There is a conviction among scientists that, as a consequence of human activity, the planet's absorption limits have been crossed, and that, if drastic measures are not adopted soon, there is a serious risk of entering into a dynamic of irreversible processes, which could put humanity itself at risk. The recent update of the analyses on planetary boundaries carried out in 2023 by the Stockholm Research Institute shows that, of the nine fields analysed, in six (climate change, biodiversity...) the limits of safe and secure space have been exceeded. Likewise, the ecological footprint indicator published by the Global Footprint Network in 2023 shows that, as a whole, 1.7 Earths would be needed to maintain the current standard of living of the world's inhabitants. Given this, a growing number of academics and social movements have begun to argue that degrowth policies are necessary, because indefinite growth is not possible on a finite planet. Is that right?

We must begin by distinguishing the growth of economic activity in material terms and in monetary terms: the former, of course, collides with the limits of the planet. The second, on the other hand, is possible, as long as material growth is decoupled from monetary growth (or GDP). Or, as some say, if GDP growth dematerializes. Is that possible?

There are factors that can play in favour of this dematerialization or decoupling. For example, substitution processes and innovations that reduce the consumption of natural resources or emissions. But the price reductions derived from these efficiency improvements can increase demand for the products and, in the end, due to this “rebound effect”, we can end up consuming more natural resources or generating more emissions and waste.

If we look at what has happened so far, clearly the decoupling or dematerialization has not occurred to the extent or characteristics required: at a global level, in absolute terms, in sufficient magnitude, permanently... (see Parrique et al., 2019; Vaden et al., 2020). But it can be argued that this has happened because appropriate policies have not been applied until now. Thus, prediction models have been built to estimate whether climate change could be avoided by applying certain efficiency improvement policies and developing certain technologies for CO2 capture; and, according to these models, climate objectives could be achieved with hardly any negative effects on growth. But most ecological economists criticize such models for setting unambitious objectives or being based on extremely improbable assumptions far removed from historical evidence. (See Dolter and Victor, 2017)

Basically, there are three types of postures regarding the relationship between economic growth and the environment. (i) Those who believe that economic growth is possible and desirable, especially if appropriate environmental and structural policies are adopted, so that efficiency increases and sectoral composition changes, and growth becomes green (green growth). (ii) Those who believe that efficiency improvements and changes in the composition of activities will be insufficient, so that efficiency improvement measures must be accompanied by measures of sufficiency or reduction in the level of economic activity (or degrowth). And (iii) those who believe that objectives should not be set in terms of growth or decrease, since this is a means and not an end, and because, in addition, doing it in advance, citizens and public decision-makers may become scared and oppose environmental measures. This third group advocates, then, adopting the environmental and socioeconomic policies that are necessary to keep the Earth within safe planetary and social limits, regardless of the effects they may have on growth. For them, there are cases in which economic growth will help achieve socioeconomic and environmental objectives (e.g. in less developed countries), and other cases in which it will prevent achieving those objectives (e.g. in developed countries). For this reason, this third current declares itself agnostic regarding growth (a-growth).

In reality, everything indicates that, to address current environmental problems, a revolution of efficiency will not be enough, and that a revolution of sufficiency (reduction and change in production and consumption patterns) will also be necessary. But the challenges that an efficiency revolution entails are already enormous, as shown by the fact that the policies for this, despite having a great academic consensus, have not been able to be put into practice due to the opposition of interest groups, such as those of the fossil fuel industry. Besides, potential degrowth measures have less theoretical foundation and empirical evidence of their positive effects. Therefore, it seems the most practical thing to advance in what there is consensus or agreement among those in favour of growth green, of degrowth and a-growth: in the efficiency revolution.

What we must begin to get out of our heads is the idea that economic growth is an adequate indicator of well-being and that we must pursue it as an objective. Just as there is no evidence that GDP growth can be decoupled from material growth (in the magnitude or characteristics required), what there is evidence is that the improvement of well-being can be perfectly decoupled from the increase in GDP (see Navarro, 2022).

Let us add, finally, that the movement, academic and social, for degrowth does not originate only because it is believed that environmentally there is no other way out than a reduction in the level of activity in developed countries. This movement also responds – and primarily – to a desire to achieve a different and better society, in socioeconomic and environmental terms, than the current one. For most members of that movement, that is not possible within capitalism, so degrowth is a movement that pursues a radical transformation of the current system.

mikel navarro

Mikel Navarro

Mikel Navarro is a Professor in Economics at Deusto Business School, of the University of Deusto, and Senior Researcher at Orkestra-Basque Institute of Competitiveness..