Sustainability
Economic growth
Why green growth
is impossible
The government’s Sustainable Development Commission has aired
what may be the most inconvenient of truths. But the debate has
barely begun. Nick Schoon reports
B
eing for or against economic growth has, until
now, been a stark dividing line in all politics and
thinking on the environment.
To declare growth as a bad thing which should
stop was to place yourself in a deep and, some
would say, lunatic green fringe. You were likely
to be seen as an eco-fundamentalist, unwilling
to engage with the real world of vote-seeking politicians, profitseeking business and ordinary human beings. You were also at
risk of being portrayed as caring more about protecting nature
than people.
But now, the Sustainable Development Commission (SDC), a
senior government advisory body, has reported that economic
growth in developed countries like the UK should cease.1 “There
is, as yet, no credible, socially just, ecologically sustainable scenario of continually growing incomes for a world of nine billion
people [the global population forecast for 2050],” it argues.
“For the advanced economies of the western world, prosperity
without growth is no longer a utopian dream. It is a financial and
ecological necessity.”
The commission’s report, Prosperity without growth? The transition to a sustainable economy, was published a few days before
April’s London G20 summit (see pp 52-53). This gathering of
world leaders was aimed mainly at restarting growth.
Its publication was ignored by the mainstream media but
Greenpeace and Friends of the Earth welcomed it. The document
Condenser
● The government’s own sustainable development advisers
argue that economic growth in developed nations such as
the UK should cease. But it should continue in the developing
world, to allow billions to escape severe poverty.
● The Sustainable Development Commission (SDC) says the
decoupling of economic growth from over-exploitation of
natural resources and environmental degradation is failing.
● Economic growth traps countries, cultures and societies
into ever-rising consumption of goods and services. This
undermines as well as enhances well-being, says the SDC.
● The current global recession is a direct result of an
obsession with economic growth, it argues.
● Its report proposes 12 steps to a sustainable economy.
36
should be read by everyone interested in environmental issues
and may yet generate widespread web debate.
Its arguments are not new. What is new is that they have been
marshalled and endorsed by an official commission of wise and
experienced women and men from the worlds of business, law,
academia and health, as well as environmental policy making.
“There’s no bigger issue for society to address, and no issue
more controversial for the commission to insist on addressing,”
outgoing chairman Jonathon Porritt told ENDS.
Report author Professor Tim Jackson is a commissioner
appointed for his economics expertise who heads a research group
on lifestyles, values and the environment at Surrey University.
He drew on the SDC’s own five-year investigation into economic
growth and sustainability, entitled Redefining prosperity.
The document may read like a polemic in places but was
reviewed through three drafts by the SDC and is in its name.
Professor Jackson says he knows how big a taboo he is breaking.
“I’ve felt very exposed, especially since it was published.”
But he adds that he could not avoid his finding that economic
growth should end in already wealthy nations. “As I immersed
myself in writing the report it kept confronting me; the logic of
that conclusion was very hard to find a flaw in.”
Loud debate
In media and in politics, there is a continuous, loud debate about
how economic growth should be shared between rich and poor,
nationally and internationally, and the public and private sectors.
But in the background are several decades of hard questioning
and serious argument among environmentalists, economists and
the odd brave politician on the benefits of growth itself.
There are two main themes. First, growth damages the natural
environment, degrading its ability to give people what they need
to survive and enjoy life. As societies become richer, they consume more natural resources and produce more and more waste
and pollution. If economic growth continues, there must come a
time when the harm will reach critical and lethal levels. In some
places, for some people, that time is now.
Second, economic growth does not make us feel ever happier,
but it does trap us into consuming ever more goods and services. And any cessation of economic growth is a disaster because
unemployment and human misery rise. A shark must swim to
avoid suffocation, a cyclist must pedal to avoid falling off – and
economies must keep growing to escape social unrest.
ends report 411 / april 2009
www.endsreport.com
Westfield shopping centre, London: society’s demand for abundance and novelty springs the economic growth trap, says the SDC
The first theme may be of more interest to ENDS readers. But
if economic growth necessarily inflicts mounting environmental
damage – and the SDC’s report is persuasive that it has – then
anyone interested in protecting the environment is going to have
to engage with the second theme, concerning the growth trap. Its
main details can be quickly sketched out.
In striving to compete, make profits and grow, businesses seek
increases in labour productivity – the amount of goods or services
they get out of each hour of their workers’ time. So do governments
running public services, to make tax revenues stretch further. If
there was no economic growth, these continual improvements in
productivity would put ever more people out of work.
But rising productivity drives economic growth, which creates
new jobs. Simultaneously, firms are driven to produce not just more
goods and services but new goods and services and to encourage
consumer demand for unending abundance and novelty.
What we buy and own signifies our status, affects our selfesteem and signifies, through gifts, what we think of each other.
Advertising, the media and much of popular culture strengthen
this symbolic role of shopping and possessions. Once most people own something, companies develop a new product or service
which can act as a status symbol, until so many people own it that
a new symbol has to be developed. And so on.
“The restless desire of the consumer is the perfect complement
for the restless innovation of the entrepreneur,” says one of the
report’s purpler passages. “Taken together these… are exactly
what is needed to drive growth forwards.”
So far, so familiar. Much research supports this view of growth
drivers. Plenty of popular criticism and comedy surrounds it.
Many people recognise that money and possessions can never
april 2009 / ends report 411
buy happiness, yet they still search for some of it in shopping.
Only a tiny minority choose to opt out of the consumer society
completely; rather more are excluded by poverty.
To date, this critique of growth has appealed more to politicians
than the first theme – the one concerning environmental destruction, which is seen as a hair shirt turn-off.
Almost three years ago, the Conservatives’ then new leader in
a speech said: “There’s more to life than money, and it’s time we
focused not just on GDP but on GWB – general well-being.” This,
said David Cameron, could not “be measured by money or traded
in markets. It’s about the beauty of our surroundings, the quality
of our culture and, above all, the strength of our relationships.”
Fair weather politicians
Cynics observe that politicians only flirt with such notions when
the economy is growing strongly. Come a recession, the growth
imperative reigns supreme.
And whenever politicians and the commentariat have noticed
that there are real problems with economic growth, they never
contemplate its end. Instead they talk about various ways of fixing things, such as ‘greening’ growth, moving to a less Anglo
Saxon, more Scandinavian model of capitalism, or paying less
attention to GDP and more to other well-being measures.
Nevertheless, no single statistic attracts more national attention than the annual rate of GDP growth. Anything less than 2%
is a cause for concern; zero or less is a tragic misfortune.
There were hints that the supreme priority accorded to economic growth was starting to be questioned in one corner of
government even before the SDC’s report. The Labour government’s first sustainable development strategy, published in 1999,
37
Sustainability
Economic growth
had “maintenance of high and stable levels of employment and
economic growth” as one of four central aims. This was removed
when the environment department (DEFRA) rewrote the strategy in 2005, following a review by the SDC and consultation.
This current strategy, Securing the future, often refers to economic growth, but usually in stressing the need to break the link
with increasing environmental impacts. However, this more
guarded attitude is not replicated across the rest of Whitehall,
nor even across DEFRA. The Treasury, business and energy
departments have remained gung-ho for steady GDP increases.
Just before the SDC dropped its anti-growth bombshell,
DEFRA and the energy and climate department (DECC) issued
an economic framework for carbon-reduction policies written by
their chief economists. That document treats growth as the traditional policy imperative. Environmental policies, it says, must be
designed to do as little harm to GDP growth as possible.
“There’s no bigger
issue for society to
address”
Jonathon Porritt, SDC
Growth is also treated as gospel by Britain’s two great carbonreduction barons, Lords Nicholas Stern and Adair Turner. In
their government-commissioned writings on how to tackle climate change, both see GDP growth as providing the resources
required to decarbonise the economy and invest in new infrastructure (ENDS Report 382, pp 34-36 and 407, pp 14-15). Both
argue that in return for a small lowering of the growth rate for a
few decades, we can save ourselves from much heavier economic
damage caused by rampant climate change later on.
This is the latest variation on a theme played by business people and politicians since the modern environmental movement’s
birth in the 1970s. Only economic growth, they argued, can provide the resources to deal with environmental problems. The conflict which green fundamentalists depicted between free market
economies and planetary protection was false. Environmental
problems were far worse in poor, undeveloped countries and
those with decrepit command economies.
It is a message that sounds more natural coming from business
and the political right, but New Labour seized on it for its ‘modernisation’ agenda. As the economy became more digital, knowledgebased, resource-efficient and “weightless”, environmental quality
would improve. There was no need to preach unpopular messages
to voters about making do with less to save the Earth.
During these days of recession there is a new twist – saving the
Earth can save the global economy. Leaders like Gordon Brown
tell us that investment in cutting carbon can help restore growth.
But the SDC’s report says economic growth has tended to add
to the world’s overall environmental problems rather than solving
them. As economies grow, as output and consumption of goods
and services increases, there comes a time when nations start trying to ‘decouple’ GDP growth from the mounting environmental
damage. Natural resources may start to run short or increasingly
wealthy citizens demand greener policies.
On first impressions, the UK has done rather well in decoupling
its sustained (until recently) economic growth from environmental damage. Emissions of air and water pollutants have massively
reduced; greenhouse gas emissions have fallen more slowly.
Household waste output is static while recycling is rising.
But look closer and the picture darkens. We over-fish the North
Sea. UK biodiversity continues to decline. Water use may be static
but remains at environmentally damaging levels.
And to get the true picture, you have to look at the UK’s global environmental impacts: the damage done in creating all our
UK-produced goods and services plus the damage associated with
those we import from abroad minus the damage done by those we
export. When you look at UK environmental impacts this way,
any notion that we are decoupling collapses.
The UK’s long shift from manufacturing to services has pushed
more and more of our environmental impacts overseas. As our
economy has grown our water and energy use has soared outside our borders. According to a DEFRA-commissioned analysis,
the UK’s consumption-related emissions of carbon dioxide rose
by 11% between 1990 and 2004. Yet the government reported a
6% decline in CO2 for that period, based on emissions only from
within the UK (ENDS Report 402, p 22).
In an ever more interdependent world, the environmental
impacts of economic growth must be assessed at the global level.
When it is, decoupling is either not happening or is occurring too
slowly. Worldwide greenhouse gas emissions remain linked to
global economic growth. So, it seems, does consumption of many
Breaking with GDP growth
The SDC proposes 12 steps
for a sustainable UK economy
under three headings:
Building a sustainable
macroeconomy
◆ Developing macroeconomic
theories, models and
research base to underpin a
sustainable economy.
◆ Investing in infrastructure
and jobs, particularly in
greener transport, buildings’
energy efficiency, renewables
and other green industry.
◆ Improving financial and
fiscal prudence, increasing
38
incentives for saving, curbing
consumer debt, outlawing
destabilising market practices
such as short-selling.
◆ Reforming macroeconomic
accounting – developing
alternatives to GDP to give
more information about
wellbeing, environmental
damage and resource
depletion.
Protecting capabilities for
people to flourish
◆ Sharing work, reducing
working hours.
◆ Tackling systemic
inequality, largely through
redistribution.
◆ Focusing more on people’s
“capabilities for flourishing”.
◆ Strengthening human
and social capital through
stronger local communities
and lifelong learning.
◆ Reversing the culture of
consumerism – tougher
media regulation, possibly
banning advertising to
children and establishing
‘commercial-free zones’.
Respecting ecological limits
◆ Imposing resource and
emission caps, similar
to those used in carbon
trading schemes, for all nonrenewable resources.
◆ Ecological tax reform,
shifting taxation from
incomes onto resource use
and emissions.
◆ Promoting green
technology transfer to
developing nations and
protecting biodiversity and
carbon sinks (such as forests)
in the developing world. This
would be funded through
mechanisms such as a tax on
international currency flows.
ends report 411 / april 2009
www.endsreport.com
Figure 1 global fossil fuel use is linked to gdp...
Figure 2 ...and so is consumption of metals
1980 = 100
1990 = 100
250
200
Iron ore
World GDP
Gas
Coal
CO2 from fossil fuel combustion
200
Bauxite
Copper
Nickel
150
Oil
World GDP
150
100
100
50
50
1980
1985
1990
Source: US Department of Energy
1995
2000
2005
1990
1995
2000
2005
Source: US Geological Survey
renewable and non-renewable natural resources, from metal ores enjoy our free time? Instead of producing and buying ever-more
250
and fossil fuels to freshwater and fish (see figures 1 and 2).
stuff, we would take up ever more hobbies and recreations.
People are consuming too much for natural systems to cope
But modern leisure is highly materials and energy intensive.
with. As economies and incomes grow they consume yet more. We travel, we use ever-more electronics at home, we go to energy200
And when technology promises to sort things out, allowing more hungry buildings like gyms. If we were to go down this road, the
use of a declining resource, then “rebound effects” may come into consumption of leisure would soon take over from the consumpplay. If we save energy, we are likely to spend some of the savings
tion of goods in signalling social status (there are signs it already
150
in ways that push up energy use.
is). We would still be trapped in spiralling consumption.
Economic growth is not solely to blame. Population increase
Sometimes Prosperity without growth? seems slightly hesitant
100
plays a part. But the global economy has been growing at a faster
about its difficult conclusion. There is that tell-tale question mark
rate than population for some time now. Furthermore, popula- at the end of the title. Its final sentence talks about “a prosperity
tion growth is slowing and seems likely to cease in the second that, for now at least, will have to do without growth”.
50
half of the century (indeed, this slowing down is largely thanks to 1980
That
hesitancy
is1990
not
surprising.
Zero
growth
is 2005
a difficult
1981
1982
1983
1984
1985
1986
1987
1988
1989
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2006
2007 meseconomic growth). But economic growth shows no signs of end- sage to sell. Some components of economic growth and some outing unless there is some colossal global catastrophe.
comes from it reflect some of the best things about human beings.
It is good to want a more experience-rich life, to live longer and be
End of growth
healthier. It is good to want to use our ingenuity and collaboration
Which brings us to the SDC’s uncomfortable conclusion: eco- to make and do things more efficiently.
nomic growth should end in developed nations but continue for
some decades in developing ones, to lift billions out of poverty.
ENDS asked DEFRA, the SDC’s sponsor, what it thought of
this. It came up with a statement that avoided any answer. When
pressed, DEFRA referred us to HM Treasury which declared:
“The government has clearly stated its belief that economic
growth and sustainability need not be in conflict.”
So where does the SDC go from here? It has no policy recipe
for how a zero-growth economy could work, but it does set out
a dozen starting points for heading off towards a genuinely sustainable economy (see box, left).
Professor Jackson says zero growth must not mean increasing
Its main aim is to bring the debate about economic growth into inequality and an end to progress. People’s incomes could conthe government, business and media mainstreams. It also wants tinue rising through their working lives.
research into how a no-growth economy might escape mounting
But not only may it prove impossible to halt economic growth
social tensions and collapse. “The models for a no-GDP growth in the developed world; we may never want to try. If so, it seems
economy are deeply undeveloped,” says Professor Jackson.
likely that wealthy nations will have to devote far more of the
And while there may be evidence aplenty that economic growth resources flowing from growth to ‘defensive expenditures’ as gloand long-term environmental protection have proved incompat- bal crises mount. They will have to spend increasingly on adaptible to date, business, politicians and the public are likely to need ing to climate change and rising sea levels, on guarding borders
far more facts and far more convincing before they start facing up against refugees, and defending critical supply chains. Poorer
to this most inconvenient of truths.
countries will not have those options.
So could the SDC be wrong? Is there some way in which we
Most people confronted by the SDC’s conclusion will reject
can grow global wealth and protect the entire planet? Radical or ignore it. But the onus is on them to explain how economic
depopulation might do the trick, but lacks appeal.
growth can be transformed to provide environmental and social
Another way of escaping the growth trap might be to grow dif- sustainability. It is a tall order. n
ferently, to move to a more leisured, less materialistic society. As
nicholas.schoon@ends.co.uk
we become more technologically advanced and wealthier, could
we not take more and more leisure hours and create a growing Download at endsreport.com/downloads
number of part-time jobs providing the service staff we need to w 1. Prosperity without growth?, SDC
“The models for a noGDP growth economy
are undeveloped”
Professor Jackson, SDC
april 2009 / ends report 411
39
2
World GD
CO2
Coal
Gas
Oil