A Green New Deal must not be tied to economic growth

Giorgos Kallis

We must not reproduce the ideology of capitalist growth, which created the climate crisis in the first place.

The Green New Deal bill is an audacious 10-year mobilization plan to move the U.S. to a zero-carbon economy.

Bold and ambitious interventions like it are necessary, in the U.S. and elsewhere, if we are to unsettle the current complacency with climate breakdown. Academics like the economist Robert Pollin, who kept the idea of a Green New Deal alive in past years and provided the science to back it up, are to be congratulated for their efforts.

Pollin has for years now proposed his simplified version of a Green New Deal an investment of between 1.5 to 2 percent of global GDP every year to raise energy efficiency and expand clean renewable energy. This would be the moment for him to celebrate that his cause has been taken up, and contribute to working out the specifics. Instead though, he chooses to focus on the differences between his proposal and a “degrowth agenda,” which he finds “utterly unrealistic” a waste of time for the Left at best and dangerously anti-social at worst. While this is not the moment to split hairs, Pollin’s insistence on degrowth is inadvertently productive. It lets us see a sore point in the Green New Deal narrative, and this is that it risks reproducing unless carefully framed the hegemonic ideology of capitalist growth, which has created the problem of climate change in the first place.

To begin with, Pollin never explains why growth is a necessary ingredient for his proposal. It is not clear why he has to argue that a Green New Deal will be good for growth instead of simply advocating cutting carbon while meeting needs and fostering wellbeing. The only reason he provides for his preference for growth is that “higher levels of GDP will correspondingly mean a higher level of investment being channelled into clean energy projects.” If Pollin seriously means that he shares “the values and concerns of degrowth advocates,” then he could simply tweak his model and come up with a fixed amount of investment (independent of GDP) that would produce the same decarbonization. Higher levels of GDP will not only lead to higher levels of clean investment, but also higher levels of dirty investment and the majority of investment is dirty. A one percent growth in GDP leads to an increase in carbon emissions of 0.5-0.8 percent, and this is as statistically robust a relation as it gets (clean energy investment has no statistically significant effect on emissions yet, though, of course, this could and should change in the future). If we continue to grow at 3 percent per year, then by 2043 the global economy will be twice as large as it is now. It is difficult to imagine creating a renewable energy infrastructure for our existing economy in a short time span, much less doing so for an economy that is two times bigger. The smaller our economic output is, the easier the transition will be.

Pollin may well have chosen to emphasize growth because new deals are about growth. But a Green New Deal does not have to be like the old New Deal. Pollin does not suggest that his investment program should be financed by deficit spending, neither does he suggest that it should be a short-lived stimulus, repaid by growth. An investment at the level of 2 percent of GDP does not need deficit spending; assuming there is the political will for such a program, it could be financed by replacing dirty or socially useless investments (and there are many, starting with armaments). If there is no extra spending and debt, then there is no need to stimulate growth to pay it back.

At some points in his article written for the New Left Review, Pollin seems to suggest that growth is an outcome of his proposal, not a goal or precondition. He claims that “for accounting purposes,” growth in renewable energy investments “will contribute towards increasing GDP.” But even in accounting terms, without deficit spending, there is no reason why a clean investment program will cause growth, since the 2 percent that will go to renewables would go to some other investment instead.

The economy moreover is not an accounting convention. We could just as well imagine spending lots of money on digging and filling in holes, which could serve as a temporary stimulus in a period of low liquidity and low demand, but is obviously not a recipe for sustained growth. Pollin writes in his text that “building a green economy entails more labor-intensive activities” and that the private sector does not invest in renewables because they have low profit margins. Shifting financial resources from high-productivity and high-profit sectors to low-productivity ones is not a recipe for growth. growth. The energy productivity of renewables is also lower than that of fossil fuels. An economy of low productivity, low profits and low energy returns is unlikely to be a bigger economy that grows. And this is fine, since our priority right now should be to decarbonize, not grow the economy. But Pollin unnecessarily links the former to the latter.

Maybe Pollin is right, and I am wrong. Maybe a massive clean energy program would end up stimulating growth. However, it would be wrong to sell a program for stabilizing the climate with the promise of growth. What happens if it doesn’t produce growth? Do we abandon decarbonization? And since climate change is not the only problem with growth, there are good reasons why we can’t afford more growth even if it were powered by the sun.

Economists typically justify growth in terms of poverty or stability. Pollin innovates by justifying it in the name of climate change. And this is coming from someone who otherwise sees the irrationality of perpetual growth.

Compound growth is what the Marxist scholar David Harvey calls a “bad infinity.” For Harvey, capitalism’s requirement for compound growth is the most deadly of its contradictions. He points to the irrationality of expecting that demand, investment and profits will double every 24 years (this is what a 3 percent growth each year amounts to), quadruple every 48, grow eight-fold every 72, ad infinitum and ad absurdum.

Consider the following: 65 percent of anthropogenic emissions come from fossil fuels. The remaining 35 percent come from things like land-use change, soil depletion, landfills, industrial meat farming, cement and plastic production. Even if the energy mix were to become 100 percent clean and we continued to double the economy every 24 years, we would be back up to our existing emissions levels in short order. This is how irrational the pursuit of compound growth is.

Climate breakdown now threatens to bring this absurdity to an end. But it is not only the climate biodiversity loss through mass extinction, change in land use and resource extraction are all directly linked to economic growth. Despite his claims to the contrary, there is no prospect of what Pollin calls “absolute decoupling,” or a reduction of these impacts while the economy grows.

It is fanciful to think that there is one type of neoliberal growth that is bad, and another type of growth that could be inclusive, progressive, clean, etc. Growth is an integrated process, and no matter what the ideologues of growth claim, there is no proof that we can grow the economy by selectively growing the “goods” while decreasing the “bads.” Armaments, advertising, fossil fuels, planned obsolescence and waste of all kinds are integral to capitalist growth. Since its beginnings in colonial Britain, growth has been fueled by unequal exchange of labor and resources between imperial centers and internal and external peripheries.

Growth requires the investment of surplus for the creation of more surplus. And this surplus is created by exploiting wage-workers and appropriating the unpaid work of women, migrant workers and nature. Shifting of costs in space and time has also been central. Access to low-cost labor and resources is vital for economic growth; if inputs become expensive, the economy slows down.

Pollin claims that growth has stalled because neoliberalism prioritized the interests of the rich. The brutal cuts of structural adjustment policies and neoliberal austerity, however, were always made in the name of growth. And the promise of growth bought the social peace the neoliberal project needed. Even if the real outcome was the concentration of wealth amidst anaemic growth rates, this tells us something useful about the dangers of a “growth politics.”

Pollin argues that we can’t afford to dream that another world is possible, not now, because climate change is urgent and “we do not have the luxury to waste time on huge global efforts fighting for unattainable goals.” We are asked to accept that the only game in town is capitalism, and that questioning capitalism and its destructive pursuit of growth is a luxurious waste of time. If not now, then when, one might wonder?

Erik Swyngedouw has warned against the depoliticizing tendency of carbon reductionism that is, reducing all politics down to a question of their effect on carbon emissions, especially when coupled with claims of urgency. Granted, climate change is a huge problem, but it is not the only problem in whose service we should pause other aspirations. And climate change is not a stand-alone problem with a technical solution – but rather, it is symptomatic of the broader system that is producing it. Pollin’s reduction of climate change to a question of an investment fix is appealing because it makes the problem seem manageable. But climate change is not a technical problem. Climate change is a political problem, in the real sense of the word political, meaning a problem involving competing visions of the kind of world we want to live in.

Now, Pollin has a valid concern in that a degrowth agenda would involve a reduction of GDP, which has many problems not least, rising poverty, inequality, debts, austerity, etc. We would be fools if we were oblivious to those risks. In a capitalist economy bound to grow or collapse, growth is fundamental for the stability of the system. But growth is also exploitative and self-destructive. Should we support capitalism forever, just because a collapsing capitalism is worse for workers than a capitalism that does well?

Those of us who write about degrowth do not advocate an intentional reduction of GDP (we are the first to criticize GDP as it mixes “goods” with “bads” and doesn’t count unpaid work). Perhaps Pollin is confused because we do claim that doing the right things,

ecologically and socially, will in all likelihood slow down the economy as measured by GDP. Or because we argue that certain sectors of the current economy that are central to its expansion armament, advertising, unnecessary consumer goods, speculative financing, etc. should contract. Given how coupled the capitalist economy is to growth, this raises the question of how, or under what conditions, we could secure human wellbeing and equality without growth. This is a huge research question, involving economic models, historical and ethnographic studies, and an assessment of potential institutional reforms, such as worksharing, a guaranteed basic income or a maximum income tax. It is also a political agenda for the Left, to build the capacities to decouple wellbeing from growth.

Pollin claims that those of who write about degrowth do not offer a specific program to combat climate change. Speaking for myself, I do not feel I have to add more to the excellent proposals already made by Pollin himself, Naomi Klein and many, many others. The problem with climate change is not that we are short of ideas on what is to be done. The problem is that we are not doing it.

What we offer from a degrowth perspective is a different diagnosis of why we are not doing it. We argue that this is because there is a fundamental clash between capitalism’s pursuit of growth and climate mitigation. Good climate policies have not been adopted because of their impact on growth, and growth is outstripping the gains made from renewable energy. Our contribution is to open up the debate about alternatives to growth.

In the climate community, people have their pet ideas. Some want a carbon tax, and others want a carbon dividend (a tax returned as basic income). Some want green bonds, others want a Green New Deal. It is safe to say that if we are to decarbonize the economy at the unprecedented rate required, all of these ideas will be necessary. But decarbonization is not just a matter of adding solar and wind to the energy mix it is also a matter of taking fossil fuels out. This requires legislation and political commitment alongside struggle to stop fossil fuel projects and coal mines, and to divest from oil companies.

Pollin suggests that a 2 percent investment in clean energy and efficiency will be sufficient on its own, but there are reasons to be skeptical about such a claim. I would like Pollin to be right, but I’ve read other reputable climate scientists and engineers who are much more reserved than Pollin about the prospect of 100 percent renewables.

There are problems with the intermittency of solar and wind, as well as their huge storage requirements (one of the principal solutions envisaged, storage as hydroelectric energy, which requires a dramatic damming of remaining rivers, which is an environmental nightmare). There are the emissions involved in fuelling a renewable energy transition, which might be enough on their own to overshoot the remaining carbon budget. There are the rare earth minerals necessary for constructing solar panels and batteries, minerals that are scarce and extracted from areas and communities already suffering from our unquenchable hunger for raw materials. There is the question of land use and impact on landscapes. As is common in these technical debates, Pollin prefers data favourable to his argument. But he would agree, I think, that the picture is very complicated and uncertain, to say the least.

I do not like to be a skeptic in the current political context where renewables face an uphill battle against the fossil fuel and nuclear power lobbies. I wish that a 100 percent renewable future were possible and would be as harmless as Pollin thinks. But our experience with previous technological fixes suggests we should be on the side of caution, both because of unfulfilled promises, and because there are always side effects and unforeseen costs. Even if the environmental and social costs of renewable energy are not as high as some skeptics think, they are not insignificant either and with compound growth, even an insignificant impact quickly grows toward infinity. The lower the level of energy use, and the smaller the economy, the easier it is to decarbonize, and the fewer impacts that will be caused along the way. There is no reason for someone concerned with climate and the environment to advocate economic growth.

Furthermore, Pollin provides no evidence that the scale of investment he proposes will do the job. Granted that there has been no such massive investment in the past, so it is hard to assess its potential effect. On the campaign trail, US candidate Obama promised $150 billion over a period of 10 years. In 2009, the American Recovery and Reinvestment Act provided stimulus funding of $90 billion in strategic clean-energy investments and tax incentives to promote job creation and the deployment of low-carbon technologies, promising to leverage approximately $150 billion in private and other non-federal capital for clean energy investments. Fossil fuel emissions decreased by 11 percent from 2007 to 2013, but this was not a result of growth in renewables (despite a tripling of wind power and a 30-fold increase in solar power during Obama’s presidency), but mostly an after-effect of the recession, high gasoline prices and to a lesser extent, a shift from coal to natural gas.

In 2009, South Korea announced a Green New Deal Job Creation Plan: $38.1 billion invested over a period of four years dedicated to environmental projects to spur slumping economic growth and create a million jobs.

Korea’s emissions were 15 percent higher in 2014 than in 2008. Pollin refers to Germany as “the most successful advanced economy in developing its clean-energy economy.” German emissions in 2014 were almost unchanged since 2009. They had fallen 20 percent since 1992, and following the collapse of industry in East Germany. And even so, in per capita terms, they are 80 percent higher than the world average. If the whole world were to consume as much as the “successful” case of Germany, not only would global carbon emissions not fall, they would almost double.

Naomi Klein wrote that climate change “changes everything.” Pollin tells us that it does not have to change anything, other than 2 percent of GDP. We will keep flying, eating beef, driving cars to suburban homes, flying helicopters and jets with the only difference being that all this will be powered by clean electricity. I won’t debate the facts and the feasibility of this vision again, so instead I’ll just point out that intuitively this doesn’t make sense to people, and it doesn’t because you don’t have to be a scientist to understand how much our current lifestyle depends on fossil fuels. Those who deny climate change know it and those who fight for climate justice know it, too. To stop climate change, we not only need to clean production, but also to reduce and transform consumption. We need free public transport, new diets, denser modes of living, affordable housing close to where the jobs are, food grown closer to where it is consumed, reduction of working time and commuting, low-energy ways of living and finding satisfaction, curbs on excessive incomes and on ostentatious consumption. It is not as though the Green New Deal is an agenda designed to fight climate change alone – it is a green Left agenda that should be pursued even if there were no climate change. And we have to pursue it independently of whether or not it is “good for the economy,” because we put people before the economy.

The Green New Deal bill goes in the right direction and its differences from Pollin’s narrower proposal are informative and much closer to what I am arguing here. The bill does not only commit funds to renewable energies, but also to health, housing and environmental infrastructures. It has provisions for economic security, akin to job guarantee and basic income schemes – provisions that will be vital if we are to secure wellbeing without growth.

Granted, the bill does not talk explicitly about post-growth or de-growth, and does not challenge head-on prevalent patterns of consumption as much as one like me sitting in an academic chair and not involved in parliamentary politics would have liked but consumption would surely change too if public services were expanded to the extent foreseen in the bill. Importantly, unlike Pollin, the bill does not emphasize growth or justify the plan in terms of growth.

Pollin’s insistence, then, on accentuating the differences between degrowth and the Green New Deal is outdated and unnecessary. Pollin’s article was titled “Degrowth vs. a Green New Deal.” Maybe it is time to stop inventing more internal “versus” and do the hard work of constructing some new “ands.” What about degrowth and a Green New Deal? The opponent is formidable and what we need are alliances, not divisions.

The author thanks Jason Hickel and David Ravensbergen for their comments and suggestions to an earlier draft of this essay.

This article first appeared in truthout on 10 march 2019, and has been reproduced with the permission of truthout.

Source: https://truthout.org/articles/a-green-newdeal-must-not-be-tied-to-economicgrowth/

Editorial notes:

1. In the fourth paragraph, it is mentioned that if there is no extra spending and debt, then there is no need to stimulate growth to pay it back. This seems to imply that public debt needs to be paid back. From a modern monetary theory perspective, this is invalid if one is talking about a monetary sovereign government, but valid if one is talking about any other form of government.

2. In paragraph 20, it is mentioned that “one of the principal solutions envisaged, storage as hydroelectric energy, requires a dramatic damming of remaining rivers: an environmental nightmare”. This is somewhat inaccurate, because many of the solutions which have been promoted in Australia for pumped hydro do not depend on damming rivers at all, apart from Snowy2.0. They can be installed on the coast, at places with modest gradients, or in disused mines, for example, and the latter would be win-win.

There also lots of other storage solutions such as molten silicon or compressed air. However, many of these technologies are still in a development stage, and time is short to implement them, which means that investors are tending to go with batteries, for which there are environmental issues.