Two things stand out about this misconception. First, it is widespread and growing in popularity. A large swath of climate activists swear by it. Second, it is completely, indefensibly and obviously wrong. A little thought blows it away. How can you put these two facts together? Is it that relatively affluent environmentalists want to feel guilty? I don’t know, but let’s take a moment to see how deeply misguided this view actually is.
1. Start with this simple point: if economic growth is bad, recessions are good. The Great Recession that came down on us in 2008-2009 should have been a cause for celebration. Maybe we need to get slammed even more next time. Does this make sense to you?
2. The anti-growth crusade smacks of rich-country myopia. The majority of the world’s population has immense unmet needs. They desperately need an inclusive form of economic growth that allows for rising living standards and a margin of security. If the global economy does not grow over the next few decades, it will be a disaster.
3. Hostility to economic growth seems to be based on a fundamental misunderstanding of what the term means. GDP is the product of final demand, goods and services directly consumed by households or capital goods purchased by firms, and the prices they command in the market. (Government production of goods and services is valued at cost.) It’s by no means a perfect gage of anything, but there it is. One way GDP can grow is if an economy produces more “stuff”—more cars, buildings, electronic gadgets and so on. Another way is by producing more services—more education, more live music, more health care. A third way is by producing better, higher-valued goods and services—skilled craftsmanship, elegant design, innovative technologies. Only the first of these is tied to an environmental burden; the second two are largely burden-less and may even reduce the footprint our economy leaves on the natural world. This should be obvious.
In case it isn’t, let me show you two chairs. On the left is one you can by for $60 at a big box store. It is cheaply made, with lots of plastic and shoddy adhesives, and it will be junk within a few years. On the right is a beautiful, hand-produced chair made of sustainably harvested wood with a stunning design—built to last a lifetime. Of course, it costs $600. For the price of the chair on the right you can have ten of the ones on the left. If society used to produce five of the cheap chairs and now produces one of the expensive ones instead, that’s economic growth. In fact, as basic needs are met, there is a tendency in modern economies to shift toward higher quality rather than more stuff. We could have policies that encourage this shift to happen even faster.
4. Suppose, in spite of everything, you still want to end economic growth—how will you prevent it? Will you prevent people from starting businesses? Or buying what they want to buy? What exactly is the plan that’s going to prevent economic growth from occurring?
5. Ah, but now I hear that the anti-growth people aren’t really anti-all-growth, only anti the growth of bad, unnecessary things. That sounds more reasonable, but who gets to decide which items are “good” or “bad”? And how will you prevent people from making or buying the “bad” stuff? If we’re talking about climate change, “bad” ought to mean “uses fossilized carbon”, putting us back in the world of ordinary policy, like carbon taxes and caps. But that isn’t anti-growth, just anti-carbon. And it doesn’t impose anyone’s judgment of what items are “unnecessary” on anyone else.
6. Did I mention that, outside a small echo chamber of environmental enthusiasts, ideological hostility toward economic growth is political suicide? What coalition can you put together on this platform? The carbon budget timetable is very tight, and it would help to have a viable political strategy.
7. Finally, suppose it really is all about economic growth, and there’s no other way to stop the carbon juggernaut—by how much does the world’s economy have to shrink to do the job? Remember, we are talking about reducing total carbon consumption by about 2.5% per year, more in the rich countries, less in the poor ones. By mid-century we have to be at near-zero use. Seriously, how much impact will a few percentage points more or less of global GDP have on this immense change in fossil fuel consumption? Isn’t it obvious that the struggle is over what and how we produce, not whether the aggregate economic value is going up or down?