As the driving force in modern economics our current conceptions of growth are both illusory and perilous. While innovations and efficiencies are incentivized in a growth driven free market system, our preoccupation with unregulated expansion is overtaxing our biosphere and heralding our demise.
We are blinded by growth. By definition when our economies are not growing we are in recession. For an economy to be working well countries are expected to see growth rates of around 3 percent. Anything less is referred to as sluggish or slow growth.
The majority of what we call growth is driven by dirty energy and unbridled consumerism. Fossil fuels and the acquisiton of things we really don’t need drain resources, add greenhouse gases and degrade the environment.
Much of what we call growth is an illusion. For example, our
current economic models interpret debt (personal, corporate or
government) as growth. While it may appear to be benefitial, as we saw with the collateralized debt obligations that caused the recession of 2008, such short term benefits can have serious consequences down the road.
Environment AND economics
The economy and the environment are inseperably interrelated. In the book Prosperity Without Growth, Tim Jackson explores the
unsustainability of current rates of consumption drilling down on the
false dichotomy between environmental action and economic growth.
Although ecologists see the environment as a subset of the economy, economists tend to ignore environmental impacts altogether. If corporations consider environmental impacts it is commonly characterized as an “externality”.
The environment has been excluded from our economic models and this eschews the unavoidable reality that the economy is fundamentally dependent on the environment. Excluding environmental realities is the greatest market failure we have ever seen. Our current trajectory is the result of this omission driving us like lemmings towards the cliff of eco-ruin.
We can no longer afford to avoid the ever encroaching evidence demonstrating that our current economic model is destroying the ecosystems upon which our economy depends.
For growth to be tenable it must be decoupled that is to say it must be seperated from emissions production and resource extraction. Although this is daunting it is not impossible. We already have the means at our disposal to significantly reduce our footprint and do more with significantly less.
We can decouple through rigorous monitoring, radical efficiency, creative sourcing, technological ingenuity, emissions-free energy and all-around innovation.
In a 2017 Environmental Leader article, Jessica Lyons Hardcastle, cites a World Resources Institute (WRI) report which calls for decoupling growth from environmental impacts. The report makes the point that it is in businesses’ self-interest to address risks like social inequality, climate change, and environmental degradation.
Sadly after some initially hopeful data, we are seeing evidence that suggests we are not decoupling growth from either emissions or resources. Although businesses may be publishing sustainability reports, WRI cites research which suggests that only 5 percent are taking stock of ecological limits. Even those that do do not address specific impacts on planetary boundaries.
The WRI report explains that companies will need to innovate new business models that deliver shareholder value and meet consumers’ needs in different ways. As Hardcastle says, “future business success depends on executives
decoupling economic growth from resource use and environmental impacts”.
Do the math
The equation is not hard to follow, our biosphere has limits and it cannot support infinite growth. Economic models that account for environmental impacts reveal the powerful logic of decoupling. The benefits of decoupling far outweigh the short term gains from business as usual. Even if we approach this from a purely economic perspective we are forced to reckon with the exhorbitant costs of our failure to incorporate environmental impacts. Climate change alone comes with a $44 trillion dollar price tag.
It is ecological and economic suicide to ignore the earth’s carrying capacity. If we incorporate environmental realities we can reframe our economic models and our conceptions of growth. This is the only viable way forward within a market based system.
The Illusion of Growth and the Fallacy of Kuznets Curve
The Perils of Growth and the Ubiquity of Growthism
The Death of Decoupling is a Major Blow to Climate Action
Decoupling Economic Growth and Resource Consumption
More Decoupling Proving Corporate Emissions Reduction Compadible with Growth
The US/China Ratify Climate Deal and Corporations are Decoupling
Decoupling economic growth from emissions
More Evidence for the Decoupling of the Economy and Emissions
The Challenge of Sustainability: Economic Growth and Emissions Reduction
We Can Reduce GHG Emissions and Tackle Climate Change