Why We Will Be Better Off When We Stop Economic Growth

economy

Why We Will Be Better Off When We  Stop Economic GrowthThe end of growth will come one day, perhaps very soon, whether we’re ready or not. If we plan for and manage it, we could well wind up with greater well-being.

Both the U.S. economy and the global economy have expanded dramatically in the past century, as have life expectancies and material progress. Economists raised in this period of plenty assume that growth is good, necessary even, and should continue forever and ever without end, amen. Growth delivers jobs, returns on investment and higher tax revenues. What’s not to like? We’ve gotten so accustomed to growth that governments, corporations and banks now depend on it. It’s no exaggeration to say that we’re collectively addicted to growth.

The trouble is, a bigger economy uses more stuff than a smaller one, and we happen to live on a finite planet. So, an end to growth is inevitable. Ending growth is also desirable if we want to leave some stuff (minerals, forests, biodiversity and stable climate) for our kids and their kids. Further, if growth is meant to have anything to do with increasing quality of life, there is plenty of evidence to suggest it has passed the point of diminishing returns: Even though the U.S. economy is 5.5 times bigger now than it was in 1960 (in terms of real GDP), America is losing ground on its happiness index.

So how do we stop growth without making life miserable — and maybe even making it better?

To start with, there are two strategies that many people already agree on. We should substitute good consumption for bad, for example using renewable energy instead of fossil fuels. And we should use stuff more efficiently — making products that last longer and then repairing and recycling them instead of tossing them in a landfill. The reason these strategies are uncontroversial is that they reduce growth’s environmental damage without impinging on growth itself.

But renewable energy technology still requires materials (aluminum, glass, silicon and copper for solar panels; concrete, steel, copper and neodymium for wind turbines). And efficiency has limits. For example, we can reduce the time required to send a message to nearly zero, but from then on improvements are infinitesimal. In other words, substitution and efficiency are good, but they’re not sufficient. Even if we somehow arrive at a near-virtual economy, if it is growing we’ll still use more stuff, and the result will be pollution and resource depletion. Sooner or later, we have to do away with growth directly.

Getting Off Growth

If we’ve built our institutions to depend on growth, doesn’t that imply social pain and chaos if we go cold turkey? Perhaps. Getting off growth without a lot of needless disruption will require coordinated systemic changes, and those in turn will need nearly everyone’s buy-in. Policymakers will have to be transparent with regard to their actions, and citizens will want reliable information and incentives. Success will depend on minimizing pain and maximizing benefit.

The main key will be to focus on increasing equality. During the century of expansion, growth produced winners and losers, but many people tolerated economic inequality because they believed (usually mistakenly) that they’d one day get their share of the growth economy. During economic contraction, the best way to make the situation tolerable to a majority of people will be to increase equality. From a social standpoint, equality will serve as a substitute for growth. Policies to achieve equity are already widely discussed, and include full, guaranteed employment; a guaranteed minimum income; progressive taxation; and a maximum income.

These are ways to make economic shrinkage palatable; but how would policymakers actually go about putting the brakes on growth?

Meanwhile we could begin to boost quality of life simply by tracking it more explicitly: instead of focusing government policy on boosting GDP (the total dollar value of all goods and services produced domestically), why not aim to increase Gross National Happiness — as measured by a selected group of social indicators?

These are ways to make economic shrinkage palatable; but how would policymakers actually go about putting the brakes on growth?

One tactic would be to implement a shorter workweek. If people are working less, the economy will slow down — and meanwhile, everyone will have more time for family, rest and cultural activities.

We could also de-financialize the economy, discouraging wasteful speculation with a financial transaction tax and a 100 percent reserve requirement for banks.

Stabilizing population levels (by incentivizing small families and offering free reproductive health care) would make it easier to achieve equity and would also cap the numbers of both producers and consumers.

Caps should also be placed on resource extraction and pollution. Start with fossil fuels: annually declining caps on coal, oil and gas extraction would reduce energy use while protecting the climate.

Cooperative Conservatism

Altogether, reining in growth would come with a raft of environmental benefits. Carbon emissions would decline; resources ranging from forests to fish to topsoil would be preserved for future generations; and space would be left for other creatures, protecting the diversity of life on our precious planet. And these environmental benefits would quickly accrue to people, making life more beautiful, easy and happy for everyone.

Engineering a happy conclusion to the growth binge of the past century might be challenging. But it’s not impossible.

Granted, we’re talking about an unprecedented, coordinated economic shift that would require political will and courage. The result might be hard to pigeonhole in the capitalist-socialist terms of reference with which most of us are familiar. Perhaps we could think of it as cooperative conservatism (since its goal would be to conserve nature while maximizing mutual aid). It would require a lot of creative thinking on everyone’s part.

Sound difficult? Here’s the thing: ultimately, it’s not optional. The end of growth will come one day, perhaps very soon, whether we’re ready or not. If we plan for and manage it, we could well wind up with greater well-being. If we don’t, we could find ourselves like Wile E. Coyote plunging off a cliff. Engineering a happy conclusion to the growth binge of the past century might be challenging. But it’s not impossible; whereas what we’re currently trying to do — maintain perpetual growth of the economy on a finite planet — most assuredly is. View Ensia homepage

This article originally appeared on Ensia

About The Author

Richard Heinberg is senior fellow at Post Carbon Institute and the author of 13 books. A strong advocate for a shift from fossil fuel dependence, he has published essays in dozens of outlets, including Nature, The Wall Street Journal, CityLab and Pacific Standard.

Related Books

Our Renewable Future: Laying the Path for One Hundred Percent Clean Energy

economyAuthor: Richard Heinberg
Binding: Paperback
Studio: Island Press
Label: Island Press
Publisher: Island Press
Manufacturer: Island Press

Buy Now
Editorial Review:
One of GreenBiz's Six Best Sustainability Books of 2016

The next few decades will see a profound energy transformation throughout the world. By the end of the century (and perhaps sooner), we will shift from fossil fuel dependence to rely primarily on renewable sources like solar, wind, biomass, and geothermal power. Driven by the need to avert catastrophic climate change and by the depletion of easily accessible oil, coal, and natural gas, this transformation will entail a major shift in how we live. What might a 100% renewable future look like? Which technologies will play a crucial role in our energy future? What challenges will we face in this transition? And how can we make sure our new system is just and equitable?

In Our Renewable Future, energy expert Richard Heinberg and scientist David Fridley explore the challenges and opportunities presented by the shift to renewable energy. Beginning with a comprehensive overview of our current energy system, the authors survey issues of energy supply and demand in key sectors of the economy, including electricity generation, transportation, buildings, and manufacturing. In their detailed review of each sector, the authors examine the most crucial challenges we face, from intermittency in fuel sources to energy storage and grid redesign. The book concludes with a discussion of energy and equity and a summary of key lessons and steps forward at the individual, community, and national level.

The transition to clean energy will not be a simple matter of replacing coal with wind power or oil with solar; it will require us to adapt our energy usage as dramatically as we adapt our energy sources. Our Renewable Future is a clear-eyed and urgent guide to this transformation that will be a crucial resource for policymakers and energy activists.




The End of Growth: Adapting to Our New Economic Reality

economyAuthor: Richard Heinberg
Binding: Paperback
Features:
  • New Society Publishers

Brand: New Society Publishers
Studio: New Society Publishers
Label: New Society Publishers
Publisher: New Society Publishers
Manufacturer: New Society Publishers

Buy Now
Editorial Review:

Economists insist that recovery is at hand, yet unemployment remains high, real estate values continue to sink, and governments stagger under record deficits. The End of Growth proposes a startling diagnosis: humanity has reached a fundamental turning point in its economic history. The expansionary trajectory of industrial civilization is colliding with non-negotiable natural limits.

Richard Heinberg’s latest landmark work goes to the heart of the ongoing financial crisis, explaining how and why it occurred, and what we must do to avert the worst potential outcomes. Written in an engaging, highly readable style, it shows why growth is being blocked by three factors:

  • Resource depletion
  • Environmental impacts
  • Crushing levels of debt

These converging limits will force us to re-evaluate cherished economic theories and to reinvent money and commerce.

The End of Growth describes what policy makers, communities, and families can do to build a new economy that operates within Earth’s budget of energy and resources. We can thrive during the transition if we set goals that promote human and environmental well-being, rather than continuing to pursue the now-unattainable prize of ever-expanding GDP.

Richard Heinberg is the author of nine previous books, including The Party's Over, Peak Everything, and Blackout. A senior fellow of the Post Carbon Institute, Heinberg is one of the world's foremost peak oil educators and an effective communicator of the urgent need to transition away from fossil fuels.





Afterburn: Society Beyond Fossil Fuels

economyAuthor: Richard Heinberg
Binding: Paperback
Studio: New Society Publishers
Label: New Society Publishers
Publisher: New Society Publishers
Manufacturer: New Society Publishers

Buy Now
Editorial Review:

Climate change, along with the depletion of oil, coal, and gas, dictate that we will inevitably move away from our profound societal reliance on fossil fuels; but just how big a transformation will this be? While many policy-makers assume that renewable energy sources will provide an easy "plug-and-play" solution, author Richard Heinberg suggests instead that we are in for a wild ride; a "civilization reboot" on a scale similar to the agricultural and industrial revolutions.

Afterburn consists of fifteen essays exploring various aspects of the twenty-first century migration away from fossil fuels including:

  • Short-term political and economic factors that impede broad-scale, organized efforts to adapt
  • The origin of longer-term trends (such as consumerism), that have created a way of life that seems "normal" to most Americans, but is actually unprecedented, highly fragile, and unsustainable
  • Potential opportunities and sources of conflict that are likely to emerge

From the inevitability and desirability of more locally organized economies to the urgent need to preserve our recent cultural achievements and the futility of pursuing economic growth above all, Afterburn offers cutting-edge perspectives and insights that challenge conventional thinking about our present, our future, and the choices in our hands.

Richard Heinberg is a senior fellow of the Post Carbon Institute, the author of eleven previous books including The Party's Over and The End of Growth. He is widely regarded as one of the world's most effective communicators of the urgent need to transition away from fossil fuels.





economy
enafarzh-CNzh-TWtlfrdehiiditjamsptrues

follow InnerSelf on

google-plus-iconfacebook-icontwitter-iconrss-icon

 Get The Latest By Email

{emailcloak=off}

follow InnerSelf on

google-plus-iconfacebook-icontwitter-iconrss-icon

 Get The Latest By Email

{emailcloak=off}