Green or Growth?

Published on Tuesday, 01 June 2010 11:48

By Robin Whitlock

Is the concept of 'economic growth' compatible with environmental protection, and if it is what form should it take?

One of the most fundamental and perhaps controversial issues underlying current environmental discussion is the question of whether the notion of 'economic growth', in its present form, is compatible with environmental protection and sustainability.

The term 'economic growth' refers to the means by which the increase in gross domestic product of a nation, calculated 'per capita', i.e. per person, is measured and indicated. Essentially it applies to the rate of production of goods and services over a period of time.[1] This sounds like it should be something that is valuable to society since theoretically it helps to increase the overall wealth of a nation and therefore also of the citizens of that nation. However, growth as it is currently understood does not take account of the resources, that is to say the raw materials obtained from natural resources that maintain it.

This omission is clearly emphasised by the Green Party in their economics policy, stating, "In a world of finite resources, it cannot make sense to depend on economic growth".[2] Counter to this however is the idea that resource depletion caused by economic growth will be reversed or even avoided by innovation resulting in technology and techniques that mean resources are used in a more balanced or 'economic' fashion. This appears to be the line taken by the three major political parties. The Conservative Party for instance maintain admirable manifesto commitments to environmental reform but their green policy is separate from their economic policy as if the two issues were completely separate. Labour on the other hand sees investment in tackling environmental issues as an essential 'driver' of economic growth, while the Liberal Democrats hint at a similar approach claiming that a 'green thread' runs through all their policies.

So which view is the correct one, or has more legitimacy? The answer to this question is still hotly debated.

William Brock (1973) wrote, "received growth theory is biased. It neglects to take into account the pollution costs of economic growth."[3] The Sustainable Development Commission in the foreword to their report Prosperity Without Growth outlines the extent of the problem; 'The global economy is almost five times the size it was half a century ago. If it continues to grow at the same rate the economy will be 80 times that size by the year 2100'.[4] The report also presents many valid reasons why we should question the current model of growth - two billion people who live on less than $2 per day, fragile ecosystems upon which we depend for survival, the failure to provide economic stability and security, the end of cheap oil, the prospect of steadily rising commodity prices, the degradation of forests, lakes and soils, conflicts over land use and water supplies and the need to stabilise concentrations of carbon in the atmosphere.[5]

George Monbiot, one of the leading social commentators on environmental issues and regular columnist for The Guardian, is one of those who is steadfast in his opposition to economic growth as a viable approach to dealing with environmental issues. Recently, with regard to the Deepwater Horizon oil spill in the Gulf Mexico, he referred to the relaxation of rules by President Obama that might have prevented such a disaster, as reported in The Guardian by US environment correspondent Suzanne Goldenberg on 9th May. He claims that it is economic growth and the resultant demand for oil which spurred onwards the oil companies involved in this episode to take huge risks when selecting drilling sites. In the same column he refers also to disasters in Ecuador and Nigeria and to deforestation in Indonesia. He points to the gross under-estimation of UK carbon emissions on the basis that the figures don't take into account emissions produced by outsourced manufacturing, that is to say goods produced for the UK market abroad.

Monbiot's view is echoed by Michael deSilvio, Chief Operating Officer at Green Tech Inc based in Richmond, Virginia in the US. "Humans need to construct the global economy base a new business paradigm; one which does not consider limited world resources and the environment solely as property, and one which must take into consideration functions and services provided for free by nature". Michael approaches this latter point from an interesting new angle, that of how we would achieve the functions currently performed by nature, the pollination of crops being one example. "Consider the ultimate costs of replacement if lost or threatened" he says "for example the human/business cost of pollinating agriculture - a service largely provided by insects - if agriculture had to fulfil that service without nature's assistance. While current business strategies and decisions may take into account extraction and post-extraction production costs, it very rarely takes into account the unforeseeable costs of resource exploitation or habitat destruction - except perhaps as a cost of doing business."

Many writers and professionals looking at this question take an optimistic view, looking at different models of growth rather than rejecting the principle of growth per se.

One of them is Andy Hobsbawm, the co-founder of dothegreenthing.com and a speaker at the Communicating Sustainability conference in London on 7th June. He agrees that the present economic model needs to change but stresses that there are different models of growth. "It's the question of the day because of the wealth created by the market economy" he tells me "but there are different kinds of models, steady state economics is one and there are also 'no growth' models." The real issue he argues is how can you regulate growth so that it's fairer and more sustainable. "We have to keep exploring different options, capitalism has been shown to be the most unstably structured house of cards and no-one even understands the present capital flows so it's clearly in need of reform." Andy identifies globalisation as perhaps the biggest problem, "but politics isn't global so there are no institutions to tackle this. My personal feeling is that there would ideally be some kind of mixed economy. I think we need to converge the economies so that smaller economies have room to grow and we meet in the middle somewhere. Maybe for the rising global middle class we can create a different set of values for the 21st century which is not based on consumption.

Bertrand Chovet, Managing Director and Partner of Interbrand in Paris, who is also speaking at the conference, is similarly reluctant to reject the principle of growth while simultaneously recognising that better models are available. "Sustainability can be seen as a questioning of our economic growth model, but an evolution versus an revolution" he explains in a personal communication on the Linked In website. "Sustainability is all about balance. It will never be to switch from a dark side to a better world but to balance the best of the old world with the concern about our next generations."

Mark Butkus, an environmental writer from New York, has been writing about green issues for the last twenty years. With regard to the issue of finite resources he seems to be particularly optimistic believing that this aspect of the debate is of little consequence. "We all know that fossil fuels are expected to dry out in the next 40 years" he tells me. "Many economic models show that we are thinking ahead - even BP with all their issues at the present time have business models beyond fossil fuels."

Mark cites China as a worthy example of the progress towards change being made in the world at the moment. "They are leaps and bounds ahead of us at the present time and have been fast-tracking projects at an incredible pace". Yet Mark has also seen favourable developments closer to home in the US. "I drove through Michigan last spring - there is a lot of industrial infrastructure already in place for us to compete with the Chinese with the production of wind turbines, photo voltaics etc. The state itself is thinking outside the box and looking at economic models that will put its citizens back to work".

David Music's expectations regarding the Chinese, and other developing countries such as India, are less optimistic. David is an industrial engineer from Atlanta and he believes that those countries will have no choice but to follow the west's pattern of industrialisation in order to develop their economies. Only then will they be able to convert to sustainable technology, that is to say once their industrial infrastructure is in place. "That infrastructure currently has a high environmental cost" he says "and their is no way those countries can grow their economies without it. In the US, western Europe and Japan, growth can be environmentally protective in aggregate because we have already built out an effective infrastructure that covers the entire country for businesses to run on. Growth can be made simply by increasing utilization or expanding bandwidth through the use of more environmentally friendly systems and processes".

Mark however believes there is a new economy emerging out there, but nevertheless he remains cautious. "The question is do we have the initiative to leave behind the old practices and embrace the new? This is a new frontier in need of a new mindset".

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