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Degrowth in the Netherlands: An Overview

Through a degrowth-course at the University of Amsterdam and meetings with like-minded people, the Dutch degrowth-platform Ontgroei was established. Co-founder Crelis Rammelt reports about the state of degrowth thinking and its movement in the Netherlands.

“Just act normal, as that’s insane enough as it is,” we tell each other here in the Netherlands. We are quick to judge those who do not follow normal behaviour. But when normalcy has led us to social injustice and environmental destruction, it would be insane not to act abnormal!“ To understand the state of de-/post-growth thinking and its movement in the Netherlands, we need a bit of context. Our dominant social imaginary has long been firmly rooted in socially unjust and ecologically destructive growth fetishism. Read more…

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Strong correlations between economic growth and environmental impacts

Perpetual economic growth is incompatible with a finite planet. To some extent, innovation can reduce throughput, thus ‘decoupling’ economic growth from environmental impacts. However, the level of decoupling has been ‘relative’, which means that impacts still grow, just not as fast as the Gross World Product (GWP) (Figure 1).

Figure 1. Gross World Product (GWP), World primary energy consumption and World consumption emissions (based on WB 2020; BP 2020; GCA 2020).

An indication of a strong coupling between economic growth and environmental impacts is suggested by a strong long-term correlation between the two (Figure 2). The GWP growth rate is strongly correlated with both world primary energy consumption growth (Pearson correlation coefficient: 0,88) and world consumption emissions growth (0,75).

Figure 2. Growth rates of GWP, primary energy consumption and consumption emissions (based on WB 2020; BP 2020; GCA 2020).

Sources

British Petroleum (BP) (2020). Statistical Review of World Energy. Retrieved 21 Aug, 2020, from https://www.bp.com/en/global/corporate/energy-economics/statistical-review-of-world-energy.html.

Global Carbon Atlas (GCA) (2020). CO2 Emissions. Retrieved 21 Aug, 2020, from http://www.globalcarbonatlas.org/en/CO2-emissions.

World Bank (WB) (2020). World Development Indicators. Retrieved 19 Aug, 2020, from http://data.worldbank.org/indicator/NY.GDP.MKTP.CD.

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Is degrowth about bringing down GDP?

In a thought-provoking piece in CASSE’s Steady State Herald, Brian Czech worries that many degrowthers seem agnostic about GDP degrowth. But should degrowth be about bringing down GDP? My answer: not primarily. We had an interesting exchange of ideas on CASSE’s website (Below, I have tried to summarise some of the points. For full text see here).

Me: GDP is just a blunt aggregate weighing scale. You can make yourself sick by eating too much apple pie, but it also matters whether the pie contains too much dough and too few apples: a pie of the right size can still be unhealthy. Degrowth efforts are likely to bring down GDP because socially and ecologically undesirable economic activities that count towards GDP are deliberately replaced by socially and ecologically desirable economic activities that don’t count towards GDP. In other words, not everything that can be counted counts, and not everything that counts can be counted. Other activities that currently count towards GDP, e.g., in health care, education, welfare and other public services, should be preserved—like apples in an apple pie. Degrowth is therefore not primarily about bringing down GDP; it’s about downscaling what is unhealthy, unfair and unsafe. GDP-degrowth cannot guide us there.

Brian: … GDP growth with healthy and happy services proliferating everywhere would still entail an expanding trophic base … In seafaring terms, when she’s loaded to the Plimsoll line it doesn’t matter if you add a puppy or a skunk; either way your ship is sunk! …

Me: I agree with you that ‘healthy and happy’ services also contribute to throughput, and therefore to our ‘sinking ship’. But I’m still not 100% convinced about GDP-degrowth, because it lumps together what should be downscaled and what should be preserved. Another metaphor: just as GDP growth is sailing by a wrong compass, so too could GDP-degrowth lead us astray. So for me, we are left not with GDP-degrowth, but with biophysical degrowth towards a steady-state (AND the ‘degrowth’ efforts I have noted).

Brian: I am very tempted to say, acknowledging but the merest tinge of exaggeration, that there is nothing more biophysical than GDP! …

Me: The growth rates of GDP and material throughput are indeed very strongly correlated. No disagreement with you there.
However, we are primarily concerned with lowering material throughput, not the indicator of GDP per se. Material throughput must shrink, which will undoubtedly bring down GDP. But we should not put the cart before the horse. For me, as a Degrowth scholar, the matter of how we shrink material throughput is key, and GDP-degrowth as a policy goal doesn’t help—especially as we begin to partly decommodify economic life, reclaim the commons and work towards other ambitions linked to the degrowth movement.
I already referred to preserving (or even growing) essential basic services (more apples and less dough in the cake). Adding to that, it would be beneficial if the material standards of living of the ‘poor’ go up (on a side note: this type of growth is not equivalent to GDP growth in the global South, which tends to happen at the expense of the poor). In a world of limits, growth of throughput by the ‘under-consumers’ demands more degrowth of the throughput by the ‘over-consumers’.
These are just some examples of why we need more targeted degrowth strategies (as opposed to GDP-degrowth in the aggregate). Of course, in the aggregate, we also need to make sure that we downscale to and remain in a safe steady state. But I doubt that World GDP is the best indicator to help us make that assessment (especially if we start to transform the economy as mentioned above). To track our aggregate biophysical impacts, we might want to look at the planetary boundaries framework, for example.

Brian: I don’t view the choice as either/or. I am all for targeted throughput caps, starting with oil at the wellhead… The main point of my article is that it is misleading and counterproductive to call for degrowth while wavering on the implications for GDP. When we cap oil at the wellhead, we will (ceteris paribus) be lowering the rate of GDP growth… On the other side of that exact same coin, … efforts to lower the rate of GDP growth … will absolutely lower throughput. Take just three examples:
– Removing tax code incentives for having more children than two.
– Sectoral salary caps (see today’s Steady State Herald (later today)).
– Keeping the Federal Reserve (or whatever monetary authority) out of the growth game and purely onto its original mission of fighting inflation.
These and many other fiscal and monetary reforms are throughput droppers as surely as wellhead capping, and with crystal clarity of intent—vis-à-vis GDP—for all to see.

Crelis: Thank you for this clarification Brian. I fully agree with you on the first point. It would indeed be counterproductive not to recognise that a reduction in throughput brings down GDP. I believe we are on the same page there. For me, the discussion was more about the second point, regarding the policy focus on GDP-degrowth.
There is a difference between saying “we need to reduce GDP” and “we need to understand that GDP will be reduced as a consequence of all this targeted degrowth stuff we‘ve been talking about.” It seems to me that the monetary/fiscal reforms you mentioned intend to do much more than to lower the indicator of GDP (even if that is going to be one of the outcomes). But maybe I am splitting hairs.
In any case, your article is in part about why some degrowthers are not engaging with a GDP-degrowth policy, or failing to take a clear stance. While I don’t speak for them of course, I was trying to provide examples of some of the ambitions in the degrowth movement for which GDP-degrowth doesn’t provide a very useful compass. At the same time, I do see the importance of debunking the GDP fetish. So of course it is not an either/or choice. We need to tackle the problem on many different fronts. But that is exactly the point I think; there are different fronts.

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Recovering from COVID-19? Let’s do it without GDP growth

COVID-19 has infected both our bodies and economies. On March 12, Mark Rutte compared the Dutch economy to ‘a patient’ requiring treatment. The next day, his government was ready with a rescue plan for major firms, such as Air France-KLM and Schiphol. Just as our bodies need oxygen, the economy needs money – so the theory goes. Other European governments are also preparing to inject credit, and a lot of it, to ensure their economies’ survival.  Yet, this cure is limited. It presupposes that our economies need growth in order to flourish. If we do not steer away from this limited paradigm, then the cure we apply now will become a liability by giving rise to potential crises in the future. Read more…

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This isn’t the type of downscaling that degrowth thinkers have in mind!

In the early 17th century, the bubonic plague is said to have played a crucial role in popping the tulip bubble in the Netherlands. Today, the coronavirus (COVID-19) is leading not only to a health crisis, but also an economic one. The outbreak is sparking realistic fears of a deep global downturn. Our globalised, just-in-time, cost-cutting, risk-taking and profit-maximising economy has shown a rather limited ability to absorb shocks. In a time of crisis, the instability and fragility, but also the inequality of the economic system becomes painfully obvious. Read more…

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Capitalism inevitably leads to crises

Capitalism typically goes through cycles of expansion to contraction. We commonly refer to these as ‘business cycles’ or ‘economic cycles’. Every now and then, however, these cycles go off the hinges. They become unstable and can lead to recessions, crises and depressions. This inherent instability of the capitalist system cannot be explained by standard economic models. Instead, those models blame instability on excessive regulation, government interventions or other factors outside the market-economic system. Some unorthodox economists see it differently. Steve Keen, for example, developed an alternative kind of economic model—one that can mimic instability. The model provides compelling and urgent insights into how economic crises arise from within the structures of capitalism. Another crisis seems inevitable as long as the causes are misdiagnosed. Read more…

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Good infinity

Cycles of growth and decline in ecology were famously revealed in so-called predator-prey relationships. As foxes eat chickens, chicken reproduction drops, which leaves fewer chickens for foxes to eat. Consequently, the fox population drops, which then allows the chicken population to rebuild. As its food source becomes available again, the fox population also rebuilds and the cycle starts again. Read more…

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Decoupling: a key fantasy of the SDG agenda

At the core of the new Sustainable Development Goals (SDGs) is the idea that economic growth (defined as money flow or market value) can be ‘decoupled’ from the physical growth of the economy (resource consumption) and the associated environmental pressures (degradation, pollution). Paradoxically, however, the concept’s main promoters admit that there is virtually no evidence that decoupling works, that the conceptual basis for it is weak, and that even if it were possible it is not politically feasible. Decoupling is, thus, a dangerous fantasy sustained by disavowal – the simultaneous admission and denial – of its impossibility in practice. Read more…

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Progress towards MDG water target underplays the arsenic problem

Bangladesh’ 2011 progress report towards the Millennium Development Goals (MDGs) underplays the arsenic problem. The proportion of the population using improved drinking water sources is said to have reached 86%. However, the report takes the most conservative estimate of 20 million people exposed to arsenic contaminated drinking water exceeding the Bangladesh Drinking Water Standard (BDWS). In contrast, in 2001, the British Geological Survey estimated that 35 million were exposed to levels above the BDWS or 57 million above the stricter World Health Organisation (WHO) guideline. In 2000, the WHO warned that this could go up to 77 million. Is the drop down to 20 million suggested by the recent MDG report justified? We have serious doubts. Read more…

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Are We Really There Yet? The MDGs and Extreme Poverty

According to the United Nations a significant milestone has been reached for the Millennium Development Goals – the halving of the proportion of people living in extreme poverty. Alex Surace and Crelis Rammelt investigate this claim by exploring the methodology used to calculate extreme poverty. Read more…