Green growth and degrowth

Question 1

Limits to Growth - 1972

Answer 1

• 1972: Club of Rome publishes “Limits to Growth
• Considered 5 factors to ultimately limit growth:
  – Population increase
  – Agricultural production
  – Nonrenewable resource depletion
  – Industrial output
  – Pollution generation

Question 2

Planetary boundaries 2015

Answer 2

• Defining a ‘safe operating space’ for humanity for 9 areas, e.g. Climate Change, Freshwater Use, OCean acidification, Land-system change –> Biosphere Integrity and biochemical flows are transgressed (überschritten)
• later also freshwater (boundary expanded to include green water) and novel entities (incl. plastics and other human made chemicals)

Question 3

What is Economic growth?

Answer 3

Economic growth:
* Increase in the capacity of an economy to produce goods and services (over time or over a time period)
– Caused e.g. by increase in the capital stock, advances in technology, and improvement in education
– Traditionally, measured in terms of gross national/domestic product (GNP/GDP)

GDP only reflects the size of the nation’s economy, not the nation’s welfare –> yet it is often treated like and indicator for all aspects of development

Question 4

What is Economic development?

Answer 4

• Usually indicated by an increase in citizens’ quality of life
• Often measured with the Human Development Index (HDI), which considers education, life expectancy and poverty rates

Question 5

Interpretation of the GDP - neglects and positive

Answer 5

Traditional interpretation: The GDP reflects the economic development of an economy which is often understood as the most important indicator for human well being within that economy.

Precise interpretation: The GDP reflects the volume of monetarized transactions within an economy, without a normative judgment on their economic, ecologic and social implications.

The GDP neglects:
 Family work
 Concentration/distribution of wealth
 Inequality
 Long term effects of economic activities

The GDP includes as positive:
 Internalization of external effects (e.g. reduction of CO2 in the atmosphere)
 Transitions that caused the externalities (e.g. running a lignite fired power plant)
 Assets needed after a natural catastrophe taking place (e.g. flood or earthquake) or an epidemic
 Export and production of weapons

Question 6

Critics about classical economic growth concept

Answer 6

• Reduced availability of resources (energy sources, raw materials etc.)
• Declining quality of the environment
• Decline in the health of flora and fauna upon which humans depend
• Rise of negative societal side effects
   Refers also to the concepts of “Limit of growth”/ “planetary boundaries”

Question 7

GDP alternatives

Answer 7

Adjusted economic measures
* Expressed in monetary units
* Considering factors like: Environmental costs and benefits; Distribution of wealth ; Crime, etc.
* e.g. Genuine Progress Indicator (GPI)

Subjective measures of well being
* Elaborated by surveys asking about subjective indicators like: e.g. World Value Survey

Weighted composite measures of several indicators
* A combination of the two other measures
* e.g. Happy Planet Index

Question 8

Adjusted Economic Measures: GPI

Answer 8

is calculated by starting with personal consumption expenditures. Then making more than 20
additions and subtractions to account for different
factors, e.g.:
 Value of volunteer work
 Costs of divorce
 Crime
 Pollution
Moreover it accounts for inequality.

Question 9

Subjectivemeasures of Well Being: World Value Survey

Answer 9

covers almost 100 countries and includes questions about how satisfied people are with their lives

The WVS measures, monitors and analyzes:
– support for democracy
– tolerance of foreigners and ethnic minorities
– support for gender equality
– the impact of globalization
– attitudes toward the environment , work, family, politics , national identity, culture , diversity, insecurity
– subjective well being

Question 10

Weighted Composite Measure: Happy Planet Index

Answer 10

The Happy Planet Index combines subjective and objective indicators, namely:
– Subjective life satisfaction/wellbeing
– Life expectancy
– Ecological footprint

Question 11

Green economy - definition

Answer 11

A green economy is defined as low carbon, resource efficient and socially inclusive (according to UNEP)
* Green Economy provides a macro economic approach to sustainable economic growth with a central focus on investments, employment and skills
– Growth in employment and income
– Public and private investment in economic activities,
nfrastructure and assets:
* Reduced carbon emissions
* Reduced pollution/enhanced biodiversity and ecosystem services
* Enhanced energy and resource efficiency
– Natural capital is a critical economic asset and a source of public benefits

Aspects:
- greening of existing industries –> Resource efficiency and pollution prevention
- creating green industries –> Environmental technologies

Question 12

Green industry definition

Answer 12

Recurring topics:
–Improved resource efficiency, decreased pollution and waste generation, minimization of chemicals risks
– Develop new products which require less resources (water, materials, energy over life cycle)
– Increase process efficiency
– Minimize process emissions, adopting clean technologies
– Switch to low carbon inputs
– Close material loop (recycling, circular economy)

Question 13

Green growth definition

Answer 13

IPCC AR6, pg. 173
–Eco modernism “ aims to decouple GHG emissions and other environmental impacts from GDP growth through three primary strategies:
(a) ‘green’ technological innovation ,
(b) resource efficiency or productivity improvements and
(c) the sustainable intensification of land use in both rural and urban areas”

Question 14

Environmental technologies

Answer 14

• Based on renewables
  – Renewable energy like wind power
  – Bio based materials
• Recycling plants
• Transportation
  – Drivetrain technologies like e mobility
  – New fuels, e.g. power to x
• Construction
  – ecological building

Question 15

Green economy vs. sustainability

Answer 15

Green economy does not replace sustainable development, but creates a new focus on the economy

Question 16

What is resource efficiency?

Answer 16

• in the context of sustainability: intersection of economy and environment
• Resource decoupling: more efficiency from resource use
• Impact decoupling: less impacts from resource use

Assessment:
Resource efficiency= Added value/resource use

• Resource efficiency is also reflected in various business strategies, as it does not exclusively focus on an environmental dimension but takes into account economic aspects as well

Question 17

Potential side effect of decoupling

Answer 17

Rebound effects:

Increased efficiency allows products to be manufactured/services to be perfomed using fewer resources (energy, water, raw materials), often at a lower cost
….BUT the savings are often offset…
- direct: more frequently/intensively used
- indirect: saved cost may be used for another product

Question 18

Policy instruments to support green economy

Answer 18

*“Command and control” (regulation)
– e.g. compulsory technical standards or ban of materials/substances (e.g. Montréal Protocol)
– Taxes, subsidies (e.g. CO 2 tax)
– Environmental standards (e.g. Environmental impact assessment (UVP) or Strategic environmental assessment (SEA)

• Market based (industry can decide how to achieve this)
  – e.g. setting benchmarks or compulsory targets (e.g. ETS)
  – Fees/pollution charges
• Voluntary
  – Environmental management systems ISO 14001 & EMAS
  – Sustainability reporting (e.g. CSR) & Commitments, e.g. to respect human rights
  – Certificates, labels (e.g. ecolabel), producer responsibility, etc.
  – International initiatives, e.g. WBCSD, UNEP, UNDP & National initiatives, e.g., forums such as Sustainable cocoa or „Bündnis für nachhaltige Textilien“

Question 19

Summary green economy

Answer 19

• Numerous efforts of industry for achieving sustainable development exist!
• But there are also numerous challenges and barriers:
  – So far, focuses often only on environmental issues, e.g. climate change (though social aspects become more and more important) –> may change in the coming years SDGs, mandatory CSR reports etc .
  ––„Green is not always sustainable“ trade offs exist!)
  – There is always a risk of greenwashing and bluewashing
  – Changing to sustainable industry often requires high initial costs and resources and especially commitments of industry/governments
• Costs are often still the main driver …and economic growth is still perceived as main driver for improving social & economic conditions and growth rates the most prominent indicator for the success of economic policy…

Question 20

Some growth criticism…

Answer 20

• Failure of decoupling : any attempt to decouple the current level of materialized freedom based on material efficiency, closed loops
• Peak happiness : After reaching a certain level, increases income or consumption do not result in a further increase in individual well being
• Peak everything : Economic growth is reaching its economic limits: expected shortage of resources, apostrophized as “Peak Oil”, is foreseeable to expand to such an extent that an “Peak Everything” is approaching
• Financial crisis
• Potential to reproduce patterns of exploitation and excessive resource extraction with minerals required for the clean energy transition (e.g. lithium, cobalt, nickel, etc.)

Main findings:
1. There is no empirical evidence that absolute decoupling from resource use can be achieved on a global scale against a background of continued economic growth
2. Absolute decoupling from carbon emissions is highly unlikely to be achieved at a rate rapid enough to prevent global warming over 1.5 C or 2 C, even under optimistic policy conditions
 Conclude that green growth is likely to be a misguided objective, and that policymakers need to look toward alternative strategies

Question 21

What is Degrowth?

Answer 21

*….does not require decrease in well being happiness and well being can be maximized

Underlying principle of degrowth: growth threatens our survival as a species
Why?
a) Total debt always expands in a modern capitalist system, setting us up for economic collapse
b) Total ecological footprint always expands in a modern capitalist system, setting us up for environmental collapse

Question 22

Degrowth movement

Answer 22

• Challenging increasing GDP as the main focus
• Living within ecological limits
• Resources are equally shared
• Material accumulation is less relevant in culture
• Instead of efficiency, the focus will be on sufficiency
• Instead of technological innovation for technology’s sake, but will focus on technology which is useful for everyone
• Advocate for the downscaling of production & consumption, because overconsumption causes long term environmental issues and social inequalities

Question 23

Drivers of economic growth and Mitigating the growth imperative

Answer 23

Drivers of economic growth:
- Supply side (Specialization due to mass production) - Growth - Demand side (Consumption of goods and services)

Mitigating the growth imperative
-> Change of supply structures which are less capital intense, specialised and spatially confined as well as more modest

Subsistence and Suffience; Reduction of cultural growth drivers

Question 24

Some key demands of the degrowth movement

Answer 24

• More taxes on flights, energy –& resource consumption (incl. external costs)
• Support of local economy (fiscally and legally) to promote short transport routes, more transparency etc.
• Stop of privatization of public good (e.g. water and energy supply)
• Investments in (and also restructure of) public infrastructure (e.g. more investments in public transport than in motorways)
• Stop of environmentally unfriendly tax benefits (e.g. for company cars)
• Reformation of education system (e.g. more awareness on env. problems)
• Promote and support research on degrowth
• Some proposals within the current system:
  – Universal basic income
  – 4 day work week

Question 25

Some degrowth criticism…

Answer 25

• Drivers behind energy related GHGs: The Kaya identity
• Hard to target affluence
• Degrowth has been called unrealistic and too idealistic
• Degrowth challenges deeply embedded cultures, values, mind sets and power structures
   leading to challenges with acceptance and therefore political feasibility
  *“May not be an effective, let alone an efficient strategy to reduce environmental pressure” (van den Bergh, 2011 )
• Unlikely to happen in the time frame needed to meet climate goals
• Green growth is embedded in existing policies and strategies

Question 26

A-Growth

Answer 26

*A- Growth proposes to ignore GDP information and focus instead on sound environmental, social, and economic policies independently of their effects on economic growth (van den Bergh and Kallis , 2014; van den Bergh, 2011)
– Effective climate agreement
– Different work time norm / flexible labor market
– Regulate commercial advertisement
– Education regarding consumption and the environment
– Ignore (or at least put less importance on) the GDP
– Research subsidies and state procurement opening alternative technology scenarios

Question 27

Some opinions / summary

Answer 27

Pro Green Growth/Decoupling:
- Decoupling has not yet been tried as a serious global strategy…”
- “The degrowth people are living a fantasy where they assume that if you bake a smaller cake, then for some reason, the poorest will get a bigger share of it , that has never happened in history.”

Pro Degrowth Views:
- A degrowth society embraces the necessity of “energy descent”descent”,
*“An innocent 2 or 3% per year, it’s an enormous amount of growth cumulative growth, compound growth over time , I don’t see it being compatible with the physical reality of the planet”

Question 28

Economic growth & economic development…
…in international, EU & national strategies?

Answer 28

• Existing strategies emphasize the relevance of sustainable growth considering concepts of resource efficiency, energy efficiency, decoupling of economic growth from well being/human development… is considered as the only way to stay within planetary boundaries

SDGs: –> SDG 8: Sustainable Development, targets are: GDP growth, higher economic productivity, improve resource efficiency

Germany’s sustainability strategy 2021, includes targets/indicators:
- resource protection/efficiency
- debts
- GDP
- Employment

European Green Deal:
- Aims to ensure economic grwoth decoupled from resource use

Circular Economy Action Plan:
- “Reduce pressure on natural ressources and create sustainable growth and jobs”; “Decoupling economic growth from resource use, while boosting sustainable growth”