by Jason Hickel
And all of this is just at our existing levels of aggregate economic activity – with the existing levels of consumption in rich and poor countries. If poor countries increase their consumption, which they will have to do to some extent in order to eradicate poverty, they will only tip us further towards disaster. Unless, that is, rich countries begin to consume less.
The Conundrum of Growth
Getting rich countries to consume less might sound like a simple thing to do. It would certainly be a fair and sensible move. But given the present structure of the economy it is almost literally unthinkable. Indeed, almost the entire economics profession and nearly all of our politicians are focused on exactly the opposite agenda: to increase GDP growth. And increasing GDP growth means ramping up production and consumption each year. Of all the economic ideas out there today, this is perhaps the most hegemonic. It is so commonly accepted that almost nobody thinks to question it.
We tend to take the GDP measure for granted as though it has always existed. Most people don’t realise that it was invented only recently. It has a history. During the 1930s, the economists Simon Kuznets and John Maynard Keynes set out to design an economic aggregate that would help policymakers figure out how to escape the Great Depression. The goal was to calculate the total monetary value of all the goods and services produced in the economy so they could see more clearly what was going wrong and what needed to be done to fix it. Kuznets argued for a measure that would help society maximise well-being and track the progress of human welfare; he wanted GDP to exclude negative things like advertising, commuting and policing, so that if those things went up governments would not be able to say that people’s lives were getting better when in fact they were not. But when the Second World War struck, Keynes broke from this vision and insisted that we should count all money-based activities – even negative ones – so we would be able to identify every ounce of productivity that was available for the war effort. In the end Keynes won, and his version of GDP came into use.
GDP was intended to be a war-time measure, which is why it is so single-minded – almost even violent. It tallies up all money-based activity, but it doesn’t care whether that activity is useful or destructive. If you cut down a forest and sell the timber, GDP goes up. If you strip a mountain range to mine for coal, GDP goes up. If you extend the working day and push back the retirement age, GDP goes up. But GDP includes no cost accounting. It does not measure the cost of losing the forest as a sinkhole for carbon dioxide, or the loss of the mountain range as a home for endangered species, or the toll that too much work takes on people’s bodies and minds and relationships. And not only does it leave out what is bad, it also leaves out much of what is good – for it does not count useful activities that are not monetised. If you grow your own food, clean your own house or take care of your ageing parents, GDP says nothing, for these activities don’t involve transacting money. It only counts if you buy these services.
Of course, there’s nothing inherently wrong with measuring some things and not others. GDP itself doesn’t have any impact in the real world. GDP growth, however, does. As soon as we start focusing on GDP growth, we’re not only promoting the things that GDP measures, we’re promoting the indefinite increase of those things. And that’s exactly what we started to do in the 1960s. GDP came into widespread use during the Cold War for the sake of adjudicating the grand pissing match between the West and the USSR. Suddenly, politicians on both sides became feverish about promoting GDP growth. Kuznets was careful to warn that we should never use GDP as a normal measure of economic success, for it would incentivise too much destruction. And yet that is exactly what we began to do – and then it was swiftly pushed around the rest of the world by the World Bank and the IMF. Today, nearly every government in the world, rich and poor alike, is focused obsessively on the single objective of increasing GDP growth.
According to the standard narrative, we need GDP growth rates of at least 2 or 3 per cent per year in order to have a healthy, functioning global economy. Anything less, and economists tell us we’re in crisis; if growth drops towards zero, the whole system – we’re told – will fall apart. So what does this degree of growth look like? Well, in 2015 global GDP stood at $73 trillion. Growing that by 3 per cent means adding more than $2 trillion; that’s how much we have to add to global economic production next year, just to stay afloat. To put that in perspective, $2 trillion is roughly the GDP of the United Kingdom. Imagine all the cars, all the televisions, all the houses, all the factories, all the barrels of oil and everything else that is produced in Britain every year. Keep that mountain of stuff in your mind. That’s how much we have to add next year on top of what the world is already producing. And because growth is exponential – not linear – we have to add even more than that the next year, and more still the year after.
The multiplier of compound growth is extremely powerful. A 4.5 per cent rate of growth – which is roughly the aggregate rate that the governments of the world want to achieve – doubles a ‘thing’ every sixteen years. Within thirty-two years the thing is quadrupled. If Ancient Egypt had started with one cubic metre of possessions and grew them by 4.5 per cent per year, by the end of its 3,000-year civilisation it would have needed 2.5 billion solar systems to store all its stuff. It doesn’t take a scientist to realise that endless exponential growth is absurd, in the true sense of the word. To imagine that we can continue on this trajectory indefinitely is to disavow the most obvious truths about our planet’s material limits. As David Attenborough once so eloquently put it, ‘Anyone who thinks that you can have infinite growth on a finite planet is either a madman or an economist.’
If we are overshooting our planet’s ecological capacity at our existing levels of economic activity, what happens when we factor in exponential growth? Even the near future looks quite bleak. Scientists tell us that by 2050 our mature tropical forests will have disappeared. Species biodiversity will have declined by another 10 per cent. Stocks of all presently fished seafood will have collapsed by an average of more than 90 per cent from 1950 levels. Most major metal reserves will be exhausted, including gold, copper, silver and zinc, along with many of the key metals used in renewable energy technologies, like lead, indium and antimony. If Silicon Valley entrepreneurs like Elon Musk are to be believed, we might be able to replace some of these metals by mining the moon and asteroids. But extraterrestrial extraction won’t help us much with the forests and the fish. Nor will it do much for our soil crisis: at present rates of depletion, the topsoils of the world’s farmlands will be more or less useless by 2050, and by 2075 they will be gone.
Despite these obvious problems, for some reason we have come to believe that GDP growth is equivalent to human progress. We assume that when GDP goes up, it makes our lives better: it raises our incomes, it creates more jobs, it means better schools and hospitals and so on. This may have been true in the past, when the world was relatively empty of people and the human footprint was small relative to the bounty of the Earth. Unfortunately, it no longer holds. In the United States GDP has risen steadily over the past half-century, yet median incomes have stagnated, the poverty rate has increased and inequality has grown. The same is true on a global scale: while global real GDP has nearly tripled since 1980, the number of people living in poverty, below $5 per day, has increased by more than 1.1 billion. Why is this? Because past a certain point, GDP growth begins to produce more negative outcomes than positive ones – more ‘illth’ than wealth. The reason is because there are no longer any frontiers where accumulation doesn’t directly harm someone else, by, say, enclosing the land, degrading the soils, polluting the water, exploiting human beings or changing the climate. We have reached the point where GDP growth is beginning to create more poverty than it eliminates.
When the entire global political establishment puts its force behind the goal of GDP growth, human and natural systems come under enormous pressure. In India it might come in the form of land grabs. In the UK, it’s privatis
ation of public services. In Brazil it looks like deforestation in the Amazon basin. In the US and Canada it brings fracking and tar sands. Around the world it means longer working hours, more expensive housing, depleted soils, polluted cities, wasted oceans and – above all – climate change. All for the sake of GDP growth. People who push against these destructive trends will tell you how futile it feels. It is futile because our governments don’t care. They don’t care because according to their most important measure of progress, the destruction counts as good, and must continue at all costs. This is not because humans are inherently destructive. It is because we have created a rule that encourages us to behave in destructive ways. As Joseph Stiglitz has put it, ‘What we measure informs what we do. And if we’re measuring the wrong thing, we’re going to do the wrong thing.’
It is worth pointing out that, as long as GDP growth remains the main objective of the global economy, the solutions we covered in the previous chapter may prove to be impossible to achieve. The pressure to increase GDP translates into pressure for more debt, more structural adjustment, more ‘free trade’ and so on, as the system groans and writhes in a desperate search for frontiers of accumulation, more things to be monetised. It is like an iron law. It is necessary for the very continuation of our economy’s existence – at least as the economy is presently organised.
False Promises
When ecologists and climate scientists present projections of what our world will look like if we carry on with GDP growth, they are quite often shouted down by economists who insist that technological innovations and efficiency improvements will help us ‘decouple’ economic growth from material throughput. Don’t worry, they say, we will be able to keep GDP growing indefinitely without ruining the planet.
From one perspective, this appears to be correct. The ‘domestic material consumption’ of Britain, Japan and many other rich countries has been decreasing since at least 1990, and in the United States it has more or less flattened out. Domestic material consumption is the standard measure of all the physical stuff that countries extract and produce and consume, including goods imported from abroad. The fact that it is decreasing doesn’t mean that these countries are consuming fewer products; they are not. Rather, it means that the material ‘footprint’ of their consumption is decreasing, and is having less of a negative impact on the planet – all while GDP continues to go up. In other words, growth is decoupling from material throughput. It seems like excellent news, and this is the kind of data that economists draw on when they paint their very beguiling vision of a future lightweight economy.
But the reason domestic material consumption in rich countries has been shrinking is because the standard measurement ignores one crucial piece of the puzzle: while it includes the imported goods that a country consumes, it does not include the material footprint involved in producing and shipping those goods. Having been outsourced to other countries – mostly in the global South – this side of material consumption has been conveniently shifted off the balance sheet. If we bring it back into the picture, we see that the material consumption of rich countries has in fact been increasing dramatically in recent decades, even outpacing GDP growth. Another way to think about this is to look at the material throughput of the global economy as a whole, which gives us a picture of total extraction and consumption regardless of where in the world it happens. If we use this approach, we see that global material extraction and consumption grew by 94 per cent between 1980 and 2010, accelerating in the last decade to reach as high as 70 billion tons per year. And it is still going up: by 2030, we’re projected to breach 100 billion tons of stuff per year.
What will this look like in the real world? Well, the number of cars on the road is set to double by 2030, for example. The number of commercial aeroplanes in the skies will double by 2035. By 2040 we’ll have doubled the amount of stuff we ship around the world by sea. Our generation of solid waste – the stuff that gets shovelled into landfills – is on pace to triple by 2100 to 11 million tons per day. That’s a lot, when you consider the fact that waste from our cities alone is already enough to fill a line of trucks 5,000 kilometres long every day. Think about it: a line of garbage trucks strung bumper to bumper across the whole continental United States – from Los Angeles to New York City – filled with trash, every day.
Keep in mind that so far we have only considered the impact of growth on our planet’s physical resources. We haven’t even begun to talk about what it is going to do in terms of climate change. We know that we’ve already breached the safe limit of CO2 concentration in the atmosphere, which scientists say is about 350 ppm. Just recently we hit the 400 ppm mark, which will guarantee us at least 1.5°C of global warming over pre-industrial levels. On our present growth trajectory, we’re cruising for around 4°C of warming, even if we factor in countries’ pledges to cut emissions under the Paris Agreement. As we saw in the previous chapter, this means rising seas, swamped cities, increased floods and droughts, crop collapse, epidemic disease, famine and mass displacement, even according to the most sober scientific analysis. It looks very unpleasant indeed. And of course the great irony is that this degree of global warming is going to cause economic growth to collapse, costing at least 5 per cent of global GDP per year indefinitely, and possibly as much as 20 per cent.
Here again some have assured us that we needn’t worry. We can continue with business-as-usual growth, maintain the living standards of the rich world and still be safe from climate change – so long as we shift quickly to renewable energies and begin to use negative-emissions technology to pull carbon back out of the atmosphere.
The dominant proposal out there is called BECCS: bio-energy carbon capture and storage. The basic idea is that we develop enormous tree plantations that will absorb carbon out of the atmosphere. Then we cut down the trees, convert them into wood pellets, ship them around the world and burn them in power stations to create energy, while capturing the carbon that the power stations produce and storing it deep in the ground. It sounds fine on paper, but there’s one problem: we don’t have the technology yet, and even the most optimistic engineers admit that it won’t be ready in time to save us from climate change. Plus, even if we somehow managed to get BECCS online tomorrow, we don’t have enough land on the planet to make it work. We would need to create a plantation three times the size of India to harvest year after year, decade after decade, and without taking away from the agricultural land that we need to feed the world’s population.
BECCS and other such plans aside, there’s something else we need to keep in mind here: when it comes to climate change, energy use is only part of the problem. Fossil fuels account for about 70 per cent of our present greenhouse gas emissions. So even if we’re able to get off fossil fuels tomorrow and switch to perfectly clean and renewable energy, we still have to deal with that other 30 per cent.
Where do those non-fossil-fuel emissions come from? Deforestation is a major cause. Not only does deforestation actively release carbon into the atmosphere, it also deprives us of the sinks we need to absorb our emissions. To make matters worse, most deforested land is being converted to industrial agriculture, with intensive chemical fertilisers that degrade the soils. As the soils deplete, they lose their capacity to store carbon, releasing huge plumes of CO2 into the atmosphere. Then there is industrial livestock farming, which produces 90 million tons of methane per year and most of the world’s anthropogenic nitrous oxide. Both of these gases are vastly more potent than CO2 when it comes to global warming. Livestock farming alone contributes more to global warming than all the cars, trains, planes and ships in the world. There are also a number of industrial processes that contribute significantly to climate change, such as the production of cement, which requires chemical reactions that produce greenhouse gases. So too with steel, iron and plastics. And then there are our landfills, which pump out huge amounts of methane – some 16 per cent of the world’s total.
So the problem isn’t just the type of energy
we’re using, it’s what we’re doing with it. What would we do with 100 per cent clean energy? Exactly what we’re doing with fossil fuels: raze more forests, build more meat farms, expand industrial agriculture, produce more cement and heap up more landfills with waste from the additional stuff we would produce and consume, all of which will pump deadly amounts of greenhouse gas into the air. We will do these things because our economic system demands endless exponential growth. Switching to clean energy will do nothing to slow this down.
The Degrowth Imperative
If we peel back the false promises of dematerialisation and carbon capture, it becomes clear that the problem is much deeper than most are willing to admit. Our present economic model of exponential GDP growth is no longer realistic, and we have to face up to this fact. This presents us with a very difficult conundrum when it comes to development and poverty reduction. How can we eradicate poverty if we’re already bumping up against our ecological limits?
Thankfully, for the first time in history, we have the data we need to think about this. Let’s start with the international agreement to limit global warming. We know that it is very unlikely that we will be able to keep within 1.5°C warming over pre-industrial levels. But we still have a chance of keeping within the 2°C threshold, which the Paris Agreement on climate change sets as an absolute cap. If we want to keep beneath this cap, we can emit no more than another 805 gigatons of CO2. Now, let’s accept that poor countries will need to use a portion of this carbon budget in order to grow their incomes enough to eradicate poverty; after all, we know that for poor countries human development requires an increase in emissions, at least up to a relatively lowish point. This principle is already widely accepted in international agreements, which recognise that all countries have a ‘common but differentiated responsibility’ to reduce emissions: because poor countries did not contribute much to historical emissions, they have a right to use more of the carbon budget than rich countries do – at least enough to fulfil basic development goals. This means that rich countries have to figure out how to make do with the remaining portion of the budget.