse, we are already exceeding a sustainable level of resource use. A study led by Monika Dittrich suggests that resource extraction should be limited to a level of 50 billion tonnes per year — a limit that we have broken for more than a decade.
We are now at a point where our planet cannot support us if we continue along the same trajectory of economic growth. And this has led a number of scientists and economists to advance a controversial agenda of economic degrowth.
The suggestion, as advocated by people like Kallis and Alexander, is that rich countries need to downscale production and consumption. This will involve a steady decrease in GDP, or abandoning the metric altogether for a more genuine indicator of human prosperity.
However, this does not necessarily mean a decline in living standards. Although GDP has a fairly strong correlation to (subjective) happiness and life satisfaction, other variables such as social support, life expectancy and freedom from corruption seem to matter much more. And many upper middle-income countries, such as Costa Rica, Mexico and Thailand, rank higher on the World Happiness Report than richer countries like Japan, South Korea and Italy.
GDP might be useful when measuring a country’s productive output — the total value of goods and services sold — but there is much that it doesn’t take into account. It doesn’t consider environmental degradation, rates of poverty or lost leisure time. As a result, even though the Global GDP has increased since the ‘70s, more holistic measures such as the Genuine Progress Indicator and Index of Sustainable Economic Welfare have barely moved.
And so, instead of focusing on never-ending growth, we should put our efforts towards outcomes like employment, education and health. That way, we can ensure that everybody enjoys a decent quality of life.
Naturally, this will require a vast distribution of resources. Our current system, where most of the wealth flows up towards a small elite, and what remains trickles down to the rest of us, will have to change. The poorest among us are already set to bear the brunt of global warming. The only way to ensure their livelihoods is by tapping the hoards of the super-rich. This will remain true whether or not we move into a degrowth economy.
We will also need to move away from mindless consumerism. Rich countries are flooded with a deluge of cheap junk, outconsuming most upper middle-income countries by more than double the amount per capita. This is partly because of our obsession with status, our desire to keep up with others and always have more. But these desires have very little to do with our actual human needs. Meaningful relationships, economic security and opportunities for democratic participation all have a greater bearing on our well-being than mere luxury goods.
What’s more, these needs can be satisfied with a relatively low level of resource consumption. Several developing nations have a comparable life expectancy with the United States. Many score higher than developed nations on the EiU’s democracy index. And economists like Richard Douthwaite have argued that our fixation with economic growth has actually damaged family and community life.
By reducing our GDP and consumption to the level of mid-income countries, developed nations can allow poorer countries room to grow. For the rest of the world, economic growth only provides diminishing returns. And if left to run rampant, it will bring about an ecological catastrophe.
This agenda is no doubt radical. But given that we are living on a planet with finite resources, which climate change will only make more scarce, its enactment seems downright necessary.
As Kallis rightly points out, it will be much easier to reduce carbon emissions with less economic growth. And economic degrowth will ensure that less energy and materials are used on the whole. But to prepare ourselves for such a dramatic transition, we would need to rethink the economic and political foundations of our societies.
It was Margaret Thatcher who once claimed there was “no alternative” to free-market capitalism. Now, less than thirty years after her tenure, these words have taken on an ironic edge. Our only option is an alternative to growth-based capitalism. Otherwise, we will end up exhausting the very source of our prosperity.
