From a semantic point of view, “green growth” is just as misleading as degrowth. While the term degrowth acts as a deterrent, conjuring images of deprivation and depression, green growth is akin to magical thinking, giving the illusion that we can continue to produce and consume more thanks to technical progress. Except that there is absolutely no reason to believe that finance or the market, whose sole objective is to maximise profits, will save the planet.
Neo-liberal economists working on the links between growth, nature and the environment maintain that monetising negative externalities and raising the price of carbon will solve the problem of global warming and, more generally, all the environmental damage caused by human activities. But again, this is a pipe dream, as the price tag doesn’t show the full extent of the environmental issues, especially when it comes to the preservation of biodiversity.
The illusion of decoupling
To support their argument, the proponents of green growth assume that it will be possible to decouple the rise in GDP from environmental damage, largely thanks to technical progress. This is far from being the case. It is true that in certain regions of the world, and at certain times, there has been a decoupling of GDP and greenhouse gas (GHG) emissions. Between 2010 and 2016, for example, European GDP increased, while GHG emissions fell. But this is not what we have seen on a global level: over the period between 1980–2018, GDP is estimated to have grown by 198% (base 100 in 1980), while GHG emissions increased by 65% (in CO2 equivalent).
According to the United Nations Environment Programme, if we want to limit global warming to 1.5°C, we need to reduce our emissions by 7 to 8% per year, starting today. This is why, in a recent study, Carbone 4 states that for decoupling to work, it must be absolute (GHG emissions must fall), global (all areas of the world must be affected), sustainable (it must be maintained over time), rapid, and total (GDP must be decoupled from all pressures on the environment, not just greenhouse gases). In practical terms, this means that decoupling is only partial if the reduction in fossil fuel consumption results in other environmental pressures, such as deforestation, or if it is limited to a reduction in the carbon intensity of GDP.
Low-carbon energy solutions are not unlimited
In this context, it is understandable that some observers are worried about the energy transition being brandished as the infallible technical solution capable of leading us “painlessly” towards this ideal scenario. Contrary to what is sometimes projected, low-carbon energy is neither free, nor unlimited, nor easy to deploy. In fact, there is no energy production that is strictly neutral in terms of GHG emissions. Furthermore, the technical solutions involved in the transition, such as energy efficiency or carbon capture, are not always successful or deployable on a large scale. Finally, whether it is solar, wind, nuclear or biomass, these energies come up against numerous technical, financial, and sometimes even democratic limitations that can no longer be ignored: nuclear energy is a long-term energy, costly, industrially and democratically complicated to implement, solar and wind energy have a significant land footprint, in addition to posing more and more problems of social acceptance. As for biomass, it poses problems of resource limitation and management.
In light of this the way in which institutions, particularly European ones, draw up prospective scenarios is regrettable: starting from the principle that the energy transition is technically feasible, they do not pay enough attention to the conditions required to achieve it. In this respect, the question is less whether the technologies exist than how quickly they can be generalised, and who will pay for them. Whatever scenarios are chosen, we must be prepared for the transition to come at a very high cost to society. The European Court of Auditors recently estimated that it would cost $11.2 trillion between 2021 and 2030. There will be winners and losers, and it will be up to the public authorities to respond to the resulting inequalities.
Moving away from the obsession with GDP
So, in order to reduce the pressure on our ecosystem, will we have to reduce our quality of life, as those advocating for degrowth claim, and abandon any prospect of growth in our economies? On paper, this way of posing the problem may seem convincing: our linear economic system – take, make, consume, dispose – has led to the situation we are now facing, and we will not reduce our impact on the environment without making profound changes to our economic models. For example, we know the toll the excesses of capitalism and the deregulation of markets has taken on our planet. However, making GDP the source of all our ills, and the focus of our debates, is dangerous and a waste of time.
GDP is anything but an environmental indicator. By nature, some value-creating activities reduce emissions, while others are harmful. Moreover, economic growth is always used in baseline scenarios as an exogenous input to the model, over which neither the rise in temperature nor the depletion of natural resources has any influence. This construction gives the false impression that GDP can continue to increase, independently of any physical reality. For example, if we take the worst-case climate scenario studied by the ECB and the NGFS, it appears that a 5°C rise in 2100 would only reduce GDP by 25% compared to a no-warming scenario, which is ridiculously low. This proves the inadequacy of the models used.
This is why we need to move away from the obsession with GDP once and for all, and put this indicator back in its rightful place, namely that it is a useful accounting and management tool for public finances, but that it can no longer be the alpha and omega of public policies. Our economies must be steered by more relevant physical and social indicators that allow us to ensure that we are respecting the “planetary limits”. One such indicator is the Donut Theory by the English economist Kate Raworth, which clearly outlines the social and planetary limits within which any form of economic prosperity should be contained.
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