Are decarbonization and economic growth incompatible?
In this policy brief Lenaerts et al. explore the impact of decabornisation on the economy. They look at what has been achieved so far:
Energy related GHG emissions per unit of GDP are falling but the fall is slower than the increase in real GDP so that overall emissions continue to rise. CO2 emissions per unit of GDP have to decline by around 95 percent or approximately 9 percent per year on average from 2019 until 2050. Between 1990 and 2016, the world only achieved an average so-called ‘decoupling rate’ of 1.8 percent per year. For the next three decades the speed of decoupling will have to be almost five times greater. In EU decoupling rates have accelerated significantly which implies that going forward decoupling has to accelerate by a factor of 2.5.
What needs to be done for the realisation of green growth?
- Need for massive investment in deployment of existing green technologies: according to IEA’s (2021b) net-zero pathway estimates that global energy capital investments must increase from a current yearly average of about $2 trillion to $5 trillion (2019 prices) by 2030;
- Need for breakthrough green technologies for decarbonisation: Public-private partnerships schemes, adequate risk-taking by public institutions and green industrial policy can further deliver breakthrough innovation.
- Need to foster behavioural change: according to the IEA (2021b) net-zero roadmap, behavioural change accounts for 12.5 percent of global CO2 reductions between today and 2050.
Can climate change be tackled without ditching economic growth?
Authors: Klass Lenaerts, Simone Tagliapietra, Guntram B. Wolff
From: Bruegel
Debating the issue
This is a debate between Jason Hickel (LSE) who advocates degrowth and Stéphane Hallegatte (World Bank) who advocates green growth:
Hoping for “green growth” is not a reasonable response – Hickel
[E]fficiency improvements generally lead to rising absolute resource use. While this is sometimes described as a “paradox,” it is exactly what economists expect to happen: in a growth-oriented economy, gains from efficiency improvements are leveraged to expand the process of production and consumption—indeed, that is the point.
Rich countries should explore post-growth pathways – Hickel
[I]f we organize our economies around livelihoods and provisioning for human needs, rather than around elite consumption and capital accumulation, we would be able to bring resource use back within planetary boundaries and achieve a rapid transition to renewables, fast enough to stay under 1.5 °C.
The benefits of environmental protection and green growth – Hallegatte
Can green growth policies deliver both lower footprints and higher living standards? If one thinks only in terms of extraction, everything is a trade-off: if you extract less (labour from children or material from nature), you get less output. But if you think of people and nature as contributors—with healthy people and thriving nature able to contribute more—then trade-offs are less likely or last only the duration of a transition period.
A different type of growth – Hallegatte
It is one thing to say we need to scale down ecologically destructive industries or cap extraction from nature, but it is quite another to design the policies to do so in a way that is efficient, fair, and politically feasible. Options include making firms responsible for recycling their products along their entire lifetime; ensuring that all external production costs (from pumping groundwater to carbon emissions) are regulated directly or accounted for through a fee; reforming tax systems that incentivize wasteful land, energy, and natural resource consumption; and ensuring investors cannot capture short-term gains while escaping long-term costs.
Can we live within environmental limits and still reduce poverty? Degrowth or decoupling?
By: Jason Hickel, Stéphane Hallegatte – LSE, World Bank
