A discussion about GDP growth and climate change (1) doesn’t really add anything to the known economic strategies to end emissions (sinking lid carbon caps) (2) nor does it engage with the key pressures preventing us from implementing them. So I agree with you that we shouldn’t be too concerned about impact on GDP through carbon mitigation, but also think arguments in favour or against that aren’t really engaging with the critical solutions or challenges.
On the solutions side: economically, at the level of economics design, a sinking lid carbon cap makes it very simple. We set a carbon budget from now to 2050 based on the level of temperature increase and other climate impact we deem tolerable. Then, anyone emitting carbon has to buy emissions credit out of the limited budget available. I’m not saying governments should entirely leave market forces to sort it all out—there’s a strong argument to helping them along with e.g. tailpipe emissions regulations. But economically that’d be sufficient. Under this approach you don’t have to worry about whether you get growth or degrowth or something in between—just set your target and the economy will adjust to achieve it.
I suppose I must concede that some people trying to decide exactly what level of emissions, or temperature increase, we might want to tolerate treat it as a GDP optimisation problem. What level of temperature increase maximized GDP given the cost of avoiding to climate change against the costs of experiencing climate change?
But there’s also the key political pressures that keep us from implementing carbon budgets. Oil prices went up this year by a lot, and this has led to high inflation across the economy, according to some experts, and has been experienced directly by consumers as higher costs to fuel combustion engine vehicles. Political leaders of all stripes including Biden, who ran on a platform of lowering emissions, amongst other priorities, have responded by trying to get oil prices down. That’s the exact opposite of what you do to avoid climate change, but it might be the only choice democratically elected leaders have to respond to public concerns in order to be elected again. And voters aren’t primarily concerned about maintaining topline growth; they want to know: will I have a job; will I keep my job; can I afford to drive my car? GDP is a contributor to all those things, and SWB measures definitely decline during recessions. but a debate on GDP targets and subjective well-being won’t help you understand how to get support from voters for a tractable climate change response.
So I am left wondering the value of framing the question in terms of GDP at all, except perhaps in setting an economically optimal temperature increase limit target for carbon credit schemes. Maybe that kind of puts me in agreement with OP? But I disagree that the inevitable conclusion is that we need to “shrink material throughput”. What needs to be shrunk are greenhouse gas emissions, and to target growth in a positive or negative sense from the outset seems misplaced.
I’m not sure I’m following your criticism against framing the question in terms of GDP, since my point is that we shouldn’t really care about whether it grows or shrinks, and it seems that you agree (when you mentioned the carbon cap).
Alright, so we agree we need to reduce GHG emissions, but when I say that we need to “shrink material throughput” it’s not a conclusion, it’s a separate point. To reduce GHG emissions it might even be better to grow our economy, but I think shrinking resource use and caring for the planetary boundaries are also important, and I’m more skeptical that this can be done under further economic growth.
A discussion about GDP growth and climate change (1) doesn’t really add anything to the known economic strategies to end emissions (sinking lid carbon caps) (2) nor does it engage with the key pressures preventing us from implementing them. So I agree with you that we shouldn’t be too concerned about impact on GDP through carbon mitigation, but also think arguments in favour or against that aren’t really engaging with the critical solutions or challenges.
On the solutions side: economically, at the level of economics design, a sinking lid carbon cap makes it very simple. We set a carbon budget from now to 2050 based on the level of temperature increase and other climate impact we deem tolerable. Then, anyone emitting carbon has to buy emissions credit out of the limited budget available. I’m not saying governments should entirely leave market forces to sort it all out—there’s a strong argument to helping them along with e.g. tailpipe emissions regulations. But economically that’d be sufficient. Under this approach you don’t have to worry about whether you get growth or degrowth or something in between—just set your target and the economy will adjust to achieve it.
I suppose I must concede that some people trying to decide exactly what level of emissions, or temperature increase, we might want to tolerate treat it as a GDP optimisation problem. What level of temperature increase maximized GDP given the cost of avoiding to climate change against the costs of experiencing climate change?
But there’s also the key political pressures that keep us from implementing carbon budgets. Oil prices went up this year by a lot, and this has led to high inflation across the economy, according to some experts, and has been experienced directly by consumers as higher costs to fuel combustion engine vehicles. Political leaders of all stripes including Biden, who ran on a platform of lowering emissions, amongst other priorities, have responded by trying to get oil prices down. That’s the exact opposite of what you do to avoid climate change, but it might be the only choice democratically elected leaders have to respond to public concerns in order to be elected again. And voters aren’t primarily concerned about maintaining topline growth; they want to know: will I have a job; will I keep my job; can I afford to drive my car? GDP is a contributor to all those things, and SWB measures definitely decline during recessions. but a debate on GDP targets and subjective well-being won’t help you understand how to get support from voters for a tractable climate change response.
So I am left wondering the value of framing the question in terms of GDP at all, except perhaps in setting an economically optimal temperature increase limit target for carbon credit schemes. Maybe that kind of puts me in agreement with OP? But I disagree that the inevitable conclusion is that we need to “shrink material throughput”. What needs to be shrunk are greenhouse gas emissions, and to target growth in a positive or negative sense from the outset seems misplaced.
I’m not sure I’m following your criticism against framing the question in terms of GDP, since my point is that we shouldn’t really care about whether it grows or shrinks, and it seems that you agree (when you mentioned the carbon cap).
Alright, so we agree we need to reduce GHG emissions, but when I say that we need to “shrink material throughput” it’s not a conclusion, it’s a separate point. To reduce GHG emissions it might even be better to grow our economy, but I think shrinking resource use and caring for the planetary boundaries are also important, and I’m more skeptical that this can be done under further economic growth.