Can we let go of growth and embrace climate action?

Our obsession with growth stops us taking meaningful action on climate change. Flickr/hfabulous

While global warming deniers have been effective in their aim of sowing doubt in the public mind, the most powerful argument used over and over has been that cutting emissions will cut growth, and that cutting growth is a bad thing.

Pages of examples could be presented where the appeal to the effects on growth has been used to resist or water down measures to cut carbon emissions — including wild but uncontested claims of economic ruin and collapse — but so pervasive is the truth of this that the reader will need no convincing.

The argument has been refined to the point of caricature by industry and the opposition in their determination to resist recent moves for a carbon tax. The government feels compelled to respond that the tax will in fact promote economic growth.

The fetishisation of growth goes back much further. For example, in June 1997, in the lead-up to the Kyoto Conference, the US Senate passed by 95 votes to zero the famous Byrd–Hagel resolution. It declared that the United States should not adopt any international treaty to reduce greenhouse gas emissions that “would result in serious harm to the economy of the United States”.

That was during the Clinton presidency. In 2001, to explain his refusal to move on the Kyoto Protocol President Bush declared: “We must always act to ensure continued economic growth and prosperity for our citizens and for citizens throughout the world.”

Rather than being the cause of environmental decline, growth is everywhere touted as the solution to it. The arguments stretch credulity among unbiased observers but exercise a powerful sway over our political leaders and opinion-makers.

It is claimed that higher national income due to more growth provides more resources to devote to environmental protection. Of course, this does not answer the question of whether those resources will in fact be devoted to climate protection or spent by households upgrading their home entertainment systems.

As people become wealthier do they become more benevolent or more greedy? Do they place a higher value on environmental amenity?

Economists have tried to demonstrate that they do through a device known as the Environmental Kuznets Curve, which purports to show that as a country industrialises and incomes rise the quality of the environment initially deteriorates but then improves.

Setting aside worries about how the natural world is characterised as a commodity that becomes more desirable as incomes rise — a so-called ‘luxury good’ like a Rolex watch or a Mercedes-Benz — if such a relationship is robust then there is no case for the government to intervene; the market will solve its own problems.

The relationship proves to be wobbly, particularly in the case of global problems like climate change.

It is true that middle-class people often acquire enough money and political influence to isolate themselves from the foul emanations of slums and factories, but if we must wait until consumers feel rich enough to reduce spontaneously and dramatically their greenhouse gas emissions we are surely doomed.

While a case can be made that impoverished people in developing countries are “too poor to be green”, an idea promulgated in the 1987 Brundtland Report on sustainable development, there is little evidence that growth makes people “too rich to be brown”. Per person carbon emissions in Australia and the United States are double those of Europe, yet Europe is far in advance in abatement policies.

That developing countries are too poor to be green and should not be expected to be anything else naturally appeals to the bastion of free-market economics, the World Bank, which declared in its 1992 World Development Report:

“As incomes rise, the demand for improvements in environmental quality will increase, as will the resources available for investment.”

Since that was written average real incomes in the United States have nearly doubled, but the resolve to cut emissions has declined.

But economists are dogged in their beliefs, if nothing else. So Wilfred Beckerman, author of books titled Small is Stupid and In Defence of Economic Growth, was blunter:

“there is clear evidence that, although economic growth usually leads to environmental degradation in the early stages of the process, in the end the best — and probably the only — way to attain a decent environment in most countries is to become rich.”

More recently, the environmental sceptic Bjorn Lomborg makes the same claim: “only when we get sufficiently rich can we afford the relative luxury of caring about the environment”. In Lomborg’s world, preserving the species has become a relative luxury.

Recognising that growth fetishism stands as an immovable obstacle to action on climate, environmentalists soon capitulated and began to argue that we can have the best of both worlds, a healthy atmosphere and robust economic growth. Indeed they argued that promoting renewable energy in place of fossil energy would accelerate economic growth.

I myself undertook economic modeling studies that showed there could be a “double dividend” from policies to cut emissions. It is quite possible to tweak economic models to show that if the revenue is used to reduce other taxes (such as payroll taxes) the imposition of a carbon tax will actually increase GDP growth and employment.

In the climate policy debate these studies ought to be the coup de grâce, but inexplicably they are ignored. This fact suggests that, beneath the surface, objections to emission-reduction measures may not be about growth after all, but about a passionate commitment to the idea of growth.

Nevertheless, in making these arguments environmentalists have conceded that protecting the atmosphere can at best be the second most important goal.

Acceptance of this ‘both-ism’ — growth and climate protection — imposes an enormous burden on technology. We have reached the point in international efforts where technology alone holds the possibility of reconciling continued economic expansion with a livable planet.

Political and corporate decision-makers, desperate for a solution that mixes growth and emissions reduction, gamble on technologies like carbon capture and storage.

While CCS might not threaten growth, even the technology’s most avid supporters concede it will take decades before it can effectively reduce emissions and be fully commercialised.

Rather than clinging to such frail hope, wouldn’t it make more sense to reconsider the value of economic growth? Our options for combatting climate change would vastly increase, and there is no compelling evidence society would suffer.

The anxiety generated by placing our future in the lap of an untested technology is huge, and yet it is nothing compared to that flowing from the thought that radical social change is necessary to preserve a habitable Earth.

This article was extracted from Clive’s book, “Requiem for a Species: Why we resist the truth about climate change” (Allen & Unwin 2010).