The degrowth agenda
Degrowth offers a different perspective on fighting the climate crisis. But it is more speculative and academic than realistic and actionable.
Historically, economic growth and carbon emissions have been strongly correlated. The result, the current climate mess. To some, this has meant that we should decouple economic growth from emissions - encouraging growth while embracing policies to reduce emissions. Over thirty countries have reduced annual emissions and increased economic output by embracing energy efficiency and technological innovations.
To others, this is not sufficient and global decoupling is a pipe dream. At its core, degrowth eliminates the social objective of economic growth, and moves society in a new direction built around consuming fewer resources.
In general, degrowers feel that achieving the requisite emissions reductions to avoid a climate catastrophe are not compatible with continued economic growth. In 2019, over 11,000 scientists signed a letter that called for a move away from GDP growth as the economic calling card and towards a society built around “sustaining ecosystems and improving human well-being.” A study in 2021 argued emissions-fighting paths focused on degrowth scenarios should be considered and debated with as much vigor as techno-optimist strategies.
Ultimately, degrowth advocates coalesce around three distinct goals.
Reducing human-related environmental impact by changing consumption habits and encouraging local production,
Redistributing wealth between low and high income countries, and
Facilitating the transition from an individualistic, material-driven society to a more participatory society that places a value on unpaid work.
Background and theory
Degrowth started to pick up traction in 2008 when an international conference was organized in Paris by the academic collective Research & Degrowth. The conference suggested wealthy countries pursue degrowth as a “voluntary transition towards a just, participatory, and ecologically sustainable society,” thereby right-sizing both national economies and the global economy. Degrowth strives to “meet basic human needs and ensure a high quality of life, while reducing the ecological impact of the global economy to a sustainable level, equitably distributed between nations.”
Degrowers feel that “sustainable growth” is an oxymoron that society should move away from immediately. The prominent degrower Jason Hickel argues that while science and technology have produced innovations that address climate change, the focus on economic growth has meant that our collective ecological footprint has not shrunk. We just produce more stuff from the same ecological footprint.
“In a growth-oriented economy,” he writes in Less Is More, “efficiency improvements that could help us reduce our impact are harnessed instead to advance the objectives of growth — to pull ever-larger swaths of nature into circuits of extraction and production. It’s not our technology that’s the problem. It’s growth.”
Evidence suggests reducing energy demand by lowering GDP growth rates is essential to reducing emissions. This does not however mean a complete turn away from economic growth. Industries associated with fossil fuels should cease to exist, associatively contracting GDP, while replacement industries should grow within the current biocapacity. Economic growth would be manageable, and industries that are not able to evolve (e.g., oil companies that fail to diversify their portfolio into renewables) would collapse. A green jobs guarantee would be put in place to upskill labor around key economic activities like “installing renewables, insulating buildings, regenerating ecosystems and improving social care.”
Degrowers see a world that moves in two directions: Poor countries develop up to a certain level of prosperity and stop; rich countries concurrently reduce economic output to that level and stop. The theory goes that this would reduce the risk of a climate apocalypse while also reducing economic equality.
In this situation, the functional economy would move beyond capitalism. Capitalism is profit driven and premised on expanding shareholder wealth. Since the 1980s and the dawn of neoliberalism and its market-driven economies with a focus on globalization, deregulation and financialization, firms have opted to reward shareholders with share buybacks or dividends as opposed to reinvesting in the business through innovation and productive capacity improvements.1
Shareholder capitalism has been driving western economies, with companies feeling a fiduciary duty to maximize the short-term profits of shareholders, instead of supporting the revenue-generating employees. Under degrowth, profits would be removed as an economic key performance indicator (KPI), instead organizing the economy around meeting human needs within the Earth’s limits. Legislative changes such as shifts in public investment, a limited workweek and a more all-encompassing welfare state (with a guaranteed living wage and more inclusive health care) will play an important role in this solution. One way to achieve this would be the decentralization of firm ownership and a move towards democratized control of business.
Orienting society in this fashion would more equitably distribute resources, prioritizing societal needs over individual wants. Social movements, built around citizen assemblies that make decision-making decentralized, small-scale and direct, would be one path forward. Community-based wind farms operating in places like Germany and the UK with lower profitability targets than private enterprise, have been successful for over two decades and demonstrate the power of this idea.
Critiques and problems
As you can probably surmise, there are a number of issues with degrowth.
Part of the issue is that developing countries are currently responsible for more emissions than developed countries and this trend will only continue. As Kelsey Piper at Vox noted, the pandemic demonstrated the interconnectedness of the global economy. How will developing countries develop if developed nations actively reduce economic output? We just saw the devastating economic impact on developing countries of a shorter-term lockdown If Americans stop importing manufactured goods or halt tourism for the long-term, this could halt any development opportunities before they get started.
Hickel argues that this reduction would be targeted towards specific industries and that poor nations don’t need to rely on rich ones to develop (since some countries were able to engineer economic growth when the whole world was poor). However, this is largely theoretical and politically a bit of a stretch.
Hickel’s perspective is that most trade between rich and poor countries is extractive, not mutually beneficial — and that maybe when that dynamic ceases, poor countries will have the chance for the catch-up growth they merit. That’s one take. But it means that degrowth’s case for not crushing the poor world is predicated on a speculative take on how those countries can grow — one that democratically elected leaders in those countries largely don’t share.
A political economy structured around a degrowth agenda would result in global GDP contraction worse than the Global Financial Crisis for a longer period of time, with only a minimal decrease in emissions. Degrowth proponents recognize that this transition would not be materially beneficial to everyone and that reducing economic output would make financing it difficult (less consumption → less tax revenue → less government funds to spend). The economist Branko Milanovic demonstrates why this is not realistic:
[In a degrowth scenario] everybody who is above the current mean world income ($PPP 16 per day) is driven down to this mean, and the poor countries and people are, at least for a while, allowed to continue growing until they too achieve the level of $PPP 16 per day. But the problem with that approach is that one would have to engage in a massive reduction of incomes for all those who make more than $PPP 16 which is practically all of the Western population. Only 14% of the population in Western countries live at the level of income less than the global mean. This is probably the most important statistic that one should keep in mind. Degrowers thus need to convince 86% of the population living in rich countries that their incomes are too high and need to be reduced.
Good luck convincing 86% of the Western nations to dramatically reduce their income level. As even degrowth advocates note, “political parties that have put forward degrowth ideas have received limited support in elections….a better grasp is needed of the political and economic interests that might oppose or support degrowth”
New York magazine’s Eric Levitz noted that Americans might ultimately be content in a low-carbon society built around degrowth policies like more communal living and a less individualized ownership structure (e.g., restricted car ownership, housing & health care are social rights), but this would go against the American ethos. “Nothing short of an absolute dictatorship could affect such a transformation at the necessary speed. And the specter of eco-Bolshevism does not haunt the Global North. Humanity is going to find a way to get rich sustainably, or die trying.”
All you have to do is think back to the backlash against the pandemic lockdown measures to realize how infeasible this is. In April 2020, in the midst of the pandemic’s darkest period, Financial Times columnist Tim Harford wrote a column discussing the pandemic and degrowth.
Relative to the slow-burning crisis of climate change, coronavirus is vivid and immediate. It is killing people by the thousand, every day…It should be easy to get people to rally round the idea of making sacrifices to defeat the virus. Yet there is still a vocal minority opposed to any economic sacrifice whatsoever. That should unnerve any of us who worry about the far more diffuse threat of climate change.
And that was early in the pandemic when everyone was on the same page (relatively speaking), before vaccines and masks morphed from life-saving tools to political objects.
Hickel and Giorgios Kallis, another prominent degrower, propose policies like green taxes and reductions in work hours as potential degrowth stimulates. We all know the political perils of proposing new taxes (they are not popular, unless you just want to tax billionaires). Alternatively, the UK recently performed a trial four-day workweek for 70 businesses and the results were encouraging. However, these trials have focused predominantly on self-selecting, white-collar offices and have not been tested at scale across the economic spectrum.
There are also questions about the link between hours of work and carbon emissions, since more free time might actually increase emissions. Recently, the work-from-home movement has obviously had its ups-and-downs and been roundly debated and criticized for the economic impact it has had on major central business districts. If this shift in working culture is so divisive, more radical reforms (like permanent income reductions) could be laughed out of the room.
Finally, implementing degrowth in a reasonable timeframe is all but impossible.
“If we are to avert catastrophic warming, we have to lower carbon emissions by a factor of two within the next 10 years. I find it highly implausible that capitalism/market economics will be abandoned by the world on that time frame,” Pennsylvania State University climatologist Michael Mann told (Kelsey Piper). “That means we have to act on the climate crisis within the framework of the current system.”
We only have a limited time to act, and reorienting society around a political economy that would destroy growth is too much to ask. Deploying the technology we have and continuing to innovate are the realistic short-term options.
“(Climate change is) undoubtedly a monumental challenge,” Mann told (Kelsey Piper). “We have the technology to solve the problem — renewable energy, smart grid technology, and existing energy storage. We just need the political will to act.”
As this piece concludes, you are probably wondering why I spent 2000 words, and ~10 minutes of your time, laying out the case for degrowth only to say that it is an infeasible, pie-in-the-sky theory with no real world application. I think it is important that people are informed about the goings-on and debates academics and policy wonks are having.
In essence, degrowth is a very academic argument with limited real world application. That being said, some of the degrowth policy ideas, like ending fossil-fuel subsidies, valuing unpaid labor and improving public services, are essential in any future political economy. GDP is a flawed statistic that fails to account for negative externalities (like emissions) and unpaid work, and can certainly be improved upon. Giving a voice to more groups, that might have been previously marginalized, would enliven discussions. Bringing together people of different persuasions and fostering a collaborative spirit is essential for getting the best out of society.
I hope you found this piece informative.
Van der Zwan, N. (2014). Making sense of financialization. Socio-economic review, 12(1), 99-129.
Excellent article, thanks for the enlightenment.