The case for "green growth" is flawed

Samuel Alexander

Manna Matters April 2017

[Ed. note: This article first appeared in Resilience online magazine. It is an excerpt taken from a longer paper by Samuel Alexander, Jonathan Rutherford, and Josh Floyd which is published by the Simplicity Institute.]


In late 2015 the CSIRO released its Australian National Outlook (ANO) Report (‘the Report’) which outlined 20 future scenarios for Australia, exploring various global and national sustainability challenges. The Report’s main conclusion was that sustainability is compatible with continuous economic growth defined in terms of rising GDP and that consumerist values do not need to be questioned.

But while the report was met with mostly positive reviews in the media, and is likely to have ongoing influence among policy makers, our new paper, A Critique of the Decoupling Strategy: A ‘Limits to Growth’ Perspective, argues that even the Report’s most ambitious “green growth” scenario is incompatible with long-term sustainability and global justice. The very high uncertainty to which the scenario is subject to demands that we be far more circumspect about the prospects for future economic growth.

Reliance on three highly speculative strategies

In line with dominant thinking across the world, the ANO Report argues that with bold collective leadership from government – mainly in the form of policies such as a strong and rising carbon price – economic growth could be “decoupled” from environmental impacts, meaning that we can achieve environmental sustainability without affecting economic growth. Indeed, the Report claims that Australian GDP could triple by 2050 while carbon emissions, resource use, and other environmental indices dramatically fall.

In order to decouple ongoing growth from environmental impact, the Report relies heavily on three key strategies, each of which is deeply problematic.

First, in the most ambitious scenario almost half the projected emissions reductions are achieved via large scale tree plantings – known as biosequestration – designed to act as a carbon sink. Such plantings are projected to cover up to 59 million hectares or two-thirds of Australia’s most productive agricultural land.

There are several major uncertainties that make the odds of this playing out as anticipated very low. These include the potential for tree plantations to compete with critical land-uses such as food, energy and conservation; the risk that farmers may fail to act “rationally” in response to price signals and shift efficiently from agriculture to carbon farms; and the risk that net carbon gains may be less than projected due, for example, to the impact of unforeseen extreme weather events such as fire or drought. We also point out that even if this strategy is viable for Australia, the global potential is much more limited given competing land demands.

Second, the ANO Report depends heavily on the viability of carbon capture and storage technology (CCS), with CCS power-plants projected to supply up to half of both Australian and global electricity by 2050. But given that no commercial scale CCS plants (defined as more than 500 megawatts of power) operate anywhere globally, and that scaling up CCS to this level would require a new worldwide infrastructure larger than the oil industry, this assumption seems highly optimistic, to say the least. We also review many of the problems with CCS which the report fails to discuss, such as the likely very high fuel costs, and the potential lack of safe geological storage sites.

The third key strategy underpinning the ANO’s “green growth” hopes requires achieving historically unprecedented resource efficiency gains of 4.5% per annum. This is despite the fact that over the past decade the global economy has actually become gradually less resource efficient. We argue that the Report essentially asserts this outcome without demonstrating the viability of such deep efficiency improvements. We point to several reasons – such as intensifying resource depletion and diminishing efficiency gains over time – for why gains in practice are likely to be much more modest, even given favorable policy incentives.

The ANO Report’s reliance on these three strategies is crucial to the overall achievement of net zero or even negative emissions by 2050, given that all scenarios assume continued burning of significant amounts of fossil fuels. If any of these highly speculative strategies fail, let alone all of them, then Australia will be releasing far more carbon emissions than the most optimistic scenario assumes.

Two additional fundamental problems

Even if all three of these strategies somehow prove to be viable, we argue that two further considerations show that the ANO Report fails to make a persuasive case for “green growth” via decoupling.

First, the Report projects a world economy in 2050 still marred by extreme global inequality and poverty. The Report assumes that by 2050 at least 5 billion people will remain excluded from the “consumer class” – and many of the 3 billion who were part of this “class” would still have only a fifth of the per capita income enjoyed by Australians. We point out that if the Report took seriously the goal of lifting all people to “living standards” prevalent in the developed world – as is the assumed goal of global “development” – then much more growth would be required, and therefore the “decoupling” rate would have to be many times higher, and thus even more implausible, than the Report assumes.

Second, the Report provides us with no confidence for thinking Australia, or the world, will be on a long term sustainable path after 2050, when the scenario modeling timeframe ends. For example, the Report takes for granted that by 2050 Australia (and the world) would still have a growth economy, but it has recently been demonstrated that if the Report’s most ambitious scenario was extrapolated out to 2100, sheer growth in output would entirely eliminate any resource and energy reductions that had been made.

Implications for the growth economy

If this broad critique is correct, the implications are profound: humanity must face up to the fact that the dominant macroeconomics of growth is unsustainable. This means, contrary to the claims of the Report, the most developed nations must urgently make a fundamental transition “beyond growth” and “beyond consumerism“.

The message here need not be read simply as doom and gloom. Many people today are beginning to see the rich benefits of living in simpler and more frugal ways and are starting to envision alternative societal arrangements that have the potential to both avert catastrophe and liberate humanity at the same time.

Dr. Samuel Alexander is co-director of the Simplicity Institute and a lecturer at the Office for Environmental Programs, University of Melbourne. He is also a Research Fellow with the Melbourne Sustainable Society Institute.