Andrew Simms, Victoria Johnson, and Peter Chowla are the authors of the New Economics Foundation report "Growth Isn't Possible." This direct challenge to the ever-present mantra of modern capitalism is based on the contradiction between limited global resources and the unquenchable demands of expanding markets.
The previous report, "Growth Isn't Working," demonstrated that far from alleviating global poverty, the benefits of global economic growth were highly unbalanced and that globalisation, far from helping developing economies, was bleeding them of resources. The current report places growth in the context of global warming and climate change.
The science is too clear to be ignored that human activity is producing increasing levels of carbon dioxide and that this is a fundamentally important factor in global warming. That necessarily imposes economic constraints on growth. If growth requires an increase in carbon dioxide emissions, then it will be achieved at the expense of damaging the environment to the extent of undermining economic activity itself. Business as usual means irreversible damage to the environment. So much is already very clear.
The very term "growth" is ambiguous because it is possible to have increased economic activity caused by clearing up after environmental disasters such as floods and earthquakes. You can also have growth when an increasing proportion of the population is deprived of work.
But the key problem concerns the doubling time. Suppose an economy grows by 3%. It will double in capacity in 23 years, but it will consume as much in that time as in all previous doubling periods put together. For that reason, either there has to be a massive expansion of available resources, or the growth model becomes unsustainable.
Current human use of global resources is outstripping the world's capacity to replace it by 44%, so the earth needs just under eighteen months to produce the resources that the world population uses in every year. The global resources are depleting, so unless major new energy sources are found and exploited in ways which do not reduce global capacity for renewal, we are emptying the account.
In addition, there are critical planetary boundaries which we need to understand. Besides climate change, these include stratospheric ozone depletion, ocean acidification, biodiversity loss, and global freshwater use. Passing these boundaries does irreversible damage to the environment we depend on.
It has been argued that growth is the way to deal with global poverty, but it isn't working and can't work. Between 1990 and 2001, for every $100 worth of growth in the world's income, just 60 cents found its way to reducing poverty, and that was down from $2.20 in the previous decade. Just as there is historically a fall in the rate of profit (more capital is needed to produce the same amount of value), so there are diminishing returns in the idea of using growth to fund poverty relief. Globalisation doesn't deliver to the poorer economies.
Emissions of carbon dioxide already exceed the most extreme scenario (A1FI) presented by the IPCC. Although it left out consideration of this scenario from its 2007 report to make it more politically palatable, we are already pumping 1000 tonnes of carbon dioxide into the atmosphere every second and it lasts for at least a century. That's an unsustainable rate, which exceeds even the worst scenarios considered. And even if stabilisation occurs at 400ppm, that still leaves a probability of 10-34% that we'll overshoot the 2 degree increase in global temperature.
If you were asked to board a plane with just a 1% risk that it would crash, you would probably refuse. Yet insisting on global growth with the consequent emissions is taking a much bigger risk.
This report provides a challenge to those who believe that growth is the panacea for global ills, whether climate change or the alleviation of poverty. It forces us to question the assumptions of traditional economics and the mantras of global capitalism.
But the report also contains a detailed analysis of these assumptions and their implications. For example, the actual resource cost of refining hydrocarbons means that in energy terms, the process resembles turning gold into lead rather than the other way round. The economic alternatives are considered in detail including clean energy sources, as well as various methods of adaptation and mitigation such as sequestration.
The report ends with a consideration of the alternatives to continuous growth: the stationary state, the steady state, and dynamic equilibrium. The report references another publication entitled The Great Transition which outlines how an economy can continue to grow socially even when GDP is falling.
Although politically committed and presenting a very useful collection of data and analysis, this report comes over as failing to confront the political realities – governments will defend the accumulative interests of business and for them, growth is not an ideological position, but a capitalist economic imperative. While politicians accept the principles of capitalist accumulation based on market competition, they have no ideological basis for questioning continued growth.
For that reason we see all the world leaders constantly reiterating that growth is the answer to all ills. It is likely that climate conditions will get very much worse before politicians are forced to act differently. Left to their own devices, and complacent in their dogmatic belief that free markets tend to equilibrium, competition results in fairness, and the interests of business are the same as the interests of society, the politicians are impotent. They will follow the interests of capital and unfortunately, capital only recognises short term interests – the spreadsheet has no conscience nor any sense of ethics.
It is worth downloading and reading this report if only for the detailed material and discussion of the scenarios, but there are other, better resources available such as the books by John Houghton.