Is Sustainable Growth a Contradiction?

Climate and environment blog

Are growth and sustainable development possible to unite? Or does sustainability require non-existent, or even negative, growth?

Researchers have run a program and studies to bring greater clarity in these contexts.

Four scenarios

There are four scenarios that differ markedly from each other, although this does not prevent the future from proving to be a mixture of several of them.

Growth is usually measured as a change in GDP over time. The measure has its advantages and the value of the total production of goods and services gives a good indication of the economic activity in a country.

There is also a strong link between GDP / Capita and, for example, average life expectancy. However, the relationship is stronger for poorer countries that have not progressed as far in their development.

In more developed countries, there has long been a discussion that other measures are also needed that better describe the quality of life. That GDP measures economic activity, but in many ways is a blunt tool, economists reasonably agree.

In brief, the researchers’ four scenarios are:

  • Collaborative economy. Here the production of goods and services takes place mainly in cooperatives. People become both producers and consumers.
  • Local self-sufficiency. Here, some countries have a high degree of self-sufficiency with reduced imports.
  • Circular economy in the welfare state. The economy is very much based on services while the goods produced are recycled.
  • The state creates conditions and incentives.
  • Quality of life automation. Production is automated and productivity is reduced in shorter working hours. All people have basic security.

Is economic growth a prerequisite for GDP growth?

After the report’s publication, the researchers received some criticism. It focuses primarily on the fact that economic growth has been a prerequisite for the advances in, not least, a technology that makes it possible to handle many of the challenges society faces in the current environment, energy, health and more. Increased GDP provides an increased tax base and room for more welfare.

Personally, I think that our society is characterized by a view that growth is something almost self-evident and that already that relationship makes it interesting to ask how a society without growth can behave. In addition, there is much to indicate that growth will be significantly lower in the future than we have historically become accustomed to. Thus, there are reasons to consider what efforts are needed in a society with lower growth to prevent increased social divisions and increased unemployment.

The problem with equating growth and increase in GDP is that it focuses on traditional commodity production. In a market, however, value is created when a need is satisfied by a consumer, no matter what the need looks like. If the value is so large that it generates a profit from the producer, growth is created. With such an approach, growth and sustainability do not conflict with each other.

Sustainable development

It creates increased productivity and competitiveness. There will be fewer people in production, but those who remain will be given more interesting tasks and hopefully, the others will be able to take on new tasks via skills development.

Transport continues to be a challenge, but smart use of biofuels, continued electrification and better ways of planning communities and logistics solve many problems.

Products will already be made in production so that they will also be easy to reuse or disassemble for recycling of constituents. For example, steel is already in the process of recycling and some companies show that they can produce steel of the highest quality available entirely from “scrap”.

The researchers seem to have a more local perspective throughout, but my belief is that trade and thus long-distance transport will also be important in the future. But even though my simple sketch above is primarily a development of trends we can already see, I want to give the researchers right that it probably will not be enough to make everything a little smarter than today. The sustainability challenges will also require more radical changes. This is hard to say but it is not obvious that they assume that growth is zero.

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