economics growth

Growth isn’t possible, says New Economics Foundation report

Ongoing economic growth is not just questionable, but actually impossible in a world of climate change, says a new report from the new economics foundation.

Released to coincide with the economic forum in Davos, Growth isn’t possible: why rich nations need a new economic direction warns that developed countries face a choice between a safe climate or further economic growth. It is the complete opposite of what the government wants to hear:  as Gordon Brown said only days ago, “Going for growth is the government’s number one priority for this year.”

In order for growth to continue, economies need to drastically reduce their carbon intensity – the amount of CO2 released for every dollar made. Logically, efficiency would need to keep ahead of overall growth in order for CO2 levels to fall. And that’s the problem – while progress has been made in some developed countries, carbon efficiency is not high enough on the agenda and improvements are not nearly fast enough. A dollar of growth requires far less CO2 in the UK than in China, but so far no country has achieved a rate of reduction in carbon intensity that would keep climate change below 2 degrees of warming by the end of the century. As Professor Kevin Anderson of the Tyndall Centre for Climate Change concluded recently, “economic growth in the OECD cannot be reconciled with a 2,3 or even 4°C characterisation of dangerous climate change.”

Heresy it may be, but it’s really a simple matter of mathematics. In order to grow at the fairly low rate of 3% per year, rich countries would need to slash carbon intensity by 71% by 2050 – and that would still leave us with atmospheric concentrations of 500 parts per million of CO2, considerably higher than the generally agreed safe target of 350ppm.  To hit 350ppm would need a 95% efficiency target. And the news gets worse. Taking the global economy overall, carbon efficiency has essentially flat-lined since 2000. To avoid devastating climate change, says the report, the annual fall in the carbon intensity of the economy would need to improve 200-fold. It is on that basis that the authors conclude that growth isn’t possible.

The complications don’t end there, either. The report looks at carbon capture and storage, and biofuels – two of the best ways of driving that all important carbon intensity reduction. If the UK were to switch entirely to corn or oilseed rape biofuels, we would need 36 million acres to grow enough to meet our energy needs. That’s 650% more than all the arable land in Britain.

“Endless growth is pushing the planet’s biosphere beyond its safe limits, ” says report co-author Andrew Simms. “The price is seen in compromised world food security, climatic upheaval, economic instability and threats to social welfare. We urgently need to change our economy to live within its environmental budget.”

The report is the latest in a string of warnings that growth is an inadequate measure of a nation’s success, and that welbeing may be a far more profitable target for policy makers. Climate change and resource depletion are making ongoing economic growth increasingly precarious, but if recession is the only option, it is hardly surprising that the government remains committed to growth.

  • I’m reading a book at the moment that says the opposite, Lord Stern’s Blueprint for a safer planet, where he argues that climate change can create a new era of prosperity and growth. I’ll do a comparison when I’ve finished it.

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22 comments

  1. Balderdash. Carbon capture and sequestration typically costs 50 euros/tonne of carbon dioxide avoided. That is equivalent to $32/barrel which is no great shakes compared to recent gyrations in crude price. We need to capture carbon from nearly all significant power, cement, steel and chemical operations and to switch from fuel to electricity for many heating and transport applications, but the ocean will continue to absorb carbon dioxide at over 6% of today’s emission level for hundreds of years or longer, which is enough for emissions that are difficult to avoid such as aviation (currently 2%). For more details and how to do it see my website at
    http://jemsavestheplanet.blogspot.com/

    1. Really? According to the DECC’s provisional figures, Britain was responsible for 531 million tonnes of CO2 in 2008. I know you wouldn’t cut every tonne through CCS, but just for argument’s sake: 50 euros x 531 million = approximately 10 times our entire GDP.

      I’m aware I’m being simplistic, but so are those who portray CCS as a silver bullet answer. It’s a vital technology and I’m all for it, but it is one of dozens of things that we need to do.

  2. Horse shit!!! Look at history, dinosaurs hot!!! Then the ice age. Now global warming….it’s the cycle of our world. Next we will be panicked about a global freezing. Let’s just do what we can to get by in these tough times.

    1. You would do well to look at history too: yes, there are cycles, but none of them have moved as fast as the climate has in the last fifty years. It’s taken thousands of years to move from a warm age to a cool age. We’ve managed to accelerate the process far beyond the natural cycles.

      Doing what we can to get by in these tough times means tackling climate change, or the times ahead will be tougher still.

  3. Jeremy,
    When I was at school 50 times 531 million was 27 billion. Our GDP in 2008 was $2.65 trillion or 1.88 trillion euros at today’s exchange rate. I make that just 1.4% of GDP. Isn’t that worth paying to stop global warming? Or are bankers bonuses a better investment.

    1. Indeed, I appear to have read a few too many zeroes off the calculator there – sorry for casting aspersions on your science!

      That definitely is worth paying to avoid climate change, if it can be made to work. The problem that nef’s report highlights is that you either need a 95% cut in carbon intensity by 2050, or you need to cut growth. Given that it can only be applied to certain industries, how much of that 95% can carbon capture deliver?

  4. Jeremy,

    Part of the point I was making in my first comment is that although today there are many transport and heating applications where carbon capture is impractical, most of these can and will switch to electricity which can be carbon free. My website at

    http://jemsavestheplanet.blogspot.com/

    explains how to make it happen. It proposes that fossil fuel producers should be obliged to pay for the capture of an increasing fraction of the carbon content of their products. The website also gives more detail on why this proposal would be easier for all countries to agree to than cap and trade or a carbon tax, how it would drive energy saving, renewables and nuclear, how it would be implemented and how it would stop global warming.

  5. Growth is powered by cheap available energy. In the case of the industrial revolution, the unfortunate circumstance is that we allowed 150+ years of use of this energy without charging anyone for the environmental impact. The other unfortunate impact is that our energy sources are being depleted rapidly (exponential rise in demand, something like the bell-curve in supply).

    It would be wonderful if carbon capture would prove to be practical on a global scale and as affordable as it’s made up to be. However, growth is still not going to happen as the total amount of power (barrels/day, tonnes/day) can go nowhere but down. And the energy requirements of a global carbon capture system are only going to make it go down faster.

    It’s obvious (to me) that what the world needs is a civilization willing to accept significant, world-war-like investments/expenses/collective effort to drastically improve our energy use efficiency and set up the sustainable energy infrastructure that will keep the lights on, power the CCS systems and might one day allow growth to continue…on grounds like knowledge (how to use the resources available better) rather than brute force (more resources).

  6. Jeremy,

    Pleased to find you discussing carbon intensity improvements in some detail. I think you’re being a bit naughty labelling 350ppm the ‘generally accepted safe’ limit – 350ppm is still quite a ‘forward’ position, the official and concensus position is still 450ppm, surely, or 350.org wouldn’t be necessary?

    I’m trawling through your RSS feed and looking forward to reading your response to Stern. I hope you did indeed write it!

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