The fairy tale of green growth

I used to be a big fan of mobility. I used to be one of those people who constantly flee from the constricting "here" in search of the promising "there". At some point I even thought Hapiness is just a change of location or a flight away. So, what changed?

I guess it started when I moved to Germany almost 3 years ago, I became more aware of climate emergency. Last summer, heatwaves in Europe in June and July sent temperatures soaring, smashing a number of local and national records. A study published in April last year by the Swiss Federal Institute of Technology in Zürich said the summer heatwave across northern Europe last year would have been “statistically impossible” without climate change driven by human activity. For me, honestly, I just simply feel it. There are sadly bunch of scientific evidence out there to prove that human-caused climate is real and it is happening. (For climate skeptics and deniers.)

So, what should we do about it?

There are a lot of debates, reports and books about dealing with current climate crisis but writing this today, I want to focus on discussing the possibility of a solution so called: "Eco-Economic Decoupling" (some call "green growth", "green new deal" or "third industrial revolution") which refers to an economy that would be able to grow without corresponding increases in environmental pressure as step in the research process for my personal project about the ethics of economic growth in the face of climate crisis. So I would love to hear your thoughts, comments, recommendations, etc.

Let's begin....

First, it is important to distinguish between relative and absolute decoupling. The former leads to lowering trend in ecological damage per unit  of gross national product (approximately the average CO2 volume per unit of added value, measured in monetary terms), while the latter, according to dominant interpretation, aims at achieving an absolute reduction in the ecological burden while simultaneously increasing gross national product.

Even though, in historical perspective, absolute decoupling is nowhere to be seen but there is substantial evidence over a long a period of time in many fields of activity of relative decoupling and this has gradually become accepted practice in all forms of environmental protection - though it should be noted that this relates to the ''accounting error" of gross national product for individual countries. Which means a significant proportion of the energy that’s needed to maintain consumer lifestyles in wealthy nations never appears on the energy accounts of those countries at all. It appears instead on the accounts of poorer countries. A significant proportion of the carbon emissions for which rich consumers are ultimately responsible ends up being attributed to citizens in poorer countries. There are also arguments to show that this phenomenon is not a solution, it can possibly even act to intensify the problem. Let's take a look at some of them:

Decoupling is based on additional efficiency and consistency measures that in themselves can never be immaterial, but actually, in most cases, require relatively less material and energy flows than the previously used techonologies or products. This gradual benefit can be overcompensated by the necessary growth in material requirements (infrastructures, production facilities, etc.) This is because, with an increasing level of innovation, the innovative solutions cannot be put into practice by converting existing production facilities. Instead, new capacities and infrastructures must be constructed for their production. Take the case of electromobility. It aimed at reducing dependence on fossil fuels. Yet it increases demand for rare earths such as lithinium, and the facilities to produce renewable energy also need rare earths. The same applies to the many terminal devices for digital innovations on which a large propotion of the decoupling visions are based. They include the exorbitant rise in the use of coltan for mobile phone production. In some cases, one shortage scenario is subsituted by another that may be even more acute. So one needs to take a closer look to the envisioned combination of electromobility and renewable energy: How many additional production sites, power lines, industries for storage media, IT terminal devices for automation and smart metering, supply stations for electric vehicles, and waste management industries for used rechargeable batteries form the basis or consequence of such solutions?

The ‘Jevons paradox’ is the name given to this counterintuitive—from a resource conservation standpoint—outcome, whereby a more efficient use of resources leads to more, not less resource use. A simple economic explanation is that a resource used more efficiently costs less as a result. The demand for it and consumption increase (rebound), compensating for the savings from the more efficient use. Does this always have to be the case? Can’t the rebound be less than the savings?

In principle yes, but in practice one finds that the total use of resources increases as a result of technological improvements that increase resource efficiency. To understand why this happens, one has to look at the underlying growth dynamic of capitalism. As more surplus is extracted from a given amount of labour or a given stock of resources, this surplus is invested into more production, which in turn requires more resources and more labour. Efficiency brings growth, which annuls the savings from efficiency. It is unlikely that resource use will be avoided this way, unless a concrete limit is imposed upon the maximum allowable scale of resource use—or in the case of labour, the maximum amount of hours workers can work.

It is also important to note that income growth created by increased efficiency can lead to increased expenditure in every economic sector and in any place in the world. A person who has a car that consumes only 1.5 literes of diesel per 100 km and also regularly buy second-hand rather than new consumer goods could use the monetary savings to fly to Bali. And it is likely that he/she will spend more money at his/her holiday destination, leading to additional energy consumption.

Such effects can be avoided if each financial cost advantage due to efficiency measures, both on corporate and the consumer side, were prevented or skimmed off. But that would have two consequences: Firstly, the question would arise of whether all incentives to invest in efficiency measures would thereby be lost. Secondly, the following conflict would occur: The more comprehensively we manage to prevent income growth, the less likely we are to achieve growth in gross national product.

Standard economic theory assumes perfect substitution between the factors of production (capital, labour, resources), and unlimited possibilities of substitution between specific resources or materials (say fossil fuels substituting energy from biomass). There are two problems with this.

Firstly, mutual and full substitutability means that goods and services could in principle be produced by any of the three factors alone, without the use of the other two. This in reality is not the case. For example: to fly, a plane needs both pilots and kerosene. The factors of production are complements, not substitutes. Machines require workers to operate them, and labour requires tools to be productive. For certain economic processes, there is a minimum requirement of each factor without which the process cannot take place.

Secondly, it is reasonable to expect that as resources become scarce and their relative price increases, investment will go into research and development of substitutes. There might or there might not be a substitute for fossil fuels or certain scarce materials. This question is one of engineering, not of economics. One cannot assume that there will always be substitutes. And even if there are substitutes, one cannot assume that these substitutes will be able to maintain the same scale of the economy or rates of growth. If fossil fuels, for example, are substituted by lower EROI (Energy returns on energy investment) renewables, this will reduce the total amount of useful work provided by energy sources and dampen the scale and growth of the economy.

William Rees, a biologist turned ecological economist, put in practice this idea with the concept of ecological footprint. Recent research on consumption-based emissions and material flows, including indicators such as water or material footprint, is based on this insight: behind any final product or service, there is a long chain of resource and energy use, conversion and waste. In a metaphorical sense, all this is ‘embodied’ in the final product and marks its ‘footprint’.

It describes the deep-rooted perspective if being ascribe sustainability properties to products, technologies, services or other objects derived from human creative power. But the increased turnover on markets for sustainable products means nothing if it is a simple addition or a metaphorical compensation for impetuous non-sustainability.

To what extent does a passive house contribute to a sustainable development if its owner uses air travel everyweek (yes, a study shows that even short-haul flights produce huge amounts of CO2) and has choosen this type of house percisely for the effect upon reputation that comes with it? Or take the case of tote bags as recently people have been drilled in the superiority of tote bags. In 2008, the UK Environment Agency published a study showing that conventional plastic bags made from high-density polyethylene (HDPE, the plastic sacks found at grocery stores) had the smallest per-use environmental impact of all those tested. Cotton tote bags, by contrast, exhibited the highest and most severe global-warming potential by far since they require more resources to produce and distribute. (So ecologically speaking, the best practice for tote bags might be one of two extremes: use them all the time, or not at all.)

Is it because products have long become a communication instrument that creates identities that we come to an alarming conclusion: The shiny appeal of sustainable consumer symbolism is inteded to hide or compensate for the other, less sustainable, practices of the same individual. This much debated "greenwashing" is therefore not primarily aimed at improving the reputation of the corporation. It is far more a marketing idea to serve customers with a consumer symbolism that suits an ecological clean state.

So it would be possible that technologies and objects that are "sustainable" are not the solutions. However, there is one solution, lifestyles can be sustainable. Sustainability effects can be presented on the basis of individual eco-balances. In order to not blow through the remaining carbon budget, each inhabitant on the planet should only have an annual emissions quantum of 2.7 tonnes of CO2 by 2050. Those who reject that demand either want no climate protection or no global justice. The average CO2 balance of a German citizen is currently estimated at a disastrous 11 tonnes per year.

So, to achieve this lifestyles, we should focus more on essentials, instead of routinely making ourselves dizzy on the treadmill of shopping for self-fulfilment. Using fewer things more intensively and to this end remaining unswayed by other options means less stress and therefore greater well-being. Maybe it means we should liberating ourselves from an excess that not only clutters up our lives, but also makes our existence so vulnerable.

1. Befreiung vom Überfluss: Auf dem Weg in die Postwachstumsökonomie by Niko Paech.

2. Radical dematerialization and degrowth by Giorgos Kallis.