The Western model of civilization is based on growth. Historically, economic growth provided the basis for avoiding distribution conflicts by increasing the ‘cake’, in other words promoting economic growth as a method of achieving prosperity rather than redistribution. It was a democratic compromise that ensured social peace during welfare capitalism in North America and Western Europe. Nowadays, the world’s economy is almost five times the size it was half a century ago. If growth would continue at this rate, the economy would be 80 times that size by the year 2100.
Also the concept of the green economy remains firmly committed to growth. The goal of green growth is to combine increasing production and income with reduced resource-intensity. It strives for changing production patterns without questioning the underlying expansion-oriented logic of the economic system, in order to leave the existing way of life unaffected. Theories of a green economy assume that natural resources (natural capital) and produced goods (physical capital) can be substituted. The idea is that technological progress and increased productivity can raise the standard of living today, and with the increased wealth, the lost environmental quality can be restored at a later stage through ‘green‘ investments. Environmental destruction is seen as reversible. Economic growth according to green growth theories can and should be decoupled from material consumption and emissions by increasing efficiency. Hereby, a decrease in material or emission intensity per unit (e.g. less emissions per vehicle produced) is called relative decoupling. In order to meet the two-degree target, however, absolute decoupling would be required, whereby emissions and material consumption would decrease in absolute terms despite continued economic growth. Absolute decoupling has so far only been achieved in selected periods and for individual countries, mostly because these countries (like Denmark) have outsourced their resource-intensive production processes to other countries (like China). Globally, no absolute decoupling has taken place. The technological requirements for absolute decoupling would be enormous. On top of this, the savings potential of efficiency increases is in most cases only partially realised, as reduced consumption in one sphere leads to increased consumption elsewhere. This is called the rebound effect. Products may become cheaper through technological progress, which in turn creates more purchasing power for additional consumption. For example, if cars use less fuel, people save money on refuelling, which they may spend on driving longer distances or flying.
The two figures above show the carbon dioxide emission intensity per dollar as well as the absolute carbon dioxide emissions. The falling emission intensity (figure 1) depicts the relative decoupling happening during the last decades, especially in low income countries. Globally, relative decoupling has been minor. Despite that trend, the world is far away from an absolute emissions reduction. The second figure shows that no absolute decoupling has happened – emissions are still rising along with economic growth.
Empirically, no trend towards sustainability can be identified. On the contrary, global energy demand rose more than 40 percent from 2000 until 2017. Eighty one percent of this demand is still met using fossil fuels. The fossil fuel industries continue to dominate the global economy; eight of the world’s ten largest companies in 2018 were from the oil, automotive and energy sectors. Together with like-minded politicians, unions and the media, these companies form an influential fossil power bloc that defends the status quo. The coal, oil and automotive industries have so far successfully defended their ownership (of fossil resources) and their markets (for motorised private transport and ‘cheap’ energy). Without addressing issues of power, it will be difficult to combat the climate crisis.
Although the fact that the world as we know it is threatened has diffused into mainstream media and reached the political agenda, thanks to movements like Fridays for Future, ambitious climate action is still missing. We are in what Tim Jackson calls a ‘growth dilemma’; giving up on growing our economy seems to result in economic and social collapse, while further pursuit of growth risks destroying global ecosystems that form the very base of our existence. It is evident that we cannot rely on economic growth any longer. Business as usual is no longer an option. Another mode of production, consumption and living is indispensable. But what on earth might this look like?
