Growth and Climate Change … Again

I responded to a piece by Viki Johnson of New Economic Foundation on the China Dialogue website. This is a re-post of my response, which you can also read here:

Yesterday, as part of chinadialogue’s series on well-being economics, Viki Johnson of the new economics foundation argued that endless economic growth is neither possible nor necessary. Here Andrew Pendleton, associate director of the Institute for Public Policy Research (ippr), responds.

There are plenty of profound analyses of growth and enough soul- and brain-searching among economists concerned that growth alone is an inadequate measure of a nation’s prosperity. But Viki Johnson is wrong to argue that growth “is not only impossible, it is also neither desirable nor necessary.” Indeed, as we seek to deal with climate change, growth is possible, necessary and desirable.

Natural resources are finite in the absolute sense, but we must unpick the relationship between each of these and economic growth one-by-one rather than rely on a blanket assumption that we can no longer grow economies because certain resources are in short supply. Climate change, however, is not caused by resource constraint but rather by shifting carbon from one natural sink to another. There is still enough fossilised carbon in in the ground to cause major climatic shifts if burned, regardless of when oil, gas and coal reserves will be exhausted.

Similarly the sun – which is either primarily or secondarily the source of all renewable energy – is limitless in terms of our ability to exploit it. The challenge of tackling climate change, though fraught with complex politics and systemic and technological challenges, is at heart simply a matter of decarbonising energy systems. Energy is of course material to economic growth, but there is no reason why growth can’t be decoupled from emissions by a shift to apparently limitless clean energy.

And herein lies the most important and significant reason why the de-growth prescription is precisely the opposite of what is needed for a successful climate change cure. The recent global recession — a primary example of what happens when economies stop growing — illuminates this.

In order to make the transition from incumbent dirty technologies to new, clean technologies, we need high levels of investment. And yet during the 2008 recession, investment in many countries collapsed. In the United States, for instance, by the beginning of 2009 private sector investment in new plant and equipment was below 2005 levels. So while recession no doubt also produced an interruption in the growth of greenhouse-gas emissions, the economics of recession meant that less was done to mitigate future emissions. Unless you believe that climate change can be tackled without new technologies, this is clearly a bad thing.

In the political economy, the need for growth is just as keenly felt. The US recession produced levels of unemployment in excess of 10% and the Democrat government has struggled to reduce this quickly enough to avoid heavy losses in mid-term elections; if climate legislation was difficult in Obama’s first few months in power, it is nigh-on impossible now and recession is no doubt in part to blame for this.

In other words, recession in our existing economies equates strongly with human misery and entrenched, outmoded industrial practices. Growth shouldn’t be the only game in town; it’s a measure of success and not — as Johnson says — an end in itself. Inequality and how the proceeds of growth are better shared is an important debate too. But without it, our chances of investing in a cleaner, more sustainable future, avoiding dangerous climate change and raising living standards are scant indeed.

Perhaps there is another, growth-free way, but it is not at all clear from the emerging cabal of de-growthers what this would look like and how we would get from where we are now to wherever that is.

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15 Comments

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15 responses to “Growth and Climate Change … Again

  1. This article hits the right buttons. Whilst one might urge caution on growth which causes non-climate change related ill effects – and there are a great many of them – economic growth per se is not the problem in energy terms. If we wished, we could provide for most of the world’s electricity demand and a sizeable fraction of its gas demand using renewable technologies. If some people are unhappy with the term ‘renewable energy’ we could just as easily talk of harvested fusion energy, another name for solar, for example. But it is really just a question of political choice, since even during the recession global military expenditures have continued their inexorable growth. Too few politicians are willing to introduce the correct levels of investment in renewables – but they love talking about it!

  2. Roy Tindle

    “Natural resources are finite in the absolute sense.” Absolute sense as opposed to what?

    Unfortunately, alchemists failed to translate ‘base’ metals into gold or, indeed, in to any other metal. The hydrocarbons in crude oil can be chemically ‘transmuted’ and other sources can be found for their production but when the exploitable reserves of copper are gone then they may not so easily be replaced. Some observers are suggesting that we have 25 more years before the copper ores run out. Take another metal, said to as common in occurrence as copper, neodymium. this is becoming an essential component of the magnets used in electricity generation and in motors, specially in electric cars.

    One could go on. Of course there are greater reserves of many elements in the Earth’s oceans and others deeper below the Earth’s surface. In the case of the former, the simple cost of extraction and the ecological burden of so doing renders the concept impractical. With the latter, we are reliant on geological processes to recycle the Earth’s crust – and the geological timescale in which this takes place.

    A common response to this notion of resource depletion is to claim that science will find something new. The appropriate reply to this is to suggest less concentration on Harry Potter and more acceptance of reality.

    It’s not just that we are very rapidly using up many of the exploitable mineral reserves, it’s also that growth causes that process to speed up. The developing world, too, wants their share of resources and the goods into which they are made. Thus the speed of depletion grows and grows exponentially.

    I’ve never been able to understand what prevents so many economists from understanding the difference between two simple but basic mathematical concepts, infinite and finite. Even solar energy is finite but the end of that is likely to be measured in billions of years whereas some essential minerals will last only decades. Recycling? Well, yes, if we had started a century ago. Unfortunately we have mined elements that have been concentrated over geological periods and then dispersed them.

    Just take a look at the Earth as seen from the Moon: the Earth is finite, when it’s gone, it’s gone and we wont be building the machinery to harvest solar or gravitational energy. We won’t have the copper, neodymium and a whole host of other elements left to build anything.

    Anyone for evening classes in flint knapping?

  3. Pingback: From Poverty to Power by Duncan Green » Blog Archive » How to use research for influence on climate change and Arab meltdown; why aid donors are losing the plot; green growth v degrowth; Darth Vader on youtube: links I liked

  4. CD

    This article is far too simplistic from every possible standpoint. For one thing, the causal relationship between a recession and lack of growth is far from clear. If it were, economists would be able to predict recessions better. Clearly something is lacking. Second, you are making the case that the solution to climate change is to make growth a priority? Has it escaped your notice that it is this very obsession with growth that created this problem? Your suggestion then: Let’s delink growth from exploitation of limited resources and have it depend on the practically unlimited resources like solar power. This is where, I strongly encourage you to read “Without the hot air” by David MacKay, where he’s explicitly/ concisely demonstrated that ALL of the renewables put together are NOT nearly enough to meet the needs of a typical european nation (leave along the USA, where per capita consumption is double european levels). If growth is made a priority, for one thing, every desert has to be lined up with solar panels (good luck having countries with deserts “loan” solar energy to the others where Growth/”one-up-country-ship” is made a priority) AND we’d need to invest in nuclear energy on a massive scale. And then there’s the danger of uranium reserves running out in a matter of decades. What then? How do we sustain this growth?

    I strongly encourage you to check on basic facts before you draw conclusions of this nature.

    • andrewpendleton

      Hello.

      I’m actually focussing more on investment, which is a component of GDP growth; Investment is necessary in order for climate change to be effectively mitigated but, unless the Keynsians win out and government steps in, tends to fall during recessions. In recent boom years in the UK and other developed economies, consumption has been high (largely because of globalisation) and investment levels relatively low, so a more balanced economy, with investment focussed on increased climate-friendly production could serve two goals at once.

      Sorry if this is all too simplistic and not fact-based enough.

    • Roy Tindle

      Unfortunately David MacKay’s work has been discounted by a majority of energy physicists: energy physics is not MacKay’s discipline. Look at the work of Czisch at Kassel University, Barratt at UCL and Jacobson at Stanford and Delucchi at California, Davis. These have demonstrated the possibility of meeting the world’s total energy needs without the need for fossil fuels or nuclear- were the political will there.

      Jacobson & Delucchi published an earlier paper in Scientific American that can be freely downloaded at:
      http://www.stanford.edu/group/efmh/jacobson/Articles/I/sad1109Jaco5p.indd.pdf

      Their later paper was published in Energy Policy which is subscription only, regrettably. So, CD, you are absolutely correct: it is good to check on all the basic facts, first, before drawing conclusions!

      • CD

        Roy: Most articles that purpote to solve the energy issues for the next few decades are just that: A solution for the next few decades. However, *even* if we could gather the will to sovle the problem for now, so long as growth remains a priority, our thirst for energy will only increase. Solar energy may be extensive, however silicon is not. (Although there have been partial attempts beyond). Conversion efficiencies are limited theoretically at 40% due to *physical* laws and lab efficiencies barely touch 20%, with most commercial soalr panels maxing out at 10%. With the largest consumers of energy being the northern countries receiving low average sun-shine, we have a huge problem. Certainly, I am glad for the people you cited. I will make sure to read that link you’v posted asap, however, I also wonder who exactly you mean when you say a “majority” of physicists have debunked MacKay’s book. Could you give me names or references, please? Please substantiate your claims. And while we’re on the topic, have you actually read the book and his technical chapters yourself? Could you please point out the errors in his book? Since his calculations are all made so plain, it should be very easy to point out the flaws in his logic. If not, sorry but hollow claims.

      • Roy Tindle

        CD, had I but world enough and time! I’ve been a member of a 250 strong group of, mainly, energy scientists and engineers for several years and have followed discussions on these issues that have run, sometimes, for months. I’ve attended seminars by three of the physicists I named but disproving MacKay is not a matter of a few links or comments. If you want to look at this in depth then follow the link below:
        http://www.claverton-energy.com/

        Can I also correct one of your comments? You refer to silicon not being extensive but it is one of the most extensive elements on this planet and, in any case, its primary use in harvesting solar energy in photo voltaics, but what about solar thermal? Look at the Desertec Foundation’s news page:
        http://www.desertec.org/en/news/
        A German consortium has been formed to plan and build a solar concentration network around the Mediterranean. This uses solar energy to heat oil, the oil is used to generate steam and the steam drives turbines. I had the good fortune, last summer, to have dinner with the the technical director of Siemens, one of the participants, who is helping to plan this. And you didn’t mention wind energy, hydro, geothermal, wave or tidal. It’s not one technology but several.

        So this is not about ‘articles’ in the press but about existing generation and facilities now being built. At the end of 2009, world installed solar pv was running at around 21 gigawatts but wind was at 158GW and growing 30% per year.

  5. Nichol

    If growth means more people, and more consumption of natural resources per person, and more waste of energy and resources as well, and more destruction of our biodiversity that underpins the value of the ecosystem..
    how can that be sustainable?

    We need to realize that that kind of growth is not growth, but a counting error that never prices the cost of the destruction.

    If growth means that all people can still do productive work, grow our knowledge of how things work, and how to make things better, while reducing population growth, and waste. Then would a proper accounting not conclude that the value of such an economy would grow?

  6. Al

    “…but there is no reason why growth can’t be decoupled from emissions by a shift to apparently limitless clean energy.” Do you have an analysis that contradicts Tim Jackson’s ?

    • andrewpendleton

      Al. I don’t mean to trivialise the challenge; it’s right to observe progress so far and think that decarbonising energy systems will not happen quickly enough. But I do very much question the logic that says therefore that we need to focus on reducing economic growth.

      As Matthew points out in his recent post on the rebound effect, the UK has more or less already de-linked energy use from economic growth as we’ve had a steady state on energy since the 1970s. But we haven’t decarbonised our energy system and that’s why emissions remain high.

      Thus I think the main focus of tackling climate change ought to be on investment in low-carbon (actually primarily proper renewable) energy. By all means let’s also re-think economic objectives (Tim Jackson isn’t the only academic engaged in this) but while we’re having that debate, can we just get on with the task of decarbonising energy by increasing levels of investment in technology and infrastructure which may – as a by-product – increase economic growth.

      • Al

        Sure, I agree. But that doesn’t quite answer the question. If we don’t de couple growth and emissions and the economy carries on growing then emissions will carry on growing too. I was convinced(ish) by Jackson’s explanation of why de-coupling growth and emissions is impossible, or at best very very unlikely in the time scale we need. What I was asking is whether you have a come back to Tim Jackson which explains why de-coupling *is* possible.

      • andrewpendleton

        But my point in the original post deals with this. Growth and climate are not intrinsically linked. So I don’t share Tim jackson’s view and I think arguing against growth makes the politics of climate change harder and they’re tough enough as it is.

  7. Roy Tindle

    If ‘growth’ includes both goods and services then the goods element takes us to manufacturing and to carbon emissions. The decarbonisation of manufacturing is still many years away and moving manufacturing to China and India is simply increasing those emissions. Tim Jackson speaks of an economy based solely on services, and that could grow. He then raises the problem of the human addiction to the novel, to the urge to replace a mobile phone with a newer model, for example. That makes a transition to a services economy very difficult, particularly when that addiction is used to sustain the sales of more and more goods.

    Tim also refers to resource depletion. How do we continue growth of goods and services within finite and depleting resources? This is no longer some long-term picture of resource but, in many crucial materials, is becoming immanent. But Tim is only one voice of many, regarding depleting resources; this problem is presented by materials scientists throughout the world – and is becoming a significant worry in manufacturing.

    We are making the situation worse by the development of what has been called ‘eco bling’. Wind turbines don’t work well in urban areas and it could be argued that solar photo voltaic panels should only be installed where there is adequate sunshine to harvest. Instead, we are using scarce resources more as a statement of ‘green’ intent than of maximising the use of those resources. This, too, is growth but it is self defeating.

  8. Eliot Whittington

    One of the interesting things about this conversation is the mismatch between scales / frames between different people.

    After all, Andrew is talking about what we need to do in the immediate moment, to deal with one key pressing problem (i.e. Climate requires investments in key new technologies to change the way we get our energy; this requires investment and the politics of securing that investment are helped by there being growth and by the climate agenda NOT being perceived as the anti-growth agenda).

    Whereas, it seems to me, that most of the proponents of questioning growth (or suggesting that there needs to be a new basis to the economy, or that we need to count what grows differently, or whatever) take a perspective that is extremely macro… they observe, unarguably, that there is a finite planet, with finite resources, and so that sustainability in its complete sense will always be a problem until or unless we manage to wean ourselves off ever-increasing resource use.

    Tim Jackson is probably a good case in point there. He makes the case very eloquently and clearly that there is a problem in our current growth model, and that there could be a different economic model which increases well being. But he’s pretty unconvincing on any kind of sense of how we might or could get from where we are to there. So there’s a job for us all to think about that. But if we let that undermine or slow what we need to do to act on climate change in the immediate moment then we’re rather fiddling while Rome burns.

    I suppose I should allow, that in saying this, I’m definitely in the camp that says we can resolve our energy problem in the current economic model. I’m rather more worried about the impact of successively running out of rare earths and other key minerals, which seems a slightly more pressing environmental limit. I wouldn’t say climate change is an environmental limit problem – it’s a pollution problem.

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