People are realizing that degrowth is bad

The mad schemes degrowthers advocate are a fantasy that distracts us from real efforts to save the planet

I was going to write a lengthy post explaining why “degrowth” — the idea that we need to halt economic growth in order to save the planet — is a very bad idea. But in the meantime, other people have written that post, or recorded that podcast, and done it well. These include Branko Milanovic, Kelsey Piper, and Ezra Klein. So instead I’ll write a shorter post trying to catalog and boil down the arguments against degrowth.

But first, let’s go over the standard argument, so we can see why these new arguments are necessary.

The standard argument against degrowth

First, note that the typical argument against degrowth, which I laid out in a Bloomberg post a while back, is that we don’t need it; we can raise human living standards without exhausting the planet. This argument was capably put forward by Andy McAfee, in his excellent book More From Less, which you should buy and read. Essentially, the idea that economic growth requires growth in resource use is false; rich countries have started to grow while using less and less of the planet’s most important resources. For example, here is U.S. use of fresh water and various metals, as well as trade-adjusted carbon emissions:

So the idea here is that we don’t need degrowth; instead, we can keep raising everyone’s standard of living without exhausting the planet’s resources. Because growth doesn’t just mean using more and more stuff; instead, it can mean finding more efficient ways to use the stuff we have.

Degrowthers have two counters to this. Their first counter, typically, is to show a graph of resource use for the entire world, and show that it’s correlated with global growth. This is a weak response, for two reasons:

  1. Degrowthers have no idea how to combine various resources into an overall measure of resource use, so they typically go with gross weight. This is absurd, since some materials are recyclable and others are not — if you “use” a ton of copper you still have the copper, whereas if you “use” a ton of oil, your oil is gone. It’s also absurd because it doesn’t take into account the relative abundance of resources — if you figure out how to substitute 2 tons of sand for 1 ton of oil, you’re getting more efficient, since sand is much more plentiful than oil (and doesn’t pollute as much when you use it). A lot of growth is figuring out how to substitute plentiful resources for rare ones, and simply adding up gross tonnage ignores this.

  2. Past trends are no guarantee of future trends. Until the 70s, for instance, U.S. economic growth was closely correlated with both energy use and carbon emissions; after the 70s, this correlation broke down completely and the lines started moving in opposite directions. Degrowthers present historical curves as if these are laws of nature, but we know that they are not. The trend is your friend only til the bend at the end. And the fact that rich countries have hit an inflection point where economic growth no longer depends on growing resource use is a strong indicator that industrializing countries like China will also hit this point as well. (And no, falling use in rich countries is mostly not due to outsourcing, as the emissions graph above illustrates.)

So this degrowther argument is just wrong. But degrowthers have a second, far better counter to McAfee’s notion that we can have our cake and eat it too: Decoupling isn’t happening fast enough. If we wait for China and India and all the countries of Africa to industrialize in a resource-intensive way like today’s developed countries did, and then to dematerialize their growth like today’s developed countries are doing now, it will be far too late and the planet will suffer ecological catastrophe.

This argument isn’t as strong as it sounds — China and India and the rest will be able to take advantage of the efficiency-inducing technologies created by the developed countries, like solar power (indeed, they are already doing so). And they will be able to embrace “dematerialized” goods and services like social networks and video games (sorry, Xi Jinping) very early in their growth path. So these countries’ resource use trajectories won’t look quite like the U.S.’ or Europe’s.

But this degrowther argument does contain a nugget of truth: Global resource use is currently on an unsustainable trajectory. Here, via Zeke Hausfather, are the current projections for global warming by century’s end, even with the advances in techologies like solar:

Any one of these scenarios represents utter global catastrophe.

So even if there is a sustainable growth path, we are not currently on it. About this, degrowthers are right; a gentle, natural transition to green growth is possible, but is an unaffordable luxury. But degrowthers’ prescription is the wrong one.

The reason, in a word, is politics. The kind of massive intention reordering of global production and consumption that degrowthers fantasize about is not just pragmatically impossible to implement, it’s the kind of thing that essentially everyone in the world except for a few very shouty people in Northern Europe and the occasional Twitter activist is going to reject. To see why, let us turn to the excellent articles/podcasts by Milanovic, Piper, and Klein.

The political argument against degrowth

Milanovic actually has two excellent posts on the topic of degrowth. In the first one, he lays out why forcing developing countries to stay in poverty would be bad:

Let us suppose, for the sake of the argument, that we interpret “degrowth” as the decision to fix global GDP at its current level…Then, unless we change the distribution of income, we are condemning to permanent abject poverty some 15 percent of world population that currently earn less than $1.90 per day and some quarter of humankind who earn less than $2.50 per day…Keeping so many people in abject poverty so that the rich can continue to enjoy their current standard of living is obviously something that the proponents of degrowth would not condone. 

Enforcing global degrowth would require freezing world income at about $17,000/year. That means that most people in the world would never even come close to current rich-world living standards — instead, they would at best only be able to reach the level currently enjoyed in China or Botswana. Perhaps that’s not such a horrible fate, but as Milanovic notes, this would require impoverishing most of the population of developed countries. He elaborates on this point in his new post, pulling no punches:

[In order to avoid keeping most of the world in poverty, degrowthers must] introduce a different [income] distribution (B) where everybody who is above the current mean world income ($PPP 16  per day) is driven down to this mean, and the poor countries and people are,  at least for a while, allowed to continue growing until they too achieve the level of $PPP 16 per day. But the problem with that approach is that one would have to engage in a massive reduction of incomes for…practically all of the Western population. Only 14% of the population in Western countries live at the level of income less than the global mean…Degrowers thus need to convince 86% of the population living in rich countries that their incomes are too high and need to be reduced….It is quite obvious that such a proposition is a political suicide.

Milanovic quite rightly waves away degrowthers’ protestations that GDP is not a good measure of human welfare. GDP isn’t perfect, he notes, but it’s close enough where the basic point stands.

Demanding that people in rich countries accept absolutely catastrophic declines in their living standards is a political non-starter. Klein, on his podcast, tries to point this out as gently as possible:

I think that if the political demand of the [degrowth] movement becomes you don’t get to eat beef, you will set climate politics back so far, so fast, it would be disastrous. Same thing with S.U.V.s. I don’t like S.U.V.s. I don’t drive one. But if you are telling people in rich countries that the climate movement is for them not having the cars they want to have, you are just going to lose. You are going to lose fast…This is where the politics of [degrowth] for me fall apart…

I just don’t see the argument for degrowth as being anything but an extraordinarily slower way of approaching the politics, probably counterproductive compared to what we’re doing, which is I think you can make tremendous strides on climate change by deploying renewable energy technologies and giving people the opportunity to have a more materially fulfilling life atop those technologies.

Milanovic is less gentle, calling this “outright magical thinking”. He is correct. When you look at how much people in America are willing to sacrifice in terms of their material well-being in order to fight climate change, it’s far less than what Klein is talking about. And Klein is really softballing it here — it’s not just giving up beef and SUVs, it’s a dramatic reduction in the size of housing and the amount of food and the ease of transportation and the quality of medical care that people in rich countries enjoy. It is, frankly, not happening.

But even this vastly understates the political and practical difficulties of degrowth. Piper adds several key points. First of all, she notes, because developed countries have been decoupling resource use and growth for a while now, curbing resource use will actually cause a lot more restrictions on developing countries than Milanovic’s simple calculations would suggest:

From a climate change perspective, though, there’s a problem [with simply reducing rich-world living standards]. First, it means that degrowth would do nothing about the bulk of emissions, which are occurring in developing countries.

This is an incredibly important point. For example, China now produces more CO2 emissions than the U.S., the EU, and Japan combined:

(And no, this is not because of outsourcing, as you can see by looking at the trade-adjusted emissions numbers.)

Another way of looking at this is that China’s CO2 emissions per dollar of GDP are more than twice America’s, and about five times that of the EU. Any global degrowth plan that actually reduces resource use is going to entail more pain for China than its GDP numbers would suggest, simply because China is at a more resource-intensive stage of growth.

Do you think China will accept a substantial diminution of its living standards, in order to satisfy the environmental-economic diktats of activists in Northern Europe? If so, you need to rethink a great many things.

Anyway, Piper makes a second crucially important point. So far we’ve been waving our hands and talking about lowering rich-world GDP while raising GDP for poor countries. In fact, economies don’t work like that:

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.

Degrowth would thus require deep changes in the entire way that the global economy works. Change happens, but not like that; implementing the kind of reallocation schemes that degrowthers throw around with abandon would require global economic planning that would put Gosplan to shame. Klein points this out, again rather gently:

Degrowth is, as its advocates understand it, a act of global economic planning really without equal anywhere in human history. It is an act of extraordinary central planning.

In other words, it is abject fantasy.

Taken together, these criticisms are utterly devastating to the entire degrowth project. In its current form, it will not advance beyond a media fad. No matter how shrilly degrowthers quote apocalyptic projections, the things they call for simply will not happen.

Luckily, there is a better way to save the planet. And there is a better role for the degrowth movement, if they’re willing to rethink their approach and become more fact-based, reasonable, and humble.

A better direction for Earth, a better direction for the degrowth movement

Degrowth is a non-starter, and green growth won’t happen fast enough on its own. Thus, the world has only one viable option: Forced green growth. Government policy will have to accelerate the transition to green energy and dematerialized GDP faster than these transitions would otherwise take place. For climate, this will involve things like:

  • A forced rapid transition to green electricity

  • Forced rapid electrification of most energy use

  • The forced rapid adoption of low-emissions heat for industrial processes

  • Forced restriction of deforestation

…and so on.

For other resources, governments must act to avert the “tragedy of the commons”. For example, most of the plastic that gets dumped into our oceans is dumped by a few developing countries. These countries have to curb this practice, and bury the plastic like rich countries do.

In addition, even when the tragedy of the commons doesn’t exist, countries need to manage their natural resources in a far-sighted way. The U.S., for instance, has done a lot of this with land conservation, but failed to do this with respect to aquifers. Governments have to be more far-sighted than their citizens, saving resources for future generations instead of letting the current generation consume everything.

All of this requires planning. Lots of planning! But infinitely less planning than degrowthers’ schemes to reallocate global consumption and regulate the consumption of each commodity. Rapid decarbonization, curbing of global pollution, and resource conservation are tall orders, politically and logistically speaking, but unlike degrowth, they are possible.

And degrowthers might actually have a constructive role to play in this process — if they want it. Instead of focusing on reducing growth, they need to focus on reducing consumption. To those who haven’t thought deeply about economics, those two things might sound like the same thing — aren’t degrowthers already trying to curb consumption? But here’s the key difference: We need to curb consumption in order to boost investment.

Making a rapid transition to green, sustainable growth will require huge new investments. Many environmentalists — for example, the people who wrote the Green New Deal — understand this. We need to build out huge amounts of solar power, wind, and storage; retool buildings for electric power and industrial processes for hydrogen gas; build out fleets of electric vehicles to replace internal combustion; build trains and dense housing and so on; and invest in new technologies like tissue-culture meat.

This is an absolutely enormous economic undertaking, and it is economic growth. It will require delaying some consumption so that the next generation can enjoy both higher standards of living and a more sustainable planet. But crucially, it represents delaying consumption, rather than permanently reducing consumption. That’s the big difference between green growth and degrowth.

People are willing to delay consumption for a brighter future. Rapidly industrializing countries, with their high savings and investment rates and low ratios of consumption to GDP, do this all the time. But it requires political will and buy-in. People need to know that they’re not impoverishing themselves, they’re just delaying gratification — being the ants instead of the grasshopper.

Degrowthers could play a part in creating this popular buy-in, but only if they substantially change their message. Instead of “consume less”, their message should be “consume less today, so you can consume more tomorrow”. After all, at its core, isn’t that what sustainability is about?

Unfortunately, I’m pessimistic about the degrowth movement switching to a Green New Deal sort of investment-oriented framework. At its core, I feel like degrowth’s appeal comes from its implicit promise to recast genteel North European decline as some sort of grandiose world-saving moral quest. That’s an itch that no Green New Deal will scratch.

But in any case, the rest of the environmental movement — and the political Left in general — must realize that degrowth, as currently formulated, is a non-starter. There are crusades out there worth fighting for; this is not one of them.