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Lancaster University
MSc Energy and the Environment
Student: Sarah Phillipson
Tutor: Professor Nigel Clark
18 April 2016
LEC 406 Climate Change and Society
Essay: Is incessant economic growth and a secure climate future possible?
Source: http://thewalrus.ca/the-rising-tide/

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Context
Growth has been the single most important policy goal across the world for the last century. GDP is the
dominant metric by which governments are judged; indeed, our political and economic systems “eat and
breath the language of growth” (Berners-Lee and Clark 2013). However a huge body of evidence now
questions whether incessant economic growth is possible, even desirable. In the words of green economist
Tim Jackson “the irony is that we may in danger of undermining growth as we run down resources and start
changing the climate. Indeed the only thing that has slowed the relentless rise in emissions over the last few
decades is recession, and recession is no recipe for prosperity. So we’re caught in a kind of trap. A growth-
climate trap. Trash the planet or crash the system. It’s a tough choice, in fact it isn’t much of a choice at all”.
This essay explores some of the most critical questions facing modern society; is incessant economic growth
and a secure climate future possible? If indeed it is possible, is it desirable? How much agency do we have over
efficiency improvements, or energy policy and capitalism itself anyway? Through analysis of leading arguments
and available evidence this essay makes the case that pursuing conventional economic growth is very unlikely
to be compatible with a secure climate future. However, is this conventional choice a false choice distracting
from smarter, more equitable choices? Could the climate change emergency provide the greatest opportunity
to create a more equitable society? And would that society be more conducive to both a more prosperous and
climate secure future?
Introduction
The growth debate first entered public consciousness with Donella and Dennis Meadows’ landmark text ‘Limits
to Growth’ in 1972; flying against conventional market theory that there could be any limits to growth, the
authors explored the relationship between population, industrialisation, pollution and natural resource
scarcity to model future scenarios where growth may indeed be limited. Then in the 1990s and 2000s the
growth debate was revisited with renewed vigour.
At precisely the same time economic ideology consolidated around globalisation, scientific evidence and
political negotiation intensified around the climate question. The very fact these two extreme forces were
running in parallel; on the one hand deregulated capitalism and the founding of the World Trade Organisation,
and on the other the fastest rising carbon emissions of the last quarter century, no-one seemed to question –
until that is, a handful of American and British scientists and economists led by James Hansen, Herman Daly,
E.F. Schumacher and Tim Jackson started to do just that. Since then the growth debate has evolved to
represent a wide range of complex arguments along a broad spectrum ranging from the unquestioned belief in
ours (and future generations) ability to achieve incessant economic growth at one end, to zero-growth at the
other.

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What is the relationship between economic growth and climate change?
In its simplest terms economic growth is fuelled by energy; energy is very carbon intensive and the more
energy used the more carbon is emitted. Energy consumption is typically highest as nations develop basic
infrastructure and networks, then declines as priorities change from production through to more service-based
activities. The long-term relationship between global primary energy use and carbon emissions is illustrated in
Figure 1 below, and a shorter-term view in Figure 3. Interestingly, although Figure 2 clearly illustrates that
business as usual is not compatible with a secure climate future, where debate continues to thrive is around
the precise relationship between growth and climate change. Is incessant economic growth the main
accelerator of climate change and if so to what extent is growth mitigation required? Is this achievable given
the time-frames and are there additional factors at play that would allow for continued growth?
Figure 1: Andrew Jarvis and colleagues at Lancaster University pointed out the fit of manmade emissions to an exponential curve with
statistically speaking, astonishingly little deviation. The black line tracks global mega trends in energy consumption over the period since
the industrial revolution, the red line carbon emissions and the grey line the rate of decarbonisation of the energy supply. Despite a Great
Depression, two World Wars and the 2008/9 global financial crash, growth patterns since the industrial revolution have remained
remarkably resilient and maintained a fairly consistent 1.8% annual increase. (Authors note: Interestingly, the carbon curve has deviated a
little and these deviations do merit further analysis and research). Source: Jarvis et al 2015
Figure 2: In 1995 the IPCC published a set of reports forecasting future scenarios for global emissions; the SRES scenarios were a family of
forty different scenarios describing different futures for us ranging from the business as usual (A1 family of scenarios), through to best
case scenarios where we agree emission reduction pathways for a more equitable future (the B family, in particular the B2 family). Despite
five IPCC Assessment Reports and twenty-one Conference of the Parties meetings, global emissions have tracked fairly consistently the
worst-case A1 scenario. Source: Personal communication: A.J. Jarvis. Lancaster Environment Centre. Lancaster University. February 2016

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Figure 3: Relationship between GDP and fossil fuel consumption since 1980. Source: Jackson, T. ‘Prosperity without Growth’ 2009.
Earthscan. p72 (which in turn draws upon source data from the period 1980-2006 for fossil fuels taken from EIA 2008, Table 18 data for
2007 estimated using linear extrapolation over the period 2000-2006. Data for CO2 emissions taken from EIA 2008, Table H1CO2).
From research by Jarvis et al 2015 we can see the relationship between global energy use and carbon
emissions as far back as 1850 (Figure 1), but to explore the relationship between growth and a range of key
socio-economic and earth system trends, a good starting point is a set of twenty graphs compiled by Steffen et
al 2015 (see below). What these graphs illustrate is a dramatic acceleration in economic and earth system
trends from 1950 onwards:
Figure 4: The acceleration in key socio-economic and earth system trends from 1950. These twenty graphs tell the story of the
globalisation of all major sectors of the economy; from agriculture, energy and transport, to mining, engineering and manufacturing - and
the dramatic consequences for our global land, water and energy use, species diversity, ocean acidification, tropical rainforest loss and
atmospheric warming. Source: Cambridge Institute for Sustainable Leadership. Rewiring the Economy Report. 2015, in turn sourced from
Steffen et al 2015)

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Why the post 1950 acceleration?
If it is possible to pinpoint one precise moment in history that triggered these dramatic changes the Bretton
Woods conference in July 1944 is a strong candidate. As respected Canadian-American economist John
Kenneth Galbraith outlined in his 1958 book ‘The Affluent Society,’ one of the consequences of the turbulent
first few decades of the twentieth century, (a period notable for not only two world wars, and a great
depression but of relatively strong state control), was a desire for economic growth and stability and a growing
enthusiasm for market-based economic theory. It was this global mind-set that lay the foundations for the
world order we see today; when the rules of our global banking system were written and enshrined in the rule
book ‘Modern Money Mechanics’; the fractional reserve system of banking that tied the global economy to
the need for incessant economic growth.
Is GDP growth the main contributor to climate change?
Many researchers believe there is a direct relationship between the economic ideology created at Bretton
Woods and climate change, but if Bretton Woods laid the foundation, many climate commentators believe de-
regulated capitalism provided the engine; “1988 was the year both climate change entered the public
consciousness and the dawning of the dominant ideology of globalisation. A clash of the two greatest forces
the world has ever seen. The statistics speak for themselves; throughout the 1990s when globalisation was just
getting going, greenhouse gas emissions were increasing by 1% annually. By the 2000s, as China and other
emerging markets became fully integrated into the world economy, emissions were increasing by 3.4%, a rate
that has continued into the 2010s with the unprecedented peak in 2010 at 5.9%” Klein 2014.
Table 1: Correlation between exponential CO2 emission growth, economic growth and trade liberalisation Source: Naomi Klein: This
Changes Everything p72

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The growth debates
Given the importance industrial society has placed on growth it is unsurprising debate is so vigorous and
polarised. Discerning such complex narratives can be challenging but broadly debate has centred around three
key questions; pay now or pay later? And at what cost?
The incessant growth argument (Pay later)
At the furthest end of the ‘growth is possible’ spectrum sits Professor of Economics from Yale University;
William Nordhaus. Using two integrated assessment models he developed in the 1990s (DICE and RICE) to
show the interplay between economics, energy-use and climate change Nordhaus argues climate change
requires only a modest response now, with more significant action delayed for decades. (Hodgkinson 2014).
Nordhaus makes the argument that the global response to climate change justifies a high discount rate (which
using a cost-benefit analysis discounts future benefits to a high degree, giving little weight to the interests of
future generations on the basis that they will be cleverer, richer and they’ll work it out).
There is a certain tautological quality to the Nordhaus argument; Jackson (2009) observes the notable lack of
the basic mathematics of decoupling and Piketty (2014) describes his high discount argument as
‘unreasonable’. As Berners-Lee and Clark (2013) explain, if we stayed on our current carbon exponential
trajectory for 600 years, emissions would rise so steeply that our fuel burning would consume all the oxygen
currently in the Earth’s atmosphere, leaving nothing at all for us to breathe. (Appendix D)
The sustainable growth argument (Pay a little now)
Published in 2006, the Stern Review commissioned for the UK Government was the first major attempt to look
at both the costs of solving and not solving climate change. In the review Stern makes the argument that
growth is essential over the coming decades to lift developing nations out of poverty - but concedes it will cost
more and require a slower rate of growth. Nordhaus has criticised Stern for an overly low discount rate whilst
others criticise the recommendations for not going far enough.
In its 5th
Assessment Report the IPCC recommended that keeping within the already risky 2 degree global
temperature limit would require stabilisation of GHG emissions at 450ppm, but Stern uses an even riskier
500ppm threshold for his modelling, recognising that stabilising at 500ppm would cost 2% of global GDP.
(Interestingly Tim Jackson makes the point that although 2% sounds negligible, it is in fact equivalent to his
argument for zero-growth).
A detailed paper by Kevin Anderson and Alice Bows in 2011 found that to provide a 50:50 chance of limiting
temperature rise to 450 ppm CO2e/2 degrees, global emissions would need to be cut by 5-6% every year from
2016 in rich countries and from 2020 in developing countries. Cuts of that speed are unprecedented except in
times of recession prompting commentators including Anderson and Bows themselves to conclude “dangerous
climate change can only be avoided if economic growth is exchanged, at least temporarily, for a period of
planned austerity”.
Additionally many of Stern’s assumptions are optimistic. Berners-Lee and Clark observe; “he didn’t consider
fossil-fuel write-offs and, and speaking at a conference in Oxford in 2009, the energy economist Dieter Helm
explained how even if stabilising at 500ppm kept us within ‘safe’ climate limits, the argument is too simplistic;
“rich nations GDP would need to be hit considerably harder than just 2% because they have a social and
historical responsibility to transfer technology and resources to developing nations. The easy compatibility
between economic growth and climate change which lies at the heart of the Stern Report is an illusion”.

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Is de-coupling the answer? (Pay all now)
The conventional response to the dilemma of growth is to appeal to the concept of ‘de-coupling’ – the process
of separating material throughput from economic output thus enabling growth to continue uninterrupted.
Energy flows decarbonised, production processes reconfigured and goods and services redesigned.
In his influential 2009 book ‘Prosperity without Growth’ however, green economist Tim Jackson provides one
of the most persuasive arguments to challenge that view. Recognising decoupling material throughput and
economic output is influenced by more than decarbonising energy flows alone, Jackson uses high quality data
for the period 1990 to 2007 and applies it to the Ehrlich equation to support his view (Table 2).
Developed in the 1970s during the course of debate between US ecologists and biologists; Paul Ehrich, Barry
Commoner and John Holdren, the Ehrlich equation is a useful model to illustrate the most influential human
impact factors on the environment. Simply put the equation observes that human impact is influenced by:
P (population) x A (affluence/average level income) x T (the carbon intensity of economic activity)
Jackson’s argument that de-coupling is incompatible with a secure climate future rests on the relationship
between the scale and pace of decarbonisation required by the IPCC to stay within safe climate limits, coupled
with real-world data for the most influential factors; population growth, affluence growth and rate of
economic activity decarbonisation. To achieve the 4.9% year on year reduction with a 0.7% population growth
rate, and 1.4% income growth rate, the carbon intensity of economic activity has to improve by almost a factor
of 10, and as Jackson rightly observes; “there is almost no historical evidence that the world is capable of
decoupling carbon from growth. Green growth would require unprecedented, almost certainly unrealistic
levels of improvement in technological efficiency”.
Table 2: Unravelling the arithmetic of growth: The maths shows that only zero growth is compatible with the IPCCs recommendations of
30gCO2/$ carbon intensity (still a deeply unequal world, with 6g representing the most realistic and equitable goal). Source: Jackson, T.
‘Prosperity without Growth’ (2009) Earthscan. p78

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Is zero-growth the answer?
Speaking at a conference in 2010 Tim Jackson outlined his argument for zero-growth explaining; “our best
response to the climate-growth questions appears to be a kind of blind faith in our own cleverness; that
efficiency and technology can save us. So I want to check the numbers first. I want to ask the question – if we
have a world of 9 billion people in 2050 all aspiring to western lifestyles, how much smarter and more efficient
do we need to be?”
To illustrate the implications of required carbon intensity reductions on the global economy between now and
2050, Jackson has modelled 4 scenarios (Figure 5).
Scenario 1 represents the starting point where the average carbon content of economic activity would need to
fall from 347g CO2/$ in the UK to just 36g CO2/$ by 2050 to stay within the ‘safe’ IPCC target of 450ppm CO2e.
Scenarios 2-4 model what Jackson believes to be essential additional considerations; if the population peaks to
11 and not 9 billion (Scenario 2 at 30g CO2/$), to allow for equitable growth in developing nations as well
(Scenario 3 at 14g CO2/$), and factoring projected income growth rates to 2050 for developed nations
(Scenario 4 at 6g CO2/$). And as Jackson observes; “the bar on the far left is where we are now at around 770g
CO2/$ intensity, but in the world we are describing we need to over on the far right at just 6g. That’s a 130 fold
improvement and 10 times further and faster than anything we’ve ever achieved in industrial society. Maybe
we can do it, maybe we can even be removing carbon from the atmosphere – which is what we will need to be
doing by the end of the century. One thing is clear, we will need a completely different kind of economy than
the one we have now”.
Clearly a low or zero growth economy is an essential element for a secure climate future – but will that alone
be enough? Are there any additional factors at play with technology and efficiency gains?
Figure 5: Required reductions in global carbon intensities between now and 2050 outlining four alternative scenarios. Source: Jackson, T.
‘Prosperity without Growth’ 2009 (EarthScan) p. 81. Data from EIA 2008, UN 2007 and targets from IPCC 2007

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Efficiency gains and rebound effects
Although voluntary efficiency gains and carbon cuts have an essential role to play in transitioning to a low-
carbon world, evidence suggests they don’t in themselves do much, or anything at all to cut global emissions.
As Berners-Lee and Clark (2013) explain “when we improve energy efficiency, we make energy more
productive, because each drop of oil or lump of coal can do more work; as a rule, making something more
productive makes it more valuable and that in turn means we use more of it”. In their 2013 book ‘The Burning
Question’ the authors go on to explain the numerous and complex ‘ripple and rebound’ effects of various
energy efficiency measures at play throughout industrial society - from the individual to the country-level (see
Appendix A). Rebound examples include how making things cheaper encourages consumption, saving leads to
spending, and efficiencies in one part of the system are absorbed or balanced in another part of the system.
The authors therefore conclude that “quantifying the overall impact of any efficiency gains globally is almost
impossible to achieve; the effects are too numerous, too complex and too subtle”.
One of the most significant consequences of ‘rebound and ripple’ effects in this context is something the
authors describe as the ‘squeezing a balloon’ effect – a widely known phenomena where energy efficiency
gains in one part of the system bounce back as additional energy use elsewhere (UKERC 2007) Put in a global
context, Berners-Lee make the case that although limiting growth is an important part of the solution but
without a global cap on carbon, the rebound effect particularly between developed and developing nations
would be at risk of increasing, not decreasing overall emissions.

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Is conventional GDP growth the right goal anyway?
Much has been written on GDP and approaches to growing it, but far less on whether it’s the right goal to start
with. And as it turns out, the extent to which we might actually want GDP is a question that’s attracting
increasingly vigorous debate.
General criticisms of GDP lie is its failure to account for costs to environmental health, the depreciation of
finite natural resources, costs to social cohesion and health, and almost no mention of levels of indebtedness.
However, the argument that limitless GDP growth may in fact not be desirable is not new. Ever since Adam
Smith laid down the foundations of classic free market economy theory in ‘Wealth of Nations’ (1776), many of
the twentieth and twenty first century’s leading economists have recognised steady-state economics as being
the ultimate goal. John Stuart Mill, one of the founding fathers of economics recognized both the necessity
and the desirability of moving eventually towards a ‘stationary state of capital and wealth. In his landmark text
‘Treatise on Money’ (1930) John Maynard Keynes considered the day when society could focus on ends rather
than means, and since the 1970s, Herman Daly, David Pearce, Tim Jackson and others have all made a
compelling case for a ‘steady-state’ economy.
Yet despite such views, governance measures established after the second world war has ensured GDP
growth has continued to be the most important target for every nation across the world.
Then in 2009, social scientists Kate Pickett and Richard Wilkinson provided a crucial contribution to the growth
debate. Using an impressive body of evidence on income inequality from 23 of the world’s richest countries
they argued a compelling case for, rather than increasing prosperity and well-being, after a certain level of
development, continued growth doesn’t deliver any additional prosperity (Figure 6), and in the richest
societies, inequality is higher and correlates strongly with a wide range of negative health, social and
environmental metrics (Figure 7)
Figure 6: Life Expectancy and GDP per Capita. After a certain level more growth doesn’t bring more benefits anyway. Figure X shows the
relation between life expectancy and national income per head for countries at all stages in economic development. It shows that life
expectancy rises rapidly in the early stages of economic growth and then gradually levels out until, among the richest countries, the
relationship becomes horizontal and any connection is lost. What has happened is that the relationship between life expectancy and
economic growth has been broken. Source: Pickett and Wilkinson ‘The Spirit Level’ (2009). Penguin.

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Figure 7: Health and social problems are worse in more unequal countries. Regression line showing there is a strong tendency for a wide
range of health and social problems to occur more frequently in more unequal societies (the countries to the right on the horizontal axis).
The two are extraordinarily closely related – chance alone could almost never produce a scatter in which countries lined up like this. (See
Appendix B for notes on the authors data source) Source: Pickett and Wilkinson (2009) ‘The Spirit Level’ powerpoint slides available at:
https://www.equalitytrust.org.uk/resources/the-spirit-level
More recently, in his landmark 2014 text ‘Capital in the Twenty-First Century’ French economist Thomas
Piketty, whilst making no direct connection to climate change, contributed one of the most cogent arguments
for how GDP growth has structurally driven inequality. Using over 10 years of data detailing historical changes
in the concentration of income and wealth, Piketty sketched out the evolution of inequality since the
beginning of the industrial revolution. From this history, he proposed a grand theory of capital and inequality
(captured in the expression r > g), where wealth (r = the rate of return to wealth) has grown dangerously faster
than growth (g=growth), driving inequality. Irrespective of climate change it appears addressing the drivers of
incessant growth could have wider benefits for global equality.
Would more equal societies be more climate secure?
The link between more unequal societies and climate change lies in the evidence that a fragmented society
with status differences (augmented by bigger material differences between people) are inevitably more prone
to status anxieties and perceptions in the eyes of others (see Appendix B). This feeds directly to consumerism
as individuals try to communicate ‘worth’ in symbols of material goods. Greater equality is this context could
be argued as a key objective, not only because it reduces social dysfunction, and improves health and well-
being, but because it makes it possible to overcome some of the main obstacles to sustainability – the most
important being reduced consumerism.
Whilst there is no direct evidence to suggest more equal societies may be more climate secure Pickett and
Wilkinson contribute some interesting findings. Highlighting community life is much stronger in more equal
societies and people are much more likely to feel they can trust each other (Figure 8). Populations become more
public spirited, have a stronger sense of public good and are more likely to comply with national and global
environmental measures (Figure 9 and Figure 10) – and if modern society is to move towards an environmentally
sustainable way of life it means acting as never before on the basis of common good.

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Figure 8: Levels of trust are higher in more equal rich countries. Source: equalitytrust.org.uk
Figure 9: Business leaders in more equal societies give higher priority to complying with international environmental agreements.
Source: Pickett and Wilkinson. ‘A Convenient Truth’ p26 – which in turn sourced from World Economic Forum. The Global Competitiveness
Report, 2001-2002. New York. Oxford University Press, 2002

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Figure 10: Community life and public spiritedness is stronger in more equal societies. People are much more likely to participate in
activities that support the greater good – such as recycling. More equal societies recycle a higher proportion of their waste. Source:
equalitytrust.org.uk

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Conclusion
One the one hand, the body of evidence from the IPCC and others suggest we should stop treating climate
change as an urgent issue and start treating it as a global emergency, but on the other hand our political and
economic systems eat and breathe the language of growth.
Any level of climate change is dangerous to someone but there is a broad level of consensus that a 1.5-2
degree increase in global temperature above pre-industrial levels represents the safe upper limit. If
greenhouse gas emissions reach a concentration of 500ppm CO2e there is a 66-99% chance that temperatures
will exceed 2 degrees, but only if concentrations stabilise at 400ppm CO2e is there a low likelihood (an average
of 28%), however you begin to understand the urgency of the issue when you realise we’ve already exceeded
the safe level. Current greenhouse gas concentrations are at 459ppm CO2e.Even a rise of 2 degrees – almost
certain to happen this century – will confront as many as 3 billion people with water stress which in turn is
likely to result in tens of millions of deaths.
So the question of whether incessant economic growth is compatible with a secure climate future is one of the
most critical questions of the Anthropocene. The answer to that question however is both extremely complex
and laced with uncertainty. Simply put – no-one knows for sure. The scientific and economic community can
model and make projections but the world has never tried to phase out fossil fuels and transition to green
energy. There are plenty of optimistic projections from centres such as the IEA that suggest if the political will
is there it would be possible to increase efficiency and roll-out low carbon energy - but there are many layers
of uncertainty. How will the well-documented ‘rebound and ripple’ effects respond to efficiency
improvements? How rapidly can green energy scale? What future technological transformations to how we
produce, save, store, transport and consume energy might evolve and how rapidly? Indeed how much agency
do we have over energy policy? (see Appendix E - Jarvis et al 2015 Optimal directed networks theory).
The conventional view held by green economists that incessant economic growth on a finite planet is not
possible, is not new. As far back as 1759, just prior to his magnum opus ‘The Wealth of Nations’, Adam Smith
produced rather a different book ‘The Theory of Moral Sentiments’. In it, Smith emphasized co-operation as
distinct from competition, as a way of satisfying society’s needs. It places centre-stage concepts such as
reciprocity and fairness, values rather than value. Indeed both John Stuart Mill (1870) and John Maynard
Keynes (1930) recognised both the necessity and desirability of moving eventually towards a ‘stationary state
of capital and wealth’, and since the 1970s a growing voice for ‘steady-state’ economics led by Herman Daly,
Schumacher, Jackson and others have championed the arguments for zero growth.
So one thing is very clear; business as usual is not an option (see Figure 2), but what kind of growth is
compatible with a secure climate future?
In his 2009 text ‘Prosperity without Growth’ Tim Jackson makes arguably one of the most cogent and
convincing arguments for the necessity of zero-growth, and the illusion of de-coupling. One of the factors that
makes Jackson’s case so strong is his unflinching application of the arithmetic of growth – something others
have been more hesitant to adopt. However as many researchers have observed, halting growth alone, whilst
an important measure, is unlikely to have a significant effect on emissions without a global cap on carbon.
Berners-Lee (2013) highlights the impact of the well observed ‘rebound’ effects and York (2012) makes a
similar claim but for different reasons – the energy consumption required to maintain existing power supplies
and utilities (cars, buildings, power stations), is unlikely to deliver as dramatic reduction in emissions as
projected.
However, as Jackson himself points out, reams and reams have been written about GDP and how to grow it,
but far less on why we might want it in the first place. As the threat of climate change, rising inequality, and
global instability in financial markets has intensified, more has been written on the short-comings of GDP as a
measure of prosperity. Indeed many commentators are questioning how necessary or even desirable GDP is.
Certainly for the world’s poorest nations a certain level of growth is required, but a huge body of research has
shown that once average incomes rise above a certain level continued increases correlate with neither life
satisfaction of objective wellbeing indicators such as life expectancy, physical and mental health, obesity and

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trust. Additionally, there’s another huge limitation to a short-term focus on GDP; due to its omission of any key
environmental or social metrics, today’s gains may become tomorrow’s losses – GDP simply ignores the
environmental costs to depleting finite natural resources.
Encouragingly there is a growing body of evidence to suggest a low carbon economy could be achieved
without compromising economic and social stability. In fact, in 2008 Canadian economist Peter Victor designed
a test to model a low growth scenario for the Canadian economy and found not only this to be the case but
additionally unemployment and poverty were both halved (see Appendix F). Additionally Daniels et al (2013)
illustrated how many countries are already achieving comparable life expectancies at a fraction of GDP (see
Appendix G). Pickett and Wilkinson go further - whilst making no direct claim more equal societies would be
more climate secure – they do illustrate how populations become more public spirited and are more likely to
comply with environmental measures.
But perhaps the real question we should be asking is not just whether growth and GDP is compatible with a
secure climate future but whether our political and economic system is. Even if political will was there, the
scale and pace of response required would be unprecedented in global history requiring a 5-6% decrease in
carbon emissions year on year, the write-off of trillions of dollars of fossil fuel reserves, and a complete
transformation of global energy supply chains. No-one knows how the global economy would respond to such
unprecedented measures - especially in light of additional complexities including ‘rebound and ripple’ effects,
and the equitable transfer of resources to developing nations.
But the political will isn’t there.
Political decision-making is structurally wired to prioritise the short-term, and climate change requires both a
short and long term response. In the short-term wealth will insulate vested interests with the power over
global governance, banking and trade. They simply have too much to gain in the short-term with business as
usual and too much to lose if things are changed. As Berners-Lee and Clark observe “the combined fear of
fossil fuel write-offs, economic fall-out and modest cultural change has led to a state of political paralysis in
many countries…and there’s only one way around this kind of paralysis: public pressure.
Public pressure and the way forward
Given the complexity of the issues involved, no one solution is likely to hold all the answers but a number of
enablers are emerging as key ingredients in a secure economic and climate future, and principally the
necessity of public pressure in conjunction with NGOs, researchers, educators, scientists to support the:
Democratisation of global governance – many commentators believe redressing imbalances in global
governance are critical not only to the climate-growth challenge, but underlying inequalities in global
democracy. Many criticisms have been levelled at the undemocratic function of the UN Security Council and
the disproportionate power wielded by its 5 permanent member states with their power of veto. Multiple
suggestions have been made for more democratic alternatives including the establishment of a global
parliament alongside existing institutions; gradually replacing them over time. Beyond providing an obvious
forum for debate, the principal advantages would be equal and equitable representation by all nations, and a
system to hold global powers to account.
Democratisation of global money and banking – reform of the fractional reserve banking system has been
highlighted by Daly (1991), Jackson (2009), Jackson and Dyson (2012), as essential to end the incessant global
growth requirement. Different approaches have been suggested but all largely rest around removing the
power to create money from private banks and returning it to an independent but accountable public body. In
this way the creation of money and the levels of interest rates (and thus growth) can be controlled to benefit
both people and planet.

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Democratisation of global trade and capital flows - Stiglitz (2002) has demonstrated the WTO, IMF and World
Bank programmes have imposed policies that have structurally enslaved developing nations to a continuous
cycle of debt by a range of rules and ‘structural adjustment programmes’. Created by vested interests to
preserve and enhance power and wealth, the undemocratic nature of global capital and trade underlies and
accentuates the climate-growth challenge. A superior system of trade regulation has already been developed
by one of the worlds most respected economists John Maynard Keynes. In 1941 Keynes suggested a global
bank called the International Clearing Union (see Appendix H) to ensure automatic equity and balancing of
trade.
Establishing the right measure – for the last two centuries GDP has been the world’s most powerful metric for
the measurement of progress but compelling evidence now suggests its failure to reflect a whole range of
environmental, health and social metrics. A number of attempts have been made at more appropriate
alternatives, these include the World Bank’s Adjusted Net Savings index, Nordhaus and Tobin’s Measure of
Economic Welfare and Daly and Cobb’s Index of Sustainable Economic Welfare. The OECD’s Beyond GDP
initiative has attempted to collate these different attempts. One thing is clear however; it’s not just quantity
that counts but quality. There are opportunities to improve both our wellbeing and sustainability by focusing
on the right metrics, but the measure needs to reflect all aspects of human and planetary prosperity.
Reform of higher education to equip future generations with the right tool-kit – the Post-Crash Economics
Society was founded at the University of Manchester in 2012 as a response to the 2011 Bank of England’s
conference ‘Are Economics Graduates Fit for Purpose?’ The society is one example of a growing population of
students at Universities around the world inspired to rethink syllabuses and teaching methods in light of the
Financial Crisis. Indeed the scale, urgency and complexity of the climate-growth question, raises questions
about wider reforms required across higher education – not just in Economics but throughout the system.
Most obvious starting points include MBA and Management School programmes, but equally questions
should be raised about how best to meet the interdisciplinary response the issues demand.
The establishment of a global green investment mechanism - responsible for not only managing the transfer
of funding from developed to developing states, but providing ‘mission-oriented finance’ to drive the
innovation necessary throughout our energy systems, information systems, research and development,
education and training, infrastructure and governance (Mazzucato 2013, 2014 2015, Perez 2002).
The establishment of a global ‘carbon governance mechanism’ – responsible for overseeing transparency and
accountability of carbon reporting (including target setting and measurement); at country level and
throughout supply chains. Following the establishment of a global cap on carbon (Berners-Lee and Clark 2013),
the mechanism could provide funding, research, administrative and governance support for a wide range of
carbon reporting requirements to enhance quality and accountability of reporting.

17. 17
Appendix
A) ‘Ripple and Rebound’ effects from Berners-Lee and Clark (2013) ‘The Burning Question’ p47-63
Examples of ‘ripple and rebound’ effects on energy efficiency gains across industrial society and well
documented and numerous, For example; despite huge improvements in internal combustion engine
efficiency since the Model T was developed over a century ago, average fuel economy in the United
States is still only 21mpg (USEPA 2006). And despite the conventional view video conferencing would
lead to reduced carbon consumption by substituting screen-time communication with flight-
dependent, high carbon, face-to-face communication, this could be challenged when viewed from the
perspective that increased levels of communication may nurture stronger friendships in the short-
term that lead to increased face-to-face communication in the long term.
B) Pickett and Wilkinson ‘The Spirit Level’ (2009). Penguin
Data Sources:
United Nations Development Program. Human Development Report. New York: Oxford
University Press, 2003, 2004, 2005, 2006.
US Census Bureau. Gini ratios by state. 1969, 1979, 1989, 1999. Washington, DC: US Census
Bureau, 1999 (table S4).
For all international comparisons in their book the authors used the 20:20 ratio measure of
income inequality from the United Nations Development Programme Human Development
Indicators, 2003-2006. As survey dates varied for different countries (from 1992 to 2001),
and as the lag time for effects varied for the different outcomes examined the authors took
the average across the reporting years 2003-2006.
How the authors chose the countries for their research:
Firstly the authors obtained a list of the 50 richest countries in the world from the World
Bank using a report published in 2004, using data from 2002. They then excluded countries
with populations below 3 million, because they didn’t want to include tax havens like the
Cayman Islands and Monaco. They also excluded counties without comparable data on
income inequality, such as Iceland.
Developing the index of health and social problems:
The International Index the authors used as a starting point has 10 components:
o Life expectancy
o Teenage births
o Obesity
o Mental illness
o Homicides
o Imprisonment rates
o Mistrust
o Social mobility
o Education
o Infant mortality rate
Sixteen countries had at least nine of these ten measures. A further five countries had eight
out of ten. Two countries (Israel and Singapore) with fewer measures were excluded from
the index but included in analyses of individual measures. The Index of Health and Social
Problems was created by taking the mean of the z-scores for each measure (averaged over
the number of measures available for that particular country).

18. 18
C) A link between more unequal societies and climate change?
For more information on this refer to Pickett and Wilkinson ‘A Convenient Truth’ 2014, and ‘The Spirit
Level’ 2009 – Chapter 4, Chapter 5 and especially Chapter 15.
D) Maths from ‘Berners-Lee, M and Clark, D (2013) ‘The Burning Question’. P205.
“After 600 years, our emissions would be around 30 GT (today’s emissions) x e(0.0179 x 600) = 1.38 x
10 to the power 15 tonnes. Of that, 32/44 would be oxygen = 1.01 x 10 to the power 15 tonnes. That’s
more than there is oxygen in the atmosphere, which would be 20 per cent of the total weight (5.3 x
10 to the power 18kg, according to bitly.com/atmos-mass) = 1.06 x 10 to the power 15 tonnes.
E) Theory for optimal directed energy networks in industrial society
In a 2015 paper published in Earth System Dynamics, Jarvis et al hypothesised that the maintenance
of the observed 2.4% yr-1 growth rate of industrial society (Figure 1) over the last 160 years stems
from the systems’ implicit desire to optimise patterns of energy use. By assimilating work by Banavar
and West, Jarvis developed a theory for optimal directed networks that suggests the efficiency of
moving resource around within industrial society is related to how big the networks are raised to a
specific power term (Figure 11 below) that suggests industrial society seems to be evolving as an
optimally directive space-filling network. The implications for the growth v climate debate lies in the
suggestion the influence the IPCC and others think we have to make decisions over energy policy may
not be as clear-cut as conventionally thought. The industrial society system appears over a 160 year
time frame to be innovating and compensating to retain a continually observed 2.4% growth rate.
Figure 11: Theory for optimal directed networks. By incorporating work by West and Banavar at the Santa Fe Institute Jarvis et al
developed a theory to explain how industrial society networks, like those observed in the animal world, will organise themselves optimally
to use the least possible energy to move the mass required. By integrating systems thinking, network theory and the three-quarter scaling
observed between global primary energy use and carbon emissions (see Figure 1), Jarvis suggests decision makers may have less influence
over energy policy than previously thought. Source: Jarvis et al 2015. West et al 1998, Banavar et al 2010

19. 19
F) Low growth test for the Canadian economy:
Figure 12: Illustrates one of the stabilization scenarios generated by the model. By manipulating the ‘drivers’ of growth in the
model, income growth is gradually reduced from 1.8 per cent a year to less than 0.1 per cent a year, effectively stabilizing per
capita GDP. The model is calibrated against real historical data from Canada on the principal macro-economic variables:
consumption, public spending, investment, productivity growth, savings rates and so on. Making specific assumptions about
the future, the model then estimates the national incomes, computes the fiscal balance and tracks the national debt over a 30-
year period to 2035. It also keeps an account of unemployment, greenhouse gas emissions and poverty levels. Source: Jackson,
T. ‘Prosperity without Growth’ 2009. (Earthscan) p.135 in turn sourced from Victor 2008b
G) Life expectancy at birth in relation to GDP per capita
Figure 13: Many countries are already achieving comparable life expectancies at a fraction of GDP (Costa Rica achieves it at less
than a fifth the GDP of the USA) Source: Daniels et al
H) An International Clearing Union
As George Monbiot explains in his 2003 book ‘The Age of Consent’, Keynes recognized any equitable
system of regulating global trade must involve a system that regulates the terms of trade for both
creditor and debtor nations – as debtor nations can do little to affect the balance of trade. At the
Bretton Woods conference in July 1944 Keynes suggested a solution “so ambitious and electrifying it
became a banner of hope; an inspiration to the daily grind of war-time duties” (British Economist
Lionel Robbins). The solution Keynes outlined was highly superior to anything previously suggested in
terms of operational efficiency and justice of its likely outcomes. The means by which trade could be
balanced and international debt eliminated. As Monbiot explains; “A global bank called the
International Clearing Union could be established. This bank would issue its own currency; the bancor,
which would be exchangeable with national currencies at a fixed rate of exchange and would be the
unit of account between nations: it would be used to measure a country’s trade deficit or surplus.
Every country would have an overdraft facility in its bancor account at the International Clearing
Union, equivalent to half the average value of its trade over the past five years. As all the deficits and
surpluses in global trade add up, by definition, to zero, the overdrafts would, in aggregate, be equal to
the end of the year, to ‘clear’ their bancor accounts. Any central bank using more than half of its

20. 20
overdraft allowance would be charged interest. It would also be obliged to reduce the value of its
currency by up to five per cent (making its exports more attractive), and to prevent the export of
capital. These are the conventional means of discouraging excessive debt – but Keynes key innovation
was to ensure nations with a trade surplus would be subject to almost identical pressures. Any nation
with a bancor credit balance more than half the size of its overdraft facility would be charged interest
at a rate of 10 per cent. It would also be obliged to increase the value of its currency and to permit
the export of capital. If, by the end of the year, its credit balance exceeded the total value of its
permitted overdraft, the surplus would be confiscated. All these surpluses and interest payments
would be placed in the Clearing Union’s Reserve Fund. These rules would change how nations with a
trade surplus operate in 3 ways:
1. Their exports would become less attractive
2. Capital would not flee from nations in major deficit
3. Most importantly, a country with a trade surplus would seek to minimise it by introducing
domestic policies to encourage its citizens and businesses to increase the value of their imports.

21. 21
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