Can we save the planet by shrinking the economy?

Most of the world is very poor. Billions of people go hungry, can’t afford a doctor when they get sick, don’t have adequate shelter and sanitation, and struggle to exercise the freedoms essential to a good life because of material deprivation.

But for all the immiseration around us, one thing is undeniable: For the past several centuries — and especially for the past 70 years, since the end of World War II — the world has been getting much richer.

That economic boom means a lot of things. It means cancer treatments and neonatal intensive care units and smallpox vaccines and insulin.

It means, in many parts of the world, houses have indoor plumbing and gas heating and electricity

It means that infant mortality is down and life expectancies are longer.

But an increasingly wealthy world also means we eat more meat, mostly from factory-farmed animals. It means we emit lots more greenhouse gases. It means that consumers in developed countries buy a lot and throw away a lot.

In other words, it means a lot of good things and certainly some bad things as well.

Mainstream climate and environmental policy has developed over the years with a certain assumption — that we can get rid of the bad things while still preserving the good things. That is, it’s sought to figure out how to reduce carbon emissions, preserve ecosystems, and save endangered species while continuing to improve material living conditions for everyone in the world.

But to a vocal slice of climate activists, that approach seems increasingly doomed. The degrowth movement, as it’s called, argues that humanity can’t keep growing without driving humanity into climate catastrophe. The only solution, the argument goes, is an extreme transformation of our way of life — a transition away from treating economic growth as a policy priority to an acceptance of shrinking GDP as a prerequisite to saving the planet.

At the core of degrowth is the climate crisis. Degrowth’s proponents argue that to save Earth, humans need to shrink global economic activity, because at our current levels of consumption, the world won’t hit the IPCC target of stabilizing global temperatures at no more than 1.5 degrees of warming. The degrowth movement argues that climate change should prompt a radical rethinking of economic growth, and policymakers serious about climate change should try to build a livable world without economic growth fueling it.

It’s a bold, even romantic vision. But there are two problems with it: It doesn’t add up — and it would be nearly impossible to implement.

Addressing climate change will take genuinely radical changes to how our society works. Stirring as it might be to some, though, degrowth’s radicalism won’t fix the climate. Degrowth is most compelling as a personal ethos, a lens on your consumption habits, a way of life. What it’s not is a serious policy program to solve climate change, especially in a world where billions still live in poverty.

The basics of degrowth

Pinning down what degrowth means can be tricky because degrowthers often differ on details. But there are some common threads to their thought.

In general, degrowthers believe that in the modern world, economic growth has become unmoored from improvements in the human condition.

Jason Hickel, an anthropologist at the London School of Economics and the author of Less Is More: How Degrowth Will Save the World, has emerged as one of the leading spokespeople for the movement. To Hickel, the case for degrowth goes like this: The world is producing too much greenhouse gases. It is also overfishing, is overpolluting, is unsustainable in a dozen ways, from deforestation to plastic accumulating in the oceans.

Scientists have made impressive progress on technologies that, he argues, should have been sufficient to address the climate crisis — think solar panels, meat alternatives, eco-friendly houses. But because wealthy societies are so focused on growing the economy, those gains have been immediately plowed back into the economy, producing more stuff for the same ecological footprint, yes, but not actually shrinking the ecological footprint.

Hickel argues that this problem is unsolvable within our current framework. “In a growth-oriented economy,” he writes in Less Is More, “efficiency improvements that could help us reduce our impact are harnessed instead to advance the objectives of growth — to pull ever-larger swaths of nature into circuits of extraction and production. It’s not our technology that’s the problem. It’s growth.”

His solution? To abandon the lodestar of economic policy in nearly every country, which is to aim for economic growth over time, increasing wealth per person and expanding the ability of their citizens to purchase the things they want and need. Instead, Hickel argues, rich countries should focus on getting emissions to zero — even if the result is a much-contracted economy.

If that sounds unappealing, he devoted much of the book — and much of our interview — to arguing that it wouldn’t be. He points out that some countries, like the United States, are rich but get very little for their spending, in terms of national well-being; poorer countries like Spain have better health care systems. He argues that current levels of well-being could be maintained at a tenth of Finland’s current GDP — assuming that society also adopted wide-scale redistribution and socialist labor policies.

At the heart of Hickel’s argument is an idea that divides degrowthers and their critics: the concept of “decoupling” growth from environmental impact. Hickel and his fellow degrowthers are skeptical that economic growth as we know it can ever truly be achieved without accompanying growth in emissions.

But critics argue that not only is it possible — it’s already been happening. For the past decade, as many countries have transitioned to green energy, they have successfully seen their emissions shrink while their GDP has grown.THE DEGROWTH MOVEMENT ARGUES THAT HUMANITY CAN’T KEEP GROWING WITHOUT DRIVING HUMANITY INTO CLIMATE CATASTROPHE

“There have been really big changes since 2005,” when people were debating whether decoupling was even possible, Zeke Hausfather, a climate scientist at the Breakthrough Institute, told me. “Green energy has gotten cheap. Solar power is the cheapest energy at the margins in every country today. Global coal use has peaked.” His research finds evidence of “absolute decoupling” — emissions shrinking while GDP grows — in 32 countries, including the United States, the United Kingdom, and Germany.

Degrowthers I spoke to don’t dispute that decoupling is possible. But they argue it won’t be enough to shrink emissions as rapidly as they need to. And there’s a compelling bit of evidence for that view: Even as some countries have decoupled, others have increased emissions, and overall atmospheric carbon is at its highest level ever recorded.

Where an optimist might see, in the decoupling of the past few decades, signs that growth and climate solutions can coexist, a pessimist might find the degrowth diagnosis more persuasive: that our growth-focused society clearly isn’t up to the task of solving climate change.

The pessimists have picked up momentum of late. It’s true, in one sense, that degrowth is a somewhat fringe idea: No politician has endorsed it, and no serious policy proposals based on it have been put forth. But degrowth has nonetheless drawn sympathy in some quarters — including among prominent climate thinkers.

Steven Chu, who served as secretary of energy under President Obama, has endorsed it, arguing, “You have to design an economy based on no growth or even shrinking growth.”

More than 11,000 scientists signed William Ripple’s 2019 letter “World Scientists’ Warning of a Climate Emergency,” which argues “our goals need to shift from GDP growth and the pursuit of affluence toward sustaining ecosystems and improving human well-being by prioritizing basic needs and reducing inequality.”

And a recent paper in Nature explored how a “degrowth” of 0.5 percent of GDP per year might interact with climate and emissions targets, arguing that while “substantial challenges remain regarding political feasibility,” such approaches should be “thoroughly considered.”

The tension at the heart of degrowth: Can we fix global poverty without economic growth?

One big problem with degrowth is this simple fact: In the coming decades, most carbon emissions won’t be coming from rich countries like the US — they’ll be happening in newly middle-income countries, like India, China, or Indonesia. Already, developing nations account for 63 percent of emissions, and they’re expected to account for even more as they develop further and as the rich world decarbonizes.

Even if emissions in rich countries go to zero very soon, climate change is set to worsen as poorer countries increase their own emissions.

That will, of course, have deeply negative climate impacts. But the alternative is a nonstarter — should the world really prioritize curbing emissions and economic growth if it meant suppressing the growth of those countries?

Degrowthers see no dilemma here. What Hickel envisions is global movement in two directions: Poor countries could develop up to a certain level of prosperity and then stop; rich countries could develop down to that level and then stop. Thus, climate catastrophe could be averted, all while making the world’s poor more prosperous.

“Rich countries urgently need to reduce their excess energy and resource use to sustainable levels so our sisters and brothers in the global South can live well too,” Hickel put it. “We live on an abundant planet and we can all flourish on it together, but to do so we have to share it more fairly, and build economies that are designed around meeting human needs rather than around perpetual growth.”

From a climate change perspective, though, there’s a problem. First, it means that degrowth would do nothing about the bulk of emissions, which are occurring in developing countries.

Second, the global economy is more interconnected than Hickel implies. When Covid-19 hit, poor countries were devastated not just by the virus but by the aftershocks of virus-induced slowdowns in consumption in rich countries.

There’s some genuine appeal to the idea of an end to “consumerism,” but the pandemic offered a taste of how a sudden drop in rich-world consumption would actually affect the developing world. Covid-19 dramatically curtailed Western imports and tourism for a time. The consequences in poor countries were devastating. Hunger rose, and child mortality followed.

Covid-19, of course, wreaked direct economic havoc at the same time, with lockdowns having an especially negative impact on some poor countries; the effects of the pandemic and international demand shock were combined, and in some cases they’re hard to separate. But the United Nations, the World Bank, and expert analyses point to the decline in global consumption as a significant part of the picture.

Degrowthers reject this concern on two fronts: First, they argue that a sustained, deliberate reduction in consumption wouldn’t be anything like a recession. Recessions, they agree, are really bad, but that’s because consumption falls in affected sectors, instead of being targeted at things that don’t improve well-being. Degrowth, they say, would be different.

Second, they contend that there is some path to economic growth in poor countries that doesn’t rely on trade with rich ones — certainly some countries managed economic growth when the whole world was poor, after all.

Hickel’s perspective is that most trade between rich and poor countries is extractive, not mutually beneficial — and that maybe when that dynamic ceases, poor countries will have the chance for the catch-up growth they merit. That’s one take. But it means that degrowth’s case for not crushing the poor world is predicated on a speculative take on how those countries can grow — one that democratically elected leaders in those countries largely don’t share.

What GDP doesn’t capture — and what it can tell us

In a way, the debate over degrowth is a debate over the meaning of one economic indicator: gross domestic product (GDP).

GDP measures the transactions within an economy — all the occasions when money changes hands in exchange for goods and services. It’s not wealth, but it’s one of the primary ways we measure wealth.

It certainly doesn’t capture everything of value. When parents spend a quiet weekend at home teaching their children to read, for example, nothing GDP-generating has happened — but value has certainly been created.

Degrowth articles burst with such examples. GDP, they love to point out, includes the production of things like nerve gas, even though that has no social value. And it doesn’t include storytelling, singing, gardening, and other simple human pleasures.

“If our washing machines, fridges, and phones lasted twice as long, we would consume half as many (thus the output of those industries would decline), but with zero reduction in our access to those goods,” Hickel told me. If everyone worked half the hours they currently do, and made half the income, they might mostly be better off — at least, assuming that their basic needs were still met.

“We propose policies like a living wage, a maximum income ratio, wealth taxes, etc. to accomplish this,” Hickel told me. “Given all of this, the language of poverty really gets it wrong: longer-lasting products, living wages, shorter working weeks, better access to public services and affordable housing — we are calling for the opposite of poverty. Yes, industries like SUVs and fast fashion would decline, but that doesn’t mean poverty. We can replace them with public transportation and longer-lasting fashion, thus meeting everyone’s needs.”

There’s a lot of speculation here, and a lot of what degrowth’s critics would call hand-waving. Degrowth is fundamentally premised on the claim that we can cease to focus on growth while getting better than ever at addressing human needs. If that’s true, then that would certainly be great news.

But in many ways, it’s a vision more wildly optimistic — disconnected from actual policy results — than any of the more standard “sustainable development” models degrowthers criticize for being out of touch.

First, in the world today, there’s an extremely strong association between growth and welfare outcomes of every kind. GDP, while imperfect, is a better predictor of a country’s welfare state, outcomes for poor citizens in that country, and well-being measures like leisure time and life expectancy than any other measure.

“GDP does leave out non-commercialized activities that are welfare-enhancing,” economist Branko Milanovic writes in a rebuttal of degrowth:

It is, like every other measure, imperfect and one-dimensional. But … it is imperfect at the edges while fairly accurate overall. Richer countries are countries that are generally better-off in almost all metrics, from education, life expectancy, child mortality to women’s employment etc. Not only that: richer people are also on average healthier, better educated, and happier. Income indeed buys you health and happiness. (It does not guarantee that you are a better person; but that’s a different topic.) The metric of income or GDP is strongly associated with positive outcomes, whether we compare countries to each other, or people (within a country) to each other.

The things degrowthers care about — leisure time, health care, life expectancy — are strongly correlated with societal wealth. The generosity of a welfare state and the availability of transfers to a state’s poorest people are also strongly correlated with societal wealth. Innovation, discovery, invention, and medical technology improvements are also strongly correlated with societal wealth.

The strong correlation between child mortality and GDP per capita is apparent on the above graph. There are some outliers — some countries outperform or underperform their GDP somewhat, in terms of preventing child deaths — but in general, wealth strongly predicts child survival. No single, simple medical intervention causes the difference. Wealthier societies on average get better health outcomes across the board.

This graph looks at child mortality not just by comparing rich countries to poor ones but also by comparing countries over time, as they get richer: Getting richer improves outcomes for children.

Leisure time, too, has increased — and hours worked have declined — as the world has gotten wealthier.

It might be possible in principle to do better — to decouple, if you will, health and well-being from access to material resources, so that everyone is well-off with many fewer resources.

But the examples degrowthers point to remain speculative ones; if we ought to be skeptical, as degrowthers argue we should be, about the decoupling of wealth from ecological impact, we ought to be at least as skeptical about the prospects of decoupling wealth from living standards.https://1c06b3bec9adf85c3abafa138ca71fcb.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.html

“In the end, economic growth is about the production of stuff that people need and then the consumption of those things by the people who need it,” Max Roser at Our World in Data, a research institute focused on finding, visualizing, and communicating historical economic and health data, told me. He added:

The money aspect, and the abstract concept of GDP, distract us and make it less obvious what it’s actually about. People want to have enough food, they need to go to the doctor, they need childcare, they want a good education. People need lots of stuff, and one thing that people care about are goods and services, and they need to be produced, and economic growth is about an increase in the quality and quantity of the goods and services that people need.

There’s also the knotty problem of who gets to decide which goods and services people choose to spend their money on. Many of the climate scientists I spoke to shared Hickel’s impatience for many specific carbon-intensive modern industries. “I’m not going to defend bitcoin,” the Breakthrough Institute’s Hausfather told me. (The cryptocurrency has attracted intense criticism for being astoundingly carbon-intensive.)

But there is a lot in between bitcoin and basic subsistence needs. And “enough for everyone who needs it” inherently requires value judgments about what people really need, and what things they value that are frivolous luxuries. That’s why so many anti-poverty programs have moved away from giving people “what they need” toward just giving them cash — that is, giving them wealth, which they can choose to spend however they please.

“Even poor people have so many needs for goods and services that you can’t possibly put them on a list and say, ‘Now we’re done here,’” Roser told me. “That’s the beauty of money, that you can just go out there and get what you need rather than what some researcher determines are your needs.”

Degrowth is unrealistic — and gaining traction

As a policy program, degrowth suffers from being both too radical and not radical enough.

There’s a lot of broad-brush policy prescriptions in the degrowth lit, but those details never really add up.

While it’s not a short book, Less Is More feels surprisingly sparse when it comes to envisioning how the changes it recommends could be brought about. The chapter on solutions recommends cutting the workweek and changing tax policy — two solid proposals — but then rounds that out by recommending ending technological obsolescence, advertising, food waste, and student debt.

I’m not particularly opposed to those policies. But they seem laughably inadequate for the magnitude of the task at hand: confronting the climate crisis. Degrowth successfully persuades that guiding humanity and our planet through the 21st century will be really, really hard — but not in a way degrowth particularly solves.https://1c06b3bec9adf85c3abafa138ca71fcb.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.html

Where degrowth literature is relentlessly pessimistic about the prospect of our problems being solved under our current economic system, it turns oddly optimistic about the prospect that they’ll be solved once we embrace a different way of viewing wealth and progress. If cutting carbon emissions fast enough to matter requires shrinking the global economy by 0.5 percent a year indefinitely, starting right now, as the Nature paper estimates, that’ll take policy measures much larger and more ambitious than any proposed in Less Is More.

“If we are to avert catastrophic warming, we have to lower carbon emissions by a factor of two within the next 10 years. I find it highly implausible that capitalism/market economics will be abandoned by the world on that time frame,” Pennsylvania State University climatologist Michael Mann told me. “That means we have to act on the climate crisis within the framework of the current system.”

In that sense, there’s actually something anti-radical about any climate plan so radical that it can’t be concretely brought about in the next decade.

And yet, implausible as it is, degrowth is gaining a foothold in intellectual and policy circles. What accounts for its seemingly growing popularity? This was a question that puzzled me until I heard the same answer from one degrowth advocate and one opponent: that it’s not, really, exactly about climate.

“It started in the 1990s in France, picking up on radical European politics in the 1970s,” Giorgos Kallis, a researcher studying degrowth at the Universitat Autònoma de Barcelona, told me. “There was an in-between political space there — radical greens, putting much more emphasis on localized production, emphasis on conviviality and autonomy. This is a discourse that comes from them. It wasn’t just about avoiding a particular environmental problem. It was a holistic proposal.”

That was also the diagnosis of Zion Lights, a former spokesperson for Extinction Rebellion, who has become one of the climate movement’s internal critics, arguing that the movement focuses too much on environmentalist-friendly proposals that have nothing to do with climate.

“It has become difficult to talk about making energy policies for combating climate change, for example, without being told that such thinking is actually irrelevant because it doesn’t involve system change,” she recently argued. “We need cheap, clean energy at scale and we need it now.”

In that sense, a good analogy for degrowth might actually be locavorism — the movement that focuses on eating food grown locally. It’s popular with environmentalists, both those whose convictions are about climate change and those who long for a return to the land. Its actual climate impacts are limited or even negative — for some products, it’s better for them to be grown in their optimal environment even with carbon-intensive shipping — and it definitely does less for the climate than, for example, going vegan. But it retains its allure.

How to fight climate change while building good human societies

Degrowth’s radicalism isn’t where I part ways with it: The future will almost certainly require us to eat much less meat, dramatically change land use, and potentially invest a significant chunk of society’s resources in mitigation indefinitely.

But I don’t tend to see such efforts as fundamentally futile. Degrowthers do — even when there have been significant successes.

Climate scientists have spent a long time warning the world about climate change, but they nonetheless tend to sound a more optimistic note than degrowthers like Hickel. “It’s undoubtedly a monumental challenge,” Mann told me. “We have the technology to solve the problem — renewable energy, smart grid technology, and existing energy storage. We just need the political will to act.”

Take solar panels. Two decades ago, cheap solar panels were just a dream. Now they’re everywhere and have become a crucial tool in the fight against climate change.

Not only that, solar panels have democratized electricity. Just one small-scale instance: In rural Kenya, you can see donkeys saddled with solar panels so that farmers can charge their phones. And there are many such examples that count as a win for both human progress and our fight against climate change.

It should go without saying that since rich governments got us into this climate mess, they should be at the forefront of getting us out of it. We need massive investments in carbon capture, green energy, plant-based meat, mitigation, and straight-up cash transfers to poor countries disproportionately affected by the climate crisis.

Many of the researchers I spoke to were open to the idea that in the long run, humanity would need to rethink many of our cherished assumptions about how economies work, in order to build a civilization that can flourish for thousands or millions of years. They didn’t reject degrowth as a philosophical contribution to the question of what future human civilizations should care about.

But such articulations of different philosophies of human flourishing should not be mistaken for public policy.

We don’t have very long, and we need to decarbonize quickly. We have technologies that have made a big difference already, and they must be made available on an unprecedented scale. We have more speculative solutions, technological and societal, and we should be prepared to try those, too. The scale of the problem is such that we need to act now — and we need to be clear-eyed about which ideas truly move the needle.