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5. An outlook on economic growth
The so-called ‘green growth’ approach, based on a profound faith in technological solutions, has come to define our times. There are occasional comments regarding the issue of overpopulation or the importance of not over-consuming, but the reality is that mainstream environmental discourse, especially in the political realm, has placed its faith, explicitly or
83 implicitly, almost entirely in techno-fixes. This would mean that we expect to reduce (eventually to zero) our environmental impact almost exclusively by producing and consuming the same goods and services more efficiently, which concept is in itself paradoxical. The argument holds, that this way, economies can still grow in terms of GDP, while environmental impact reduces. This, in essence, is part of the vision encapsulated within notions of
‘sustainable development’ and ‘green growth’. It is so convenient that governments, businesses, and the general population tend to accept it without further inquiries into the specificities, irrespective of whether it has much empirical support. Perhaps the limits of technology can be most easily understood when clarifying exactly what is expected of technology in terms of achieving sustainability. Throughout much of the 20th century, developed economies achieved around 3% growth in GDP annually, meaning that they doubled in size roughly every 23 years. This has become a reference point for signifying political-economic success, so let us assume that when the United Nations talks of ‘growth’ it means continuing levels of growth that have been experienced in recent decades. Over eighty years, at 3% growth, the economies of the developed world (populated by roughly 1 billion people) would have doubled in size three times, meaning they would be eight times larger, in terms of GDP, than they are now. If we also assume that by 2100 the world population is going to be around 11 billion (UNDESA 2019) and that this population has caught up to the living standards of the developed world by this stage, then the global economy would be almost 90 times larger, in terms of GDP, than the size of the developed world’s aggregate economy today.
Considering that ecosystems are trembling under the pressure of one ‘developed world’ at the existing size, no one could seriously think our planet could withstand the equivalent of a 90-fold increase. There would be efficiency improvements, indeed, meaning that the impact could be significantly less than projected above, however, even based on estimates of decoupling, we would still need several planets worth of biocapacity (WEIDMANN et. al. 2015). The point is that efficiency gains could not possibly be expected to make the projected amount of GDP growth sustainable. The levels of decoupling required would simply be too much. Therefore, according to some experts, we should no longer focus on how to make our current growth model sustainable but rather to find out what economic model is sustainable at all (ALEXANDER 2014).
We can find narratives other than ’perpetual economic growth’, although these are mostly theoretical ones, only vaguely developed and described. However, it is still worth paying attention to them because the following phase of this research could be finding a solution for a sustainable economic model through a deeper understanding of socio-economic
84 narratives. GUSKE et al. (2019) in their article propose the narrative of ‘Small is beautiful’ as a direct reference to the original concept of E. F. SCHUMACHER (1973), which refers to a complete reconfiguring of our economic system. According to this narrative, the structure of the economy is organized around small or medium-sized, local enterprises. These are mostly decoupled from international value chains and independent from global corporations. Instead, local businesses keep supply-chains local, try to use alternative resources and production methods, which will eventually lead to a replacement of international supply-chains. According to the authors, in this more sustainable economic system, a fundamental value shift has taken place. Economic growth is no longer the prevailing indicator for success and well-being;
consumers no longer consider owning goods such as the latest fashion items or the newest technology a status symbol; producers no longer invest in excluding others from using valuable knowledge. Instead, community-oriented values prevail, putting well-being and a good life at the heart of society, which includes quality of life, social cohesion and participation. A different narrative from the same authors (ibid.) is named ‘Transparent and manageable’, where the economy is built on more sustainable production and consumption patterns, achieved by increasing transparency of international supply-chains and stricter standards regarding the environmental and social impact of products. Sustainable solutions are no longer more expensive, rather they are competitive in markets. This change in focus results in a change of the overarching economic goals. Producing and selling more goods, increasing profit margins and ultimately growing in terms of revenue is no longer the main goal, instead, network effects resulting from a higher number of users of sustainable solutions gain relevance. STEVENSON (2019) introduces the ‘Radical Transformationism’ narrative, according to which we have to accept that environmental sustainability is completely incompatible with continuing economic growth. This narrative rejects capitalism as the only viable economic system – in fact it claims that environmental sustainability is completely incompatible with continuing economic growth –, and recommends an alternative to our existing market-based economies through strengthening economic relations based on cooperation and sharing. Existing market-based environmental solutions are part of the problem not part of the solution, the narrative claims.
This perspective is also associated with a fairly high level of scepticism about the existing sustainability initiatives of businesses, governments, and international institutions.
6. Conclusions
We have evidence that as nations get richer, their overall ecological footprints and carbon emissions tend to rise, from which it follows that the argument that higher GDP will
85 automatically produce sustainable economies (which is the EKC hypothesis) lacks evidential foundation. The main problem is that according to the narrative of growth-orientated economy, efficiency gains are almost always reinvested into increasing production and consumption, not reducing them. These rebound effects have caused the overall environmental impact of economies to increase, even though technology has produced many efficiency gains in production and cleaner solutions. In other words, technological advancement has resulted in relative decrease, but little or no absolute decrease of emissions and natural degradation. The latter is what is needed, however, given that the global economy is in serious ecological overrun. Since there seems to be no reason to assume that more efficient growth is going to reduce humanity’s ecological footprint within sustainable bounds, it follows that we must consider alternative models of economy – alternative models of progress – even if this challenge conventional economic wisdom. We cannot solve our problems using the same kinds of thinking that caused them. All appropriate technologies must be exploited – this paper does not argue otherwise –, it only maintains that technology by itself is not going to be able to solve environmental problems when the application of technology is governed by a growth imperative. Accordingly, this paper has argued that what is needed for true sustainability is a transition to a fundamentally different kind of economic thinking – an economic paradigm that seeks sufficiency rather than limitless growth. This may not be a popular message, and it may already be too late for a smooth transition from the infinite growth model (GILDING 2011), however, on a finite planet, currently there seems to be no alternative. Although this hypothesis hereby cannot be validated through empirical research - which was also not the purpose of this paper -, the professional opinion of the author reflects that there seems to be strong evidence that techno-optimism by itself cannot be the ultimate solution for problems emerging from global sustainability issues.
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