Growth isn't Possible
From: New Economics Foundation
As economists and politicians anticipate the publication of official figures for UK economic growth and the World Economic Forum gathers at Davos, new research from independent think-tank nef, warns that we should be wary of celebrating rising GDP.
The report, Growth Isn’t Possible: Why rich nations need a new
economic direction, published today, Monday 25 January 2010, presents
evidence that endless economic growth isn’t possible when faced with the threat
of climate change and other critical environmental
boundaries.
In a unique analysis, the authors
assessed a combination of the leading models for climate change and energy use
in the global economy. They then asked whether global economic growth could be
maintained, while retaining a good likelihood of limiting global temperature
rise to 2 °C, the agreed political objective of the European Union and
considered the maximum rise to which humanity could adapt without serious
difficulty. They found that this would require unprecedented and probably
impossible reductions in the carbon intensity of a growing economy. None of the
models or variations looked at could square the circle of global economic growth
with climate safety. Their analysis shows that:
- Even at a growth rate of 3 per
cent (low for many developing countries), the global economy would need to
reduce its carbon intensity by 71 per cent by 2050 (compared to 2002) or 2.7 per
cent per year. This would mean achieving more than double the yearly average
improvement between 1965 and 2002. But even this would result in a level of
carbon dioxide (CO2) in the atmosphere of 500 parts per million
(ppm). Whereas the latest climate science shows that such a level would push
temperature rises far passed the 2 °C
threshold.
But even this scenario assumes that
there is general, significant political will and international co-operation to
move to low carbon economies, neither of which was demonstrated at the
Copenhagen Climate Change Summit in December 2009. And in the previous decade
the carbon intensity of the economy (i.e. the amount of carbon needed for every
unit of output) showed no improvement and in the first half of the decade
actually headed in the wrong direction, up.
Leading NASA climate scientist,
James Hansen, recommends a target of 350 ppm CO2 for avoiding
dangerous climate change. According to the new analysis, with a growth rate of 3
per cent, this requires an unprecedented and likely impossible change to the
carbon intensity of the economy.
- At a growth rate of 3 per cent, in
order to stabilise emissions at 350ppm by 2050, carbon intensity of the global
economy would need to fall by 95 per cent by 2050 (compared to 2002) or 6.3 per
cent per year, an almost five-fold increase in the yearly average between 1965
and 2002. - However, between 2000 and 2007,
the carbon intensity of the economy effectively flat-lined. Given this, in
order to achieve a 350ppm target, the annual fall in the carbon intensity of
economy would need to improve by more than 200-fold. For each year that the
target was missed, the necessary improvements would grow higher
still.
The report also looks at the
practical and theoretical limitations of various technological developments seen
by many politicians as central to tackling climate change. Carbon Capture and Storage (CCS), although
hugely hyped is still largely untested. Doubts surround the cost, site
availability and energy needed to implement CCS. Where biofuels are concerned, if the UK were to
use oilseed rape and corn biofuels instead of petrol and diesel we would need 36
million hectares of land to grow it – 650 per cent more than all the arable land
in the UK.
Even before considering inevitable
additional side-effects, these calculations suggest that there is no magic
technological bullet that will allow us to continue with business as usual in
the face of climate change and other critical resource thresholds. Instead, the
report suggests, we should focus on the policy implications of extensive new
research indicating that high levels of well-being and quality of life can be
achieved in rich countries at much lower levels of consumption. With an
increasing number of life-supporting environmental services becoming
over-burdened, the report highlights the key task of re-engineering economies to
work within their environmental budget.
Andrew Simms, co-author of the
report and nef policy director
said, “We tend to think of growth as natural
for economies, forgetting that in nature things grow only until maturity and
then develop in other ways. A world in which everything grew indefinitely would
be strange indeed. A young hamster, for example, doubles its weight each week
between birth and puberty. But if it grew at the same rate until its first
birthday, we’d be looking at a nine billion tonne hamster, which ate more than a
year’s worth of world maize production every day. There are good reasons why
things don’t grow indefinitely. As things are in nature, so sooner or later,
they must be in the economy.
“The economic
priorities of the rich world are as ridiculous as the impossible hamster.
Endless growth is pushing the planet’s biosphere beyond its safe limits. The
price is seen in compromised world food security, climatic upheaval, economic
instability and threats to social welfare. We urgently need to change our
economy to live within its environmental budget. There is no global,
environmental central bank to bail us out if we become ecologically
bankrupt.”
The reports findings are supported
by the recent work of Prof. Kevin Anderson of the Tyndall Centre for Climate
Change Research at Manchester University, which concluded that: “Economic growth
in the OECD cannot be reconciled with a 2, 3 or even 4°C characterisation of
dangerous climate change.”
“The latest climate science shows that we are already
terribly close to being committed to crossing the 2°C threshold. This means if
there is to be any chance of avoiding this rise there needs to be a ‘crash’
reduction in greenhouse gases, specifically CO2,.” said Dr Victoria Johnson, co-author of the
report and lead researcher of the climate change and energy programme, “The easiest way to achieve this is for a rapid
phase-in of energy demand reduction in developed nations – who, on average, are
consuming excessively the world’s fossil fuels and other natural resources.
There are historical precedents for rapid reductions in energy consumption such
as the 1970s oil crises and the 2001 Californian electricity crisis, so we know
when there is the political will, rapid change is
possible.”
“At the same
time, we need to make sure the solutions to climate change work for adaptation
to climate change too. Magic bullets such as carbon capture and storage, nuclear
or even geo-engineering are potentially dangerous distractions from more
human-scale solutions. These, like decentralised renewable energy, can help
achieve the emissions cuts necessary and improve society’s ability to adapt to
climate change. There is an emerging movement of these human-scale solutions but
they need government support. At the moment, magic bullets such as biofuels,
nuclear and carbon capture are getting much of the funding and political
attention but missing the target. Our research shows that to prevent runaway
climate change this needs to change.’
The report concludes that, in an
economy designed to respect environmental thresholds, it may actually be easier
to achieve human well-being, social equality, full employment and strong public
services. nef's recent report,
The Great Transition, outlined
how best to organise a economy in which people can flourish, while also
remaining in a dynamic equilibrium with the
biosphere.