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Limits to Growth: Policies to Steer the Economy away from Disaster

“If the rich nations in the world keep growing their economies by 2% each year and by 2050 the poorest nations catch up, the global economy of more than 9 billion people will be around 15 times larger than it is now, in terms of gross domestic product (GDP). If the global economy then grows by 3% to the end of the century, it will be 60 times larger than now.

The existing economy is already environmentally unsustainable. It is utterly implausible to think we can “decouple” economic growth from environmental impact so significantly, especially since recent decades of extraordinary technological advancement have only increased our impacts on the planet, not reduced them.

Moreover, if you asked politicians whether they’d rather have 4% growth than 3%, they’d all say yes. This makes the growth trajectory outlined above all the more absurd.

Others have shown why limitless growth is a recipe for disaster. I’ve argued that living in a degrowth economy would actually increase well-being, both socially and environmentally. But what would it take to get there?

In a new paper published by the Melbourne Sustainable Society Institute, I look at government policies that could facilitate a planned transition beyond growth – and I reflect on the huge obstacles lying in the way.”

Exit from the Megamachine

“In the early modern era – starting in the 15th century – the foundations of a transnational trade and finance system and a global division of labour were . However, these economic structures were unable to function by themselves. They were and still are dependent on states that can enforce property rights, provide infrastructure, defend trade routes, cushion economic losses and reign in resistance against the system’s injustices. In the light of this, state and market are not opposite forces (as frequently claimed) but have historically emerged in a co-evolutionary manner as parts of a greater structure.

This system also encompasses an ideological framework legitimizing the forceful expansion and implementation of the system and portraying it as salutary mission. A popular contemporary example for this is the invocation of our “Western values”. Formerly, terms such as “Christianity” (as opposed to the “pagans”), “occident” or “civilization” (as opposed to the “savages”) or “development” (as opposed to the “under-developed”) were used for this purpose. The dominant organizing principle of the megamachine is the endless accumulation of capital or, put more simply: to multiply money forever. This is something new in human history. Before, there were many systems in which people accumulated immense riches through the exploitation of others. There were also societies that have destroyed their own natural resources and livelihoods and thereby themselves. None of them, however – from the Roman Empire to the Mayas – was based on a never-ending accumulation; i.e. on the virtually automatic augmentation of goods and money that became an end in itself.

This bizarre logic that emerged in the early modern era is the central motor for the aggressive expansion and permanent growth that the system needs to exist. New markets and energy sources have to be made accessible by all means – including violence – and ever bigger landscapes are exploited for the economic system. According to this logic, any pause, any deceleration or moderation is equivalent to crisis and collapse. This is why – as we will see later – all hopes that “green technology” alone will save us from ecological collapse are delusive.”

Limits Revisited

“Four and a half decades after the Club of Rome published its landmark report on Limits to Growth, the study remains critical to our understanding of economic prosperity. This new review of the Limits debate has been written to mark the launch of the UK All Party Parliamentary Group (APPG) on the Limits to Growth. It outlines the contents of the Club of Rome’s report, traces the history of responses to it and dispels some of the myths surrounding it. As Prof Tim Jackson summarises the report in his recent CUSP blog, if the Club of Rome is right, the next few decades are decisive: One of the most important lessons from the study is that early responses are absolutely vital as limits are approached. Faced with these challenges, there is also clearly a premium on creating political space for change and developing positive narratives of progress. A part of the aim of the APPG is create that space.”

You can’t have capitalist growth without environmental destruction.

“If climate wonks have a Holy Grail, it’s decoupling rising greenhouse gas emissions from a rising GDP. Paths to economic growth have historically involved digging up and burning massive stores of carbon held in fossil fuels. For centuries, their fumes have produced the energy needed to build factories, plan modern cities, and increase living standards.

Calls to find new paths to prosperity are met by cries from the Right that pit growth against environmental stewardship. Take dirty energy out of the mix, they say, and the chances for a better life for billions crumble.”

Parliamentary group warns that global fossil fuels could peak in less than 10 years

“A report commissioned on behalf of a cross-party group of British MPs authored by a former UK government advisor, the first of its kind, says that industrial civilisation is currently on track to experience “an eventual collapse of production and living standards” in the next few decades if business-as-usual continues.

The report published by the new All-Party Parliamentary Group (APPG) on Limits to Growth, which launched in the House of Commons on Tuesday evening, reviews the scientific merits of a controversial 1972 model by a team of MIT scientists, which forecasted a possible collapse of civilisation due to resource depletion.

The report launch at the House of Commons was addressed by Anders Wijkman, co-chair of the Club of Rome, which originally commissioned the MIT study.

At the time, the MIT team’s findings had been widely criticised in the media for being alarmist. To this day, it is often believed that the ‘limits to growth’ forecasts were dramatically wrong.”

But the new report by the APPG on Limits to Growth, whose members consist of Conservative, Labour, Green and Scottish National Party members of parliament, reviews the scientific literature and finds that the original model remains surprisingly robust.

Planning For a Steady State – (No Growth) Society

“It has been a core doctrine of the Industrial Age that businesses need to grow continually. There are no prominent politicians or economists challenging this axiom. In industrialized societies the concentration of capital leads to unequal distribution of wealth. In most societies there is strong pressure by the wealthy class to limit taxation of wealth, so income is taxed instead. The only recent counter-example was the use of inheritance tax in Britain during much of the 20th Century to redistribute the hereditary wealth of the land owning class. Instead we have a variety of income taxes. To keep the non-wealthy from becoming discontented it is necessary to postulate growth. This will “lift all boats” in the current jargon, meaning that even the poor will get to be better off in the future, if we only have faith in “growth”. The success of this pipe dream can be seen in the recent debates of the US estate tax. Even though only 2% of the population would be effected by the tax, many people were persuaded to oppose it on the baseless assumption that they would grow into wealth. We have even changed the vocabulary used. Instead of increasing the size of a business we now “grow” a business. Thus implying some similarity with a living organism.”

Steady State Economy

“A steady state economy is an economy with stable or mildly fluctuating size. The term typically refers to a national economy, but it can also be applied to a local, regional, or global economy. An economy can reach a steady state after a period of growth or after a period of downsizing or degrowth. To be sustainable, a steady state economy may not exceed ecological limits.

Herman Daly, one of the founders of the field of ecological economics and a leading critic of neoclassical growth theory, defines a steady state economy as:

An economy with constant stocks of people and artifacts, maintained at some desired, sufficient levels by low rates of maintenance ‘throughput’, that is, by the lowest feasible flows of matter and energy from the first stage of production to the last stage of consumption.

A steady state economy, therefore, aims for stable or mildly fluctuating levels in population and consumption of energy and materials. Birth rates equal death rates, and production rates equal depreciation rates.”

Abolish the Treasury?

“I was present this week at the launch of a new All Party Parliamentary Group that I’ve been involved in helping set up. This APPG is the first ever on the limits to growth. The APPG is chaired by Caroline Lucas, and co-chaired by George Kerevan (of the SNP) and Daniel Zeichner (of Labour). These MPs were there, along with several others, and, as I’ll say more about shortly, they made some remarkable interventions, during the proceedings

The meeting was successful and encouraging. The room was packed out (with a substantial waiting list): well over 100 people were there, with standing room only.”

#LimitsRevisited – APPG on Limits to Growth launch | London, 19 April 2016

“On 19th April 2016, the APPG on Limits to Growth held its inaugural event (Limits to Growth or Opportunities for Prosperity?), with the current Co-Chair of the Club of Rome, Anders Wijkman, as our keynote speaker. The event also marked the launch of Limits Revisited – a new review of the limits debate commissioned specifically for the APPG.”

Life in a ‘degrowth’ economy, and why you might actually enjoy it

“What does genuine economic progress look like? The orthodox answer is that a bigger economy is always better, but this idea is increasingly strained by the knowledge that, on a finite planet, the economy can’t grow for ever.

This week’s Addicted to Growth conference in Sydney is exploring how to move beyond growth economics and towards a “steady-state” economy.

But what is a steady-state economy? Why it is it desirable or necessary? And what would it be like to live in?”

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