https://newleftreview.org/issues/II112/articles/robert-pollin-de-growth-vs-a-green-new-deal

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limate change necessarily presents a profound political challenge in the present historical era, for the simple reason that we are courting ecological disaster by not advancing a viable global climate-stabilization project.1 There are no certainties about what will transpire if we allow the average global temperature to continue rising. But as a basis for action, we only need to understand that there is a non-trivial possibility that the continuation of life on earth as we know it is at stake. Climate change therefore poses perhaps the ultimate ‘what is to be done’ question. There is no shortage of proposals for action, including, of course, the plan to do nothing at all advanced by Trump and his acolytes. In recent numbers of nlr, Herman Daly and Benjamin Kunkel have discussed a programme for a sustainable ‘steady-state’ economy, and Troy Vettese has proposed re-wilding as a means for natural geo-engineering. In this contribution, I examine and compare two dramatically divergent approaches developed by analysts and activists on the left. The first is what I variously call ‘egalitarian green growth’ or a ‘green new deal’.2 The second has been termed ‘degrowth’ by its proponents.

Versions of degrowth have been developed in recent work by Tim Jackson, Juliet Schor and Peter Victor. A recent collection, Degrowth: A Vocabulary for a New Era, offers a good representation of the range of thinking among degrowth proponents. As the editors put it: ‘The foundational theses of degrowth are that growth is uneconomic and unjust, that it is ecologically unsustainable and that it will never be enough.’3 As is evident from the fifty-one distinctly themed chapters in their collection, degrowth addresses a much broader range of questions than climate change alone. In fact, as I will discuss, a major weakness of the degrowth literature is that, in concerning itself with such broad themes, it gives very little detailed attention to developing an effective climate-stabilization project. This deficiency was noted by Herman Daly himself, without question a major intellectual progenitor of the degrowth movement, in his recent nlr interview. Daly said he was ‘favourably inclined’ toward degrowth, but nevertheless demurred that he was ‘still waiting for them to get beyond the slogan and develop something a little more concrete.’4

Let’s dispose of some red herrings at the outset. First, I share virtually all the values and concerns of degrowth advocates. I agree that uncontrolled economic growth produces serious environmental damage, along with increases in the supply of goods and services that households, businesses and governments consume. I also agree that a significant share of what is produced and consumed in the current global-capitalist economy is wasteful, especially most of what high-income people consume. It is obvious that growth per se, as an economic category, makes no reference to the distribution of the costs and benefits of an expanding economy. As for Gross Domestic Product as a statistical construct, aiming to measure economic growth, there is no disputing that it fails to account for the production of environmental bads, as well as consumer goods. It does not account for unpaid labor, most of which is performed by women, and gdp per capita tells us nothing about the distribution of income or wealth.

One further general point. Introducing his nlr interview with Daly, Benjamin Kunkel states that ‘fidelity to gdp growth amounts to the religion of the modern world.’5 A large number of degrowth proponents express similar views. This perspective makes the critical error of ignoring the reality of neoliberalism in the contemporary world. Neoliberalism became the predominant economic-policy model with the military coup of Pinochet in Chile in 1973, and the elections of Thatcher in 1979 and Reagan in 1980. It has been clear for decades that, under neoliberalism, the real religion is maximizing profits for business in order to deliver maximum incomes and wealth for the rich. The financialization of the global economy under Wall Street’s firm direction has been central to the neoliberal project. As is well known, the concentration of income and wealth in the advanced economies has proceeded apace under neoliberalism even while average economic growth has fallen to less than half the rate that was sustained during the initial postwar ‘golden age of capitalism’ that ended in the mid-1970s. If economic growth were really the ‘religion of the modern world’, then its high priests would be concentrating on how to put capitalism back on the leash that prevailed during the ‘golden age’ rather than on consolidating the victories achieved under neoliberalism.6

Returning to climate change, it is in fact absolutely imperative that some categories of economic activity should now grow massively—those associated with the production and distribution of clean energy. Concurrently, the global fossil-fuel industry needs to contract massively—that is, to ‘de-grow’ relentlessly over the next forty or fifty years until it has virtually shut down. In my view, addressing these matters in terms of their specifics is more constructive in addressing climate change than presenting broad generalities about the nature of economic growth, positive or negative. I develop these points in what follows.

To make real progress on climate stabilization, the single most critical project is to cut the consumption of oil, coal and natural gas dramatically and without delay. The reason why this is so crucial is because producing and consuming energy from fossil fuel is responsible for generating about 70 per cent of the greenhouse-gas emissions that are causing climate change. Carbon dioxide emissions from burning coal, oil and natural gas alone produce about 66 per cent of all greenhouse-gas emissions, with another 2 per cent caused mainly by methane leakages during extraction. The most recent worldwide data from the International Energy Agency (iea) indicate that global co2 emissions were around 32 billion tons in 2015.7 The reports of the Intergovernmental Panel on Climate Change (ipcc), which provide conservative benchmarks for what is required to stabilize the average global temperature at no more than 2° Celsius above the pre-industrial average, suggest that global co2 emissions need to fall by about 40 per cent within twenty years, to 20 billion tons per year, and by 80 per cent as of 2050, to 7 billion tons.8

The global economy is nowhere near on track to meet these goals. Overall global emissions rose by 43 per cent between 2000 and 2015, from 23 to 32 billion tons per year, as economies throughout the world continued to burn increasing amounts of oil, coal and natural gas to produce energy. According to the iea’s 2017 forecasting model, if current global policies remain on a steady trajectory through 2040, global co2 emissions will rise to 43 billion tons per year. The iea also presents what it terms a ‘New Policies’ forecast for 2040, with the global ‘new policies’ corresponding closely to the agreements reached at the un-sponsored 2015 Paris Climate Summit. Coming out of the conference, all 196 countries formally recognized the grave dangers posed by climate change and committed to substantially lowering their emissions. Nevertheless, the iea estimates that, under its New Policies scenario, global co2 emissions will still rise to 36 billion tons per year as of 2040. Moreover, the iea’s forecast takes no account of the fact that the Paris commitments were non-binding on the signatory governments, nor that the United States under Trump has renounced the agreement. In short, there is at present nothing close to an international project in place capable of moving the global economy onto a viable climate-stabilization path. 9

People still need to consume energy—to light, heat and cool buildings; to power cars, buses, trains and planes; to operate computers and industrial machinery, among other uses. As such, to make progress toward climate stabilization requires a viable alternative to the existing fossil-fuel infrastructure for meeting the world’s energy needs. Energy consumption, and economic activity more generally, therefore need to be absolutely decoupled from the consumption of fossil fuels—that is, fossil-fuel consumption will need to fall steadily and dramatically in absolute terms, even while people must still be able to consume energy resources to meet their various demands. The more modest goal of relative decoupling—through which fossil-fuel consumption and co2 emissions continue to increase, but at a slower rate than gdp growth—is therefore not a solution. Economies can continue to grow—and even grow rapidly, as in China and India—while still advancing a viable climate-stabilization project, as long as the growth process is absolutely decoupled from fossil-fuel consumption. In fact, between 2000 and 2014, twenty-one countries, including the us, Germany, the uk, Spain and Sweden, all managed to absolutely decouple gdp growth from co2 emissions—that is, gdp in these countries expanded over this fourteen-year period, while co2 emissions fell.10 This is a positive development, but only a small step in the right direction.

The core feature of the Green New Deal needs to be a worldwide programme to invest between 1.5 and 2 per cent of global gdp every year to raise energy-efficiency standards and expand clean renewable-energy supplies. Through this investment programme, it becomes realistic to drive down global co2 emissions relative to today by 40 per cent within twenty years, while also supporting rising living standards and expanding job opportunities. co2 emissions could be eliminated altogether in forty to fifty years through continuing this clean-energy investment project at roughly the same rate of about 1.5–2 per cent of global gdp per year. It is critical to recognize that, within this framework, a higher economic-growth rate will also accelerate the rate at which clean energy supplants fossil fuels, since higher levels of gdp will correspondingly mean a higher level of investment being channeled into clean-energy projects.

In 2016, global clean-energy investment was about $300 billion, or 0.4 per cent of global gdp. Thus, the increase in investments will need to be in the range of 1–1.5 per cent of global gdp—about $1 trillion at the current global gdp of $80 trillion, then rising in step with global growth thereafter—to achieve a 40 per cent emissions reduction within twenty years. The consumption of oil, coal and natural gas will also need to fall by about 35 per cent over this same twenty-year period—an average rate of decline of 2.2 per cent per year. Pursuing this same basic investment pattern beyond the initial 20-year programme, along with the continued contraction of fossil-fuel consumption, could realistically achieve a zero-emissions standard within roughly the next fifty years. Of course, both privately owned fossil-fuel companies, such as Exxon-Mobil and Chevron, and publicly owned companies like Saudi Aramco and Gazprom have massive interests at stake in preventing reductions in fossil-fuel consumption; they also wield enormous political power. These powerful vested interests will have to be defeated.

Investments aimed at raising energy-efficiency standards and expanding the supply of clean renewable energy will also generate tens of millions of new jobs in all regions of the world. In general, building a green economy entails more labour-intensive activities than maintaining the world’s current fossil fuel-based energy infrastructure. At the same time, unavoidably, workers and communities whose livelihoods depend on the fossil-fuel industry will lose out in the clean-energy transition. Unless strong policies are advanced to support these workers, they will face layoffs, falling incomes and declining public-sector budgets to support schools, health clinics and public safety. It follows that the global green-growth project must commit to providing generous transitional support for workers and communities tied to the fossil-fuel industry.

There are major variations in the emissions produced by burning oil, coal and natural gas. To produce a given amount of energy, natural gas will generate about 40 per cent fewer emissions than coal, and 15 per cent less than oil. It is therefore widely argued that natural gas can be a ‘bridge fuel’ to a clean-energy future, through switching to it from coal. Such claims do not withstand scrutiny. At best, an implausibly large 50 per cent global fuel switch to natural gas would reduce emissions by only 8 per cent. But even this calculation does not take account of the methane gas that leaks into the atmosphere when natural gas is extracted through fracking. Recent research has shown that when more than about 5 per cent of the gas extracted by fracking leaks into the atmosphere, the impact eliminates any environmental benefit from burning natural gas relative to coal. Various studies have reported a wide range of estimates as to what leakage rates have actually been in the United States, as fracking operations have grown rapidly. A recent survey puts that range between 0.18 and 11.7 per cent for different sites in North Dakota, Utah, Colorado, Louisiana, Texas, Arkansas and Pennsylvania. It would be reasonable to assume that if fracking expands on a large scale in regions outside the us, it is likely that leakage rates will fall closer to the higher-end figures of 12 per cent, at least until serious controls could be established. This then would diminish, if not eliminate altogether, any emission-reduction benefits from a coal-to-natural gas fuel switch.11

For some analysts, ‘clean energy’ includes nuclear power and carbon capture and sequestration (ccs) technologies. Nuclear power does generate electricity without producing co2 emissions. But it also creates major environmental and public-safety concerns, which have only intensified since the March 2011 meltdown at the Fukushima Daiichi power plant in Japan. Similarly ccs presents hazards. These technologies aim to capture emitted carbon and transport it, usually through pipelines, to subsurface geological formations, where it would be stored permanently. But such technologies have not been proven at a commercial scale. The dangers of carbon leakage from flawed transportation and storage systems will only increase if ccs technologies are commercialized and operating under an incentive structure where maintaining safety standards will reduce profits. An appropriately cautious clean-energy transition programme requires investment in technologies that are well understood, already operating at large-scale and, without question, safe.

Thus, the first critical project for a global green-growth programme is to dramatically raise energy-efficiency levels—that is, using less energy to achieve the same, or higher, levels of energy service through the adoption of improved technologies and practices. Examples include insulating buildings more effectively to stabilize indoor temperatures, driving more fuel-efficient cars—or, better yet, relying on well-functioning public-transport systems—and reducing the amount of energy wasted through generating and transmitting electricity, and through operating industrial machinery. Expanding energy-efficiency investment supports rising living standards because, by definition, it saves money for energy consumers. A major study by the us Academy of Sciences found that, for the us economy, ‘energy-efficient technologies . . . exist today, or are expected to be developed in the normal course of business, that could potentially save 30 per cent of the energy used in the us economy while also saving money.’ Similarly, a McKinsey study focused on developing countries found that, using existing technologies only, energy-efficiency investments could generate savings in energy costs in the range of 10 per cent of total gdp, for all low- and middle-income countries. In Energy Revolution: The Physics and Promise of Efficient Technology, Mara Prentiss argues further that such estimates understate the realistic savings potential of energy-efficiency investments.12

Raising energy-efficiency levels will generate ‘rebound effects’—that is, increased energy consumption resulting from lower energy costs. But such rebound effects are likely to be modest within the context of a global project focused on reducing co2 emissions and stabilizing the climate. Among other factors, energy-consumption levels in advanced economies are close to saturation point in the use of home appliances and lighting—we are not likely to clean dishes more frequently because we have a more efficient dishwasher. The evidence shows that consumers in advanced economies are more likely to heat and cool their homes and drive their cars when they have access to more efficient equipment—but again, these increased consumption levels are usually modest. Average rebound effects are likely to be significantly larger in developing economies. It is critical, however, that all energy-efficiency gains be accompanied by complementary policies (as discussed below), including setting a price on carbon emissions to discourage fossil-fuel consumption. Most significantly, expanding the supply of clean renewable energy will allow for higher levels of energy consumption without leading to increases in co2 emissions. It is important to recognize, finally, that different countries operate at widely varying levels of energy efficiency. For example, Germany presently operates at an efficiency level roughly 50 per cent higher than that of the United States. Brazil is at more than twice the efficiency level of South Korea and nearly three times that of South Africa. There is no evidence that large rebound effects have emerged as a result of these high efficiency standards in Germany and Brazil.

As for renewable energy, the International Renewable Energy Agency (irena) estimated in 2018 that, in all regions of the world, average costs of generating electricity with clean, renewable energy sources—wind, hydro, geo-thermal, low-emissions bioenergy—are now roughly at parity with fossil fuels.13 This is without factoring in the environmental costs of burning oil, coal and natural gas. Solar-energy costs remain somewhat higher on average but, according to irena, as a global-weighted average, solar photovoltaic costs fell by over 70 per cent between 2010 and 2017. Average solar photovoltaic costs are likely to fall to parity with fossil fuels as an electricity source within five years. Adnan Amin of irena summarizes the global cost trajectory: ‘By 2020, all mainstream renewable power generation technologies can be expected to provide average costs at the lower end of the fossil-fuel cost range. In addition, several solar pv and wind power projects will provide some of the lowest-cost electricity from any source’.14

In the last number of nlr, Troy Vettese argued that it would be unrealistic to expect that a global renewable-energy infrastructure could be the foundation for a viable climate-stabilization project because, at present consumption levels, it would take up enormous amounts of the earth’s land surface. Vettese writes: ‘A fully renewable system will probably occupy a hundred times more land than a fossil-fuel powered one. In the case of the us, between 25 and 50 per cent of its territory, and in cloudy, densely populated countries such as the uk and Germany, all of the national territory might have to be covered in wind turbines, solar panels and biofuel crops to maintain current levels of energy production.’15 The primary focus of Vettese’s article is not renewable energy and land use. Instead he presents an extended case for what he terms ‘natural geo-engineering’ as a climate solution, with global ‘afforestation’ being the main driver. This involves increasing forest cover or density in previously non-forested or deforested areas, with ‘reforestation’—the more commonly used term—as one component. The case Vettese makes for afforestation is valuable, but it is undermined by his initial discussion on renewables and land use.