“The best state of human nature is that in which, while no one is poor, no one desires to be richer”
- John Stuart Mill, Of the Stationary State (1848)
Most governments prioritise economic growth as a policy objective. Nowadays many of them also aim to become ‘net zero’ by the middle of the century. But these two objectives are in conflict.
The UK’s Labour Party is a case in point. Last month Keir Starmer, its leader, announced five missions on which the Party’s next election manifesto would be based, and that would guide it in government. Here are the first two:
“Secure the highest sustained growth in the G7, with good jobs and productivity growth in every part of the country making everyone, not just a few, better off
Make Britain a clean energy superpower to create jobs, cut bills and boost energy security with zero-carbon electricity by 2030, accelerating to net zero”
Also last month, the Conservative government in the UK published a series of ‘Powering up Britain’ policy documents, including a Net Zero Growth Plan. Its proposals differ from Labour’s by aiming to decarbonise the power system by 2035 (“subject to security of supply’) yet allowing continued extraction and burning of fossil fuels (in the belief that the carbon emissions can be sequestered with the unproven technology of CCUS - carbon capture, usage and storage). The title explicitly links moving to net zero with continuing to grow, and the text insists that “green and growth go hand in hand’ and that its “vision for a green and sustainable future will provide new opportunities to grow and level up the UK economy and support hundreds and thousands of green jobs.”
Within the UK, Labour competes with the Conservatives over how best to pursue economic growth, clean energy, and net zero. Internationally, the UK competes with the EU, US etc in pursuing the same objectives. How different political parties, and different national governments, pursue these objectives will vary, but the overall constraints that they face are similar, and these are almost invariably downplayed.
How realistic is the timescale for decarbonisation?
Present-day politicians, particularly in UK, are keen on targets, but vague on how to achieve them. In the UK, zero-carbon electricity targets are based on a massive expansion in wind and solar capacity, together with some nuclear. Wind and solar are, of course, intermittent, and nuclear is inflexible. At present the intermittency of wind and solar and inflexibility of nuclear are balanced by fossil fuel supplied gas generation. The balancing function at present carried out by gas would have to be carried out in another way. Batteries could cope with short term imbalances, but not long term ones. Interconnection with Europe might access Swiss or Norwegian hydropower, but many European countries would often be competing for that access at the same time. Green hydrogen could be stored to power gas generators, but that would require more renewable energy capacity to produce it. A number of solutions are technically feasible, but implementing any of them would require a co-ordinated plan. Such a plan does not exist. And even if there was one, achieving it by 2030 or 2035 would take heroic effort.
Scale and timing are critical, but are ignored by political orthodoxy, both on the right and on the left. Batteries are needed not just for short-term energy storage but for electric vehicles - another key component of zero-carbon policies, but one that will require a huge expansion of renewable energy capacity to supply its fuel. Many of the materials that will be required to construct the batteries, wind turbines, and solar panels that are needed to deliver decarbonisation, not just in the UK but throughout the world, are in short supply. Other sources, and alternative materials, can be exploited, but only after huge investments in mining infrastructure which would take years to come into being. We simply do not have the time to wait for this.
How clean is ‘clean energy’?
At present, the materials that are needed for decarbonisation are not only in short supply, they are very often mined and refined under conditions that are extremely hazardous, both to workers and to the local environment (eg silicon in China, cobalt and coltan in DR Congo, nickel in Indonesia, lithium in Bolivia, and rare-earths in Myanmar). Accelerated growth and the search for alternatives will inevitably contribute to land use change and biodiversity loss, so crossing planetary boundaries that, like climate change, are already in a critical state.
Mainstream politicians have belatedly realised that we have to decarbonise to have any hope of avoiding runaway climate change. But they have been slower to appreciate that we are in danger of overshooting these other critical planetary boundaries. As a result, they adopt policies to tackle climate change without taking into account how these might contribute to ecological breakdown.
What is ‘growth’?
The growth that mainstream politicians are so keen to promote is growth in GDP - Gross Domestic Product, a measure of the monetary value of all the goods and services produced annually in an economy. At first, national income was measured to indicate the availability of resources for the war effort, or to help achieve full employment. During the Cold War, the emphasis shifted from the composition of GDP to its growth, both as a symbol of geopolitical power and as an enabler of increased military expenditure. Since then, growth has increasingly become an end in itself.
Simon Kuznets, the economist who devised the framework of national income accounting in the 1930s, was keen to emphasise that it was not a measure of welfare, but that has not stopped politicians from treating it as such, despite its many drawbacks. Crucially, GDP excludes unpaid work (eg childcare in the home), and includes activities that are harmful (eg pollution). In recent years, GDP growth mainly benefits the well off, with little trickling down to those on low incomes. At a global level, there is a close correlation between growth in GDP and growth in raw material extraction, so GDP growth contributes directly to ecological destruction.
“Growth has come to stand in for human well-being, and even progress itself. This is remarkable, given that GDP measures such a narrow slice of economic activity. GDP growth is, ultimately, an indicator of the welfare of capitalism”
(Jason Hickel, Less is More: how degrowth will save the world, 2020)
Decoupling or degrowth?
The idea of ‘green growth’ is based on a myth - that growth in GDP can be ‘decoupled’ from material use. There is no evidence that this is occurring at a global level. There is, particularly in high income countries, a shift from manufacturing to services. This reduces consumption of materials, but service workers spend much of their incomes on (increasingly imported) material goods. Over time, as easily accessible minerals are exhausted, more natural resources have to be extracted to produce the same quantity of useful output. And there is almost always a rebound effect from technological innovation that reduces demand for materials - the resulting cost reduction boosts product demand, and with it the need for more material inputs. Historically, there has been little or no decoupling, and that is unlikely to change in the near future.
“The validity of the green growth discourse relies on the assumption of an absolute, permanent, global, large and fast enough decoupling of economic growth from all critical environmental pressures….there is no empirical evidence for such a decoupling currently happening … the hypothesis that decoupling will allow economic growth to continue without a rise in environmental pressures appears highly compromised, if not clearly unrealistic.”
(European Environment Bureau, Decoupling Debunked , 2019)
Promoting growth, however ‘green’, is not a solution to the problem of ecological breakdown, it is a key part of the problem. Reducing demand for both energy and minerals is needed - not only to reduce negative impacts on biodiversity and land use, but to stand any chance of transitioning from fossil fuels to renewables quickly enough to avoid global heating accelerating out of control.
“This is what we mean by ‘degrowth’ … It is the first step toward a more ecological civilisation. Of course, doing so may mean that GDP grows more slowly, or stops growing, or even declines. And if so, that’s okay; because GDP isn’t what matters … It’s about shifting to a different kind of economy altogether - an economy that doesn’t need growth in the first place.”
(Jason Hickel, Less is More, 2020)
Living within a safe and just space
Much of the academic discipline of economics is based on a denial that there is any conflict between economic growth and a finite planet, and on an assumption that economic growth is needed for people to thrive. Perhaps the most influential counter perspective is that put forward by Kate Raworth in her 2017 book, Doughnut Economics. Raworth’s doughnut is a visual metaphor. The outer edge of the doughnut is an ecological ceiling, beyond which we overshoot planetary boundaries, resulting in collapse. The inner edge is a social foundation, below which people are deprived of the resources that they need in order to thrive. The aim of economic policy, she suggests, should not be to maximise economic growth, but to enable everyone to access life’s essentials without trashing the planet.
“Below the Doughnut’s social foundations lie shortfalls in human well-being, faced by those who lack life’s essentials such as food, education and housing. Beyond the ecological ceiling lies an overshoot of pressure on Earth’s life-giving systems, such as through climate change, ocean acidification and chemical pollution. But between these two sets of boundaries lies a sweet spot - shaped unmistakably like a doughnut -that is both an ecologically safe and socially just space for humanity. The twenty-first century task is an unprecedented one; to bring all of humanity into that safe and just space.”
(Kate Raworth, Doughnut Economics: seven ways to think like a 21st century economist, 2017)
Living within a safe and just space does not require all growth to be avoided. People living in absolute poverty in the global South deserve some growth in order for them to be able to access a fairer share of world income and meet basic needs. And in high income European countries, there is an urgent need for renewal of the foundational economy (health, care, social housing, etc) that has been decimated by the privatisation and outsourcing that neoliberal policies have encouraged since the 1980s. But more effective taxation of incomes and wealth of the rich is essential, not just to cancel the government spending needed to fund investment in decarbonisation, but to reduce wasteful overconsumption that stimulates greed instead of satisfying need, and to ensure a fairer distribution of income and wealth. And, to be absolutely clear, our planet needs to become a safe and just place not only for humans, but for the rest of the living world as well. Above all, there should be less emphasis on targets, and more on how to achieve them.
“In the many discourses of ecological responsibility - from radical degrowth to government net zero targets - we found there was much emphasis on aims and what has to change, and too little engagement with processes and how to secure change.”
(Foundational Economy Collective, Foundational Economy, 2022 edition)
We cannot thrive in a patriarchal capitalist economy that worships growth, increases inequality, and continues with business as usual, albeit minus the carbon. We need instead an economy that prioritises fairness and respects nature. And we need a politics which understands that and is able to deliver it.