Degrowth: A Dangerous Idea or the Answer to the World’s Biggest Problems?

Degrowth: A Dangerous Idea or the Answer to the World’s Biggest Problems?


London
CNN business

Conventional economic logic rests on a core assumption: Bigger economies are better, and finding ways to maintain or increase growth is paramount to improving society.

But what if growth does little at best to solve the world’s problems, and at worst encourages the destruction of the planet and jeopardizes its future?

That is the radical message of the “degrowth” movement, which has been on the political fringes for decades with its warning that unlimited growth must end. Now that the pandemic has given people in some parts of the world a chance to rethink what makes them happy, and as the magnitude of the changes needed to address the climate crisis become more apparent, their ideas are gaining more recognition in the Mainstream – even as fears mount of what could be a painful global recession.

For economists and politicians of all persuasions, growth has long served as the North Star. It is a means of creating jobs and generating taxes on public services, increasing wealth in rich countries and reducing poverty and hunger in poorer ones.

London's financial district is seen in the distance behind housing developments on October 8, 2022.

But degrowthers argue that an endless thirst for more – bigger economies, bigger consumption, stronger corporate earnings – is short-sighted, misguided, and ultimately harmful. Gross domestic product, or GDP, is a poor measure of social well-being, they stress.

They also see the expansion of a global economy that has already doubled since 2005 — and would be more than seven times that at annual growth of 2% in a century — putting the emissions targets needed to save the world beyond reach .

“An innocent 2 or 3% per year, that’s a tremendous amount of growth – cumulative growth, compound growth – over time,” said Giorgos Kallis, a leading degrowth scientist at Universitat Autònoma de Barcelona. “I don’t see that it’s compatible with the physical reality of the planet.”

According to the degrowth movement, the solution is to limit the production of unnecessary goods and try to reduce demand for unneeded items.

This unorthodox school of thought has no shortage of critics. Bill Gates has called degrowthers unrealistic and stressed that asking people to consume less for the sake of the climate is a losing battle. And even believers recognize that their framework can be a political non-starter given how difficult it is to imagine what a slowdown in growth would look like in practice.

“The fact that it’s an uncomfortable concept is both a strength and a weakness,” said Gabriela Cabaña, a degrowth advocate from Chile and a PhD student at the London School of Economics.

But in some corners it is becoming less taboo as governments and industry fall behind in efforts to stop the planet from warming above 1.5 degrees Celsius, after which some climate change impacts become irreversible.

Climate activists, including degrowth supporters, gathered in Munich on November 12, 2021.

The United Nations Intergovernmental Panel on Climate Change recently cited degrowth in a major report. The European Research Council has just allocated around $10 million to Kallis and two colleagues to study practical “degrowth” strategies. And the European Parliament is planning a conference entitled “Beyond Growth” next spring. The President of the European Commission, Ursula von der Leyen, is expected.

Even some on Wall Street are starting to pay more attention. Investment bank Jefferies said investors should consider what happens if degrowth gains momentum, noting that “climate-scared” younger generations have different consumer values.

In the debate on how to avoid climate catastrophe, there is a central consensus: if the worst effects of global warming are to be averted, the world needs to cut annual CO2 emissions by 45% by 2030. After that they must descend steeply and quickly.

Most roadmaps that include a plan to achieve this goal involve a dramatic reconfiguration of economies around clean energy and other emission-reducing solutions, while encouraging new technologies and market innovations that make them more affordable. This would allow the global economy to continue growing, but in a “green” way.

But proponents of degrowth are skeptical that the world can reduce emissions in time – and protect delicate, interconnected ecosystems – while pursuing a never-ending economic expansion, which they say will inevitably require the consumption of more energy.

A construction site in Belgrade, Serbia in heavy smog on November 1, 2022.

“More growth means more energy use, and more energy use makes it harder to decarbonize the energy system in the short time we have left,” said Jason Hickel, a degrowth expert who is part of the team funded by the European Research Council. “It’s like trying to go down an escalator that’s accelerating up against you.”

While energy can go green, growth also requires natural resources like water, minerals, and wood.

It’s a concern echoed by Greta Thunberg, arguably the most famous climate activist. She criticizes “fairy tales about non-existent technological solutions” and “eternal economic growth”. And it touches on another point degrowthers raise: Is our current system, which has led to rampant inequality, even working for us?

This question resonates in the Global South, where there are fears that the green energy revolution could simply repeat existing patterns of over-exploitation and resource extraction, but with minerals like nickel or cobalt — key components of batteries — in place of oil.

The “love of growth,” said Felipe Milanez, a professor and degrowth advocate from the Brazilian state of Bahia, is “extremely violent and racist and only reproduces local forms of colonialism.”

Degrowth can be difficult to talk about, especially when fears of a global recession mount, with all the pain of lost jobs and disrupted businesses that come with it.

But proponents, who often refer to recessions as symptoms of a broken system, make it clear that they are not promoting austerity or telling developing countries striving to improve living standards not to reap the rewards of economic development.

Instead, they’re talking about sharing more goods, reducing food waste, moving away from privatized transportation or healthcare, and extending the shelf life of products so they don’t need to be bought as regularly. It’s about “thinking in terms of sufficiency,” as Cabaña put it.

Cars hit the road in New Jersey on April 22, 2022.  The United States is the second largest emitter of CO2 emissions.

Introducing degrowth would require a dramatic rethink of market capitalism, which has been adopted by almost every society on the planet over the last few decades.

However, within the current system, some suggestions might exist. A universal basic income – where everyone receives a flat payment regardless of employment status, allowing the economy to reduce its reliance on polluting industries – is often mentioned. So a four day week.

“When people have more economic security and more economic freedom, they make better decisions,” Cabaña said.

The latest report from the IPCC – the UN global warming agency – found that “tackling inequality and many forms of status consumption and focusing on well-being supports efforts to mitigate climate change,” a nod to one of the greatest goals from degrowth. The movement was also name-checked.

But degrowth is also the subject of significant opposition, even from climate scientists and activists with similar goals.

“The degrowth people live a fantasy where, for some reason, they assume that if you make a smaller pie, the poorest get a bigger share,” said Per Espen Stoknes, director of the Center for Green Growth at BI Norwegian School of Economics . “This has never happened in history.”

Steam and smoke rises from the Belchatow coal-fired power station in Rogowiec, Poland.  The station emits about 30 million tons of carbon dioxide per year.

Green growth advocates believe their strategy can work. They cite promising examples of GDP gains decoupling from emissions, from the UK to Costa Rica, and the rapid increase in renewable energy affordability.

Gates, the Microsoft co-founder who prioritizes investments in climate innovation, admits overhauling global energy systems is a Herculean task. But he believes improving accessibility of the right technologies can still get there.

Degrowthers know their criticism is controversial, although in a way that’s the intention. They think that given the UN estimate that global warming will increase to between 2.1 and 2.9 degrees Celsius based on the world’s current climate promises, a tougher, more revolutionary approach is needed.

“The less time [that] left now, the more radical changes are needed,” said Kohei Saito, a professor at the University of Tokyo.

Could a growing cohort agree? In 2020, his book on degrowth from a Marxist perspective became a surprise hit in Japan, where concerns about the consequences of stagnant growth have influenced the country’s politics for decades. Capital in the Anthropocene has sold almost 500,000 copies.

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