Low growth and sustainability

Decoupling GDP from its material weight

[D]ecoupling GDP from the flow of emissions is not the same as decoupling economic activity from the stocks of environmental and material resources on which future prosperity depends. To achieve the latter, sufficient or strong absolute decoupling is needed. At the global level, sufficient absolute decoupling to prevent climate breakdown would require an average annual decline in the carbon intensity of global economic output of around 14% every year for the next three decades. The highest rate of decoupling ever achieved by the world’s advanced economies was a little under 3%, in the years immediately following the oil crises of the 1970s. The average rate of decline across the world at the moment is less than 1%. In the case of a rich country like the United Kingdom, sufficient absolute decoupling would mean a decline in the nation’s carbon footprint at a rate in excess of 20% each year, with a net zero target that might need to be as early as 2030.

Unraveling the claims for (and against) green growth
Authors: Tim Jackson, Peter A. Victor
From: University of Surrey, York University

A model of low growth and environmental sustainability

Jackson and Victor develop a stock-flow consistent ecological macroeconomic simulation model (LowGrow SFC) for Canada in order to determine whether important social and environmental objectives can be achieved in a modern economy without necessarily relying on continued economic expansion, i.e. increases in real GDP. They differentiate between three scenarios:

• Base Case: current trends continue into the future;
• Carbon Reduction Scenario: in which measures are introduced to reduce greenhouse emissions;
• Sustainable Prosperity Scenario: which includes policies implemented in the Carbon Reduction Scenario plus annual transfer payments to reduce the inequality of incomes and a decline in hours worked.

They find that the Sustainable Prosperity Scenario will lead to a low or no growth economy but could also deliver a better quality of life with greater social equality and lower environmental impact.

An interesting question:

[D]o the various policies and measures introduced to improve social and environmental outcomes and to maintain financial stability essentially mean that LowGrow SFC no longer describes a capitalist economy?

LowGrow SFC: a stock-flow-consistent ecological macroeconomic model for Canada
Authors:Tim Jackson, Peter A. Victor
From: University of Surrey, York University