November 24, 2018
This piece originally appeared on my Patreon page.
A friend recently sent me a piece by Jason Hickel, arguing that growth can’t be green and that we need to move away from growth-oriented economics. I am not convinced. It strikes me both that the piece misrepresents what growth means and also confuses political obstacles with logical ones. The result is an attack on a concept that makes neither logical nor political sense.
In the piece, Hickel points out the enormous leaps that will be required to keep our greenhouse gas emissions at levels that will prevent irreversible environmental damage. He then hands us the possibility, that even if through some miracle we can manage to meet these targets with the rapid deployment of clean energy, we still have the problem of the use of other resources that is wiping out species and wrecking the environment.
Hickel’s points about the imminent dangers to the environment are very much on the mark, but it is not clear that has anything to do with the logic of growth. Suppose the Sustainable World Party (SWP) sweeps to power in the next election. They immediately impose a massive tax on greenhouse gas emissions, which will rise even further over time. They also inventory all the resources that are in limited supply and impose large and rising taxes on them.
Furthermore, they pay developing countries large sums to protect regions that are important for sustaining species facing extinction and for the global environment. The new administration also hugely increases spending on research on clean technologies and has massive subsidies for zero-emission vehicles and even more importantly for mass transit. As the SWP implements this policy, it has very stimulative fiscal and monetary policies.
Will the economy continue to grow through this transition? That’s hard to say. If the price of gas quadrupled people would obviously drive less and buy fewer cars. On the other hand, since the government is throwing money at them with its fiscal and monetary policy, they may choose to spend more money on things that are not inherently research. They may spend more money on education, seeing movies and plays, gym memberships, eating at restaurants, better software for their computer and other types of spending that don’t either directly involve the use of resources or at least not obviously more than the alternative. (Eating at a restaurant obviously involves consuming food, but it doesn’t necessarily mean consuming more food than eating at home.)
But whatever happens in the transition period, what would keep the economy from growing in subsequent years? We have locked down all the resources in short supply and preserved large chunks of the world from encroachments by roads and settlements, but it is hard to see why we would not be developing better health care technology, better software, more types of cultural output, better housing (in the sense of being more pleasant — not necessarily larger) and other improvements in living standards, all of which count as growth in GDP.[1] Where is the war with growth?
Or to flip it over, let’s put Hickel and the anti-growthers in charge. (I confess, I have just read two essays by him, so I may be misrepresenting his views). He explicitly doesn’t want us to have growth, but in the Hickel world will we stop people from developing better software, improved medical treatments, improved educational techniques, and other advances that mean growth? I assume that won’t be the case, but then how is Hickel’s world different than the world that any pro-growther who takes the environment seriously would want?
There is a tendency by some anti-growthers to insist that growth means greater resource use. It doesn’t. If the argument is that we can’t continually expand out use of resources on a finite planet, that’s fine and obviously true. But why can’t our software, our entertainment, our education, and our healthcare get ever better? If there is a limit in these areas, it is very hard to see what it is.
The Politics of Growth and Anti-Growth
The challenge posed in Hickel’s essay is for pro-growthers to come up with a plan that both saves the world from a disastrous rise in temperature and also to prevent the further destruction of species and habitats through the excessive use of land and other resources. Actually, it is not hard to design a set of policies in terms of taxes, subsidies, and outright restrictions that could meet this challenge and still allow growth. The problem would be getting political support for this agenda.
Any pro-growther can write down on paper a $300 a ton tax on carbon emissions, large taxes on the use of water and other resources, and huge subsidies for clean energy, public transit, energy efficient housing and other types of conservation. The problem is getting political support for this agenda. If Hickel’s challenge to the pro-growthers is whether we can get this environmentally friendly agenda adopted politically in a time frame where we can save the planet, he has raised a very important question without a good answer.
But let’s say we adopt the anti-growth agenda. We tell people we are now against growth. Presumably, to save the planet in our new anti-growth framework we push many of the same policies. Perhaps the policies will be stronger in the form of even of even higher taxes or outright prohibitions on the use of some resources. Does anyone believe that this agenda has a better chance of being adopted because we told people that we are opposed to growth? It is very difficult to see how our stated opposition to growth makes one iota of difference in terms of selling environmentally sustainable policies, except leading people to think we are weird because we’re telling them that something they always thought was good is in fact bad.
If the point is that people engage in all sorts of environmentally wasteful consumption that does not actually make them happy, it would be hard to argue with the anti-growthers. But there do not seem to be many people anxious to get sermons on their bad consumption habits and prepared to change their ways. Unfortunately, shifting people to more sustainable consumption patterns is going to be a very difficult process and that happens to be true even if the future of the planet necessitates this shift.
At the risk of caricaturing the argument, it seems as though the anti-growthers believe that we adopt policies because of the worship of growth, as opposed to the specific benefits being offered. This strikes me as completely off the mark.
When ExxonMobil and other major fossil fuel companies oppose measures to restrict greenhouse gas emissions, they couldn’t care less whether these policies would raise or lower GDP growth. They are concerned about their profits: end of story. The same is true of all the other companies that engage in practices that are harmful to the environment.
As for the politicians who support these companies, the odds are that the vast majority have never given a moment’s thought to the meaning of these policies. They know what these companies want them to say and do, and the campaign contributions follow. The claims about growth are just window dressing. They have to pretend to have the larger interest of the public at heart since it would be pretty hard for ExxonMobil to tell people that a carbon tax was bad simply because it would hurt its profits.
Okay, but what about the general public? Does ExxonMobil’s argument have salience only because they worship growth? I would argue that “growth” per se means very little to most people. If the GDP grew by one percentage point more or less last year, most people would have no idea. For the vast majority of the population “growth” means whether they have a secure job that provides them with decent pay and benefits like health care insurance.
It is possible to maintain high levels of employment even as we use taxes and subsidies to move people away from the most environmentally damaging forms of consumption. It is worth noting that, even taken at face value, the economic models that show job loss from restrictions on greenhouse gas emissions are not actually describing a world where people cannot find jobs. These models are actually describing a world in which more people chose not to work because the higher price of energy means a higher cost of living and therefore a lower real wage. In these models, at a lower real wage fewer people choose to work.
While these models may not be a perfect description of reality, it is undoubtedly the case that many workers would be quite upset if the price of gas doubled or tripled. And, this would be true even if we made heroic efforts to increase the availability of public transit.
The issue is how to change people’s perceptions of what is important in life. I don’t see simple answers here, but there are some things we do know. In Western Europe, people consume on average roughly half as much fossil fuel per person as we do in the United States. I suspect that their per person use of most other resources is also roughly half as large as it is for the United States.
Part of the story is that European countries have chosen to take more of the gains of productivity in leisure than income. On average, workers in Northern Europe work roughly 20 percent fewer hours a year than workers in the United States. They are also likely to retire earlier. As a result, their incomes average 20 to 30 percent less than in the United States.
European countries also have much more public consumption than in the United States, in the form of health care insurance, education through college, and public pensions. As a result, tax burdens are considerably higher in European countries than the United States.
It may be the case that European consumption patterns are still too resource-using to be sustainable, but these countries have shown a greater willingness to endure higher taxes and other costs associated with reducing energy consumption further. This doesn’t mean that there is not substantial opposition to such measures, but they clearly face better political prospects than in the United States.
The Path to Green Policies
The idea that we will have some moment of Great Awakening, where the world, or at least the US public, recognizes the need to substantially reduce greenhouse gas emissions seems implausible. We will have to plod through with the hope that the plodding will be fast enough to prevent too much undoable destruction.
A good roadmap for this plodding would be to follow Europe. The most politically viable part of a follow Europe strategy is pushing for shorter work years. There is considerable support in the United States for mandated time off in the form of paid sick days and paid family leave. Such measures have won support in states and cities across the country. It is reasonable to think that mandated vacation days would also be salable.
We can also support work sharing measures as an alternative form of unemployment insurance. This is good macroeconomic policy (it’s better to keep people employed even at shorter hours than to have them be unemployed), but it also holds out the possibility that if people come to work shorter workweeks for a period of time, they may like it and try to continue with short workweeks. In any case, this one should not be a big lift politically, even Republicans have supported work sharing.
The collective consumption story also has some hope here. There is considerable support for expanding the role of the federal government in ensuring access to health care. The same is true of public support for college and higher education more generally, also childcare. These will not be easy political lifts, but they are also not far-fetched possibilities at this point.
The other part of the story is reversing the upward redistribution of income of the last four decades. There are two issues here. First, people are inclined to try to emulate the consumption patterns of those higher up on the income ladder. When the very rich have wasteful lifestyles, this percolates down to the middle class. They also want to have large houses, powerful cars, etc.
Jeff Bezos has perhaps given us the most extreme example of this story. Being on occasion the richest person in the world, depending on the price of Amazon stock, Bezos has said that he can’t think of anything better to do with his money than to send stuff into space. If recreational space travel becomes a common form of consumption, not only for the very rich, but the aspiring upper middle class, then we will have taken a huge step backward in the effort to save the planet.
The other part of the story is that people are willing to make sacrifices when they perceive them as being shared. One reason for the anger of the French towards the recent rise in gas taxes imposed by President Macron is the perception that Macron is working for the rich. He has cut the top tax rate and the rich in France seem to be doing very well. Policies aimed at reversing the upward redistribution of income of the last four decades, as I lay out in Rigged, could go far towards getting people to accept lifestyles that are less taxing on the environment.
Conclusion: Fighting Growth Is Not a Real Battle, Trying to Save the Environment Is
At the end of the day, it is difficult to see how we help the environment by attacking growth. We need measures that sharply reduce environmental damage. Telling people that we are against growth is not likely to make it easier to adopt environmentally friendly policies. Given the rate of destruction we are seeing, our best efforts may well not be enough, but that doesn’t mean attacking growth will get us there either.
I have an old friend who got married in Los Vegas by an Elvis Presley impersonator. When people asked him why he explained that he got married once before by someone who wasn’t an Elvis impersonator and it didn’t work out.
Of course, this made zero sense (my friend was kidding), but this does seem like Hickel’s anti-growth logic. We may not be able to prevent the destruction of the planet on our current course, but telling people we are against growth does not help matters in any obvious way. FWIW, my friend’s second marriage also ended in divorce.
[1] To be entirely accurate, many of these items are poorly measured in GDP, so they may not be picked up. For example, we pick up treatments for AIDS as a service in GDP. If we can effectively stop the spread of AIDS, so people don’t need treatment, the benefits will not be picked up in GDP as now measured. Similarly, the massive improvements in health resulting from the reduction in smoking over the last four decades are not picked up in GDP.
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