Degrowth & Economics — Are They Incompatible?

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There’s a line in a Paul Simon song that goes like this: “There’s too many people on the bus from the airport, too many holes in the crust of the earth. The planet groans every time it registers another birth.” Recently, we the people of Earth celebrated the news that there are now 8 billion humans aboard our little blue lifeboat at the far edge of a minor galaxy. But is this really something we should be happy about?

The Industrial Revolution, made possible by extracting and burning fossil fuels, has brought prosperity to billions of people. But it has also created a culture of rising expectations. Can that go on forever and ever, world without end, amen? The simple answer seems to be, “Of course not,” but that unleashes a whole set of complex considerations. Who gets to live and where? Who prospers and who doesn’t? And here’s the biggie. Who decides? It should be intuitively obvious to the most casual observer that answering those questions isn’t going to be easy.

Unlimited Growth

There are those, like the members of the Club For Growth, who think any limits on capitalism are anathema. These Ayn Rand acolytes are unwavering champions of the “greed is good” mantra. There are even religious cults who preach that Jesus Himself wants us all to be rich and if we are not, it’s our own fault. It’s hard to imagine a more perverse interpretation of the New Testament than that.

In a recent edition of The Economist (subscription), the editors are quite happy to trumpet that the link between growth and emissions has been broken. For the first time in modern history, economic growth occurred in many countries while emissions actually declined.  What they miss, however, is that the decline in emissions was temporary. Carbon emissions roared back as the Covid pandemic waned. And even if there was some good news, it was a drop in the bucket compared to how far emissions have to decline in order to rein in how quickly the Earth is overheating.

COP 27 & Developing Countries

These issues were front and center at the COP 27 climate conference in Egypt last week. Writing in The Guardian, Larry Elliott argued that it is possible to stop the endless conveyor belt of rising expectations. In fact, we must do so if we want the Earth to continue to host the human family.

He says, “It is a mark of how successful rich western countries have been in lifting people out of poverty that developing countries are keen to have what we’ve had. If faster growth means cleaner drinking water, more children in school and fewer mothers dying in childbirth then the world’s poorer nations want more of it.

“But there’s an obvious problem. If developing countries are to have the same — or even remotely the same — standards of living as developed countries, that means a lot higher use of resources and additional pressure on the planet. It means an increase in energy use and the risk of an irreversible global climate crisis.

“Given the existential threat posed by global heating, the concept that growth is good is being seriously challenged by those who say policymakers should be aiming for zero growth or even degrowth economies, ones that are shrinking. Make no mistake, it is a good thing that the accepted wisdom is being questioned. The idea that faster growth is the solution to every problem is no longer tenable.”

Elliott goes on to discuss the obvious limit on growth — nutrition. If there isn’t enough food, people will die and that will put a hard limit on growth just as Thomas Malthus predicted. We see a harbinger of that future in Pakistan, where devastating floods have wiped out most of that country’s food production for this year and possibly for years to come.

John Stuart Mill warned that the “increase in wealth is not boundless.” His ideas paved the way for what became known as steady state economics, a concept championed by Herman Daly who put forth the idea that the constraints in the natural world would imposed limits on growth. In 1968, Robert Kennedy said that gross domestic product measured everything except the things that make life worthwhile.

Degrowth Will Be The Hardest Task Of All

Elliott says achieving a steady state economy or degrowth will be “hellishly difficult.” It means changing how we think about economic opportunity. Political parties compete with each other to promise voters the best growth strategy. Every announcement from governments and corporations touts the number of new jobs that will be created. When GDP is rising, that’s good news. When it is falling, that’s bad news. Countries are judged by how they rank with other nations when it comes to growth.

Recessions are a form of degrowth and they result in unemployment, bankruptcy, homelessness, and hardship. It is seldom mentioned, but the echoes of the economic devastation from the global economic crisis in 2008 are still influencing elections today. Lots of people were wiped out financially, while the rich got richer. That narrative plays an important role in the politics of grievance exemplified by JD Vance.

Recessions also mean politicians tend to double down on growth, Elliot says, because they are fearful of a backlash from voters if living standards are falling. Faced with the choice between higher use of fossil fuels or having the lights go out, governments have opted for the former.

Elliott claims the only way to make a steady state economy achievable is to harness an anti-poverty strategy to a pro-planet strategy. “It is just about possible to imagine western societies where — after some vigorous redistribution — everyone has the income, wealth and time to lead a good life. But even that’s not going to be enough. What’s needed is a global strategy that encourages poorer countries to meet their legitimate anti-poverty goals in a way that is least harmful to the environment.” Vigorous redistribution, as Elliott so blithely calls it, has led to any number of major and minor wars over the course of human history.

The UK could speed its progress towards being a net zero economy, he says, but unless that is accompanied by deep cuts in fossil fuel use by much bigger emitters of greenhouse gases — like China and India — there would have no discernible impact on rising global temperatures. “Western countries can and should  set an example with speedier transition to cleaner energy, but it is naive to imagine poorer countries are going to go for degrowth any time soon,” he says.

Clean Energy Is The Answer

The immediate priority should be to make developing country growth as clean as possible, Elliott suggests. Doing so will require an investment by the developed world of $2 trillion each year between now and 2030, according to a joint paper created by the UK and Egypt and presented at COP 27 last week. [The United States spent that much on its war on Afghanistan.]

Nicholas Stern, the climate economist who wrote a landmark 2006 review of the economics of climate change, was a lead author of the report. He said, “Rich countries should recognize that it is in their vital self interest, as well as a matter of justice given the severe impacts caused by their high levels of current and past emissions, to invest in climate action in emerging market and developing countries.

“Most of the growth in energy infrastructure and consumption projected to occur over the next decade will be in emerging market and developing countries and if they lock in dependence on fossil fuels and emissions the world will not be able to avoid dangerous climate change, damaging and destroying billions of lives and livelihoods in both rich and poor countries.”

This thinking became the basis of the “loss and damage” agreement that was one of the few bright spots in this year’s global climate summit. Talk is cheap, of course, and actions speak louder than words. With the US House of Representatives now controlled by reactionaries, the prospect of America making a significant contribution to any such fund is greatly diminished.

A New Marshall Plan

Elliott calls for a new version of the Marshall plan, the post-WW II program in which finance provided by governments and the international financial institutions acted as the catalyst for private investment. The consensus in Egypt last week was that the International Monetary Fund and the World Bank could be doing more to provide developing countries access to cheaper finance to fund climate mitigation and adaptation projects. Of course, the World Bank is how headed by an avowed climate denier, so don’t hold your breath.

Elliott’s supposedly hopeful message ends on a down note. “Failure to mobilize the necessary resources would be disastrous but, tragically, all too likely. Western governments are assuming that they have all the time in the world to make tweaks to their business as usual models. The brutal truth is that they don’t,” he writes.

The Takeaway

It takes a healthy dollop of optimism to see a way out of the mess humans have created here on our earthly home. Glaciers are melting, seas are rising, forests are burning, drought in California is paired with flooding in Pakistan. The Keeling Curve continues its upward climb, yet despite it all, fossil fuel shills were thick on the ground in Egypt last week preaching that oil, gas, and coal will be essential for decades to come. The next COP summit will be hosted by Dubai, a city-state that exist solely because of the blessings conferred by fossil fuels. Think big steps forward on emissions are gong to happen there? Don’t get your hopes up.

The cover of The Economist a few weeks ago had this headline: “Say Goodbye To 1.5º C.” We’re out of time folks. The fossil fuel folks have run out the clock to satisfy their own selfish interests, which has been their strategy for the past 40 years or more. Humanity will be the ultimate loser because of their relentless greed.

We can power human society with renewables — solar, wind, hydro, tidal, deep geothermal. Enough energy from the sun falls on the Earth every day to power our civilization for a year. It’s free; all we have to do is harvest it and distribute it equally to everyone who wants it. But will we? The answer to that is contained in a scene from the movie The Matrix which classifies humans not as mammals but as a virus, a plague. Based on the observable evidence, that diagnosis is correct.

Hope

We here at CleanTechnica strive to bring our readers news that is hopeful. The truth is, unless we change how we organize our societies, there is little reason to hope. We have been warned, over and over again, and yet we persist in making acquisitiveness the basis of our existence. It’s as if we believe that silly bumper sticker that says, “He who dies with the most toys wins.” That’s a lie. Those who die with the most friends are the winners.

We are going to need a lot of friends to survive the onrushing climate crisis. Some of those friends will be women, some will live in what some of our leaders blithely refer to as “shithole countries.” All of them working together will be needed to bring humanity through this crisis successfully. Ultimately, our survival is down to all of us learning to work together. That is our only hope.