Both academic and political schools of thought (i.e. degrowth and greengrowth), agree on the fundamental observation: the current growth model, based on an ever-increasing consumption of natural resources and environmental degradation, must be overhauled. The risks linked to climate change and the sapping of biodiversity are unacceptable and brown growth might even autodestruct through the increase in commodity prices and the economic cost of pollution. Proponents of degrowth and those of green growth often overlap on public policy prescriptions for environmental protection and, specifically, energy savings and the development of renewables.  However, on one issue they are diametrically opposed: the impact the ecological transition would have on economic growth.

According to degrowthists, economic growth and environmental protection are incompatible, at least in industrialised countries.  Green growthists believe that the two objectives are compatible and that environmental protection measures can even work to stimulate economic growth both in the short and long term.  The debate on this point could be enriching, yet sadly it is sterile.

It is sterile because the subject is complex – the interactions between economy and environment are extremely complex and the two communities struggle to exchange on the issue: first, because they don’t think very highly of each other; and second because they use different analytical tools.  What’s more, the subject of economic growth is terribly polarising.  During the “golden age” economic growth undeniably brought prosperity to industrialised countries (especially during the Trente Glorieuses in France), and at times we blame – perhaps excessively so – our current challenges on today’s lack thereof.  Therefore calling for, or hoping for, an end to growth is to many tantamount to going back to the “stone age.”

The debate between green growthists and degrowthists is sterile, but it does assist in better understanding the interactions between economy and environment, to identify the key points to succeeding in separating pollution from growth and more generally pollution from economic development.  It draws our attention to the major economic transformations underway – digitisation, globalisation – and their environmental impact. It can clarify the links between growth and prosperity, differentiate between the actual growth needs for our economies and the purported needs, especially at this time in which industrialised countries have experienced a decade of flat growth and when the future prospect of growth is not necessarily very promising.

That is precisely what is interesting in the opposition between the two schools of thought: it invites us to consider what our actual future needs in growth will be, especially at a time when the uncertainty of the possibility for it in the medium term has never been so great. Will new information and communication technologies (NICT) finally be able to live up to their promise of a new wave of growth in the most advanced countries? Does the natural shift to a service-based economy condemn those countries to the weak productivity gains of the last few decades? Finally, we know that our economy must change in order to reduce our ecological footprint.  What we don’t know, however, is the macroeconomic impact that these types of changes will have, although it is a safe bet that they will probably not be slight. Will we witness a wave of economic growth, as some believe? Concretely, will that translate into a half point uptick or downtick in the decades to come? Will we have stagnation? It is time for us to reevaluate our foregone conclusions on economic growth and our understanding of the mechanisms that underpin it and the growth prospects for the future.  We also need to consider what the – real – growth needs of our economies and our societies are. These are the issues that we would like to be at the heart of the degrowthist-green-growthist debate.

In July 2013, the Institut du développement durable et des relations internationales [1](Iddri) held an international conference entitled “An Innovative Society for the 21^st Century” at the French National Assembly under the high patronage of the President of the Republic of France.   The aim was to offer a forum for dialogue amongst green growthist, degrowthists, and policy makers.  Over the course of two days, they discussed, or rather attempted to discuss, their views on economic growth, the economic impact, the rarefaction of resources, the climate emergency, and the reasons why industrialised countries need GDP growth, or not, to be able to function.  At the conclusion of the conference, we established four major areas for reflection and work by the academic and political communities to frame the debate between green-growth and degrowth and to make it a useful one for our societies.

Giving structure to a passionate debate

The debate between green-growth and degrowth is at times passionate. You can subscribe to one of the two schools of thought much like you do to a religion: through your faith. That is not, however, the only reason that it is difficult to structure discussion between the two.  Diverging views on how the economy and environment interact are also a major contributing factor. Growthists blame degrowthists for placing too much emphasis on stocks and flows of materials whilst failing to factor in the “economic game” of increases in the price of resources and technological and organisational innovation.  Degrowthists s criticise the economic models of green–growthists, for losing sight of the flows of materials and for overly concentrating on monetary flows or on overestimating the possibility for innovation and for not explicitly factoring in key technologies and their limits. Yet, “new generation” models are already beginning to bridge the gap between the two schools of thought: they can form a good basis for dialogue or even serve as a starting point for cooperation in designing models.

At the same time there is a need for clarification of the key hypotheses on which is founded the idea that there is, or not, an absolute link between growth, and more generally, economic development and pollution. Comparative analysis of several energy scenarios, could bring to light key hypotheses in the area of the reduction of greenhouse gases, from which we hope to find in the near future:  the dynamic of a decrease in costs of low carbon technologies, changes in the transportation patterns of goods and people, the spatial organisation of cities and production, changes in consumption habits and their energy content. The discussion should be organised around the following key hypotheses. What current dynamics are at play? What future possibilities will there be? What leeway exists for policy?

Analysing the promise that NICTs hold

NICTs are at the heart of discussions on the future of growth, green or not, and on the new “growth models.” They deserve particular attention as they open the way to new uses, new business models, new ways of spatial management: in short, an entirely new economy with new potential for productivity and growth. There is much hope surrounding these technologies, from shared Internet of things to micro-production of energy and “car-sharing 2.0”, purchasing on the web of baskets of local produce to, more generally, services to people, not to mention 3D printers, and the industrial revolution that they will purportedly spur.

Some of these hopes will not materialise on a massive scale.  Others will, in the way that we imagine or not, thanks to exchanges amongst the digital economy, the “dominant” economy and users. Will this kick start new productivity gains?  Will it lead to gains in terms of quantity or quality?

NICTs stimulate social innovation and open the door to major organisational changes that could help us to protect the environment. But, they could also harm the environment, by encouraging behavior with a high ecological footprint (for example, apartment exchanges boost long-distance tourism) or through the ecological footprint of the technology itself. NICTs are big consumers of resources and are currently responsible for 2 % of the world’s emissions in CO2, which is as much as civil aviation.  What’s more just like with civil aviation, the digital market is booming.   What new regulations will be needed to ensure that NICTs serve to protect the environment and not hurt it?

Better understanding globalisation to better protect the environment

The debate on growth – green or not – focuses our attention on better understanding the major economic transformations that are underway and the effect that they will have on the ecological agenda, which are, in addition to the digital transformation, the globalisation of lifestyles and exchanges of goods, capital and technologies.  Much like NICTs, globalisation brings with it great hope, both brown and green.

To what an extent is globalisation a factor in growth?  Is it still a factor in growth despite the fact that customs duties, and more generally barriers to trade, have for the most part been eliminated? For developing countries this is clear, perhaps in part thanks to exchanges, but mainly due to technological transfers and more generally economic organisation. Globalisation is an enormous moving sidewalk that spreads from North to South a model of growth, that today is brown but that tomorrow will perhaps be green. It is a driving force for economic convergence between developed and developing countries.  By reducing production costs, globalisation is also a factor in the spreading of new technologies within a single industrialised country.

But does that mean that globalisation is a factor in invention? Does it or doesn’t it help industrialised countries to broaden the “technological frontier,” to find new potential for green productivity? It is yet to be seen if all of that hope will be transformed into reality. The new map of innovation that seems to be emerging, and in which the South does not simply borrow inventions from the North, but adapts and produces its own inventions and sends them North, holds the hope of “enriching the world’s capacity for invention.”  The new map of production, in which the North “harnesses the value” well upstream and downstream, could be a boost to intensive investment in R&D.

However, there is reason to be wary of the sterilising effect globalisation might have on radical invention and major technological change.  Solar energy is a case in point despite its specificity that it must be subsidised at least transitionally.  Faced with competition from China, industrialised countries are hard pressed to produce this new technology on an industrial scale.  Does this endanger their R&D capacity, which is key on the world stage? Should existing technology be produced to stimulate change? Is the upstream of the solar industry in Europe dependent on the economic health of the downstream?  We must delve into this issue much like we must investigate the relationship between R&D and production, to better understand the risks and opportunities of globalisation for innovation and better regulate them.

Prosperity without growth: too good to be true?

The real problem degrowthists and green growthists have in discussing the issue comes down to the role of economic growth in our societies.  Growth is considered essential for prosperity; the possibility of stagnation, or economic decline is thrown out before even having been debated sufficiently.  If there is no good scenario without growth, then growth will be needed, or a return to growth will have to be assured, thanks to, or despite, the protection of the environment.

Is there no way for a positive future without growth? Can a post-growth society be prosperous? We feel that it is important to have degrowthists and green growthists work on this question. Because it is a key issue and not just for environmental reasons.  Considering the doubts surrounding future growth, the prospect of stagnation for the next decade or two must be studied. By analysing our imagined needs in growth and our actual needs, the subject of the future of growth can be addressed more calmly. Moving to the next step will facilitate coming back to the previous step.

Building a positive scenario for industrial societies even without a return to strong growth is not impossible.  Some writers have shown for some time that subjective happiness and GDP have no correlation. What’s more, the link between growth, on the one hand, and reducing inequalities and employment on the other, are not as strong as we would generally think.  Considering the ageing population and the development of the healthcare system, an extended period of weak growth, mainly piques the attention of Welfare states. This subject is not just a debate for the future; it is a debate for today. Weak growth is at the heart of the crisis in industrialised countries: for several decades, some have chosen to run up their deficits to prop up their social models while they wait for a return to strong growth.  Others have left inequalities to spread, while the most vulnerable are left to run up their debts. Both models are unsustainable in the long term.

Getting to work

Is it so important to know if environmental protection will spur more or less growth? Why not be “a-growthist”, act, and see what our GDP looks like in the end?  This is a legitimate question.  It is important, however, to discuss the macroeconomic impact of the rarefaction of some resources or some environmental policies for at least two reasons.  First, if those policies have prolonged sluggish growth in the majority of industrialized countries for decades, we must adapt our economic and social policies to the perspective of lasting weak growth.  Second, the debate between degrowthists and green growthist could turn out to be useful for the ecological transition by opening new areas for reflection and work on the key elements of decoupling, NICTs and globalization.

The green growth school of thought is a step ahead. Political leaders give priority to growth over environmental and social developmental issues and therefore are responsive to the idea that environmental protection is compatible with or even boosts GDP growth. By pointing out how difficult it is to decouple growth from pollution, the degrowth school of thought, nonetheless forces us to question our priorities.  Not all environmental protection measures are win-win.  Protecting the Northern Crested Newt does not necessarily add to GDP growth, no more than setting the objective of no more than a 2° C increase in world temperatures does. The challenge that political leaders face is therefore to accept contradictions, and how long things take, and to propose, given the uncertainty surrounding future economic growth, “a positive scenario” for our society and set a new standard for progress that is not built on disproportionate hopes for growth.  That is their responsibility.

 

This article was originally published in French by IDDRI and translated by the Green European Journal.