Alternatives to Growth-Centric Development

Alternatives to Growth-Centric Development TABLE OF CONTENTS 1. INTRODUCTION................................................................................................................... 3 2. WHAT IS GROWTH-CENTRIC DEVELOPMENT? ....................................................... 4 3. WHY MIGHT WE NEED TO MOVE AWAY FROM GROWTH-CENTRIC DEVELOPMENT? ................................................................................................................. 6 3.1 Exceeding the Earth’s Limits ......................................................................................................... 6 3.2 Growing Economic Inequality ....................................................................................................... 9 4. WHAT ARE THE ALTERNATIVES? .............................................................................. 14 4.1 Perspectives from the Global North ............................................................................................ 15 4.2 Perspectives from the Global South ............................................................................................ 20 5. GETTING BEYOND GROWTH .......................................................................................... 23 5.1 Measure success differently ......................................................................................................... 24 5.2 Reduce consumption and production .......................................................................................... 28 5.3 Provide social safety nets and redistribute wealth ..................................................................... 32 5.4 Change ownership structures ....................................................................................................... 35 5.5 Use communal management of natural resources ..................................................................... 37 6. CONCLUSION: PROMOTING ALTERNATIVES ........................................................... 40 KEY TERMS AND CONCEPTS .............................................................................................. 44 REFERENCES............................................................................................................................ 49 1. INTRODUCTION Current patterns of economic development are strongly related both to increasing carbon emissions and other environmental impacts and to high levels of inequality. In responding to these global problems, it may be necessary to rethink some of the fundamental assumptions underlying economic growth. This module examines the implications of this reassessment both for economic theory and practice. Recent reports by the Intergovernmental Panel on Climate Change (IPCC) have virtually eliminated any doubts that human economic activities are affecting earth’s climate. Emissions of various greenhouse gases, particularly carbon dioxide (CO2), trap heat near the earth’s surface, leading not only to a general warming trend but to sea-level rise, ecological disruption, and an increase in severe weather events, such as hurricanes, floods, and droughts.1 According to the World Scientists’ Warning of a Climate Emergency, “the climate crisis is closely linked to excessive consumption of the wealthy lifestyle. The most affluent countries are mainly responsible for the historical GHG emissions and generally have the greatest per capita emissions. . . Profoundly troubling signs from human activities include sustained increases in both human and ruminant livestock populations, per capita meat production, world gross domestic product, global tree cover loss, fossil fuel consumption, the number of air passengers carried, carbon dioxide (CO2) emissions, and per capita CO2 emissions since 2000.”2 Though almost all countries have pledged to reduce their emissions to combat global temperature rise by signing the global Paris Agreement,3 most still place a priority on economic growth. Global GDP is currently greater than it has even been, with approximately 100 trillion dollars’ worth of goods and services being produced and sold around the globe each year. At the same time, despite recent economic growth, inequality is still prevalent, with 1% of the world’s population holding nearly half of the wealth. 11% of the global population still lives in extreme poverty, and undernourishment has actually increased in recent years after a period of steady decline.4 The issues of climate change and inequality are not unrelated, as a recent study found that climate change is already increasing global income inequality, and this trend will only get worse as climate change accelerates.5 Further, the recent increase in global undernourishment is attributable in part to an increase in climate related disasters.6 In response to the combination of environmental issues, especially the climate crisis, and unequal distribution of the benefits of economic development, some economists have turned away from the mainstream idea that economic growth is the primary goal of any economy, and instead started to examine alternatives that may be more compatible with both environmental protection 1 IPCC, 2018. Ripple et al., “World Scientists’ Warning of a Climate Emergency,” BioScience, November 5, 2019. 3 The Paris Agreement is a coordinated global response to curb emissions and keep global temperature rise below 2°C. The agreement allows each country to create their own Nationally Determined Contributions (NDCs) which are based on equity with an understanding that developing countries will take a longer time to reach peak emissions. 4 United Nations, 2018. 5 Diffenbaugh and Burke, 2019. 6 United Nations, 2018. 2 and equity. This module presents a brief history of growth-centric development and its alternatives. It introduces several of the main growth-centric alternatives, by outlining some of the key overarching principles of these various theories and providing examples of these principles in practice in both the developed and developing world. The module concludes with some of the main challenges these alternative approaches to development face in becoming mainstream, and suggestions for moving forward. 2. WHAT IS GROWTH-CENTRIC DEVELOPMENT? A growing economy is typically considered to be primary measure of the well-being of a country, and the main goal for development. The term economic growth refers to an increase in output (production of goods and services) over time. Economists measure output of a society using gross domestic product (GDP). While it is widely recognized that GDP does not measure human wellbeing, both economists and policy makers often assume that an increase in GDP corresponds to an increase in welfare. Increasing economic production has always been a core concern of the discipline of modern economics. The level of growth that is considered both desirable and feasible, however, has varied as economics has evolved and branched out into a variety of sub-disciplines. Classical Economics Since the emergence of the discipline of economics in the late 1700s, scholars have raised concerns related to whether, how long, and under what conditions the earth’s resources would be able to sustain growing human populations. Thomas Malthus was one of the earliest economists to talk about these limits. Malthus believed that the power of population growth was ultimately greater than the power of the earth to produce subsistence for humans, and that as a result natural resources would not be able to keep up with unchecked population growth. While other early economists contributing to the field known as Classical Economics, including Adam Smith and David Ricardo were not as concerned as Malthus, they still recognized that there was a limited amount of fertile land suited for production and treated land as a special case of a non-substitutable factor of production that limited growth. While most Classical economists did focus on capitalism and the need for the growth of the economy, many, including Smith and John Stuart Mill, believed that once a certain level of output per capita had been attained the economy would naturally settle into a “stationary state”, with a constant population and constant stock of capital. Mill described the stationary state as both a natural and desirable progression of capitalism after sufficient levels of wealth were accumulated. He also noted that even though quantitative development, in the form of production and wealth may not increase in this stationary state, qualitative development, in the form of improved human well-being, should still occur through educational and cultural progress. Neoclassical Economics With the transition from Classical Economics to Neoclassical Economics in the mid-1800s, the concepts of the stationary state and of land as a limiting factor to growth were largely forgotten. Many of the philosophical, sociological, and anthropological aspects of classical economics were also left behind. The discipline instead became focused on creating universal mathematical models and theories to describe the economy, with the primary goals of maximizing utility of the individual by increasing consumption (in microeconomics) and maximizing output, or GDP of the nation (in macroeconomics). In the effort to create simplified, universal models, land and natural resources lost their role as non-substitutable limiting factors to growth. Instead they became treated as perfectly substitutable inputs (substitutes) along with capital and labor. A Focus on Economic Growth and Market Expansion The focus on economic growth intensified in the late 1940s in the post-World War II era. This era, often known as the “Golden age of capitalism” was an area of rapid growth and low unemployment in United States as well as Western Europe and Eastern Asia. The returning labor force combined with a strong manufacturing climate, recent developments in automation, and high government spending on infrastructure development created substantial increases in production and subsequently GDP. As incomes rose, consumption increased, and the use of fossil fuels and natural resources expanded rapidly. The end of World War II also led to the meeting of delegates from 44 allied nations known as the Bretton Woods Convention, resulting in the formation of International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (a member of the World Bank Group). The purpose of these organizations was to stabilize exchange rates, while promoting international economic corporation, free trade, and to stimulate reconstruction and economic development. In addition to promoting growth in the Global North, this also advanced the integration of the economies of the Global South into the world economy, promoting capitalism and modernization. Figure 1. Total output of the world economy (adjusted for inflation and expressed in international $ in 2011 prices) Source: World GDP – Our World in Data. In the 1970s and 80s, neoliberalism also emerged as a primary theory of neoclassical economics, furthering the emphasis on free trade and free markets as the best way to promote growth. The primary concepts of neoliberalism include promoting privatization of state-owned enterprises, and freeing businesses from government regulation. Neoliberal policies include the encouragement of free trade, breaking up labor unions, and eliminating price controls. They also favored privatization of public goods and reducing public expenditure on services like education and healthcare, instead putting the focus on market incentives and individual responsibility. Since the end of WWII, global GDP has increased 10-fold (Figure 1) and mainstream economics remains dedicated to the primary goal of continuing this GDP growth around the globe. 3. WHY MIGHT WE NEED TO MOVE AWAY FROM GROWTHCENTRIC DEVELOPMENT? Today, there are increasing signs that the biosphere as a whole is affected in its regulation of biological and geophysical processes by the current scale of human activities. As society has moved from a relatively “empty world” in which human activity was small relative to overall planetary processes to a relatively “full world” in which human activity dominates the planet, an exclusive emphasis on economic growth could produce serious, and possibly irreversible, ecological damage.7 At the same time, overall economic growth has failed to bring wealth and improvements in well-being to many around the globe. 3.1 Exceeding the Earth’s Limits Ecologists have developed several approaches for assessing the overall scale of human economic activity relative to the planetary carrying capacity. These assessment approaches consistently show that we are living beyond the limits of our planet. Two of these approaches: The Planetary Boundaries Approach, and Ecological Footprint Approach are introduced below. Planetary Boundaries The Planetary Boundaries Approach, first developed by the Stockholm Resilience Center in 2009, is a method of evaluating the earth’s limits and current capacity, considering nine earth system processes. These include: 1. 2. 3. 4. 5. 6. 7. 8. 7 See Daly, 1996. Stratospheric ozone depletion Loss of biosphere integrity (biodiversity loss and extinctions) Chemical pollution and the release of novel entities Climate change Ocean acidification Freshwater consumption and the global hydrological cycle Land system change Nitrogen and phosphorus flows to the biosphere and oceans 9. Atmospheric aerosol loading For each earth system process an environmental boundary is determined, designating at what point we move from a safe operating space into a zone of uncertainty or high risk. Figure 2 shows the boundaries for each process relative to current impacts. Due to the complex nature of some of these systems, and the high level of uncertainty of how critical they are to maintaining current ecosystem function, planetary boundaries have not been quantified for three of these categories: atmospheric aerosol loading, chemical pollution and the release of novel entities, and functional diversity (a sub category of biodiversity). Figure 2. Planetary Boundaries Source: Steffen et al. 2015. Figure 2 shows that as of 2015, two boundaries—nitrogen and phosphorous flows, and loss of biosphere integrity (biodiversity)—have already been crossed; while two others—climate change and land system change—are in the zone of uncertainty or increasing risk. Ecological Footprint Another approach for assessing the relationship between human economic activity and natural capital is the ecological footprint (EF) measure. The premise of this approach is to convert all human impacts into equivalent units of biologically productive land area. In other words, a person’s ecological footprint is the amount of land required to support his or her lifestyle, considering both the resources required to support one’s consumption and to adequately assimilate one’s wastes back into the environment. Some impacts convert easily to land-area footprints. For example, demand for meat converts to pasture area needed to raise livestock. Other impacts are more difficult to translate to land-area equivalents. For instance, carbon dioxide emissions from burning fossil fuels are accounted for in the EF approach based on the area of vegetation that would be required to absorb the carbon emitted. Calculation of a country’s ecological footprint requires data on more than 100 factors, including demand for food products, timber, energy, industrial machinery, office supplies, and vehicles. Comparing a nation’s ecological footprint to its land area (adjusted for its ecological productivity, or its biocapacity) provides information on whether it is living within its ecological limits. The EF for each country is calculated on a per-capita basis, as is each country’s biocapacity. An EF above a country’s biocapacity suggests that it is on an unsustainable path. EF can also be calculated on a global level (Figure 3). The total global EF surpassed total earth biocapacity around 1970, and has been rising ever since (with a brief reduction during the 2008 recession). Currently about 60% of the world’s ecological footprint is due to emissions of carbon dioxide (the gas most responsible for human-induced climate change), 20% is due to growing crops, and 10% is due to harvesting forest products. Figure 3: Global Ecological Footprint, 1961-2014 Source: Global Footprint Network 2018 National Footprint Accounts 3.2 Growing Economic Inequality Despite the tremendous overall growth of the economy that has occurred over the past 75 years, we are still failing to improve well-being for many groups. Figure 4 below shows that with the exception of the Middle-East, Sub-Saharan Africa, and Brazil, the share of the total national income held by richest 10% of the population has increased in most regions across the globe since the 1980s. The Middle East, Brazil, and Africa have extraordinarily high inequality, and it appears that other areas may be moving towards this “high-inequality frontier”.8 According to the World Inequality Report 2018, “the poorest half of the global population has seen its income grow significantly thanks to high growth in Asia (particularly in China and India). However, because of high and rising inequality within countries, the top 1% richest individuals in the world captured twice as much growth as the bottom 50% of individuals since1980.”9 This extreme inequality suggests that the current model of growth-centric development is concentrating too much wealth at the top. A more balanced approach would focus on improving well-being by providing human services such as education and health care, and helping people in developing nations to protect local environments and maintain control of resources that have been exploited for economic gain by the world’s high earners. Figure 4: Top 10% income shares across the world, 1980–2016 Source: World Inequality Report 2018. 8 9 World Inequality Report, 2018, Executive Summary. Ibid. Inequality within Countries Intra-country economic inequality (i.e. inequality within a country) can be measured by either looking at income inequality or wealth inequality. Income refers to salaries and other incomes earned by individuals each year, while wealth refers to the monetary value of all of an individual’s assets (property, savings, stocks, vehicles, etc.) An individual with a lot of debt may have zero, or negative wealth. To measure the level of intra-country inequality, economists use a statistic called the Gini coefficient. The Gini coefficient is a measure of income distribution within a country, with zero representing complete equality (everyone has equal income levels) and 1 representing complete inequality10 (one person receives all of the income). There is great variation in levels of inequality across the globe, ranging from lower levels of inequality in many of the Slavic and Scandinavian countries (around 0.23) to higher levels in the southern African countries (around 0.61).11 On average, countries across the globe have seen increasing levels of intra-country inequality over the past 30 years. Growth in inequality has been especially high in higher income countries,12 while it has actually fallen in many Latin American countries, though this region still remains the most unequal in the world.13 Figure 5: The Global Wealth Pyramid, 2019 Source: Credit Suisse, Global Wealth Report 201914 10 Gini coefficient can be either expressed on a 0-1 scale, or 0-100% scale. CIA World Factbook. 12 Toth, 2013. 13 Oxfam, 2019. 14 https://www.credit-suisse.com/about-us-news/en/articles/media-releases/global-wealth-report-2019--globalwealth-rises-by-2-6--driven-by-201910.html 11 Measures of wealth distribution generally show significantly higher inequality than income distribution. According to the Global Wealth Report 2019, less than 1% of the global population own 44% of the world’s wealth, while the bottom 50% own less than 2% of global wealth (see Figure 5). In the United States,” wealth has become more concentrated since at any time since the "Roaring" 1920s, according to economist Gabriel Zucman. The richest 1% of Americans currently own a whopping 40% of total household wealth.”15 The growing gaps in income and wealth within countries have been driven in part by a long history of systemic racism with policies aimed at serving only the wealthy, often white, population. The effects of these policies have been compounded over time, with racial wealth disparity growing in many countries. In the United States, for example, the median white family now has 41 times more wealth than the median black family, and 22 times more wealth than the median Latino family. Other forms of racial and ethnic income and wealth disparity are present in countries across the globe. Since European colonization in the 15th century, many native and indigenous peoples have lost control of land and their natural resources, setting them behind on the development path. A national survey of ten countries in Latin America, Asia, and Africa found that indigenous people are poorer than non-indigenous people in all countries sampled, and that the wealth gap between indigenous and non-indigenous groups has been growing over the past 20 years.16 Ongoing efforts to “modernize” traditional societies by encouraging them to focus on incorporation into the global system have failed to generate economic growth for this sector of the population, while simultaneously stripping away many aspects of culture and society that contributed to their well-being. Inequality between countries Though global inequality persists, there has been some decline in inter-country inequality (inequality between countries) in the past 20 years as gains have been made in moving people out of absolute poverty.17 Worldwide, the number of people living in extreme poverty (less than $1.25 per day) has dropped from 1.9 billion people in 1980 to 836 million in 2015.18 The world Gini coefficient has declined from a high of around 0.74 in 1975 to 0.63 in 2010.19 There has been a growth in the “global middle class”, but at the same time the gains from economic growth have failed to reach many people in rural and less developed areas. As result, the share of global income going to the bottom 50% globally has barely changed over the last several decades, while the share going to the top 1% has increased significantly (Figure 6). Mainstream economic theory supports the idea that increased incorporation into the global economy and producing for export will help countries in the Global South to achieve economic growth, but there are a number of alternative theories that dispute this. For example, dependency 15 da Costa, 2019. Hall and Patrinos eds., 2012. 17 Roser, 2016. 18 United Nations, 2017. 19 Niño-Zarazúa, Roope, and Tarp, 2017. 16 theory argues that development of the dominant countries of the Global North was based on active underdevelopment of the dependent (peripheral) countries in the Global South. Figure 6: Rise of the top 1% and stagnation of the global bottom 50%, 1980-2016 Source: World Inequality Report 2018 According to dependency theory, the dominant countries that make up the world’s economic and financial centers have extensive control over capital, finances, and technology. They are also able to purchase land and extract resources in the peripheral countries, relying on extremely cheap labor provided by local residents. Through international trade that favors the dominant countries, surplus generated in underdeveloped countries is transferred to the dominant countries, helping to strengthen both their surplus and their control over these underdeveloped economies. This results in a loss of productive resources in the peripheral countries, as well as an exploitation of labor that prevents the development of their own internal markets and technical capacity.20 Proponents of dependency theory argue that the lack of development in these countries is therefore not due to a lack of integration into the global capitalist system, but rather a result of it. This theory, popular in the 1970s largely fell out of favor with the rise of neoliberal economics in the 1980s, but some components of it remain relevant today in investigating issues of inter-country global inequality.21 Shifting the focus of economic development away from increasing global income and wealth to focusing on improving the well-being of the world’s poorest could help to continue the downward trend in inter-country inequality, while also reversing the recent growth in intra-country inequality. 20 21 Dos Santos, 1970. INET, 2017. Pollution inequality It is not surprising that individuals with higher incomes make a greater contribution to global emissions and pollution levels. Larger homes, car ownership, international travel, and higher levels of consumption of all types of goods all contribute to a larger ecological footprint. Figure 7 below shows results from a 2015 Oxfam study that found that worldwide the richest 10% of the population is responsible for almost half (49%) of carbon dioxide emissions, while the poorest 50% contribute only 10%. Another study looking at individual lifestyles found that income level was the single greatest predictor of carbon footprint, and that increases in income outweighed pro-environmental behaviors like recycling or purchasing energy efficient appliances.22 Figure 7: Percentage of CO2 Emissions by World Population Source: Oxfam, 2019. Despite being the primary emitters of carbon dioxide, the world’s top earners often don’t have to bear the environmental costs of the pollution they create. The economic growth that has occurred for the top 10% of the population has not only not failed to reach the world’s poor, it has actually further diminished the quality of life for low income communities and minority ethnic groups by exposing them increased air and water pollution, and toxic wastes created by the wealthy. As with economic inequality, there is both inter and intra-country pollution inequality. For example, the United States and Canada are the largest producers of solid waste per capita, but much of the waste generated there is exported to countries with poor environmental regulations 22 Moser and Kleinhuckelkotten, 2016. for disposal.23 Figure 8 below shows the flow of electronic waste from high waste producers in the Global North (US & Canada, and Europe) to the Global South. Figure 8: Global E-Waste Flow. Source: Zhaohua, W., Bin, Z., & Dabo, G. (2016). In addition to developed countries exporting waste to developing countries, pollution generating activities including manufacturing, electricity production, and mining often occur in lower-income areas and regions populated with minority racial and ethnic groups. In the United States, for example, non-white people face higher exposure to particulate matter air pollution than white residents in all but four states and Washington, D.C.24 4. WHAT ARE THE ALTERNATIVES? With growing concerns for the environment and equality, there are a variety of alternative theories that move away from economic growth as the central focus for development and well-being. Though many of these theories are more recent Western developments, they often draw from concepts presented in classical economics, or in the religions and policies of other cultures. These theories range from a complete rejection of growth (and a shift to degrowth or a steady state) to a focus on shifting the patterns and content of industrial expansion (green growth). 23 24 Kaza et al., 2018. Mikati et al., 2018. 4.1 Perspectives from the Global North Steady State Economy The theory of the steady state economy suggests that once an economy reaches a size where human needs are being met within the ecological limits of the environment, neither growth nor degrowth in terms of the consumption of material and energy resources should occur. The concept of the steady state economy, as noted above, goes back to classical economists such as J.S. Mill, but was revived in the 1970s by economist Herman Daly. In Daly’s vision of a steady state economy the stock of manufactured capital is kept constant, though GDP does not necessarily remain constant. Economic activities that involve no resource consumption or that are environmentally neutral or environmentally friendly, including services, arts, communication and education activities, could grow indefinitely. One major difference between the classical view of the stationary state and the modern steady state is that while classical economists believed the transition to a stationary state would be a naturally occurring process, Daly argues that major government intervention will be required to make this transition. Daly proposes intervention in the form of redistribution of income, population limitation, and control of capital by limiting the flow of natural resources into the economy and the flow of wastes associated with production (he defines the combined flows as throughput of resources and wastes). Figure 9: The transition to a steady state economy Daly was one of the founders of the field of Ecological Economics, which emerged in the mid1980s. In addition to the concept of the steady state economy, one of the main theories of this field that differentiates it from neoclassical economics is the recognition of limits to growth due to the fact that the economy itself is not independent, but instead a subsystem of the finite ecosystem. Following Daly’s approach, ecological economists are skeptical of the benefits of further economic growth. They argue that beyond a certain point the marginal benefits of growth are outweighed by the increasing marginal costs to the environment. Once economic production passes ecological thresholds or over-depletes resources, it becomes uneconomic growth, which is not only unsustainable but also harmful to overall wellbeing. Another main principle of ecological economics is the concept that economic theory must be grounded in biophysical reality, where the economy is bound by the energy limitations described in the laws of thermodynamics. One of the major contributors here, Nicholas Georgescu-Rogen, was an early contributor to another growth alternative theory known as degrowth. Degrowth The degrowth movement is another movement that challenges the idea that economic growth should be the primary focus of development. Degrowth can be defined as equitable downscaling of production and consumption that increases human well-being and enhances ecological conditions at the local and global level, in the short and long term.25 The concept was first introduced in the 1970s, with the publication of The Limits to Growth in 1972. The Limits to Growth is a report commissioned by the Club of Rome that contained the results of a computer simulation of economic and population growth with a finite supply of resources. The simulation and associated report were a collaboration between a team of 17 scientists, and predicted that ongoing upward trends in human population growth, resource use, and pollution would have dire consequences for humans and the planet. The report made a call to limit economic activity to within the biophysical limits of the planet. Though the term was coined in the 1970s, the movement remained out of mainstream economics for the next 35 years, gaining interest again during the global financial crisis of 2007-2008. In 2008, 140 multidisciplinary scientists gathered in Paris for the first conference on degrowth. The conference was a response to the environmental, social and economic crisis of the time. The main result of this conference was the development of the Paris Degrowth Declaration. The declaration describes the reasons degrowth is needed, while laying out core principles for a paradigm shift. The declaration also introduces the idea of “Right-Sizing” the global and national economies, which means that a mix of degrowth in the wealthier parts of the world, growth in the Global South and redistribution of wealth will be needed to achieve a desirable outcome. The declaration concludes with a call for further progress: “Progress towards degrowth requires immediate steps towards efforts to mainstream the concept of degrowth into parliamentary and public debate and economic institutions; the development of policies and tools for the practical implementation of degrowth; and the development of new, nonmonetary indicators (including subjective indicators) to identify, measure and compare the benefits and costs of economic activity, in order to assess whether changes in economic activity contribute to or undermine the fulfilment of social and environmental objectives.” 25 Schneider, Kallis, and Martinez-Alier, 2010. Since the Paris meeting, an international degrowth conference has been held every two years to further the theories, and develop concrete proposals for political action. Many of these policies are discussed in Section 5 below. The concepts of steady state and degrowth are complementary, as degrowth can be considered a process, with an end goal of a steady state economy.26 While Figure 9 above shows how a developing economy could transition to steady state, with high initial growth followed by deceleration and an eventual plateau, Figure 10 below represents how many economies will need to go through a phase of degrowth before settling into a steady state that is within the carrying capacity of the earth. Figure 10: The Degrowth Transition to a Steady State Economy Source: O’Neill, 2012. Green Growth Contrary to steady state and degrowth approaches, the green growth approach deems growth of GDP as both necessary and desirable, but recognizes that effort should be undertaken to achieve this growth in industries that help increase efficiency of resource use while reducing pollution. Green Growth approaches see economic growth as the key driver for improving standards of living, as well as for generating the necessary funds for conservation and environmental initiatives. But in the Green Growth perspective, more goods can be produced with less resources, waste, and pollution, through improved eco-efficiency. Examples of green growth at the national level can include things like investing in renewable energy development, infrastructure improvements that promote public transportation use, and use of ecolabeling to promote organic and biodynamic agricultural practices. Though all of these 26 O’Neill, 2012. practices can also be used in pursuing degrowth strategies, the continued focus on growing the economy is what differentiates their use here. One of the core principles behind green growth is that pollution and environmental destruction must be decoupled from growth of GDP. An example of decoupling of economic growth from emissions growth is shown in Figure 11, which presents GDP and carbon dioxide (CO2) emissions in the United Kingdom over the last several decades. We see that the UK economy has expanded by a factor of about 2.6 since 1970, but that CO2 emissions have declined by over 35%. Unfortunately, the situation in the United Kingdom, which was able to take advantage of new discoveries of natural gas to reduce coal consumption, cannot be easily replicated elsewhere. Further, many of the gains made in the UK were a result of exported pollution, where the country imported goods that were carbon intensive to produce, simply transferring their pollution to other countries. Increased use of imported biodiesel fuel is a prime example of this kind of pollution transfer, as production and refining of biofuels often involves clear-cutting forests, and use of heavy machinery for processing. At the global level, we see little evidence of decoupling in the case of carbon emissions. Figure 11: Decoupling in the United Kingdom, Real GDP vs. CO2 Emissions, 1970-2014 Source: World Bank, World Development Indicators Another example of green growth is the United Nations Environment Programme (UNEP) Green Economy Initiative, launched in 2008. UNEP defines a green economy as: “one that results in improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities. In its simplest expression, a green economy can be thought of as one which is low carbon, resource efficient and socially inclusive.” UNEP has developed a complex model to analyze the economic and environmental impacts of directing investments to promote a transition to a green economy. They consider a green scenario where 2% of global GDP is invested in various ways to promote sustainability, including energy efficiency, renewable energy, waste management, infrastructure improvements, agricultural production methods, and water management. They compare the results of this green economy scenario to a business-as-usual (BAU) scenario where investment rates follow existing trends. The results are shown in Figure 12. In the short-term (2015), the green economy scenario results in about 1% lower real GDP and lower GDP per capita. But in the longer term the green economy shows substantially better economic performance than the BAU scenario. By 2050 real GDP in the green economy scenario is 16% higher than in the BAU scenario. The environmental differences between the two scenarios are initially small, but become dramatic over the following decades. By 2050 global energy demand is 40% lower in green economy scenario, and the ecological footprint is 48% lower.27 Figure 12: Environmental and Economic Projections, Green Economy Scenario versus Business-As-Usual Source: UNEP, 2011. 27 UNEP, 2011.