A man tends to vegetables in front of a power station in Tongling, China. Photograph: Bloomberg/Getty Images
Kicking our growth addiction is the way out of the climate crisis. This is how to do it
With the right global economic policies, we could fight poverty and global heating at the same time.
‘What’s needed is a strategy that encourages poorer countries to meet their anti-poverty goals in a way that is least harmful to the environment.’
For the best part of three centuries, there has been a consensus about the goal of economic policy. Since the dawn of the industrial age in the 18th century, the aim has been to achieve as rapid growth as possible.
It’s not hard to see why there has been this focus. Growth has raised living standards, increased life expectancy, improved medical care and resulted in better educated, better fed populations.
Indeed, 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.
There is nothing new about the current debate. Thomas Malthus predicted eventual famine once population growth exceeded food supplies. John Stuart Mill’s comment, that the “increase in wealth is not boundless”, paved the way for what became known as steady-state economics. Herman Daly, who died last month, long championed the idea that the constraints of the natural world imposed limits to growth. Robert Kennedy famously said that gross domestic product measured everything except that which makes life worthwhile, and his words resonate now even more strongly than when he uttered them in 1968.
That said, achieving a steady-state economy or degrowth is not going to be easy. Far from it, it will be hellishly difficult.
For a start, it will mean changing the way we think about economic success. Political debate is conducted by parties that vie with each other to promise voters the best growth strategy. Language matters, so when GDP is rising, that’s good news, and when it is falling, it is bad news. Countries are judged by where they sit in international league tables of growth. It would be the hardest of sells for any politician to try to convince UK voters they should welcome the recession that is now only in its early stages.
That’s because over many decades, people – especially the most vulnerable – have found that degrowth has not been good for them. Recessions are a form of degrowth, and they result in unemployment, bankruptcy, homelessness and hardship. Recessions also mean politicians tend to double down on growth, 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.
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.
Britain accounts for 1% of annual CO2 emissions, whereas China and India account between them for 36%. African countries have much smaller carbon footprints, but they are likely to grow as populations rise and demand for energy increases. The UK could speed its progress towards being a net zero economy, but unless that was accompanied by deep cuts in fossil fuel use by much bigger emitters of greenhouse gases, it 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.
That doesn’t mean the idea of a steady-state planet is a pipe dream. It does, though, suggest that the immediate priority should be to make developing country growth as clean as possible. And that needs more than warm words. It requires big money: $2tn each year between now and 2030, according to one estimate.
The aim should be a new version of the postwar Marshall plan, in which finance provided by governments and the international financial institutions acts as the catalyst for private investment.
The aim should be a new version of the postwar Marshall plan, in which finance provided by governments and the international financial institutions acts as the catalyst for private investment. Avinash Persaud, the special climate envoy to Mia Mottley, the prime minister of Barbados, rightly says that the International Monetary Fund and the World Bank could be doing more to provide developing countries – many of which are burdened with high debts and punitive borrowing costs – access to cheaper finance to fund climate mitigation and adaptation projects.
Failure to mobilise 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.
- Larry Elliott is a Guardian columnist