The case against degrowth
Degrowth can be defined as the planned reduction (through policy interventions) of production and consumption in high-income countries, in order to reduce the environmental impact. If the production and consumption is measured in terms of resource throughput, we are talking about resource degrowth. If it is measured in terms of GDP (economic wealth), we can call it economic degrowth.
This article argues why campaigning for degrowth is ineffective, and can even be counterproductive or harmful. Instead of degrowth of the economy, increasing technological innovation (research and development of clean tech) is more effective.
The ImPACT equation
To understand degrowth, we can start with the ImPACT equation, given as:
Im=PxAxCxT,
with Im the impact on the environment (e.g. kg CO2 emissions, decrease in biodiversity, level of pollution), P the population size (number of consumers), A the affluence or economic activity per capita (dollar economic wealth created per person or dollar GDP per person), C the consumption intensity of resources (e.g. kWh energy per dollar, m² land per dollar or kg minerals per dollar GDP), and T the translation factor that translates resource use in environmental impact (e.g. kg CO2 emissions per kWh energy used, decrease in ecosystem quality per m² land used). The total greenhouse gas emission is the product of four factors: the number of people times the average amount of dollars income per person times the average amount of energy used per dollar times the average emissions per unit energy used.
Degrowth assumes that the four factors in the ImPACT-equation are independent from each other (or more generally non-decreasing functions of the other factors). If that is the case, and as all four factors are positive, it is clear that one can reduce the environmental impact by reducing per capita GDP (the factor A) or resource use (the product of A and C).
With the impact equation, we can look for those factors whose reduction is the most effective way to reduce total environmental impact. We aim for the largest reduction in impact, preferably all the way down to zero.
Reducing population: the population degrowth objective
Reducing population size (the factor P) is the objective of population degrowthers or antinatalists. The only ethical method to reduce population size, is investing in voluntary family planning to reduce unwanted pregnancies. However, this measure has a limited potential: even if all unwanted pregnancies are avoided, population size will not decrease fast enough to meet climate targets. More drastic population reduction measures, for example by unvoluntary sterilization, are unethical and politically unfeasible. One cannot reach zero impact by reducing only the population size, except if one reduces the population to zero, which is definitely unfeasible.
Reducing population size may not only be ineffective, but could be harmful in some ways. First, there are the negative economic effects of population reductions. Fewer people means fewer brains and hence fewer new discoveries, inventions and solutions to problems. It means less specialization of work, less division of labor, which results in lower labor productivity and hence longer working hours (less leisure). It means having fewer customers and buyers, and hence lower incomes.
Second, there are negative ethical aspects of population reductions. Having fewer happy people is problematic according to some reasonable population ethical theories, such as total utilitarianism that maximizes the sum of welfare of everyone in the future. It is possible that future generations have higher welfare levels than us. If these future populations are smaller than what could have been, it means that a number of very happy lives do not exist. Total welfare is lower than what could have been. According to many reasonable population ethical theories, a world that has extra people who are extra happy, is better than a world where those happy people do not exist, all else equal.
Reducing affluence: the economic degrowth objective
Reducing affluence (the factor A) is the economic degrowth objective. Within the degrowth movement, the measure of GDP is often criticized as not measuring what really matters (e.g. flourishing). As a result of this direct attack on the GDP metric, degrowth is often perceived (at least by outsiders) as striving for a reduction of GDP. Such economic degrowth is not necessary, not effective, not politically feasible and potentially harmful.
Economic degrowth is not necessary, because it targets the wrong enemy. GDP is not the enemy; environmental impact is the enemy. Environmental scientists are able to determine upper bounds on environmental impacts such as pollution. For example, climatologists have determined the carbon budget: how much greenhouse gases can still be emitted that keep the atmospheric temperature increase below 1,5°C. But GDP is measured in dollars, a totally different quantity than kg CO2. Hence, none of the economic degrowthers are able to say what is the upper bound or true limit on affluence. There are no scientific studies that estimate the maximum level of GDP that is still permissible.
In the very end, it all comes down to computation (information processing). Everything we value, such as the feelings of well-being created by our computing brains or the biological diversity created by ecosystem processes, is based on computation. The true limits to growth, are the limits of computation, and these are extremely far away. GDP can still grow by an extremely huge amount before hitting these limits.
Economic degrowth is not an effective strategy to reduce environmental impact. First, from a global social justice perspective, economic degrowth should apply only to the high-income countries. Poorer countries should be allowed to grow in order to reduce poverty. However, most (more than 50%) of the global environmental impact (for example global greenhouse gas emissions) occurs in non-high-income countries with high levels of poverty, where degrowth is not appropriate. Suppose degrowth results in a reduction of 50% of the average GDP per capita in the high-income countries. This will reduce the total impact with less than 25%. Such a small reduction in greenhouse gas emissions is not sufficient to meet climate targets and keep the temperature increase below 1,5°C. Hence, reducing affluence has only a small potential. In general, reducing the total impact all the way to zero by only reducing affluence requires a 100% reduction of affluence, which is not feasible.
Economic degrowth is not so politically feasible, as it requires a lot of international cooperation between high-income countries. Reducing GDP is an objective of economic degrowth, but that does not immediately translate into a concrete policy. To study the effectiveness and feasibility of economic degrowth, we have to look at specific policy proposals made by degrowthers.
The most obvious degrowth policy proposal that targets economic growth and affluence, is the implementation of an income ceiling or maximum income level (e.g. a 100% income tax rate above a certain threshold). Degrowthers argue that the relationship between what is measured (income or GDP per capita) and what matters (e.g. well-being, life satisfaction, flourishing), is non-linear and concave. That means increasing the income or wealth of a poor person strongly increases that person’s well-being, but increasing the income of a rich person does not much increase that person’s well-being. If a population becomes very rich, increasing GDP is no longer an effective means to increase the well-being of those people. Hence, setting a maximum income level where the relationship between income and well-being breaks down, should be feasible. But degrowthers neglect the also non-linear and concave relationship between environmental impact (e.g. ecological footprint per capita, greenhouse gas emissions per capita) and GDP per capita. Richer people have a higher propensity to save, which means a smaller fraction of their income goes to consumption. Richer people also make use of more clean technologies that are more expensive. Hence, someone with twice as much income, has less than twice as much environmental impact. This non-linear relationship between GDP and environmental impact means that choosing a high maximum income level does not reduce the total environmental impact that much.
In general, choosing the maximum income level is difficult. If the maximum income level is high, it still allows for a lot of growth, as many people can increase their incomes. If on the other hand the maximum income level is low, it becomes politically unfeasible, as many people will consider that income level as poverty.
A more problematic aspect of a maximum income, is that it can decrease innovation and technological progress, because it reduces the incentive to earn more money by taking risks and invest in innovation. The same goes for another degrowth proposal: a maximum size on (for-profit) companies. This regulation would imply that companies cannot grow and take advantage of their increasing returns to scale. This reduces efficiency. Many small companies are often not able to produce the same things as efficiently as a fewer number of larger companies.
Another degrowth policy proposal that intends to target affluence, is a reduction of working hours. Income and affluence can be reduced by reducing hourly wages, but this faces political resistance, or reducing working hours. However, in free market capitalist societies, we already see a reduction in working hours per worker. Due to increasing productivity and income levels, which corresponds with economic growth, people increasingly value leisure time and prefer to work fewer hours. As a consequence, further government interventions to regulate working hours, for example by setting a maximum that people are allowed to work, would be less effective. And such regulations are too economically disruptive. For example, some highly productive people are willing to work more hours and employers are willing to pay them for those extra hours, but they would be prevented from doing so. This is an infringement on liberty.
Finally, economic degrowth can be harmful. A policy to reduce economic growth risks having negative economic side-effects, for both richer and poorer countries. The rich countries that degrow could face for example increased unemployment and increased government debt (due to lower tax revenues). There are at present no economies that show a decrease in their GDP while at the same time not increasing unemployment or government debt. There is no clear consensus among economists how to safely degrow as a country. Degrowth can be considered as a risky experiment to figure out how to avoid unwanted economic problems while reducing GDP. Also poorer countries can be harmed if richer countries degrow, because of reduced international trade and decreasing export levels towards degrowing richer countries.
Reducing resource consumption: the resource degrowth objective
A third strategy to reduce environmental impact, is to reduce the resource consumption intensity C. This can be very cost-effective, as it saves energy and resource costs, but it has limited feasibility. Just like the previous two factors, reducing the impact all the way to zero by reducing consumption intensity to zero, is not feasible. This unfeasibility is not because of political reasons, but because of physical limits (in particular the second law of thermodynamics).
Due to its cost-effectiveness, we already see a decrease in the global average energy intensity (kWh energy used per dollar GDP) with 1% per year over the past two decades.
Instead of focusing on the factors A and C separately, the degrowth movement focuses on the product AxC. What is needed according to resource degrowth, is neither merely a reduction in economic activity as measured in GDP, nor merely a reduction in consumption intensity, but a reduction in resource throughput, as measured in GDP times consumption intensity.
As with economic degrowth, resource degrowth is not necessary, not effective, not politically feasible and potentially harmful.
The major criticism against resource degrowth policies, is its lack of necessity. First, the real limits to growth are still far away. Consider energy scarcity. The amount of solar energy that hits the earth is almost 10.000 times more than the energy used by all humans. Add the solar energy that can be captured in space (e.g. on the moon), all geothermal energy that can be captured, and nuclear energy from both fission and fusion, and it becomes clear that there is an abundance of energy. Limits on materials (e.g. metals and minerals) are less stringent, because given enough energy, materials can be recycled or mined at hard-to-reach places (e.g. the ocean floor, the moon, asteroids,…). The physical limits of resource use are not yet reached, so why would we need a self-declared, political limit on resource use that is much lower than the physical limit that sets the true boundary?
Second, even if we hit the limits, planned policies are not required. Private property rights on resources (energy, land, minerals) are feasible. These rights are already in place or easily implementable. With such property rights, there is no market failure, which means that free markets solve the scarcity problem through the price mechanism. In other words; markets will automatically indicate whether resource growth and GDP growth are no longer possible. In particular, if the prices of resources increase so fast that resource use or GDP no longer grow, then the market indicates that the limit to growth is reached. As the market will not let the economy grow any further, extra government interventions to stop the growth are superfluous.
But at this moment, there are no indications that we are near the limit. For example, energy expenditure accounts for less than 10% of GDP in high-income countries. That means that the energy prices need to increase really a lot before they impact economic growth. But the prices of resources do not increase so fast that growth becomes impossible. In fact, the prices of most resources (adjusted for inflation) are not even increasing. There is more evidence for a general decreasing trend of resource prices the past decades. This is the opposite of what one would expect if we reached the limits to growth.
Next to their lack of necessity, the resource degrowth policy proposals are not so effective. The two most relevant proposals are an advertisement ban and a resource taxation.
Suppression of advertisements from the public space might be effective, as it could decrease overconsumption. However, this effectiveness is very limited. First, there is some economic evidence that advertisement does not increase consumption that much. Second, an advertisement ban could decrease the prices of products, which results in higher consumption levels. Commercial advertisement is economically inefficient, because it is a zero-sum game: if one company advertises, the competing companies have to spend advertisement budgets to promote their products. In the end, the competing companies are pulling on a rope in opposite directions. The rope is not moving that much and the rope pullers waste energy. Similarly, the competing companies waste costs on advertisement. An advertisement ban would save the companies these costs, which means they can lower their prices.
Degrowthers argue that technological innovations that increase resource efficiency and decrease resource use are not so effective, due to possible rebound effects. For example, households save energy costs when they use more energy efficient appliances. That means they have more money left for extra consumption of other things. Their use of energy efficient appliances also decreases energy demand, which means the price of energy decreases, which means other people will buy (and waste) more energy. These concerns for rebound effects are legitimate. But degrowthers underestimate or neglect similar rebound effects of their policy proposals, such as an advertisement ban.
A second resource degrowth policy proposal is a resource taxation. We have to make a distinction between a resource tax and a pollution tax. When there are negative externalities, such as pollution, a taxation is very effective (although its effectiveness is mitigated due to a lower political feasibility, as it requires international cooperation). A pollution tax internalizes the external costs of pollution into the price of the product. However, when there are property rights on resources, there are no such negative externalities. Furthermore, the supply of resources is inelastic (independent of the price). Consider a tax on land use. As the land is already there (i.e. it is not being produced), a land tax does not decrease land use (unless the tax would be really high, which is politically unfeasible). In general, a resource taxation does not decrease resource use and hence is not effective to reduce the environmental impact.
But a resource tax remains important, though, because it increases fairness through redistribution. A resource tax allows to redistribute the unearned income (resource rent) from owning resources. A resource tax-and-dividend system, where resource tax revenues are distributed to all citizens as a universal dividend, is both fair and efficient. A resource tax is efficient, because resources are created by nature and not by the resource owners. The resource owners will not be disincentivized by the tax: they will not produce less resources when resources are taxed, because the resources are not produced by the owners. And a resource dividend makes the system fair: as no-one produced the resources, the value of the resources belongs equally to everyone. A dividend is a method to equally distribute the value (resource rent) of the resources among citizens.
Improving technology; the ecomodernist objective
In contrast with the degrowth movement, the ecomodernist and effective environmentalist movements primarily focus on the fourth factor in the ImPACT-equation. This T-factor represents technology. A high T-factor means a lot of dirty technology is being used in the economy. Ecomodernists and effective environmentalists campaign for increased government funding in clean technology research and development.
There are several reasons why ecomodernists and effective environmentalists focus on reducing the T-factor by increasing government spending on clean tech innovation.
A first reason is that of all factors in the ImPACT-equation, T is the only factor that can feasibly (according to the laws of physics, without much political resistance) be reduced all the way to (almost) zero, such that the environmental impact becomes (almost) zero. For example, there are clean energy technologies, such as nuclear energy and renewable energy, that have (almost) zero greenhouse gas emissions per energy unit.
Due to technological innovation (research and development of clean technology that has a low environmental impact), we already see a decoupling of climate impact and economic growth in most high-income countries. The consumption-based per capita CO2-emissions in almost all high-income countries (e.g. EU, US,...) dropped by about 25% the past 15 years (since 2005), whereas their levels of GDP per capita kept increasing. Degrowthers are skeptical about such decoupling, and argue that such decoupling is not fast enough to meet climate targets and avoid 1,5°C global warming. But at least we have evidence that decoupling due to technological innovation is possible. In contrast, degrowthers believe in the feasibility of another kind of decoupling, between economic wealth and human well-being or life satisfaction. But there are no countries that show an increase in well-being (e.g. an increase in living standards or flourishing) and a decrease in GDP or resource use. There is strong evidence that GDP is positively correlated with measures of well-being. Degrowthers should be more skeptical about the decoupling of well-being and GDP, than about the decoupling of GDP and environmental impact.
A second reason for the effectiveness of reducing the T-factor, is the interdependence between the factors A and T. In particular, with appropriate policy, the T-factor can be made a decreasing function of A. And this function could even be steeper than 1/A. That means an increase in A could reduce the total environmental impact, because the factor T decreases stronger than the increase in A. Suppose the affluence A increases with 10% (which can be reasonably expected after 5 years of growth at the average growth rate of the past two centuries). If only 1% of that increase in GDP is used for funding of clean technology innovation, which should be politically feasible, the global budget for clean technology R&D more than doubles (currently less than 0,1% of global GDP goes to clean tech R&D). A doubling of R&D could roughly correspond with having the clean technologies on the market twice as fast. If a clean technology has zero CO2 emissions per kWh energy or dollar GDP, it doesn’t matter if the economy grows with 10%, because zero times 10% is zero. Reducing GDP, on the other hand, is dangerous, because there will be less money available for funding of clean tech R&D and for paying for the new clean tech infrastructure.
Third, technological innovations have positive returns to scale. Technology has large spillovers: once invented, the whole world population can adopt the clean technology without extra R&D costs. The innovation is a public good. The provision of public goods is a market failure, because markets are not sufficient providers of public goods. Therefore, it is important that governments invest in this public good by increased funding of clean tech R&D.
Fourth: technological innovation is politically feasible. It does not require international cooperation. It does not face much societal resistance.
Degrowthers argue that clean tech innovation introduces rebound effects that make this policy less effective. For example more clean tech could decrease the price of dirty technology and hence increase the use of dirty technology. However, a rebound effect is mitigated if a pollution tax (or a tax on dirty technologies) is introduced, and if the R&D focuses on clean technologies that are sufficiently substitutable (instead of complementary) with dirty technologies. If clean tech is a good substitute, it can automatically outcompete dirty technologies from the market. Compare it with the transition from horse carriages to motorized cars. The cars outcompeted the horse carriages from the market, even without a horse carriage tax or other government policies to regulate horse carriage use. Horse carriages were considered a big environmental problem in 19th century cities, because of the horse manure and horse cadavers on the streets. And these carriages created other negative externalities, such as the noise of the horse hooves and accidents by unexpected movements of horses. But economic or resource degrowth policies were not necessary to solve these problems. Technological innovation, in particular the invention of the car, solved it.
The inconsistencies of degrowth
The above discussion showed several inconsistencies of degrowth. There are at least four examples where degrowthers inconsistently neglect problems.
First, degrowthers argue that increasing GDP per capita is not effective to increase well-being, because of the non-linear, concave relationship between well-being and income. But they neglect the similar non-linear relationship between GDP per capita and environmental impact. This concave relationship means that limiting GDP (e.g. with an income ceiling) is not effective to reduce environmental impacts.
Second, degrowthers argue that technological innovations that improve resource efficiency are not so effective to reduce environmental impacts, because of potential rebound effects. But they neglect similar rebound effects of some of their own policy proposals, such as an advertisement ban.
Third, degrowthers argue that technological innovations do not allow for a sufficient decoupling between GDP and environmental impacts. But they neglect that a decoupling between economic wealth (GDP) and well-being is less realistic. Many countries already show a decoupling between GDP and climate impact, i.e. an increase in GDP together with a reduction of greenhouse gas emissions, but there are no countries that show an increase in well-being together with a decrease in GDP.
Finally, degrowthers argue that we should not be too optimistic about technological innovation, as it is merely a so-called techno-fix that doesn’t change the economic-sociological-cultural structures that are at the root of the environmental problems. But they neglect that an econo-fix that drastically changes the economic system towards degrowth, or a socio-fix that changes cultural norms about consumption, are at least as difficult, unfeasible or intractable as a techno-fix. Degrowthers are not able to argue why change of the economic-political system is more feasible than a change in technology. A lot of clean technologies are not invented yet, but a degrowth economic-political system is not yet invented either.
I appreciate the detailed write-up but felt that this lacked a fair attempt to present the strongest arguments in favour of degrowth and then critique them (steelmanning).
It’s been a few years since I studied degrowth in my undergrad degree so my understanding may be weak/ rusty/ simply wrong. All the same, my impression is that a pro-growth attitude is the majority opinion in EA which makes a fair presentation of the alternative argument particularly important as many readers may be predisposed to agree with you.
I’m not an advocate for degrowth (more just have some sympathy for some its general principles but uncertain they can be applied very well) so other people can likely present a better case in its favour. Samuel’s comment goes into more detail than I intend to but to highlight a few points that stuck out for me:
1) I don’t think reducing population is a universal, or even dominant, objective amongst people who support degrowth. e.g. this blog post which discusses the topic and highlights that population reduction is unnecessary given the majority of emissions come from a minority of people.
2) It seems pretty clear that rich people produce a lot more emissions—e.g. reports like this or this highlighting huge disparity in emissions between the richest 1% and the poorest 50% globally.
3) It’s quite possible capitalism has led to people working more, not less. While a chart like this shows a decline in working hours since the end of the Industrial Revolution, it’s quite plausible people worked far less before the Industrial Revolution—e.g. here
I think it’s great to see engagement with ideas like degrowth on the Forum and appreciate anyone’s efforts to write up a more significant argument for what they think and then publish it, I would just encourage a more thorough engagement with the argument you’re critiquing in a post like this.
I didn’t particularkly steelman degrowth, because I thought the arguments in favor of degrowth are pretty obvious: you can decrease environmental impact by reducing economic activity and resource throughput. I tried to find reasons why such reductions would be most feasible and most effective, but couldn’t find them.
“I don’t think reducing population is a universal, or even dominant, objective amongst people who support degrowth.”> That’s why I called it the population degrowth approach, to be distinguished from the resource degrowth aproach. The common usage of degrowth refers to resource degrowth. but population degrowthers are arguing in just the same way as resource degrowthers, that reducing X (be it economic activity, consumption or usage of dirty technologies) is not enough, just like resource degrowthers are arguing that reducing Y (e.g. usage of dirty technologies) is not enough. Population degrowthers are skeptical about the potential of consumption reductions (econo-fix), just as resource degrowthers are skeptical about the potential of technology innovations (techno-fix).
“2) It seems pretty clear that rich people produce a lot more emissions—e.g. reports like this or this highlighting huge disparity in emissions between the richest 1% and the poorest 50% globally.”> True, but those richest 1% created 82% of the economic wealth (also from the same Oxfam source: https://www.oxfam.org/en/press-releases/richest-1-percent-bagged-82-percent-wealth-created-last-year-poorest-half-humanity). According to your Oxfam reference, the richest 1% cause 15% of carbon emissions. Hence, 82% of created economic wealth corresponds with only 15% of emissions. If you would reduce all economic wealth creation by the richest people, which means reducing it with 82%, you only reduce carbon emissions with 15%. This proves again my point about the non-linear relationship between GDP (created wealth, income) and carbon emissions. Income growth shows a decreasing marginal environmental impact. That makes degrowth measures like income ceilings less effective.
“3) It’s quite possible capitalism has led to people working more, not less. While a chart like this shows a decline in working hours since the end of the Industrial Revolution, it’s quite plausible people worked far less before the Industrial Revolution”> That could be true, but as long as degrowthers are not arguing to move back to preindustrial societies, I don’t think this point is relevant. Plus, importantly: humans have longer lifespans now compared to preindustrial times. That means it could be the case that I still have more leisure time over my whole life, than someone in the 16th century over her whole life. And what about our pensions? They didn’t have that in the 16th century.
There is a lot of important new research about degrowth, so I will try to summarize:
Most humans try to solve problems by adding, but we should more often reduce. More complexity increases risks: https://podbay.fm/p/sean-carrolls-mindscape-science-society-philosophy-culture-arts-and-ideas/e/1630327697
Degrowth researchers I talked to say that we have convincing findings that green growth is not likely. We might see decoupling, but not rapid enough. So we have to choose between economic growth or reaching our environmental goals in time. Meta-study based on more than 10,000 scientific papers:
https://iopscience.iop.org/article/10.1088/1748-9326/ab8429
https://iopscience.iop.org/article/10.1088/1748-9326/ab842a
See also:
https://eeb.org/library/decoupling-debunked
https://www.researchgate.net/publication/301857037_A_Simple_extension_of_Dematerialization_Theory_Incorporation_of_Technical_Progress_and_the_Rebound_Effect
https://tel.archives-ouvertes.fr/tel-02499463/document
https://degrowth.org
The world might fail in reaching further growth even if we continue trying. So what happens if we globally soon encounter a long period of degrowth? Probably not as much as many fear. Research has found that the need for growth is much about expectations. Like investments and loan decisions are made in the belief that growth will continue. But more is not the same thing as better. A large Swedish report about four different scenarios of a future beyond growth:
https://bortombnptillvaxt.se/english/startpage.4.21d4e98614280ba6d9e68d.html#.YSfAq8gvND8
All together, this new research indicates that GDP increases if we work more hours or use more resources (capital, energy, raw materials) per hours. Economic growth is not equivalent to efficiency, creativity or development, but is primarily driven by capital investments: https://www.mdpi.com/2071-1050/8/5/490?fbclid=IwAR35JaACj8pRq54I-K4bFTB2gk1rqjq_1_Brz6ThdFRlVcz0p8HKu0iZPzc
In reports by the UN panel on climate change (IPCC) and the corresponding body for biodiversity – IPBES – the researchers are increasingly more outspoken about overconsumption. The IPBES report from 2019 is based on more than 15 000 scientific publications and was compiled by more than 400 experts from 50 countries. One of the key messages is that a sustainable global economy needs to focus on decreasing levels of consumption and new visions for a good life – quality of life instead of a focus on economic growth. We can still have a lot of growth in important areas, but not overall:
https://zenodo.org/record/3553579#.YSzCGMgvND9
Income level is the single largest contributor explaining the variation in greenhouse gas emissions between households in Sweden, so maybe we should embrace the popular opinion to choose more free time on the society level, instead of raising high salaries even higher? https://onlinelibrary.wiley.com/doi/abs/10.1111/jiec.12168?fbclid=IwAR028wFiJx7k6LNK__BmuNqyzJb2XTmKyXgJP-9jxiFi08OKdWsFuQGWKQM
Even during the pandemic, Americans want to prioritize environment more than growth: https://news.gallup.com/poll/344252/americans-emphasis-environmental-protection-shrinks.aspx
We also see global public support for more focus on environment and well-being at the expense of economic growth: https://globalcommonsalliance.org/news/global-commons-alliance/global-commons-g20-survey
Finally, a report about where we have scientific consensus about growth, and where we have the real difference in opinions:
https://cogito.nu/publikationer/ten-thoughts-on-growth
Your thoughts about this?
I feel like I don’t understand something. The strongest argument against “degrowth” seems that the idea collapses immediately once you consider obvious pragmatic issues, in the same sense a commune or marxist utopia sounds good but doesn’t seem to work in practice.
My guess is that the following is the real world feasibility of these systems:
”capitalism >>> high quality technocratic communism >> degrowth >= anarchism ”
As one facet of the issue with degrowth, it seems that just moderate implementations are blocked by basic geopolitical or military concerns. If most countries deindustrialized, that leaves even tiny countries like North Korea with great military power.
You might think the reaction to the above would be to keep military institutions intact, but that would lead to wild distortions and doesn’t seem to work since military effectiveness relies on other sectors (technology, cyber espionage, soft power).
I can keep writing about more issues, but it feels very sophomoric and uncharitable in doing so. That is usually a sign I don’t understand what’s going on.
I would really appreciate a serious and respectful conversation between experts in the field. I have followed this debate for many years, but people are always talking ABOUT the other side. So I asked experts in favour of not aiming for growth and they say that they only get three kind of responses: Either none, or that others agree, or a response that is not convincing at all for a researcher, often straw man arguments.
And i tend to hear the same story from the other side, so i think EA might be the organization to arrange a high level conversation between experts about degrowth?
Can people please list who they think should be asked if an EA org wanted to host a debate? I don’t know who an excellent moderator would be, my first guess after not being very informed about the space is that Tyler Cowen would make a good participant on the growth side, and I don’t know enough about degrowth to even make a guess at who would participate for the degrowth side.
I would argue that we shouldn’t look at “per capita” but CO2 emissions as a whole, since the climate isn’t going to be more lenient just because we have more people. Most countries haven’t been able to decouple their overall consumption-based CO2 emissions from their GDP, including our country:
And the world as a whole:
Now a couple countries have managed to decouple it so it is technically possible, but given how quickly we need to act I don’t think we have enough time.
But why do we need to grow right now? If we slow down for a couple of decades to make our economic systems more sustainable we can still grow to reach these limits later. And slowing down now might very well mean preventing a catastrophic risk.
I’m also curious as to your thoughts on the other types of environmental damage. Let’s say we innovate our way into replacing all combustion engine vehicles with electric vehicles. EV’s require lithium for their batteries whose manufacturing is very bad for the environment independently of CO2 emissions (also human rights are often violated) and they’re heavier which is worse for our infrastructure.
New technologies require more rare metals whose industry causes violations of human rights / degradation of the environment / wars. And it’s not a little bit more either, 1kWh of renewable energy requires ten times more metals than 1kWh of fossil energy. Perhaps tech-based solutions let us only play a game of whack-a-mole, replacing manure externalities with CO2 externalities and now rare metals externalities.
GDP is subject to Goodhart’s law. Countries lie about their GDP and also change what GDP measures, just so they can increase it.
Also, according to this study, the relationship between GDP and life satisfaction is ‘hump shaped’, life satisfaction seems to peak at around $30,000-$33,000 and then slightly but significantly decline among the richest countries. (This could potentially be an explanation for the Easterlin paradox)
I have two more degrowth policies which you haven’t mentioned, which might be more to your taste:
Tariffs on polluting goods, which would have a negative effect on growth, but a positive effect on the environment. And since most countries are protectionistic this should be politically feasible.
High severance taxes. This would also have a negative effect on growth, but also have positive impact on the environment. And since most governments like having a higher budget this should also be politically feasible.
Your proposed tech based solutions are achieved through ‘soft’ policies such as taxes instead of ‘hard’ policies such as banning, why couldn’t the other policies be achieved the same way? E.g replace sterilizing people with giving them less child care subsidies, or replace banning people from working over a certain number of hours with taxing them more? You are correct to warn of side-effects, but these policies can have positive side effects too, for example this (admittedly non-causal) study which found that working less hours is associated with higher life satisfaction.
I would like to point out that carbon taxes are regressive, so it would need to be paired with a climate income if we don’t want to exacerbate the rising wealth inequality.
It will arguably have negative ethical aspects if total utilitarianism is right, but it arguably won’t have negative ethical aspects if one of the following ethical theories is right:
Negative utilitarianism argues that minimizing suffering has greater moral importance than maximizing happiness.
Contractarianism argues that morality is arrived from mutual agreement, and unborn children cannot agree to be born.
Kantian ethics argues “A man should never be used as merely a means to an end, but always be treated as an end in himself”. A child can be created for the sake of other people, but not for their own good and should therefore not be created.
Libertarianism argues you shouldn’t take nonconsensual actions toward other people, and people cannot consent to being created.
Positive utilitarianism argues it’s immoral that humans slaughter, experiment and destroy the habitats of billions of animals. An argument could be made that even positive utilitarianism wants us to reduce the number of humans.
There are many possible answers for contractualism and virtue ethics, so no definite conclusion there.
Counter-arguments could be made of course, but overall a (surprisingly) large number of ethical theories could be seen as in favor of reducing the human population.
EDIT: Thanks for the response, I’ll look more into it!
Thanks for the comments. Some quick replies
You can consider total instead of per capita CO2 emissions, but then I could also consider total instead of per capita welfare (life-satisfaction or well-being). Perhaps per capita life satisfaction doesn’t grow with income (Easterlin’s paradox), but total life satisfaction increases with population size (just like total emissions increase with population size in a decoupled economy with constant per capita emissions).
The decrease in emissions is not quick enough, but the question is what is the most effective way to make it quicker. As we already see some decoupling, further and faster decoupling seems feasible. We could make it faster, with more technological innovation. I don’t see much evidence that degrowth would result in faster emission reductions, given the fact that it seems hard to even start degrowth. No country voluntarily started degrowth so far. And to meet climate policy targets with only degrowth, degrowth not only has to start, but it also has to be very fast.
One reason to grow now is to have more money available for more scientific research to have more technological solutions to many problems such as climate change. Spending money on campaigns to have an economy with less money (i.e. degrowth campaigns to reduce GDP), seems to me more like a waste of money, that could have been used to fund research. (And not just a waste of money, but also in a sense a bit stealing and burning money.)
Other types of environmental damage are also a concern just like climate change, but as with climate change, no sufficient reason for degrowth. Environmental costs of rare metals can be included in the price, as a tax, just like a carbon tax. And the human rights violations can more effectively be addressed with appropriate international policy than with degrowth.
The more autocratic countries seem to lie more about their GDP, but this does not refute the usefulness of GDP. And as GDP positively correlates with many important measures (life expectancy,…), I don’t think it is so bad to not attempting to decrease GDP.
Thanks for the study about GDP and life satisfaction. On Easterlin’s paradox, this is an interesting read: https://forum.effectivealtruism.org/posts/coryFCkmcMKdJb7Pz/does-economic-growth-meaningfully-improve-well-being-an
Tariffs on polluting goods and severance taxes are proposed by degrowthers, but also by most mainstream economists, so I don’t consider them to be characteristic degrowth policies.
Giving parents less child care subsidies seems a bad idea to me, given some studies I recently heard about that free child care is probably at least as good (cost-effective) as direct cash transfers. Child care subsidies are good for household incomes (mothers can work more and earn higher income) and child development.
Taxing people from working too much hours: I think that basically comes down to the usual labor taxation we already have, especially in a progressive income taxation system. People who work more hours have higher incomes and hence higher marginal tax rates in a progressive system. That is basically taxing extra working hours.
Working less may indeed result in higher life satisfaction, but people can freely choose to work less, if they want such higher life satisfaction. But that also means they earn less, so they face a trade-off between money and life satisfaction. It is possible that people prefer more money above more life satisfaction. If this is the case, then from a preferentialist utilitarian perspective, it is better if people earn more money (hence higher GDP) than if they get a higher life satisfaction. Looking back at Easterlin’s paradox: a higher GDP results in more preference satisfaction than a higher life satisfaction does. So if preference satisfaction (and not life satisfaction) is what ultimately matters, growing GDP is good.
A carbon tax is indeed regressive, and a climate income (carbon fee and dividend) system is more progressive, but I’m not sure that such a system is more progressive than a system where the carbon tax income is for example used to fund clean tech R&D. It could be that clean tech R&D can more effectively reduce emissions and reduce climate change than a fee and dividend system. And if climate change harms the poorest people more (marginal damages or costs to people in poorest countries are highest), then reducing more climate change might be more progressive. So if you include future generations and people in poor countries, I’m not sure whether the “carbon fee and dividend” system is more progressive than a “carbon fee and clean tech R&D subsidies” system.
You can have population ethical theories that entail having fewer people is good, but they also often face very counter-intuitive implications. Negative utilitarianism could entail a preference for total extinction (through sterilization). I don’t see how contractarianism, Kantian ethics and libertarian ethics really entail having a smaller population is good.
A very approachable summary and critique of “degrowth” is by Vox here.
The article above seems like a mainstream take (maybe even very favorable relative to the reaction of a moderate person in a western country).
I’ve never heard of degrowth either used as a term of art, or the essence of degrowth advanced soberly as a real policy agenda. This is after both time spent in economist circles as well as time spent with activists, such as anarchists and environmental anarchists (as part of “social movement organization” research or something).
Because of this, it seems “very online” or a construct advanced in certain academic circles.
Former Vox writer Matt Yglesias also has the green case for more energy consumption here that may be of interest.
As you mention, increases in efficiency tend to be followed by equal increases in consumption in society absent other incentives and policies. So it’s understandable that some people might think we need some limits on resource extraction. And that some think we might be better off continuing innovation within those sustainable limits, instead of hoping we will always be able to invent technology that allows us to ignore those resource limits and failing to plan for possible limits.
It does seem intuitively satisfying to just throw my hands up at the political system and hope technology solves everything, but I wonder if that’s more a result of laziness and despair than well reasoned understanding and moral correctness. The 40 hour work week was once unthinkable. So were child labor laws. So was a ban on CFCs. What if people had just given up? What if we had just hoped someone would invent a better alternative to CFCs that caught on in time, and we allowed the ozone to be destroyed? Instead, we got rid of CFCs and invested in new technology. Technology does not develop in a political vacuum. We would not have seen over 90% cost reductions in technologies like solar during the past 10 years without major investments and support from the Obama administration.
Reducing carbon emissions is an example of “degrowth” in one sector of the economy. The wealthiest 10% of the world are responsible for over half of emissions in 2015. That’s not exactly a decoupling of wealth/consumption/pollution, in my opinion. And we know that happiness barely increases above $75,000 a year, so is rising GDP really benefiting most people when it mainly goes to the top 10%? It makes sense that some restrictions on the 10%’s huge resource use could potentially be helpful in making sure there is enough for everyone to thrive (and may even be good for the overwealthy too). For example, banning all new fossil fuel extraction and creating a carbon tax that is used to fund clean energy jobs will improve the health of millions and save thousands of lives by reducing air pollution. Most people would consider this good overall, even if it limits growth compared to allowing fossil fuel extraction to expand alongside renewables. And there’s a good case to be made that in the long run, damage from fossil fuels would cause even greater degrowth from massive, sudden, and sustained shocks to the economy rather than more gradual, palatable, and planned transitions in production and innovation.
Most people would prefer to work less so that they can spend more time with friends, family, and passion projects. And 9 out of 10 people would even give up $23 out of every $100 they would ever make for a guarantee of more meaningful work. So it’s not clear to me that more consumption is always the best way to increase well-being for people compared to other options or that we should solely pursue a strategy of ignoring resource limits and hoping for the best with technology investments.
To summarize, I don’t feel particularly attached to one perspective or the other. Here are three questions I have.
1. Why shouldn’t we set sustainable limits on resource extraction and continue to invest in technology? Why is ignoring the possibility of running out of resources and betting everything on innovating our way out of all of those limits within a few decades better than a more careful approach? There are plenty of people who chop down an entire forest today for a quick buck rather than harvest sustainably in perpetuity, even if the latter would generate more wealth in the long run.
2. A lot of people would rather have more time and meaningful work than money. Why should we ignore their preferences instead of taking a more flexible approach that allows people greater freedom over what they do (maybe through policies like offering shorter work weeks, building more affordable housing, and even some sort of basic income perhaps—all funded by taxing wealth and/or sharing assets) rather than trying to maximize GDP growth at their expense—or at least without prioritizing them as much—like we have often done over the past few decades?
3. It’s not clear to me that all increases in growth and consumption necessarily mean greater happiness, creativity, and innovation forever. Why not reduce certain kinds of consumption and use those resources to increase investments in innovation? Why should we be opposed to potentially reducing consumption overall even when it ends up boosting happiness overall? I think there’s sometimes truth to the saying “less is more.” There’s diminishing marginal utility to much consumption. Some people overeat while others barely have enough; some people are stressed because they work so much, while others are stressed because they don’t have enough work to be sure they can afford to live; and so on.
“As you mention, increases in efficiency tend to be followed by equal increases in consumption in society absent other incentives and policies. So it’s understandable that some people might think we need some limits on resource extraction.”>I think it is better to have limits on environmental impact. Price mechanisms such as a carbon tax can be used to counter rebound effects on environmental impacts.
“The 40 hour work week was once unthinkable. So were child labor laws. So was a ban on CFCs.”> Economic growth made these policies much more politically feasible.
“What if people had just given up?”>Anti-degrowth environmentalists are not saying we should give up. They say we should invest more in technological innovation.
“Technology does not develop in a political vacuum, and we would not have seen over 90% cost reductions in technologies like solar during the past 10 years without major investments and support from the Obama administration.”>These are points primarily used by anti-degrowth environmentalists to argue for the importance (effectiveness) of more government funding of clean tech innovation. Degrowth environmentalists, on the other hand, are more skeptical about the importance of such clean tech innovations: they prefer a shrinking economy, where we have less money available for technological research. Looking at degrowth thinkers, organizations, panels and declarations, you don’t see a promotion of increased clean tech innovation funding. It is definitely not a top policy proposal. What you do see, is an explicit rejection (proposal to ban) of some technologies such as genetic modification, nuclear power and nanotechnology, a moratorium on techno-scientific research, an orientation research toward low-tech research and convivial tools, raising awareness about “technological addiction”, opposing digital technologies in education. These are not really helping the acceleration of clean tech innovation.
“Reducing carbon emissions is an example of “degrowth” in one sector of the economy.”> The energy sector can still grow, even when decarbonizing.
“The wealthiest 10% of the world are responsible for over half of emissions in 2015.”> But they own 85% of the wealth. Hence, per unit of wealth, they emit less. Suppose you had a policy that annihilates 85% of global wealth, namely all the wealth owned by the richest 10%. The richest 10% can no longer consume anything. That would only reduce emissions with 50%. With clean tech innovation, we can reduce more than 50% of emissions, without such politically unfeasible policies as 85% wealth reduction.
“And we know that happiness barely increases above $75,000 a year,”>Environmental impact also shows such a diminishing marginal effect. Above a certain income, someone’s environmental footprint barely increases when income increases. Richer people have a higher propensity to save than to consume. In high income countries, we see that an increasing income over time even correlates with reduced CO2 emissions (absolute decoupling). Cfr environmental Kuznets curve.
“so is rising GDP really benefiting most people when it mainly goes to the top 10%?”> The rising CO2 emissions mainly go to the bottom 90%...
“For example, banning all new fossil fuel extraction and creating a carbon tax that is used to fund clean energy jobs”>This is not specifically a degrowth policy proposal. Anti-degrowth environmentalists also favor such proposals. Such proposals are compatible with economic growth.
“Most people would prefer to work less so that they can spend more time with friends, family, and passion projects.”>They can choose to do so, in a free market. At least when the labor market is competitive and flexible enough, such that it is easier to chose a job that has less working hours. Instead of degrowth regulations (e.g. maximum work hours per week), it is more effective to increase job flexibility.
“and hoping for the best with technology investments.”>You can also say that degrowth environmentalists hope for the best with degrowth campaigns, with income and working hour regulations,…
“1. Why shouldn’t we set sustainable limits on resource extraction and continue to invest in technology?”> Sure, let’s do that. But only set limits on resource extraction when that resource extraction really correspond with environmental impact. What would be the sustainable limit for energy use? Suppose you set a limit on energy use per capita. e.g. 50 kWh per day per person. Now I invent a clean technology, namely feasible nuclear fusion, that can generate trillions of kWh per day. Is my invention not allowed, merely because you chose a limit of 50 kWh/day/person?
“Why is ignoring the possibility of running out of resources and betting everything on innovating our way out of all of those limits within a few decades better than a more careful approach?”>If you prefer degrowth, then why do we not have a degrowth world? Why don’t you just make the global economy degrow? Perhaps it is difficult, but then you are betting on feasibility of changing the global economy. In the end, we are interested in cost-effectiveness. Which policy campaigns are most cost-effective: a campaign for degrowth with e.g. income and working hour regulations, or a campaign for increased government funding for clean tech R&D (funded by a carbon tax or an income tax)? Suppose the economy (GDP) grows, and only 1% of the extra income is taxed. This should be extremely feasible. If these tax revenues go to clean tech R&D, we double funding for R&D, which could almost double tech innovation, which could almost double the speed to implement these technologies. We saw a 25% reduction in consumption-based per capita CO2 emissions in dozens of high-income countries in 15 years. Imagine we have in 15 years a 50% reduction…
“There are plenty of people who chop down an entire forest today for a quick buck rather than harvest sustainably in perpetuity, even if the latter would generate more wealth in the long run.”>Why would they chop down the forest so quickly? Because the interest rate is high. But that basically means the marginal productivity of capital is high. Selling the wood and investing in capital, might be the most efficient (productive). Once marginal productivity of capital declines, a lower harvest rate would become optimal. In other words: there is not necessarily a market failure when chopping down a forest. But you may refer to the real underlying market failure: the decrease in a public good such as biodiversity. The most effective policy interventions to solve that problem of biodiversity loss due to clearcutting too much forests, is a taxation, and funding tech innovation to have better alternatives than wood (substitutes for wood).
“2. A lot of people would rather have more time and meaningful work than money. Why should we ignore their preferences”> Why would they not simply choose to work less, if that is what they prefer? Whatever the reason you come up with, I honestly don’t think that economic growth is the main obstacle or reason why they are not so able to choose fewer working hours and more leisure time. In contrast: we do see a negative correlation between economic growth and working hours: a higher GDP correlates with fewer working hours.
“3. It’s not clear to me that all increases in growth and consumption necessarily mean greater happiness, creativity, and innovation forever.”> And it is not clear to me that all decreases in growth and consumption necessarily mean lower CO2 emissions and environmental impacts.
“Why not reduce certain kinds of consumption and use those resources to increase investments in innovation?”> Sure, but that is not incompatible with economic growth.
I’ve never heard of anyone proposing 85% wealth reduction so I don’t think it’s relevant here. But you could absolutely take that wealth and use it to create good standards of living across the board within sustainable limits. That’s what everyone wants at the end of the day, right?
I don’t know anything about degrowth people saying we cannot use new technologies even if they don’t cause damage to the environment. That sounds more like straight up primitivism, which is a really obscure ideology. I think you’re better off responding to the strongest possible arguments rather than the weakest ones. That seems like the most effective way to come to the best proposals using insights from both sides.
It seems like you don’t accept the possibility to have innovation within an economy and rising standards of living without increasing total resource extraction every year. Maybe people figure out asteroid mining and all kinds of innovations so we never have to worry about any resources but it seems possible that such technology could take a long time or never be invented. Instead you turn to “Well this seems politically hard not easy and effective” and again if we end up in a world where it’s what we needed to do, then we should have done it and tried to do it no matter how hard it was. CFCs were an example of banning harmful technology instead of an innovation only approach. You say it was easier because growth continued but you don’t have a counterfactual to judge it against. Maybe it’s more palatable to not change any tax rates and investment policies and just keep raising more revenue as the economy grows, but that doesn’t mean it’s the only way to invest in beneficial technologies.
People cut down a whole forest for profit today because they are shortsighted and don’t care or they don’t have other alternatives. For some people, interest rates will never change that unless you paid them more than what they could chop the whole forest down for today. They are that shortsighted and selfish. And if you’re doing that to save the Amazon, well that also seems like a big policy change very different than just invest, grow, and hope for the best. I don’t see any reason why we can’t have growth in parts of the world that need it while reducing overconsumption in other parts.
I appreciate both comments in this thread for exploring these issues in such depth.
Thanks! Sometimes I wonder if it’s even worth thinking about topics like this since it seems so hard to see how it would even have an impact (and even if it did I could be wrong) so I’m glad you did.
I really liked your clear outline on your position, and this definitely contained some food for thought that I found to be nicely presented. That being said, I am still much more agnostic re which position to take (esp. after reading some of the comments here) than you seem to be. You wrote:
Maybe this is misguided, but why not attempt to pursue both in a twin strategy?
What if both decouplings are insufficient on their own but sufficient when combined?
This also ties in to a concept I’ve come across recently: agrowth.
Quoted from The new theory of economic ‘agrowth’ contributes to the viability of climate policies: