'Green Economic Growth' Is a Myth

There are 'no realistic scenarios' to make the economic growth demanded by capitalism compatible with a safe climate, researchers who advised the United Nations found.
July 16, 2020, 1:00pm
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Image: Barnaby Chambers/Shutterstock

As societies get richer, they consume more resources. That also means they generate more pollution, driving climate change and destroying natural ecosystems.

We need to somehow break this link between material wealth and environmental catastrophe. That’s why financial institutions and governments have been focused on the idea of ‘decoupling’ GDP growth from resource use.

The idea of ‘decoupling’ is driven by the recognition that to stay within the ‘safe limit’ of 1.5 degrees Celsius, we have to dramatically reduce our material consumption of Earth's resources.

The assumption is that it is possible to continue growing the global economy while reducing our actual resource use and material footprint, perhaps by shifting to renewable energy.

This notion has been most recently articulated in the book More From Less: The Surprising Story of How We Learned to Prosper Using Fewer Resources—and What Happens Next, by Andrew McAfee, principal research scientist at the MIT Sloan School of Management. Financial and other data, McAfee argued, shows we can actually easily reduce our material footprint while continuing to grow our economies in a win-win scenario.

But new scientific analysis by a group of systems scientists and economists who have advised the United Nations seems to pull the rug out from under this entire enterprise. The new research indicates that the conventional approach is based on selective readings of statistical data.

McAfee argues, for instance, that as we are increasing wealth, the productivity motor of capitalism is driving us to greater heights of efficiency due to better technologies. This means we are able to make stuff faster and smaller using less materials and in some cases less energy. And that in turn implies we are causing less pollution. The problem is that this story, according to the new research, ignores how greater efficiency in certain regions or sectors is not slowing down the overall consumption machine. Within the wider system these efficiencies are enabling us to consume even greater quantities of resources overall.

That’s why decades of data on material flows confirm that there are “no realistic scenarios” for such decoupling of economic growth from resource use. Combing through 179 of the best studies of this issue from 1990 to 2019 further reveals “no evidence” that any meaningful decoupling has ever taken place.

“The goal of decoupling rests partly on faith,” conclude the team from the BIOS Research Institute in Finland, an independent multidisciplinary scientific organisation studying the effects of environmental and resource factors on economy, politics, and culture.

The BIOS team previously advised the UN Global Sustainable Development Report on the risk that endless economic growth under capitalism would be undermined due to intensifying “biophysical” limits. A combination of diminishing returns from energy extraction and increasing costs of environmental crises are already undermining growth, and require us to rewrite the global economic operating system, the scientists concluded in a powerful background report to the UN.

In two new, peer-reviewed research papers published in June, their analysis goes further. Capitalism’s drive for maximising profits means that the economy is structured around continued economic growth: if it doesn’t grow, it collapses. This means that huge technological efficiencies tend to empower capitalism to grow faster and bigger.

Narrowing the window

The first study, published in Environmental Politics, points out that the environmental impacts and resource use of many national economies is unsustainable. If the economy is to continue growing or even remain at the present level, in order to stay within the planetary boundaries of resource use we have to ‘decouple’ it from these environmental impacts.

Yet the authors conclude that many of the accounting measures used to conclude that decoupling is happening systematically obscure or exclude critical data.

“The existence of decoupling in a bounded geographical area or economic sector does not, as such, mean that decoupling is happening in a wider context,” argued the BIOS team:

“Well-known and widely studied phenomena such as Jevons’ paradox, rebound, and outsourcing show that sectoral and local decoupling can co-exist with and even depend on increased environmental impact and increased resource use outside the analysed geographical or sectoral unit,” they wrote.

In 1865, English economist William Stanley Jevons noted that technological improvements which increased efficiencies in coal-use did not lead to a decline in coal consumption, but instead drove even greater consumption of coal in an even wider range of industries.

So while decoupling can seem to occur in certain geographies or sectors, it “can co-exist with (and even depend on) increased negative impacts or resource use outside the analysed sector or area”, according to the BIOS authors. All too often, greater efficiencies can translate into heightened environmental impacts because they enable greater levels of consumption at lower cost.

Much of the data marshalled by McAfee and others, in the analysis of the BIOS team, would represent cherry-picking from a narrow window that focuses on a particular region or sector without acknowledging the wider impacts outside that region or sector. As a result, much deeper environmental impacts of resource use can often be excluded from the analysis simply by narrowing down that data-focus.

I spoke to McAfee about the new research by the BIOS authors. He was skeptical of the findings: “We seem to agree that specific cases of decoupling are indeed taking place—decoupling from carbon emissions for instance. Where we disagree is that I see these instances of decoupling as part of a wider trend that is only going to improve overall, although globally less developed nations still have to catch up.”

I asked McAfee about the conclusion that such decoupling is only ‘relative’ and could be enabling increasing resource consumption. “In the United States, we have clear data on absolute decoupling,” he said. “I can highlight two key examples: Our fertiliser use and metals consumption have all undergone clear declines in recent years. This and other data provides unmistakable evidence that absolute decoupling in the US is happening. Fertiliser consumption has undergone a real reduction. So I find it quite puzzling that they conclude there’s no evidence of this.”

The data McAfee sent me did indeed seem to indicate declines in potash sulfate, phosphate, and nitrogen use from around the 2000s onwards. But his own data also complicated this picture, noting that “total fertilizer” use in US agriculture has not declined overall—it first peaked around 2008, then declined for a few years before returning to and breaching 2008 levels in 2014.

Figures from elsewhere offered a totally different picture. World Bank data shows that total fertilizer consumption per hectare in the US has experienced an overall rise from 112.52 kilograms (kg) per hectare in 2002 to 138.6 kilograms per hectare 2016. And a US Department of Agriculture study from that year finds no evidence at all of an absolute decline in energy or fertiliser consumption in US agriculture since 2002.

Economic anthropologist Dr Jason Hickel from the University of Goldsmiths argues that McAfee has committed an ‘accounting error’ which excludes “the resources involved in extracting, producing, and transporting” imported goods. As a huge amount of production is offshored, “that side of resource use has been conveniently shifted off their books.”

I ran McAfee’s stats by BIOS’ Tere Vadén, lead author of the two new studies. He told me that finding isolated cases of absolute decoupling on specific things like “horse manure, CFC-gases, paper, etc.” tells us “very little of the overall metabolism.” Usually this sort of ‘decoupling’ is only evidence of particular “changes in methods of production and patterns of consumption.” So if the US uses less paper but exports more wood including chips for burning in the UK, this tells us little about the overall economic resource use of the country. “That is why a geographically comprehensive and economy-wide perspective is needed for any evidence that has bearing on global absolute resource recoupling, which is the only ecologically sufficient goal.”

Thus, according to the BIOS authors, apparent improvements at a certain scale often turn out to be artifacts of how we are choosing to measure. Just because we are dramatically improving efficiencies in technology production does not mean we are actually reducing our real-world material footprint.

Vadén described McAfee’s book as “thin, and years behind the curve” in terms of research and evidence: “By cherry-picking small pieces of evidence of decoupling, and attaching that to a theoretically sound argument for the possibility of decoupling, it is possible to present a picture that many people find attractive. But the picture is as far from really existing capitalism, as a Soviet presentation of socialism was from really existing socialism. Yes, it is in principle possible, yes, there are some facts to support it, but overall the picture is false and misleading.”

Eating the planet

The big, long picture seems unequivocal. Global use of material resources, the team show, has increased tenfold from 1900 to the present day—from less than 10 Gigatonnes (Gt) per year to roughly 88.6 Gt in 2017. In the decades since 1970, the global rate of growth has accelerated, not slowed, as consumption has more than tripled.

Meanwhile, only 9-12 percent of materials are recycled, and about half of all resource use is used to provide energy in a broad sense. The other half is used for infrastructure such as buildings, transport, machines and consumer goods.

The BIOS authors find that there are certainly clear cases of resource use seeming to diminish while GDP grows. But these are limited to specific economic sectors or particular geographical regions, and always linked to deepening of resource use elsewhere. The problem is that there is “no evidence of ongoing, global absolute resource decoupling.”

The situation is pretty serious. The scientists attempted to identify what genuine decoupling needs to look like, and then to discover whether there is any concrete data that it is happening. Unfortunately, there isn’t:

“For absolute resource decoupling to make sense as a global goal, we would need a scenario where, in [about] 30 years, the economy produces 2.6 times more GDP out of every ton of material used, under conditions where material use diminishes [about] 40 percent globally. Currently, no trends corresponding to this scenario are observable and, to our knowledge, no concrete proposals with such a level of decoupling have been presented,” they wrote.

30 years of scientific data: no evidence of decoupling

The second paper by the BIOS team published in Environmental Science & Policy is even more damning. The team went further to review the entire corpus of scientific literature over the last few decades to see if any empirical evidence of genuine, absolute decoupling can be found.

The study reviewed 179 scientific studies on decoupling published between 1990 and 2019 and found, in short, that: “… the evidence does not suggest that decoupling towards ecological sustainability is happening at a global (or even regional) scale.”

While there is some evidence of ‘impact decoupling,’ especially for greenhouse gas emissions in wealthy countries for certain periods of time, there is no evidence of “economy-wide resource decoupling, least of all on the international and global scale. Quite the opposite: there is evidence of increased material intensity and re-coupling.”

Decoupling is therefore not a truly scientific concept, they argue. It is, instead, merely an “abstract possibility that no empirical evidence can disprove but that in the absence of robust empirical evidence or detailed and concrete plans rests, in part, on faith.”

But this does not mean we need to give up on the very idea of prosperity. Rather it means recognising that there are other ways of creating prosperity which do not require endless growth.

As Hickel has shown: “Over and over again, empirical data shows that it is possible to achieve high levels of human welfare without high levels of GDP with significantly less pressure on the planet. How? By sharing income more fairly and investing in universal health care, education, and other public goods. The evidence is clear: When it comes to delivering long, healthy, flourishing lives for all, this is what counts—this is what progress looks like.”

If these new studies are accurate, then continuing business-as-usual and saving the planet are mutually exclusive. The idea that we can do both is a persistent mythology, an article of “faith” no less, that needs to be discarded.

In its place, we need to find ways to fundamentally restructure our economies and production relations to transition to new forms of prosperity that leave endless growth in the dust.

In the words of the BIOS team, this means that “more attention should be given to conceptualizations of economy that do not rely on economic growth as the key route towards ecological sustainability and human wellbeing.”