‘Degrowth’ starts to move in from Europe’s policy fringes
Unorthodox economic ideas are finding a mainstream audience as climate change bites
May 30 2023
By Martin Sandbu Financial Times’s European economics commentator.
It is a sign of the times that a book entitled How to Blow Up a Pipeline, in which Swedish climate activist Andreas Malm advocates targeted sabotage of physical property, is being given the movie treatment. Even as political and corporate Europe have swung definitively behind the decarbonisation agenda, the toughest wing of the climate change movement argues increasingly loudly that this is not enough.
Advocates of “degrowth” say that addressing climate change requires nothing less than a fundamental rejection of the whole principle of continuous economic growth as a policy objective. Their concerns have, slowly but surely, moved from the fringes of Europe’s policy debate to at least being granted a hearing in the EU institutions.
Earlier this month, European parliamentarians organised the second iteration of a conference entitled “Beyond Growth” (the first was in 2018). Philippe Lamberts, a Green MEP behind both events, says he faced “quite a lot of pushback from the [European] Commission” the first time around. The attitude then, he says, was “if I didn’t believe in growth, I should find another job”.
Five years on, it is a different story. Now “the big shots” — leading EU officials — “are playing ball” and engaging with the debate, says Lamberts. Commission president Ursula von der Leyen and several of her commissioners and top civil servants spoke at the conference, as did European parliament president Roberta Metsola and Frank Elderson of the European Central Bank’s executive board.
It may help that the MEP does not, in fact, call outright for an end to growth. The conference materials studiously avoided the word “degrowth”. Lamberts says he prefers to speak of “shared prosperity within planetary boundaries”. He argues that we should debate what economic developments are consistent with this and act accordingly — “discussing these things is no longer seen as sacrilege”. As for von der Leyen, her speech emphasised a vision of sustainable growth, and drew applause when declaring that “a growth model centred on fossil fuels is simply obsolete”.
Others, however, go further. For example, in an article for the scientific journal Nature last December, a group of ecologists, environmental scientists and economists wrote: “Wealthy economies should abandon growth of gross domestic product as a goal, scale down destructive and unnecessary forms of production to reduce energy and material use, and focus economic activity around securing human needs and wellbeing . . . Degrowth is a purposeful strategy to stabilise economies and achieve social and ecological goals . . . ”
But most economists give no quarter to the suggestion that there is an inherent problem with growth in GDP, a measure of total paid-for production in the economy. Sir Dieter Helm, professor of economic policy at the University of Oxford, insists that “a sustainable economy can grow because technical progress continues”. He points to how “energy demand and emissions have been falling in the UK independent of the level of GDP”.
This divergence between carbon emissions and economic growth is known as “decoupling”, and disagreements over climate policies hinge, to a large extent, on how much decoupling people think it is realistic to expect.
“If you can have decoupling from GDP to materials and energy use, then you can have growth,” agrees Lamberts. But “if not, then what are the implications for fiscal policy, social security, labour markets, trade policy? . . . That’s what we want to start a discussion about.”
Views like Helm’s still dominate this debate. The idea that we may have to reduce GDP “is still extremely controversial”, says Diana Urge-Vorsatz, professor of environmental science at Central European University in Vienna and one of the authors of the Nature article. Still, she and her co-authors point out that mentions of degrowth and “sufficiency” have started to enter the reports of the Intergovernmental Panel on Climate Change — the UN body that assesses the scientific knowledge on climate change — as possibilities worth exploring.
In Europe, particularly, further impetus to the debate has come from Russia’s war in Ukraine, and the energy crisis that its weaponisation of gas supplies produced. Less than a year after the full-scale Russian invasion, large EU countries had reduced their natural gas consumption by more than 20 per cent compared with the five-year average, without a corresponding increase in oil and coal use. Their overall industrial production, nevertheless, held up strongly.
The experience of 2022, in other words, showed that large cuts in energy use and emissions are possible with concerted political action.
It is an open question whether this plays into the hands of degrowth advocates, or of the believers in decoupling who argue that decarbonisation is perfectly compatible with growth. What is certain is that the past year will have changed expectations about what policy action can achieve. There is a “massive potential for more efficiency”, says Lamberts. “German industrialists now admit to me that gas was so cheap there was no reason to save it.”
Climate Action Australia 