The Case for Growth Agnosticism

Labour's King's Speech announced its mission: removing barriers to economic growth. What to think about it and its critics?

Can the needs of the planet be reconciled with the need for economic growth within our capitalist economy? This is one of the biggest questions that divides sustainability researchers. 

Broadly speaking, there are three main positions in this debate: green growth, degrowth, and growth agnosticism (or “a-growth”). While I (and many others within CMP) are sympathetic to the degrowth position, in this post I will defend growth agnosticism. For growth agnostics, whether or not GDP growth is compatible with a socially just and ecologically sustainability economy is ultimately uncertain, and arguably besides the point: what matters is that we build this alternative economy as rapidly as possible; what happens to GDP is a secondary concern.

The green growth position is currently dominant among mainstream economists and policymakers. It believes that there is no fundamental contradiction between economic growth – measured in terms of Gross Domestic Product (GDP) – and sustainability. The key argument here is that GDP growth is not inherently reliant on environmentally damaging practices. Instead, we can “decouple” growth from environmental damage – in other words, we can continue to grow the economy while reducing CO2 emissions, energy consumption, raw material extraction, and land-use practices that destroy intact ecosystems to make way for agriculture or mega-infrastructure projects. 

As evidence, green growthers show that many rich countries – including the UK – have absolutely decoupled their GDP from emissions and energy consumption. This means that emissions and energy consumption have stabilized or declined even as GDP continues to go up in these countries. They also show that the world economy as a whole has relatively decoupled from energy and emissions – meaning that the latter are still growing, but at a slower rate compared to global GDP. At the same time, they argue that more ambitious climate and environmental policies can help accelerate these trends to create truly green growth. For instance, rich countries can coordinate and raise carbon prices while bolstering public investment in renewable energy infrastructure, thereby bringing down emissions more rapidly. They can also invest in “circular economy” practices in which waste products are recycled and used as inputs in other forms of production – such as by creating electric vehicle batteries that are easier to recycle, thus decreasing the need for primary extraction of lithium, cobalt, and other minerals that are currently needed to produce these batteries. 

In sum, the green growth argument is that we are already seeing trends towards green growth (particularly in rich countries), and that these trends can be accelerated through more ambitious policies. Furthermore, they claim that green growth is not only possible but necessary, since they believe that GDP growth is essential to eliminate poverty, fund public services, invest in climate mitigation and adaptation, and improve collective welfare overall.

Photo by Adam Victor

In contrast, degrowthers argue that the green growth position is less empirically substantiated than its proponents believe. First, degrowthers do not contest the fact that many rich countries have achieved absolute decoupling from emissions and energy use. But they argue that these statistics obscure the energy, emissions, and raw materials embodied in their imports, since they only reflect those produced within their territories. Furthermore, degrowthers show that global energy and material use continues to rise at the global scale – which they argue is really the scale we should be focusing on, since this is what is ultimately driving our planetary crisis. And as the global economy continues to expand at a compound rate – meaning that it would be roughly twice as large as today by mid-century, and five times larger by the end of the century – they fear that efficiency improvements and gains from circular economy policies would be wiped out by the dramatic increase in economic activity as a whole.

Second, degrowthers argue that the real question with emissions is not whether they can be absolutely decoupled from growth, but how rapidly. For instance, one study shows that the rates of decarbonization achieved in even the best performing countries – including the UK and Sweden – are nowhere near fast enough to achieve their net zero by 2050 targets. Furthermore, they show that a “net zero” by 2050 target is insufficient from the standpoint of global climate justice: if the whole world needs to reach net zero by 2050 in order to stabilize global temperature increases around 1.5°C, then rich countries – who have already used far more than their “fair share” of the planet’s carbon budget – would need to get there much faster, as early as 2030 according to some studies. For degrowthers, the likelihood that rich countries could achieve such ambitious climate targets while continuing to rely on economic growth is vanishingly small (if not impossible). 

Third, in direct opposition to the green growthers, degrowthers believe that green growth is not just likely to prove impossible, but also unnecessary in the first place (at least in rich countries). This is because GDP – as many economists recognize – is a poor measurement of social welfare: it measures the scale of monetary transactions and profits that accrue within an economy, which tells us little about whether quality of life is actually improving for most people. It also includes many “bads” that are harmful to quality of life: for instance, if most of us work 70 hours a week, this would boost GDP while also fuelling exhaustion and burnout rather than improved well-being. 

Degrowthers thus believe that GDP growth is a circuitous and inefficient way to improve collective welfare, especially in rich countries that already have high levels of per capita income and material consumption. Instead, they argue that alternative economic models are possible that focus on reducing our material footprint while also enhancing collective welfare – such as by shortening the work week, increasing our leisure time, guaranteeing access to basic necessities, and investing more deeply in the “care” sectors of the economy, such as mental and physical health care, elderly care, education, affordable housing, and ecological restoration.

Finally, the growth agnostic (or a-growth) position falls somewhere between these two poles, though it is closer to the degrowth position in many respects. This is the position that many of us at CMP advocate. Other prominent advocates include Kate Raworth, Jeroen van den Bergh, and the think tank Green House. A-growthers agree that GDP is a poor measurement of social welfare and doesn’t deserve to be the lodestar that guides economic policy. We agree that our main goal should be to halt the climate and mass extinction crises while improving our overall health, well-being, and security, whether or not this involves an increase in GDP. 

We are more agnostic, however, on whether “green growth” in some form is fundamentally impossible. For one, while we recognize the challenges of accelerating climate mitigation within a growth framework, it is also the case that we don’t yet know how rapidly a truly ambitious climate emergency program within capitalism could bring down emissions – because it hasn’t been tried yet! Second, while degrowthers typically focus on aggregate material-energy throughput as the key driver of the climate and mass extinction crises, the reality is a bit more nuanced: it is really the growth of particular industries that are overwhelmingly responsible for destroying the planet – mainly the fossil fuel industry, but also industrial agriculture, the livestock industry, and large-scale commercial fishing, which are predominantly responsible for the biodiversity crises plaguing our lands and oceans. Without question, we need to radically and rapidly transform our energy and food systems, while also degrowing industries like aviation that are near-impossible to decarbonize using existing technologies. But we can be agnostic on whether this necessarily requires an end to GDP growth as a whole. 

Furthermore, we recognize that it is possible for solar and wind energy technologies to enable a more abundant energy economy that is less extractive and more circular – since these technologies require less material extraction compared to fossil fuels, and can be recycled more effectively. At the same time, we recognize that the nascent renewable energy economy is already perpetuating many of the same forms of ecologically damaging and socially unjust forms of growth that characterized the fossil fuel economy – including dispossession of communities and degradation of ecosystems to make way for solar and wind farms, new mines for transition metals like lithium and cobalt, and new battery storage and transmission lines to integrate intermittent renewables. 

The nature of the renewable energy future-to-come will not be the result of technological change alone. Rather, it will also be shaped by social struggles and policy choices, which could lead to a more circular, democratic, and just renewable energy economy, rather than one that perpetuates socially and ecologically damaging extraction and enriches investor-owned utilities while foisting higher electricity costs onto the rest of us. Whether or not a more just and sustainable renewable energy economy would be compatible with continuous GDP growth is debatable, and again arguably besides the point: what matters is that we build it as rapidly as possible.

Still, we should also recognize that the green growthers have a point: at least within our current economy, GDP growth is indeed necessary to create jobs, reduce unemployment, fund public services, and ensure economic security for workers and businesses alike. It is thus understandable that the new Labour government is obsessed with increasing economic growth in order to begin fixing the UK’s numerous problems. But like the degrowthers, we do not see economic growth as inherently necessary to achieve these critical objectives. Instead this is a question of how we design our economies. Our current economy is indeed designed to rely on growth, but there is a new generation of heterodox economists arguing that we can create a different kind of economy that achieves social and ecological objectives while ditching GDP. For instance, this would likely require a different kind of monetary system in which governments do not need growth in order to fund public services: they would spend it directly into the economy, while using a mix of taxation and supply-side policies to manage inflation risks.

We do not claim to have all the answers here. We do not know exactly what a post-GDP economy would look like. But we can reasonably assume that it is possible and desirable. In terms of political feasibility, our immediate near-term objective is to push Labour to dramatically scale up investment in ecological and social protection – e.g. by providing adequate public investment for renewable energy, climate adaptation, insulation, electric vehicle chargers, worker retraining for green jobs, the NHS, and building affordable low-carbon housing. While these investments would likely have a positive impact on GDP growth, this is at most a secondary concern. Far more important is that we begin reversing the planetary crisis while investing in the things that directly improve people’s lives. If the growth imperative and fiscal orthodoxy continuously prevents us from undertaking these common sense actions, then our economic system must be redesigned in order to accord with common sense – not the other way around. To riff on a well-known cartoon from the New Yorker, we do not want to look back on the 21st century thinking: “well, the planet got destroyed. But at least for a beautiful period in time we sustained 2-3% annual compound GDP growth!”

A piece by Michael Albert (University of Edinburgh)