Degrowth Criticism

Yes, please.

Someone forwarded me an article last week, titled Four Problems for the Degrowth Movement. The author is Daniel Driscoll, a Postdoctoral Research Associate at the Rhodes Center for International Economics and Finance at Brown University.

I'm already intimidated.

Dan is a political economist and sociologist who works on climate change. So, he knows his stuff. I recommend checking him out and what he's written if you're interested.

But I was pleased to see that he had taken the time to offer some constructive criticism of the degrowth movement. If you've got Ivy League scholars doing in-depth research and writing on the topic, then that topic must be pretty important.

Over the next couple of posts, I'm going to be addressing the four arguments he makes about the problems facing degrowth. I agree with parts of what he says, and I disagree with parts, but that's all healthy. I encourage more folks to have this kind of discussion about degrowth. It normalizes the idea of degrowth in people's minds. Maybe some of those people will be foolish enough to start a degrowth blog somewhere down the road.

So let me get into it and address Daniel's first concern with degrowth.

1.        Degrowth often confuses correlation for causation and overextrapolates from the past.

Driscoll argues that degrowth assumes that growth automatically means fossil fuel use and that degrowth argues that growth cannot be decoupled from fossil energy use.

I agree that growth doesn’t have to come from fossil fuels, but it still overwhelmingly does. Globally, a little over 80 percent of our energy comes from fossil fuels. That is much lower in some countries, such as France, where nuclear power makes up about 70% of the country's electricity generation. (see below). But in general, we still overwhelmingly use fossil fuels to grow. This percentage is decreasing but at a very slow pace. So, for now, and in the near term, more growth does mean more fossil fuel energy.

In 2021, the IEA reported that global energy demand is growing faster than renewables. As long as energy demand is outgrowing renewable energy growth, we are on the wrong side of that equation. This leads us to Jevons paradox (which I will go into more detail about in a later post). Jevons paradox states that technological progress increases the efficiency with which your resource is used, reducing the amount necessary to use. But this decreases the cost of that resource which increases demand. This means that in the end more of that resource is used. So as our society became more efficient in using fossil fuel energy, we used more of it because we could get more use out of one unit of energy.

The same will be true with “green” energy. The more efficient it gets, the more we will use it. But green energy has its own “environmental footprint”’ problems. Solar panels, wind turbines, EV batteries, and everything else that creates green energy is made of materials that must be mined. Those materials also use energy in their production, and about 80 percent of that energy is still not green.  

We also simply don’t have enough of the materials we need to make the transition to clean energy we need at the speed we need. The personal vehicle fleet in the United States is transitioning to an electric fleet. By 2030 half of new cars sold are expected to be electric vehicles (EVs).     

There is just one problem. We don’t have nearly enough of the metals we need to make these cars. The rechargeable electric batteries in electric vehicles require amounts of graphite, cobalt, vanadium, nickel, lithium, copper, and other metals at levels that are just not available now at the scale we would need them to replace all internal combustion (gas-powered) engines.

If we follow a degrowth path and redesign how we travel, we could need fewer cars overall, and the ones we do use could be EVs or hybrids. Degrowth is needed to address the demand side of the curve.

Just looking at the supply curve is tempting, because that story tells us that we don’t have to change much. We can keep on living as we do, and consuming as we do if we just swap out dirty energy for clean energy.

To be fair, some economies have started to decouple growth from fossil fuel energy, which can be seen in this graphic from the folks at Our World in Data.

Some of that decrease in CO2 per-capita emissions in the developed world, has come from off-shoring some of that production to places like India and China, which have seen an explosion in CO2 use since the beginning of the period measured – 1990.

CO2 emissions in China from 1990 – 2022 went up 5.84 tons per capita, an increase of 271% (data underlying the above chart).

During that same time, emissions from the United States declined by 5.69 tons per capita or a decrease of about 28%.  However, the emissions per capita were still at about 14.95 tons per capita in 2022. That 28% decrease in fossil fuel emissions from the United States is nothing to ignore. But it needs to get far closer to 100% if we are going to avoid some devastating effects of climate change.

Current policies around the globe have us on track for global temperatures that are about 2.5C above pre-industrial levels. That means if all promises that have been made are kept, and all laws and policies on the books don’t get rolled back we can get to a 2.5C world.  I’ve seen numbers higher than that (2.7-2.8) but let’s say that 2.5C is where we are now. That is still too high. That means that those developed markets that have done some of the work to get emissions down to and decouple growth from emissions need to do a lot more.

The title of an article from the IEA earlier this year says it all. The relationship between growth in GDP and CO2 has loosened; it needs to be cut completely.

Degrowth helps with that. Yes, make the supply curve as green as possible. But also lower that demand curve, which is what an economy on a degrowth path can do. The cleanest energy is the energy you don’t use, so if we redesign our travel, our food consumption, and much of the way we live on using less energy, we can bend that emissions curve.

Conclusion

Driscoll is correct in saying that degrowth sometimes confuses correlation for causation and assumes that the 1 for 1 relationship between fossil fuel use and growth that we saw historically continues today and will continue in the future. If anyone says that, whether they are espousing degrowth or not, they are mistaken. We have begun to decouple growth from fossil fuel use. But we are not doing it nearly fast enough.  

Degrowth can't promise that it can solve that problem by itself. But neither can green growth. Both are needed. The objective is to get our global economy and our environment back in a safe space, where we are not damaging our environment at a greater pace than nature can repair it. Getting to that safer place can be done faster if degrowth compliments the “green” energy revolution.  

Much of the discussion around how to tackle climate change in the media and the financial world I come from focuses on green growth because green growth doesn't threaten our economic model.

Degrowth does.

Degrowth calls for a decline in production and consumption to get us to a safe steady state economy. That decline in production and consumption doesn't fit well in a capitalist system that calls for constantly growing GDP. That’s why you see much more about green growth in the media than you will degrowth. It isn’t a conspiracy. It is just people acting in what they perceive to be their self-interest. They perceive the status quo that makes them relatively rich and comfortable as preferable to a degrowth narrative that asks us to fundamentally change how they live.

Unfortunately, the green growth story can’t get us to where we need to be with the speed with which we need to get there. Degrowth is needed to complement green growth and help us get to a steady state economy faster.

It's a welcome sign to see these discussions about degrowth are making their way more into the mainstream academic discussion of economics. My thanks to Daniel Driscoll for advancing that discussion.