Global Forum

Is 'green growth' really possible?

By Tariq Banuri and David Le Blanc

Jerry King

 

At a logical level, the answer to the question is a resounding yes.

Currently, the world as a whole produces far more than is required to meet the needs of human beings. Beyond a threshold level of income or consumption – perhaps around US$10,000 per capita per year – additional income or consumption seems not to bring any improvement whatever in human well-being, as expressed either by individuals themselves, or by aggregate indicators of well-being, happiness, or human development. In fact, except for the one area of health – where arguably improvements in longevity and successes in fighting basic diseases can be taken as a significant improvement in human welfare – it is a challenge to pinpoint any area where consumption in excess of what advanced economies already enjoy, actually brings real improvements in human welfare.

This would suggest that in practice, human well-being is already decoupled from consumption beyond such a threshold, and therefore that the maximization of human welfare does not require ever increasing levels of consumption.

The promise of growth
The problem, however, is that economic growth is written inextricably into the very fabric of modern society. The rapid growth of the past two centuries held out the promise of a permanent solution to what might be termed the “survival” problem. Yet, although, at least in principle, the world today produces enough to meet the needs of all people everywhere, billions are still hungry and lack access to shelter, health care, water, sanitation, and other basic necessities. The only available solution for addressing this inequality is more growth in developing countries.

But growth has become essential in other ways as well. In industrialized countries, a slowdown in growth results in unemployment, economic and political instability, and various forms of social dysfunction. More generally, it is the promise of growth that plays a stabilizing role in our societies. It offers on the one hand a hope to the poor that they will not remain frozen in an unequal situation forever, and on the other an assurance to the rich that achievement of income equality or poverty eradication would not come at the expense of their lifestyles or privileges.

The key question therefore is not whether “green growth”, namely growth in human prosperity without growth in material throughput, is logically possible, but whether it can address the three goals of development, employment, and solidarity, namely whether green growth can (a) reduce global inequality and solve the “survival” problem in developing countries, (b) enable full employment, political stability, and maintenance of social welfare in industrialized countries, and (c) continue to offer the promise of a “positive sum game”, in which the improvement in the conditions of one group will not be seen by other groups as a threat to their privileges.

For developing economies, the coincidence of development imperatives and the need to limit global material flows has created the perception of a race between development and catastrophe. Is it possible to bring developing countries to decent living standards before the crisis hits?

Analogous to Tim Jackson’s recommendations for developed countries, one can identify some pressing priorities for developing countries. Perhaps the most urgent of these is a rapid expansion in modern energy services. Energy is not only the key driver of the industrial revolution; it is also the best indicator of human development. More importantly, energy has been used as a substitute for other scarce resources. Given that because of climate change, modern energy services have themselves become problematic, it is critical that the transition to renewable energy be undertaken through a cooperative global programme of investment and technological diffusion.

Second, while circumstances differ among countries, limiting population growth is certainly high on the agenda. This is not only because a lower level of peak global population is consistent with a lower demand for aggregate material throughput, but also because the desired speed of adjustment of consumption flows is now driven by ecological trends, which are moving much faster than the demographic transition.

Beyond this, accelerating universal access to education and basic services, drinking water and sanitation, and modern health services, is probably far more urgent and beneficial than the current international status quo acknowledges.

Global cooperation
To achieve all the above, growth in developing countries will be necessary. However, this growth can be largely concentrated in targeted areas, namely renewable energy services, better management of water resources, and expansion of education, health, and sanitation services. But this will require global cooperation at an unprecedented scale, involving both a targeted investment programme in developing countries, and a dramatic reduction in material throughput in developed countries. The latter would not only make room for developing countries, but also create models combining high welfare and low material use.

Jackson offers several recommendations on the reform of institutions in developed countries so that full employment is consistent with zero growth.

Beyond such reform, however, is the sticky question of values, and in particular the deep anxiety of humans towards their situation relative to others. Part of the consensus on growth in developed countries may be related to a fear that some decades from now, the rich will be few and the poor will be many, and that in order to remain at the rich countries’ table in the future, you have to keep up with your neighbours in the race for growth. If this story is true, low-growth societies in advanced countries cannot be achieved without coordination among them.

And this leads to perhaps the most difficult question: can humans thrive in a zero-sum game? If the size of the pie is fixed, will it create anxiety about your neighbour’s success, or an incentive to protect one’s privileges at all costs? Notwithstanding all its flaws, the industrial revolution, through the promise of an endless accumulation of wealth, slowly made possible the idea that cooperation could be better than rivalry, that one need not kill one’s neighbour to survive, and that political liberties and the rights of others were not necessarily in conflict with one’s own. If we have to revert to the idea of a scarcity society, how would all the advances in political development be protected? Would democracy and human rights come under threat from fascistic political movements aimed at retrieving the largest share of the pie for their groups?

Brave new world?
This has not yet been clearly worked out. George Orwell in 1984 and Aldous Huxley in Brave New World describe dysfunctional versions of steady-state economies, both showing the complete de-humanization of the individual. The power that these two books still convey today can be attributed to the fact that both explicitly expose the dangers that would have to be avoided as we confront a world without the possibility of permanent growth. It is perhaps in recognition of both the danger and the challenge that the economist, Herman Daly, once described sustainable development as the kind of development that places the least demands upon natural resources, and the most demands upon moral resources.

Viewed thus, it soon becomes clear that while green growth is possible, it will require a high level of political maturity and global social solidarity – between rich and poor countries, as well as among them. Whether such maturity and solidarity will emerge in time remains, for now, an open question... 

TARIQ BANURI is Director of the Division for Sustainable Development of the UN Department of Economic and Social Affairs.
DAVID LE BLANC is a Senior Sustainable Development Officer at the UN Department of Economic and Social Affairs.

December 7th, 2009 at 12:29 1 Comment »

 

1 Comment »

Sender:         Paul Hesp
Comments: The new UNIDO quarterly Making It is a very welcome contribution to the Organization’s efforts to stimulate the debate on development and to make itself known to a wider public. It uses plain terms and does not shun controversy. As a regular UNIDO consultant over the past quarter of a century I have not seen such a publication, and I wish it every success.

Concentrating on the articles around the theme of prosperity without growth, I have a couple of remarks and questions:

- With regard to nature, manufacturing has so far basically assumed that a free lunch is possible – it does not return to the biosphere what it takes from it. We have finally understood that this is a problem. The theme title on the cover should have been followed by an exclamation mark, not a question mark.
- UNIDO is leading the way in tackling various environmental problems, and is helping to green the VIC. But does all staff think green? Should there not be a training programme on sustainable development for all?
- As a consultant, I am only too well aware of an objection to this suggestion: no resources. I think these can be found within the VIC. Tax free-shopping is contributing to unsustainable middle class lifestyles, an environmental threat already identified in one of the UNIDO position papers for the 19.. Rio Conference (I wrote it). As UNIDO staff incomes are well above the Austrian average I think that it would only be fair if staff paid for such training out of its own pockets, by a modest surcharge on Commissary shopping and the purchase of tax-free cars. Practice what you preach. In their contribution to Making It, UN officials Banuri and Le Blanc point out that earning more than $ 10,000 a year does not appear to make people happier. I’m not absolutely sure about that – but surely we can afford to pay for raising our own levels of environmental consciousness and reducing our ecological footprint.
- Would an article in Making It on UNIDO’s field experience with environmental projects in which the major obstacles to achieving long-term results with these projects are analysed in plain terms not be useful? After all, you learn from mistakes.

I look forward to participating in the debate on sustainable development and UNIDO!