The Not-So-New Climate Economy Report

An alliance of the most influential global institutions, including the UN, World Bank, IMF and OECD, just issued a report of the Global Commission on the Economy and Climate, chaired by Felipe Calderón and Nicholas Stern. The report’s title is Better Growth, Better Climate: The New Climate Economy. In a nutshell, it says that not only is climate action compatible with economic growth, but the two may actually work as a positive feedback loop: more climate action leading to more growth, “smart” growth-spurring policies reducing emissions of greenhouse gases. By and large, the report does not contain any new arguments, as it is more of a synthesis of existing research. Alas, it is a synthesis of only a part of existing research, which can be already seen in the title: economic growth is a main objective along with the mitigation of climate change. You’ll vainly look for any reference to the degrowth and a-growth debates, and so the report, while valuable in some respects, reproduces many of the common errors of growth-enthusiasts. Continue reading

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Stanley Jevons’s Prophecy

In his famous treatise The Coal Question: An Inquiry Concerning the Progress of the Nation, and the Probably Exhaustion of Our Coal-Mines, published almost 150 years ago, the British economist William Stanley Jevons described a phenomenon whose importance today might be even higher than back in 1865–the so-called rebound effect, also known under the names of second-order effect, Khazzoom-Brookes effect, backfire or Jevons’s paradox. Jevons argued that the increased efficiency of steam engines shall lead to increased use of them and thus, counter-intuitively, to an increase in coal consumption. His insights have surprising relevance for today’s debates on economic growth and climate change. Continue reading

Peak Everything, Backstop Technology and Economic Growth

And interesting, though also frightening characteristic of today’s world is that it seems to be peaking all the time. Peak Oil, Peak Metals, Peak Soil, Peak Uranium, Peak Rare Earths. Peak Everything, to put it bluntly. Some of these slogans may be exaggerated, at least if taken literally. On the other hand, given high and rising demand for oil, coal, uranium, rare earths, metals, agricultural land and other essential resources – demand that is going to be increasing for decades to come, as China, India and especially Africa will become both richer and more populous -, there is a strong case for taking seriously concerns regarding the diminishing resource base, even if there is still much left. Continue reading

The Myth of Decoupling

It is something probably every junkie dreams of – to be able to keep taking drugs and feeling free, careless or just high, but without all the unpleasant side-effects like health issues, financial ruin, destroyed social networks etc. This, however, is illusion and no reasonable person would deny that it is. It is therefore astonishing how many otherwise reasonable persons fall prey to this illusion with regard to the great societal addiction – economic growth. They invoke the idea of decoupling GDP growth from resource use, environmental pollution and the like. But decoupling growth has nothing to do with reality, it is a myth. Continue reading

The Need to Decouple from Growth

Not first since the recent Earth Summit in Rio de Janeiro there has been much talk about the need to make the world economy “green”. The problem with this mention, somewhat similar to “sustainability”, is that everyone has a different picture of what constitutes a “green” economy (thus the decision in Rio to leave the definition in the national domain…). Astonishingly many view the “green economy” as one that still relies on economic growth – but without all the negative side-effects, such as climate change and environmental degradation in general. This is the idea of “decoupling growth“. It is just as tempting as flawed. Continue reading

Decoupling Growth or System Change?

It is becoming ever more clear that something has to change in the way human economic activity takes place and impacts the world around us. The ecological footprint of the world economy is ever increasing – it is by now believed to have reached unsustainable levels. Few people are questioning this. However, so far the (re-)actions to this new challenge have not been adequate – the 17th Conference of Parties of the UNFCCC in Durban last month, where the world leaders failed to agree on a binding framework aiming at tackling anthropogenic climate change, is a prime recent example. Alas, it is not the only one – rather it is the tip of the iceberg. There are many proposals what to do. And it is clear that human economic activity (including consumption) is the main problem. One popular idea is to “decouple” growth from resource use (in a wide sense of the latter). Continue reading