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The Role of Degrowth in the Low Carbon Energy Transition

by Hsiang-Ping Kuan Global Commons Sep 13th 20238 mins
The Role of Degrowth in the Low Carbon Energy Transition

The latest AR6 report published by the United Nation’s Intergovernmental Panel on Climate Change (IPCC) in 2023, clearly sets out that human activities are the primary cause of global warming since the start of the industrial era. The report also states that the past and present global greenhouse gas emissions from unsustainable energy, land, and resource use, consumption, and production differ greatly across regions and countries. This reflects the social inequality that exists within our current global economy and the need for a more equitable low-carbon energy transition. How to achieve a low-carbon energy transition, especially against the backdrop of economic growth, is contentious. So, how is the concept of degrowth relevant in the context of a low-carbon energy transition?

What Are ‘Green Growth’, ‘Degrowth’, and ‘A-growth’?

As the world seeks to address the challenges of climate change mitigation, academics and politicians agree that transiting to low-carbon economies has become a very urgent matter. However, there is no universal consensus on how to achieve this transition. Debates are centred around the ecological and social limits of economic growth. These limits came from planetary boundaries, which define the safe operating space for humanity within the Earth’s system. 

More on the topic: Most Planetary Boundaries Beyond ‘Safe and Just Limit’, Scientists Say

One argument comes from proponents of the ‘Green Growth’ narrative. They argue that a high level of economic growth as measured by gross domestic product (GDP) is necessary for investments in clean energy to accelerate its deployment. These investments will create a positive spillover effect and stimulate the economy further, encouraging more clean energy investment. 

A green growth approach rests on the assumption that absolute decoupling of economic growth from resource use and carbon emissions is possible, and can lead to increasing economic growth and decreasing environmental impacts. In terms of political feasibility, proponents of green growth argue that its discourse on economic growth is aligned with the current capitalist economic system which is accepted by the mainstream economic policymakers. This explains why multilateral organisations such as the Organisation for Economic Co-operation and Development (OECD), World Bank and United National Environment Program (UNEP) all believe that technological change will drive the ecological efficiency of the economy.

On the other hand, ‘Degrowth’ advocates argue that there is still a lack of empirical evidence to show that absolute decoupling is possible at a global level. From a degrowth perspective, the current fixation on economic growth is inconsistent with the goal of reducing carbon emissions, resource use and social inequity. Instead, degrowth advocates call for an “equitable downscaling of throughput, with a concomitant securing of wellbeing.”

One of the core arguments from degrowth is that GDP cannot be decoupled from throughput at the scale and speed needed to achieve a low carbon transition. Hence, a downscaling of throughput as production and consumption is necessary. As a result, a reduction in GDP will most likely come with the downscaling of throughput as production and consumption make up a large segment of GDP. This is the case even though GDP reduction is not an aim of degrowth. In terms of political feasibility, degrowth proponents do not see the concept as a political platform and thus offer no blueprint on how to move away from today’s growth-centric paradigm. They aim to create a space where people can bring together current ecological and social challenges.

The ‘A-growth’ strategy is a mid-way concept between the green growth and degrowth narrative proposed by Jeroen van den Bergh. Van den Bergh is sceptical about the potential for green growth to deliver the carbon emissions reduction required. He argues that a neutral attitude towards economic growth will be more socially and politically acceptable than degrowth.

Why Is Degrowth Relevant for a Low Carbon Energy Transition?

The first issue is that the low-carbon energy transition is happening too slowly. The world is already overshooting six areas of the planetary boundaries and the ecological overshoot of these boundaries is driven by excess resource use. Proponents of degrowth also argue that decoupling GDP from resource use is physically impossible in a finite planet. 

As in a capitalist system, improved efficiency and productivity lead to a rebound in resource use. This rebound comes from the resource gains from productivity being invested into the economy to provide more growth, driving a growth-focused economy. With a society designed around pursuing growth, no country currently uses sustainable levels of energy and resource to meet human needs and well-being sufficiently.  

Degrowth seeks to change society’s dependence on economic growth, especially downscaling destructive and excessive productions such as fossil fuels and fast fashion in wealthy nations to reduce energy and resource use. This downscaling will ensure a quicker decarbonisation timeline, stopping an ecological breakdown whilst improving social outcomes.

A review of evidence on global consumption and ecological impacts shows that increasing consumption is a key driver of global environmental impact. Even a low-carbon economy with renewable energy, electrification and negative emissions technologies will all require resources such as concrete, metals, and land. Therefore, degrowth advocates argue that it is not enough to just “green” the economy. Wealthy countries must also address affluence and reduce its consumption and overall resource use. Overconsumption also highlights the issue of global inequality, as income is linked to consumption and consumption is the key driver of environmental impacts, suggesting that overconsumption also causes environmental inequality. With growth at the root of the problem, addressing overconsumption with degrowth could reduce energy, and resource use, environmental impacts, and global inequality.

Another issue is that the rate of Energy Return on [Energy] Invested’ (EROI) is declining for global oil and gas. EROI is the ratio of energy delivered to how much energy is invested to obtain this energy. It measures the trade-off between technological advancements which increase net energy returns, and resource depletion, which decreases net energy returns. 

Renewable energy has low EROI, especially when considering its intermittent nature; therefore, therefore establishing  the rate of economic growth with renewable energy can be difficult.

Replacing fossil fuels with renewable energy may lead to increased extraction of other materials required for clean energy infrastructure, like neodymium used in wind turbines, thus worsening resource depletion. As EROI decreases in fossil fuels and low-carbon energy resources exhibit a low EROI, adopting a degrowth perspective ensures that a more sustainable economy can effectively operate on low-carbon energy sources.

How Could Degrowth Influence Policy Decisions for a Low Carbon Energy Transition?

A critique of the growth-centric paradigm has led to alternative ways of thinking about policymaking with a degrowth framework. 

Take Europe for example. In 2018, ten Members of the European Parliament organised the Post-Growth 2018 Conference in Brussels to discuss alternatives to a future dependent on growth and urging politicians and policymakers to explore this narrative. In May 2023, a group of 20 MEPs came together to organise the Beyond Growth 2023 Conference, the main objective of which was to open a discussion about shifting away from prioritising GDP growth and instead focus on promoting socially just pathways that consider the limitations set by planetary boundaries. Although the concept of degrowth is still highly debated, the term appeared in the most recent IPCC AR6 report for the first time as an alternative for development.

More on the IPCC AR6: 8 Key Findings from the IPCC Sixth Assessment Report

One of the critical areas that need attention is the reduction of unnecessary production and consumption in rich countries. This would lead to a decrease in energy use, resource depletion, and ecological impacts, and would leave more resources to low and middle-income countries.

To reduce production, some destructive sectors such as fossil fuels, cars, aviation, and private jets should be scaled down. To achieve this, possible policies include putting a price on carbon through taxes or a trading system and increasing the tax on fuel used for aviation. These strategies aim to discourage destructive sectors from increasing their production and fuelling the growth-centric economic paradigm. 

Another approach could involve gradually imposing a cap on energy use for unnecessary production. By limiting energy consumption, there will be a decrease in the overall throughput of materials, thereby easing the strain on the environment. This strategy promotes a more sustainable use of resources and helps alleviate the pressures on ecosystems caused by excessive production and consumption.

Another area a degrowth perspective could influence policy is social welfare and essential public services such as healthcare. Policies such as the de-commodification of essential services will transfer their allocation from the control of the market to social rights. This will mean that people will no longer need high incomes or seek constant economic growth to improve their basic well-being. Policy proposals should aim to improve and provide basic services such as health and education to people through the provision of Universal Basic Services (UBS). A policy such as UBS will ensure that fundamental needs such as education, healthcare transportation, childcare and housing are all provided as public services to eradicate inequality and poverty

A degrowth perspective can also be applied to employment policies. Policies proposals should include a green job guarantee and retraining workers in declining sectors such as fossil fuel industries. The jobs should be centred around social and environmentally sustainable industries such as renewable energy and building retrofitting. Another employment policy proposal would be to reduce working time by adopting a four-day workweek to increase individual well-being as well as reduce unemployment and carbon emissions.

What Does This Mean for the Future?

Degrowth offers an alternative approach to the current fixation on economic growth by emphasising the need to downscale destructive and excessive production, reduce consumption levels, and prioritise well-being and sustainability over GDP growth. By challenging the pursuit of economic growth, degrowth aims to create a society that operates within planetary boundaries and reduces environmental impacts. 

From a policy perspective, degrowth proposes various strategies to guide this low-carbon energy transition, including implementing carbon pricing mechanisms, scaling down destructive sectors such as fossil fuels and aviation, and gradually imposing caps on energy use for unnecessary production. Additionally, degrowth advocates for de-commodifying essential public services, ensuring basic needs are met through Universal Basic Services, and implementing employment policies that prioritise green jobs and reduced working hours. 

While degrowth remains a highly-debated topic, it offers valuable insights and perspectives that can inform policy decisions and shape discussions around a low-carbon energy transition. By challenging the growth-centric paradigm and promoting alternative approaches, degrowth encourages a more sustainable and equitable path forward. As societies grapple with the urgency of climate change mitigation, considering the relevance of degrowth in policy decisions can contribute to a more holistic approach to mitigating climate change.

You might also like: Degrowth: A Socially and Ecologically Just Economic Alternative?

About the Author

Hsiang-Ping Kuan

Hsiang holds a master’s degree in Energy Policy from the University of Sussex. She is currently working in education and has academic experience in Taiwan and the UK. She is passionate about climate justice and the policies needed to achieve a just energy transition. Her interests also include renewable energy, sustainability, and policymaking.

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