Can we save the planet by shrinking the economy?

Most of the world is very poor. Billions of people go hungry, can’t afford a doctor when they get sick, don’t have adequate shelter and sanitation, and struggle to exercise the freedoms essential to a good life because of material deprivation.

But for all the immiseration around us, one thing is undeniable: For the past several centuries — and especially for the past 70 years, since the end of World War II — the world has been getting much richer.

That economic boom means a lot of things. It means cancer treatments and neonatal intensive care units and smallpox vaccines and insulin.

It means, in many parts of the world, houses have indoor plumbing and gas heating and electricity. 

It means that infant mortality is down and life expectancies are longer.

But an increasingly wealthy world also means we eat more meat, mostly from factory-farmed animals. It means we emit lots more greenhouse gases. It means that consumers in developed countries buy a lot and throw away a lot. 

In other words, it means a lot of good things and certainly some bad things as well.

Mainstream climate and environmental policy has developed over the years with a certain assumption — that we can get rid of the bad things while still preserving the good things. That is, it’s sought to figure out how to reduce carbon emissions, preserve ecosystems, and save endangered species while continuing to improve material living conditions for everyone in the world.

But to a vocal slice of climate activists, that approach seems increasingly doomed. The degrowth movement, as it’s called, argues that humanity can’t keep growing without driving humanity into climate catastrophe. The only solution, the argument goes, is an extreme transformation of our way of life — a transition away from treating economic growth as a policy priority to an acceptance of shrinking GDP as a prerequisite to saving the planet.

At the core of degrowth is the climate crisis. Degrowth’s proponents argue that to save Earth, humans need to shrink global economic activity, because at our current levels of consumption, the world won’t hit the IPCC target of stabilizing global temperatures at no more than 1.5 degrees of warming. The degrowth movement argues that climate change should prompt a radical rethinking of economic growth, and policymakers serious about climate change should try to build a livable world without economic growth fueling it. 

It’s a bold, even romantic vision. But there are two problems with it: It doesn’t add up — and it would be nearly impossible to implement. 

Addressing climate change will take genuinely radical changes to how our society works. Stirring as it might be to some, though, degrowth’s radicalism won’t fix the climate. Degrowth is most compelling as a personal ethos, a lens on your consumption habits, a way of life. What it’s not is a serious policy program to solve climate change, especially in a world where billions still live in poverty. 

The basics of degrowth

Pinning down what degrowth means can be tricky because degrowthers often differ on details. But there are some common threads to their thought. 

In general, degrowthers believe that in the modern world, economic growth has become unmoored from improvements in the human condition. 

Jason Hickel, an anthropologist at the London School of Economics and the author of Less Is More: How Degrowth Will Save the World, has emerged as one of the leading spokespeople for the movement. To Hickel, the case for degrowth goes like this: The world is producing too much greenhouse gases. It is also overfishing, is overpolluting, is unsustainable in a dozen ways, from deforestation to plastic accumulating in the oceans.

Scientists have made impressive progress on technologies that, he argues, should have been sufficient to address the climate crisis — think solar panels, meat alternatives, eco-friendly houses. But because wealthy societies are so focused on growing the economy, those gains have been immediately plowed back into the economy, producing more stuff for the same ecological footprint, yes, but not actually shrinking the ecological footprint.

Hickel argues that this problem is unsolvable within our current framework. “In a growth-oriented economy,” he writes in Less Is More, “efficiency improvements that could help us reduce our impact are harnessed instead to advance the objectives of growth — to pull ever-larger swaths of nature into circuits of extraction and production. It’s not our technology that’s the problem. It’s growth.”

His solution? To abandon the lodestar of economic policy in nearly every country, which is to aim for economic growth over time, increasing wealth per person and expanding the ability of their citizens to purchase the things they want and need. Instead, Hickel argues, rich countries should focus on getting emissions to zero — even if the result is a much-contracted economy. 

If that sounds unappealing, he devoted much of the book — and much of our interview — to arguing that it wouldn’t be. He points out that some countries, like the United States, are rich but get very little for their spending, in terms of national well-being; poorer countries like Spain have better health care systems. He argues that current levels of well-being could be maintained at a tenth of Finland’s current GDP — assuming that society also adopted wide-scale redistribution and socialist labor policies. 

At the heart of Hickel’s argument is an idea that divides degrowthers and their critics: the concept of “decoupling” growth from environmental impact. Hickel and his fellow degrowthers are skeptical that economic growth as we know it can ever truly be achieved without accompanying growth in emissions. 

But critics argue that not only is it possible — it’s already been happening. For the past decade, as many countries have transitioned to green energy, they have successfully seen their emissions shrink while their GDP has grown.

The tension at the heart of degrowth: Can we fix global poverty without economic growth?

One big problem with degrowth is this simple fact: In the coming decades, most carbon emissions won’t be coming from rich countries like the US — they’ll be happening in newly middle-income countries, like India, China, or Indonesia. Already, developing nations account for 63 percent of emissions, and they’re expected to account for even more as they develop further and as the rich world decarbonizes. 

Even if emissions in rich countries go to zero very soon, climate change is set to worsen as poorer countries increase their own emissions.

That will, of course, have deeply negative climate impacts. But the alternative is a nonstarter — should the world really prioritize curbing emissions and economic growth if it meant suppressing the growth of those countries?

Degrowthers see no dilemma here. What Hickel envisions is global movement in two directions: Poor countries could develop up to a certain level of prosperity and then stop; rich countries could develop down to that level and then stop. Thus, climate catastrophe could be averted, all while making the world’s poor more prosperous.

“Rich countries urgently need to reduce their excess energy and resource use to sustainable levels so our sisters and brothers in the global South can live well too,” Hickel put it. “We live on an abundant planet and we can all flourish on it together, but to do so we have to share it more fairly, and build economies that are designed around meeting human needs rather than around perpetual growth.”

From a climate change perspective, though, there’s a problem. First, it means that degrowth would do nothing about the bulk of emissions, which are occurring in developing countries.

Second, the global economy is more interconnected than Hickel implies. When Covid-19 hit, poor countries were devastated not just by the virus but by the aftershocks of virus-induced slowdowns in consumption in rich countries. 

There’s some genuine appeal to the idea of an end to “consumerism,” but the pandemic offered a taste of how a sudden drop in rich-world consumption would actually affect the developing world. Covid-19 dramatically curtailed Western imports and tourism for a time. The consequences in poor countries were devastating. Hunger rose, and child mortality followed. 

Covid-19, of course, wreaked direct economic havoc at the same time, with lockdowns having an especially negative impact on some poor countries; the effects of the pandemic and international demand shock were combined, and in some cases they’re hard to separate. But the United Nations, the World Bank, and expert analyses point to the decline in global consumption as a significant part of the picture.

Degrowthers reject this concern on two fronts: First, they argue that a sustained, deliberate reduction in consumption wouldn’t be anything like a recession. Recessions, they agree, are really bad, but that’s because consumption falls in affected sectors, instead of being targeted at things that don’t improve well-being. Degrowth, they say, would be different. 

Second, they contend that there is some path to economic growth in poor countries that doesn’t rely on trade with rich ones — certainly some countries managed economic growth when the whole world was poor, after all. 

Hickel’s perspective is that most trade between rich and poor countries is extractive, not mutually beneficial — and that maybe when that dynamic ceases, poor countries will have the chance for the catch-up growth they merit. That’s one take. But it means that degrowth’s case for not crushing the poor world is predicated on a speculative take on how those countries can grow — one that democratically elected leaders in those countries largely don’t share.

What GDP doesn’t capture — and what it can tell us 

In a way, the debate over degrowth is a debate over the meaning of one economic indicator: gross domestic product (GDP). 

GDP measures the transactions within an economy — all the occasions when money changes hands in exchange for goods and services. It’s not wealth, but it’s one of the primary ways we measure wealth. 

It certainly doesn’t capture everything of value. When parents spend a quiet weekend at home teaching their children to read, for example, nothing GDP-generating has happened — but value has certainly been created. 

Degrowth articles burst with such examples. GDP, they love to point out, includes the production of things like nerve gas, even though that has no social value. And it doesn’t include storytelling, singing, gardening, and other simple human pleasures. 

“If our washing machines, fridges, and phones lasted twice as long, we would consume half as many (thus the output of those industries would decline), but with zero reduction in our access to those goods,” Hickel told me. If everyone worked half the hours they currently do, and made half the income, they might mostly be better off — at least, assuming that their basic needs were still met. 

“We propose policies like a living wage, a maximum income ratio, wealth taxes, etc. to accomplish this,” Hickel told me. “Given all of this, the language of poverty really gets it wrong: longer-lasting products, living wages, shorter working weeks, better access to public services and affordable housing — we are calling for the opposite of poverty. Yes, industries like SUVs and fast fashion would decline, but that doesn’t mean poverty. We can replace them with public transportation and longer-lasting fashion, thus meeting everyone’s needs.”

There’s a lot of speculation here, and a lot of what degrowth’s critics would call hand-waving. Degrowth is fundamentally premised on the claim that we can cease to focus on growth while getting better than ever at addressing human needs. If that’s true, then that would certainly be great news. 

But in many ways, it’s a vision more wildly optimistic — disconnected from actual policy results — than any of the more standard “sustainable development” models degrowthers criticize for being out of touch.

First, in the world today, there’s an extremely strong association between growth and welfare outcomes of every kind. GDP, while imperfect, is a better predictor of a country’s welfare state, outcomes for poor citizens in that country, and well-being measures like leisure time and life expectancy than any other measure. 

“GDP does leave out non-commercialized activities that are welfare-enhancing,” economist Branko Milanovic writes in a rebuttal of degrowth