Posted by Matthew Lockwood
In the second of two posts, Political Climate takes a critical look at an example of the new anti-growth literature, Growth Isn’t Possible: Why we need a new economic direction by Andrew Simms and Victoria Johnson at the New Economics Foundation.
Growth isn’t possible (GiP) does raise profoundly serious issues about the limits to economic growth and the need for urgent decarbonisation of energy systems. But part 1 argued that NEF’s approach is seriously weakened by the fudging of energy consumption and carbon emissions in the report, its thin understanding economic growth and its dismissal of innovation.
A third weakness about GiP is its narrative about economists. The authors seem almost compelled, like Tourette’s Syndrome sufferers, to make constant jibes about the profession, beginning with the pronouncement that: “for decades, it has been a heresy punishable by career suicide for economists to question orthodox growth”. This kind of silly hyperbole could be ignored if GiP had a consistent and interesting critique, but what makes it almost surreal is that, having slagged off economics on one page, the authors go on, literally on the next, to cite various economists approvingly and apparently without irony, including Kuznets, Jevons and the work of Steven Sorrell from Sussex University on the rebound effect.
What is ironic is that Andrew Simms, one of GiP’s co-authors, has also appeared recently on a list of economists who wrote a letter to the Observer arguing against premature cuts in public spending because these would prevent recovery in – you guessed it – Britain’s economic growth…
But the ultimate irony is that, in reality, many economists at the very core of the discipline also worry a lot about the sustainability of growth and about ecological limits. Such a worry lies at the heart of the Stern Review, written by an economist who has had both successful academic and public service careers. Martin Weitzman of Harvard and the other “fat tailers” argue that we should be thinking seriously about the not insignificant possibility of a major climate catastrophe. Dieter Helm at Oxford thinks the situation is “very grim” and believes we need a sharp downward adjustment in consumption before growth can resume. Partha Dasgupta at Cambridge University has given over much of his professional life to analysing sustainability and critiquing the use of GDP as a measure of economic success. None of this seems of much interest to the authors of GiP, but that is a huge mistake, since these are rigorous thinkers who produce important and useful tools for bringing economics and ecology together.
The final weakness in GiP is in some ways the biggest – it’s the politics, stupid. The NEF authors say another of their reports – The Great Transition – demonstrates that even with declining GDP, it is possible to see “rises in social and environmental value”. The problem is that, outside of the ranks of committed greens, no-one really believes this, and there is no even vaguely convincing intellectual and political case made here.
There is no serious attempt to engage with the political difficulties that changing carbon intensive consumerism presents. There is no credible vision of an alternative, no analysis of the groups that would be for and against such an alternative, and no practical programme for how to find allies, build support and neutralise opponents. There is also no recognition that economic growth has produced the middle classes who provide the constituency for environmentalism.
The reason why these absences matter so much is that the alternative economic model offered in GiP is so radically different from the status quo. In the final section on the alternative to growth, the NEF authors draw heavily on Herman Daly’s notion of a “steady state economy”, but it is hard to see how a capitalist economy can be in a steady state. Capitalist economies cycle between growth and recession, sometimes very deep recessions. Financial and other asset markets are prone to bubbles and crashes, as we have recently seen. In current real-world politics, no growth means pain – rising unemployment, people losing their homes, businesses closing, cuts in public services. It’s not surprising that politicians aren’t queuing up to explore a no-growth platform.
The implication is that the serene steady state economy is a radical departure from capitalism. In a sense it would have to be, because the productivity growth at the heart of capitalism would otherwise mean inexorably rising unemployment. Indeed at points it seems as if GiP is endorsing a reversal of the Industrial Revolution, approvingly quoting Daly’s description of a steady state economy leading to “the substitution of labor for energy in production processes and consumption patterns, thus reversing the historical trend of replacing labour with machines…”
This seems so much of a political dead end, one cannot help but think that GiP is not really about a taking the opportunity of the climate crisis to produce a coherent reformulation of the environmentalist critique of growth to win over a wider audience, but is rather preaching to the converted, safely inside its green comfort zone.
The last sentence of GiP reads: “Unending global economic growth, it would seem therefore is not possible, but also neither desirable nor necessary. If you have any doubts, ask a hamster”.
It’s awfully tempting to end here by observing that one might get more sense out of a hamster. But perhaps a more useful last thought is that GiP should stand as a warning to the environmental movement against indulging in old pleasures. Our current ecological challenge is a lot more profound than those of previous eras, but instead of rising to that challenge, this particular updating of the green anti-growth case slides back into the comfort of an escapist anti-modernism.
It is beyond question that we need a new economic direction, but this ain’t it.
andrewpendleton
chilesl
Matthew Lockwood
Political Climate 
It would be easier to believe Matthew Lockwood’s call ‘rigorous reflection’ if he could restrain his tendency for the kind of invective more usually found in the blogs of right-wing spittle mongers. If we are indeed as ‘smug’ and ‘illiterate’ as Matthew suggests, it’s strange that, even if blinded by his keyboard rage, he comes to the same conclusion that we do, namely that: ‘the real, and serious problem facing us is how to decarbonise energy.’ What his critique fails to do, sadly, is offer any kind of constructive answer to the basic question we asked: under what conditions can perpetual growth and a safe global atmospheric concentration of greenhouse gases be reconciled? In other words, what rate of reduction of carbon intensity would be needed over what period of time? And, for that matter, given other natural resource boundaries, what rate of more general de-commodification? Having asked the question, we answered with the best estimate we could, given the resources available to us. Perhaps it would be more constructive for Matthew to give us his answer to this inescapable quandary, rather than gamely wandering vitriol, if limitless growth is to be defended as an available option.
Matthew complains that there is only one page on nuclear power in our paper. Well, that’s because we had previously written a long report focused almost entirely on the weaknesses of the nuclear case. And, anyway, as everybody knows, length isn’t everything. He complains that our comments on Carbon Capture and Storage (CCS) are out of date, which is odd, because there was a paper in the journal Nature published last week that said pretty much exactly what we did. Namely, CCS is expensive, happening very slowly, and no one knows if it will work on a meaningful scale. Matthew argues that there is an inconsistency in having argued on one hand for a system that will exist ultimately in dynamic equilibrium with the biosphere (so-called ‘steady state) and supporting a green new deal programme of investment on the other. This is the point at which his seemingly intense personal dislike of us/our work prevents him from seeing that our arguments are more similar than he finds comfortable. A green new deal programme of investment is essential precisely to shift our ossified infrastructure through investment and innovation, to decarbonise it and create systems that are as close as possible to enabling us to live within our environmental budgets. It is a necessary transition, not a contradiction. More strangely, Matthew alleges that we are not interested in economic critiques of growth, or work by ‘thinkers who produce important and useful tools for bringing economics and ecology together.’ This is odd, very odd. Substantial parts of our report and numerous references do just that, and put them into historical context. We also reference many of our other works that constructively and creatively explore alternatives to the growth economy. For example, we cite our other recent work, The Great Transition, which employs tools to bring ‘economics and ecology together,’ in such a way that social and environmental value can increase while overall GDP falls. It may be an effective debating technique to set up and then attack ‘straw arguments’, but it’s not a reliable path to enlightenment. There are other significant inconsistencies in Matthew’s assessment that could be explored, but if anyone has read this far, we doubt very much that they would want to read much further. Let’s be clear, we genuinely welcome debate. We wrote this report because we thought the debate on the economics of climate change had a huge gap. Even since the Stern review was published, no one seemed to want to ask or answer a basic question, how much growth can we get away with, and at what rate of falling carbon intensity, while avoiding dangerous climate change? If we can’t get away with it – and our best estimate suggests we cant – what is the alternative? Finding and exploring such answers means a lot of people working together in an open and constructive way. It requires a spirit of collaboration that is not helped by highly personal and intemperate assaults. Perhaps, what Matthew’s two-part article reveals, is not the limits to environmentalism, but the limits to blogging.
We are trying to stimulate debate (which seems to have succeeded!) about how to decarbonise the global economy.
I wrote the posts because I disagree strongly with your argument that people who wish to do this should be following the route you have set out – calling for an end to economic growth and a transition to what remains an abstract idea of a steady state economy.
I am sorry that you have taken the criticism of GiP personally. The comments in the posts were intended as a challenge to a broader constituency, and the points raised were substantial. Indeed, we took your report seriously enough to read it thoroughly and respond in detail.
The two core concerns remain the same:
– it will not be possible to decarbonise developed economies by 2050 or earlier through an end to economic growth; rather, relying on this route would require an economic collapse on a far greater scale than anything seen in the last century – you’ll be aware that Kevin Anderson argues this, for example. The only other option open to us is really radical action on technology. That it why I think it is disappointing that GiP has such a dismissive approach to low carbon technology in general.
– with limited time, a successful strategy for mitigating climate change desparately needs a compelling political story that wins over a broad public. I suspect that things are going to get worse on this front in Britain over the next few years, not better. You must be aware that “no growth” (or major economic collapse) is not a promising start for most people.
Finding answers to difficult questions does mean working together in a constructive way, but I believe it also sometimes means robust debate.
It seems to me that Mr. Lockwood has overlooked two of the major points of the GiP report, that make me personally very skeptic about the possibility of decarbonization through technological innovation:
1- Economies grow exponentially. Innovation would thus need to grow exponentially as well to keep up. As far as I know, we usually observe the opposite phenomenon, i.e. technical innovation for a given process follows a decreasing return curve, as the limits of physical efficiency are approached. The same thing goes for product substitution: there are limits to it, and some products just have no sustitute.
2- The rebound effect (pp. 36-38 of the report), according to which an increase in the energy efficiency of a process of production means its end product will be cheaper (as its energy inputs will be less), thereby increasing demand for it. Thus, increasing the energy efficiency efficiency of production can actually result in more environmentally detrimental effects following increased demand, and not less. How this plays out varies according to each process considered, but it is the overall effect that needs to be considered.
Another application of the rebound effect is that the reduction of the cost of energy inputs of a process frees capital. That capital will be invested elsewhere, in other production activities that will bring more growth, thus effectively possibly negating the reduction in raw material consumption, and emissions and waste production generated by the improved energy efficiency. On this basis, I would argue that decarbonization on a global scale is not possible without putting a stop to growth itself.
Another comment about Matthew’s post: I think that to only focus on climate change and CO2 emissions draws the attention away from the integrated character of the biosphere and the effects of economic growth on it as a whole. Besides climate change, many other biospheric processes are affected by growth, including biodiversity loss, disruption of the nitrogen cycle, chemical pollution, etc. As they all have the same ultimate cause, it could be I think more productive to address them as a whole than piecemeal (although I agree that this might be a bit idealistic given the existing political constraints – i.e. the impossibility for most politicians and policy-makers to question the necessity of economic growth. I must however point out that one or two elected deputies in France explicitely defend a “de-growth” plaform).
In response to Maya Forstaler’s comment (part 1 of the post):
“I wonder whether it is not time for a more clear distinction in the ‘green and progressive movement’ between the localisers and degrowthers, and those who can imagine a bright green future.
Is that what you are seeing?”
I definitely see a division in the green movement, and I believe on the basis of my above argument that we need to go the radical way and ask the radical questions about the limits to economic growth. Matthew says that: “In current real-world politics, no growth means pain – rising unemployment, people losing their homes, businesses closing, cuts in public services.” This might be the case for people who live in the towns of rich, core countries. But for those who live off the land or the sea, and those who live in peripheral countries, it is uncontrolled growth that means pain and loss of livelihood. The examples are countless.
As Matthew rightly points out, a steady-state economy cannot, indeed, take the form of a capitalist economy. But it is the only bright and green future I can possibly see.
The writers here on this topic should pay some attention to the genuine climate science debate raging outside their confiend minds. The climate issue is not what the environmentalists, and assorted vested interests (especially research lobbies) have turned it into. Ideology and vested interests prevail, not knowledge. This is far too limited and uncertain for the many assertations about environmental degradation and dangerous climate change, that are being made as ‘fact’.
The degree of environmental change empirically observed is disputed and related to how far back in time we trace any change, and much remains speculation or wishful thinking. The degree and nature of the human influence on climate also remains seriously debated, at least outside the green lobby, assorted government departments and hedge funds devoted to giving ‘carbon’ (!) a price, then trading or burying it.
Frankly I think the UK has gone mad over ‘decarbonisation, and the NEF is one of the villains. Its thinkers have little sense of scale, little knowledge of teh natural sciences and even seem to lack a sense of history. Do they have any sense of responsibiluty to what the impacts of their scaremongering and negativity might be on the next generation. The new puritans or worse? I rely on future generations to solve problems as the arise. The climate and our environments, have changed greatly even since the last ice age and in many ways humanity has improved the biosphere. I look forward to well managed growth, and above all, to a greater sharing of the ability to grow and live prosperous lives.
In reply to Sonja:
“The climate and our environments, have changed greatly even since the last ice age”
Actually, the global environment has been remarkably stable since the last ice age (the last 10-12 thousand years). This is what allowed humans to develop agriculture, on which all large-scale civilizations, including ours, have been founded since then. Now, since about 1850, environmental indicators, including but not limited to climate/global temperature, have changed so drastically that many researchers started talking about a new geological era into which we would have entered. They call it the “anthropocene”, by reference to human beings as the most powerful force acting on the global environmental conditions. There is growing scientific litterature on the topic, if you are ever interested.
I would have thought that 120m rise in sea levels since the middle of the last ice age was a significant environmental change (http://en.wikipedia.org/wiki/Current_sea_level_rise).
I know that’s 18,000 years ago, so I’m extending the range by 50-80%, but as far as I can tell, 10-12,000 years ago, the levels were moving very quickly so it’s hard to pin a comparative level on them.
fwiw, 120m over 18k years is about 2/3 of a cm per annum on average, which is comparable to the scarier rates of sea level rise currently seen, I think.
Wishing to be even handed, I would not want to let this comment go unanswered. It is clear that climate science involves uncertainties and that our understanding of the future is model based. But currently the hypothesis of anthropogenic climate change comfortably stands any Popperian test – it has experienced no major falsification, and has no serious rival. ‘Climate sceptics’ who are npot actually climate scientists themselvs are rarely not scientfically motivated, and their scepicism is a kind of fantasy retreat from the very likely harsh reality. Understandable, but not very useful. I believe that the debate that is currently “raging” is far less important than many people think. Polling suggests that the accrual of evidence about climate chnage in teh 2000s, the Stern review, Al Gore etc., all had no long term impact on the prioritisation that the vast majority of people give to climate change politically. I doubt whether a minor storm about the IPCC or some UEA academics will have much effect the other way.
Dear Sonja,
As far as I can tell, the only negatives is de- before growth …
All the rest is positive, almost utopian, dreams of Justice and human rediscovery.
As jps rightly points out, climate change is the tip, and enlightened people warned us of the iceberg many years ago. If we are not capable of solving our problems, it sound a bit naive hoping in future generations. And we are plenty of problems long before getting to carbon.
Do not be scared, open your eyes and keep sharing! 🙂
Also, if we can have “rises in social and environmental value”, and we can quantify their value, and they are a good substitute for income, wouldn’t that be a bit like…economic growth?
This is not a trivial point. It’s a fairly conventional point that the social wage – things like the NHS, education, justice, public amenities – contributes to our standard of living, or if it was to become negative, detracts from it.
Consider two societies, A and B. A and B have identical patterns of private consumption of goods. A, however, has succeeded in protecting its natural environment and its public sphere to a greater extent than B. In what way is A not richer than B? If the citizens of A aren’t working as many hours as those of B, what can this possibly mean other than that they achieve higher productivity per man hour and per unit of land resources?
The problem here is not so much growth as what, precisely, is growing – this is the problem with the hamster. If the hamster was accumulating knowledge rather than waistline, nobody would think this a problem…until the intelligent hamsters attacked our cities!
“Even since the Stern review was published, no one seemed to want to ask or answer a basic question, how much growth can we get away with, and at what rate of falling carbon intensity, while avoiding dangerous climate change?”
Umm, you’re obviously not reading the literature. That question is answered in the SRES, the set of economic models which underpin the entire IPCC process.
Look at the A1 family. That envisages 11x economic growth this century. To a $550 trillion annual global economy. Look at A1T, the scenario within this family that has the lowest emissions path. The cumulative emissions from A1T do not lead to more than 2 oC raising of temperature.
Thus your question was answered several years before Stern.
How we get to A1T is largely as Matthew describes. Invest in low and zero carbon energy systems.