Module 2: Why a wellbeing economy?
Fundamentaly different
The calls from the broad post-growth movement are also fundamentally different from calls for green growth and inclusive growth. Green growth argues that economic growth can be decoupled from environmental pressures through technological advancements [1]. Inclusive growth looks for ways to distribute the fruits of economic growth more fairly across society and to create better opportunities for all within our current profit-driven systems [2] [3] [4].
While concerns about ‘inclusion’ and ‘sustainability’ are also at the heart of the post-growth movement, post-growth scholars generally conclude that the pursuit of economic growth is a barrier rather than helpful for creating an economy that delivers wellbeing [5] [6] [7] [8] [9]. For example, a focus on economic growth is often used to stop environmental policies that would have a negative impact on environmentally harmful industries. Similarly, the growth-motive often distracts from direct action to tackle inequalities, for example through raising the minimum wage or implementing taxes on wealth. Or it diverts attention away from sectors that are crucial for wellbeing but not conducive to high rates of growth in output and productivity, such as the care sector.
Watch the video of Thimothée Parrique below about why the common argument that we can continue to grow our economies as long as we can decouple GDP growth from environmental pressures does not hold:
In practice, many of the practical policies to build a wellbeing economy also have traction amongst green and inclusive growth thinkers as well as proponents of an economy of wellbeing [10]. For example, investing in renewable energy and low-carbon infrastructure, reducing resource dependency, addressing social justice and protecting social welfare, investment in education and health care systems, all of these strategies have wide appeal. The key point of difference between the growth and post-growth movements is whether a strategy of economic growth or a strategy of economic systems change is seen as the best way to achieve wellbeing for all on a healthy planet.
In summary
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The current rates of decoupling are insufficient to meet emission reduction targets in line with the Paris Agreement. Continuing on current trajectories, it would take high-income countries 220 years to achieve the required 95% cut in their emissions. On average, high-income countries would need to accelerate the rate of decoupling by a magnitude of ten until 2025 [11].
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Proponents of decoupling often put forward technological innovation as the main lever to achieve absolute decoupling, including by drastically enhancing the energy efficiency of economic activities. While energy efficiency improvements are urgently needed, so-called rebound effects mean that - in our current economic systems - improvements in energy efficiency tend to lead to increased energy consumption and production of goods because of lower costs [12].
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Political discussions often focus on climate change as the most pressing environmental challenge. Research on environmental limits, however, shows that climate change is one of nine interconnected planetary boundaries [13], six of which are currently being exceeded [14]. Absolute decoupling would need to substantially reduce environmental harms related to all nine planetary boundaries, rather than only in relation to climate change [15]. There is no empirical evidence of sufficient decoupling happening across these planetary boundaries such as land-use, freshwater use, and biodiversity loss [16] [17].
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The debate on absolute decoupling overlooks how the design of our economic systems not only lead to environmental unsustainability but also generate and perpetuate economic inequalities and social exclusion. Even if we manage to decouple growth from environmental pressures in line with planetary boundaries, this does not automatically lead to improved wellbeing for all members of society.
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Economic growth should not be a political end in itself but rather only a means to foster wellbeing. Rather than debating whether economic growth can be decoupled from environmental pressures, the conversation should be about how we can ensure wellbeing for all without overshooting environmental boundaries [18].
References
[1] Antal, M., & van den Bergh, J. C. J. M. (2016). Green growth and climate change: conceptual and empirical considerations. Climate Policy, 16 (1), 165–177. https://doi.org/10.1080/14693062.2014.992003
[2] De Mello, L. & Dutz, M.A.. 2012. Promoting Inclusive Growth : Challenges and Policies. Paris: OECD and the World Bank. http://hdl.handle.net/10986/16948”
[3] European Commission. 2020. “Europe 2020: A Strategy for Smart, Sustainable, and Inclusive Growth,” Brussels.
[4] Saqer, A. (2023). Repackaging growth at Davos: the World Economic Forum’s inclusive growth and development approach, Review of International Political Economy, 30(3): 914-938.
[5] Hartley, T., van den Bergh, J., & Kallis, G. (2020). Policies for Equality Under Low or No Growth: A Model Inspired by Piketty. Review of Political Economy, 32(2), 243–258. https://doi.org/10.1080/09538259.2020.1769293
[6] Dietz, R., & O’Neill, D. (2013). Enough is Enough: Building a sustainable economy in a world of finite resources. Routledge.
[7] Haberl, H., Wiedenhofer, D., Virág, D., Kalt, G., Plank, B., Brockway, P., Fishman, T., Hausknost, D., Krausmann, F., Leon-Gruchalski, B., Mayer, A., Pichler, M., Schaffartzik, A., Sousa, T., Streeck, J., & Creutzig, F. (2020). A systematic review of the evidence on decoupling of GDP, resource use and GHG emissions, part II: synthesizing the insights. Environmental Research Letters, 15 (065003). https://doi.org/10.1088/1748-9326/ab842a.
[8] Parrique T., Barth J., Briens F., C. Kerschner, Kraus-Polk A., Kuokkanen A., Spangenberg J.H., (2019). Decoupling debunked: Evidence and arguments against green growth as a sole strategy for sustainability. European Environmental Bureau, https://eeb.org/wp-content/uploads/2019/07/Decoupling-Debunked.pdf
[9] Costanza, R., Kubiszewski, I., Giovannini, E., Lovins, H., McGlade, J., Pickett, K., Ragnarsdóttir, K. V., Roberts, D., Vogli, R. de, & Wilkinson, R. (2014). Time to leave GDP behind. Nature, 505, 283–285. https://doi.org/10.1038/505283a
[10] Stratford, B. (2020). Green growth vs degrowth: are we missing the point? Open Democracy, https://www.opendemocracy.net/en/oureconomy/green-growth-vs-degrowth-are-we-missing-point/
[11] Hickel, J. & Kallis, G. (2019). Is green growth possible? New Political Economy, 25 (4): 469-486, https://doi.org/10.1080/13563467.2019.1598964
[12] Font Vivanco, D., Kemp, R. & van der Voet, E. (2016). How to deal with the rebound effect? A policy-oriented approach. Energy Policy, 94: 114-125, 10.1016/j.enpol.2016.03.054.
[13] Steffen, W., Richardson, K., Rockström, J. et al. (2015). Planetary boundaries: Guiding human development on a changing planet. Science, 346 (6223): 1259855, 10.1126/science.1259855.
[14] Richardson, K., Steffen, W., Lucht, W. et al. (2023). Earth beyond six of nine planetary boundaries. Science Advances, 9 (37): eadh2458, 10.1126/sciadv.adh2458.
[15] Vogel, J. & Hickel, J. (2023). Is green growth happening? An empirical analysis of achieved versus Paris-compliant CO2–GDP decoupling in high-income countries. The Lancet Planetary Health, 7 (9): e759-e769, 10.1016/S2542-5196(23)00174-2.
[16] Parrique, T., Barth, J., Briens, F. (2019). Decoupling Debunked: Evidence and arguments against green growth as a sole strategy for sustainability. European Environmental Bureau, https://eeb.org/wp-content/uploads/2019/07/Decoupling-Debunked.pdf.
[17] Vázquez, D., Galán-Martín, A., Tulus, V. & Guillén-Gosálbez, G. (2023). Level of decoupling between economic growth and environmental pressure on Earth-system processes. Sustainable Production and Consumption, 43: 217-229, 10.1016/j.spc.2023.11.001.
[18] Brand-Correa, L.I. & Steinberger, J.K. (2017). A Framework for Decoupling Human Need Satisfaction From Energy Use. Ecological Economics, 141: 43-52, 10.1016/j.ecolecon.2017.05.019.