Posted by Matthew Lockwood
Environmentalists have always had a problem with economic growth. In the crisis ridden 1970s, the narrative was about the Limits to Growth set by natural resources. In 1980, ecologist Paul Ehrlich made (and lost) a bet with economist Julian Simon that supplies of a number of different metals used in industry would run out and their prices would skyrocket.
There are now similar strands of thought in the peak oil movement. However, this time round the green critique of growth looks a bit more compelling, partly because of the step change in pressure on biodiversity, but of course most of all because of climate change. We all know that carbon emissions are at one level driven by economic growth. Human development is currently abutting a range of biological limits not least the atmosphere’s carbon carrying capacity, which is seriously overstretched. So maybe this time the environmentalists really are right.
Certainly the New Economics Foundation thinks so. A few weeks ago it published a report not so subtly titled Growth isn’t Possible: Why we need a new economic direction. One of its authors, Andrew Simms, who is head of policy at NEF, has also been speaking at the LSE recently.
Growth isn’t Possible (henceforth GiP) sets out to demonstrate that “indefinite global economic growth is unsustainable”; that “economic growth is constrained by the finite nature of our planet’s natural resources (biocapacity)”. The underlying problem it raises is a serious one – economic growth, energy use and carbon emissions are currently pretty closely linked, and unmitigated climate change is likely to make life very difficult for humanity sooner or later, to the point where there may not be much economy left.
But GiP is a good example of how the prejudices of and limits to environmentalist thinking can stand in the way of the search for genuine solutions to this problem. Sadly, it opts for easy, self-indulgent posturing over rigorous reflection.
There are a whole bunch of minor irritations in the report – it’s supposed to be about the ecological limits to growth, but soon veers off into points about growth being undesirable because it doesn’t increase happiness, and dysfunctional because it doesn’t eradicate poverty; it’s economically illiterate (for example, reproducing the lump of labour fallacy); and it’s tone is pretty smug.
But its real weakness is that at several points, it fails to engage with the nature of the problem we face.
The first failure is a lack of clarity about the distinction between energy consumption and carbon emissions as drivers of ecological limits. The argument jumps back and forth between the two, and sometimes conflates them (“can effectively be viewed as roughly analogous”). This matters a great deal, since in terms of what we can do about climate change, energy and carbon are actually very different. Although containing energy consumption through increased energy efficiency may help contain carbon emissions, there are limits to this process (that’s one of the points of the paper, one would have thought). But energy is not in itself a big ecological constraint on economic growth. The amount of direct solar energy reaching the surface of the planet (leaving aside wind and other renewables) is so vast that in one year it is about twice as much as will ever be obtained from all of the Earth’s non-renewable resources of coal, oil, natural gas, and mined uranium combined. The key problem is decarbonising energy.
A second failure is that this report, which is purportedly all about economic growth, seems to have a very thin understanding of why economies grow. For NEF, economic growth is somehow caused by the planning of government expenditure, “legal obligations on public listed companies to grow” (must have been a lot of companies breaking the law recently!), and the existence of interest-bearing credit. This rather bizarre list includes none of the factors that are more usually seen in analyses of growth, such as investment, education, the quality of institutions, and above all, innovation and increases in productivity.
GiP’s neglect of innovation probably also explains NEF’s choice of analogy for the global economy – a hamster that grows to an impossible size and destroys the world it was born into. Mildly amusing, but not enough to distract one from the fact that analogies are supposed to lead to new insights, and that this one is hopelessly meaningless.
The most powerful analogy for the modern economy is the process of evolution – an algorithm for experimentation, selection and replication that has produced vast diversity. Thus while capitalism is destructive, and certainly does threaten to destroy the habitability of the planet for us, it is also extremely creative. That creativity, that inventiveness, offers pretty much the only prospect for decarbonising energy that we have, in the form of innovative low carbon technologies. However, economies evolve in a fitness landscape that is ultimately set by human societies, and at the moment, the global economy is evolving for a high carbon landscape. We need to change the terms on which the economy evolves, not destroy the algorthim.
GiP is dismissive of low carbon technologies. Some of this is incredibly flimsy. Nuclear power gets a single page and a passing reference to a book by David Fleming. You may or may not be a fan of nuclear, but surely it deserves better than this. The material on carbon capture is considerably out of date. Renewable energy is seen as too little, too late.
In all of this, paradoxically for a supposedly radical organisation like NEF, the thinking is surprisingly conservative. Energy efficiency has historically improved only at a certain rate per year, so it will continue to do so in future. Energy infrastructure conventionally has a really long life, and replacement can’t be speeded up because it hasn’t been in the past. Existing technologies are the only ones we’ll ever have, new technology will never work.
The idea that we are only just beginning to transform our energy technologies, and that we already have some movement in costs and some interesting new technological options, seems to be completely alien to GiP. This dismissal of innovation, and an assumption that energy systems simply cannot be decarbonised speedily, is central to GiP, and leads to the tautological conclusion that only an end to economic growth can provide an ecologically sustainable future.
Except that it can’t. Because even if economic growth were to stop, you would still need to deploy low- and zero-carbon technologies, rapidly and at large scale if you want to get on a sustainable emissions trajectory.
This can be seen in GiP’s own rather obscure modelling (based on some re-hashing of World Energy Outlook scenarios) of carbon emissions out to 2050. Figure 14 on page 67 of the report shows that to achieve a target peak CO2 concentration of less than 400 ppm on a no-growth scenario will require significant decarbonisation. More intuitively, since global energy systems are already highly carbon intensive (think of all that coal-fired power generation in the US, China and Europe), even if growth stopped tomorrow, we’d still have to undertake a massive transformation to get emissions on a sustainable trajectory.
To repeat, the real, and serious problem facing us is how to decarbonise energy, which will only come from an unprecedented application of innovation and an equally unprecedented, rapid and undoubtedly costly speeding up of the replacement of capital in the energy sector. The only other possibility is not “no growth” but a serious shrinking in the global economy.
In Part 2, coming soon, we argue that GiP hasn’t moved on from the familiar but self-defeating attitudes to economics and politics that plagued much of the environmentalist movement in the past.
andrewpendleton
chilesl
Matthew Lockwood
Political Climate 
Pingback: uberVU - social comments
I agree on your critique of the growth isn’t possible analysis. It is conservative and parochial, and is fundamentally looking in the wrong place.
The reality is that it isn’t future growth that is unsustainable, but the current situation – both in terms heavy environmental footprint of the prosperous, and the continued exclusion of so many from prosperity.
Calling ‘freeze’ at this point is makes no sense, either politically or economically, when what we need is a revolution in carbon productivity.
I can’t imagine the government that could stay in power on a policy platform of economic stagnation, austerity, unemployment and massively increased aid that this would entail (ok, I can imagine it – its not going to be a democracy).
And as you say, viewing growth only as the rising gradient of a single graph (the ever expanding hamster) ignores the whole question of what drives growth – knowledge, innovation and the creative destruction of evolution in the economy. What we need now, more than ever is to accelerate these processes, to dramatically increase the productivity of our use of finite biosphere resources and expand prosperity, while keeping within environmental limits.
Given the obvious flaws in the GIP argument as you’ve pointed out, I half suspect it is a campaigning tactic, rather than a serious proposal, but I think it is a nightmare of a tactic.
It is mistake and a trap to bracket GIP as representing the consensus of ‘environmental thinking’. This, I think, is real danger – prospects for securing broad support for the ‘green’ argument that “current patterns of development are unsustainable, we need to switch to clean technologies, and this is an economic opportunity” are undermined by the green argument that “we need to switch to clean technologies, and put a stop to growth”. It is only a small step from there to “policies and regulations to drive transition to clean technologies and renewable energy are going to hurt the economy”…. and you know how that story will end.
Not really wanting to get into a ‘People’s Front of Judea’ situation, but 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?
Pingback: The limits of environmentalism – Part 2 « 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.
It seems that a large part of the exchange between Matthew and Victoria hinges on an empirical point; can economies decarbonise at a rate sufficient to avoid dangerous climate change and simultaneously support growth? The obvious questions are therefore i) what rates of decarbonisation would be necessary and ii) what are the historic precedents or types of economic governance that have or might deliver these. I think both bear out NEF’s conclusions.
I don’t wish to stray into discussions of what constitutes dangerous climate change – a neutral scientific “answer” to this is not possible – but there are analyses that link cumulative carbon budgets with likelihoods of avoiding irreversible physical changes to the climate system. If we combine these emissions budgets with historic emissions records and likely trajectories we gain a sense of the necessary rates of decarbonisation. Such work from Kevin Anderson and Alice Bows at Tyndall Manchester shows just how challenging the maintenance of economic growth will be.
It matters a great deal when global emissions peak, if this is not until 2025 then restricting warming to 2 degrees is all but impossible under coherent scenarios. Even if there is strong and immediate action, and global emissions peak in 2015, then CO2 emissions from energy and industry must fall at a rate of 6.5% p.a., from that date to total decarbonisation, if we are to leave atmospheric space for a productive agricultural system.
However responsibility for reductions is divided between rich and poor this would be a staggering feat and leads us to look at historical precedents for the decoupling of economic development and real total emissions (much as Douglas Alexander would like it to, off shore production and off balance sheet accounting won’t help us here). Stern identified France’s 40-fold increase in nuclear capacity in just 25 years and the UK’s ‘dash for gas’ in the 1990s with annual CO2 and greenhouse gas emission reductions of just 1 per cent, concluding that anything higher has ‘been associated only with economic recession or upheaval’. And even recession won’t solve the problem if we rely on capped emissions trading as our central mode of climate governance.
There is no doubt that we are locked-in to a variety of high-emission infrastructure and social practices (suburbs, commuting, oil production, pension funds, etc…) but this is not to say that the future will be the same as the past. Maybe creative-disruption can deliver decarbonisation the like of which we have not seen? But I still struggle to articulate high consumption, low carbon lifestyles that we might all grow into. Quickly. Very quickly.
Pingback: From Poverty to Power by Duncan Green » Blog Archive » Gonzalo’s blogging; Labour rights in China; insider stupidity; we’re all doomed; precision v knowledge; hamster economics; hope in Haiti and putting the UN to music: links I li
“We need to change the terms on which the economy evolves, not destroy the algorthim”
I am not familiar with math (nor Matthew) but if you change the terms of the algorithm, you should have a new algorithm, you should have destroyed the (previous) algorithm … just what we need to seriously address sustainability.
The persistent, blind faith in infinite innovation echoed in Maya’s comment is mind-boggling. I could understand that E.F. Schumacher had to deal with this kind of resistance … but it was 1973!! Wake-up dudes!
Pingback: Another green world….. « Political Climate
Well done to NEF for their work in stimulating discussion on this central issue. Tackling the current convergence of issues requires more than a focus on just decarbonising the economy. Climate change is indeed a critical threat which must be addressed immediately, but is is of course just one symptom of a unsustainable system. IF we step back for one instant and consider the basics – we are polluting the planet faster than it can absorb and process the pollutants, we are destroying natural capital faster than it can be replenished, and in doing so exacerbating the planets capacity to deal with pollution and respond to other pressures, and lastly we are still expecting another 2-3 billion folks to arrive over the coming 3-4 decades. The Limits to Growth modeling has proven to be remarkably accurate. Even if we maintained current population levels and stabilized material throughout at current levels, the system is still expected to collapse sometime this century. So any economic system that is going to move us back to a point of sustainability ( whilst accommodating the extra population growth which is coming to some significant degree no matter what we do) has to have as it core focus a shift in values away from generating artificial wealth to generating real wealth as expressed by the restoration of community and environment. These are the parameters that we need to grow. This requires we move to a system that is based upon the real economy – i.e. the transactions that occur around us every day that make life possible and meaningful, but are not factored into the current economic system. A version of the current economy that helps decarbonise society will help reduce the threat of climate chaos, but will not deal with other major threats related to overuse of resources, inequity, and other pollutants. Given how hard it is to even have this discussion with most people, the chances of us shifting to any meaningful system in time are pretty damn slim to put it optimistically – but try we must.
Pingback: Unions and environmentalism – uneasy bedfellows? | ToUChstone blog: A public policy blog from the TUC
Pingback: A New Response to Climate Change « Political Climate
Your site is definitely a breath of fresh air in comparison to the typical rubbish I read on solar panel technology. So many scams out there. Thank you for helping me out.
Pingback: ¿Decrecimiento, o disminución de la productividad? « Las Danaides
Pingback: The limits to environmentalism – Part 3 | Political Climate
A good article but your claim that “capitalism is destructive, and certainly does threaten to destroy the habitability of the planet for us” if not wrong is highly debateable. The worst environmental destructions occurred under regimes were those centrally controlled (communist, military dictatorships and fascist) ie non-capitalist. However it is people that are destructive not regimes and the beauty of capitalism is that it encourages the efficient use of resources and hence LESS destruction. The underlying reason is however property rights namely the protection thereof. Fundamentally the lack of clearly defined and protected property rights is why the above regimes were so destructive.
The Australian Prime Minister, Julia Gillard, made a speech last night in which she pointed out that the Green Party — in Australia, at least — does not understand or accept the need for maintaining and increasing prosperity. This was remarkably brave for someone who needs Green votes to remain in power, but unquestionably true. Responses like those made above confirm just how right she was.