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The climate crisis will never be solved until humanity breaks its addiction to economic growth, experts say

Photo: Nanaimo, a city on the east coast of Vancouver Island, in British Columbia, has implemented an innovative system balancing the social needs of the community with its environmental impact. | Via Ballard Homes

But serious discussions regarding ‘degrowth’ were mostly absent from COP28 in Dubai

At the root of the climate crisis lies an economy dependent on profits from unfettered growth, mostly through resource extraction, experts say. But, as world leaders wrap up at COP28 in Dubai, discussing how to fast-track the global push towards clean energy, few seem to be talking about the elephant in the room: endless GDP growth.

“Capitalism, powered by the availability of cheap and abundant fossil energy, has indeed resulted in unprecedented and global biosphere disruption,” writes Mike Joy from Degrowth Aotearoa New Zealand in the Conversation. “From an ecologist’s perspective, degrowth is inevitable on our current trajectory.”

In September, leaders from the European Union and 19 countries met in New Delhi for the G20 Summit, with the goal of pursuing “development models that implement sustainable, inclusive and just transitions globally, while leaving no one behind,” according to the declaration released afterwards.

Canada is one of the member countries that has committed to a series of actions, including accelerating “strong, sustainable, balanced and inclusive growth,” pursuing “low-GHG/low-carbon emissions, climate-resilient and environmentally sustainable development pathways” and promoting “resilient growth,” among others.

Yet, a recent survey from the Organisation for Economic Cooperation and Development found not only that Canadian standards of living have declined in the past 40 years, but also that the country is lagging behind the U.S. and Europe in the net-zero transition — that’s Canada’s global commitment to cut greenhouse gas emissions to as close to zero as possible.

“Capitalism, powered by the availability of cheap and abundant fossil energy, has indeed resulted in unprecedented and global biosphere disruption. From an ecologist’s perspective, degrowth is inevitable on our current trajectory.”

The science clearly shows that in order to avert the worst impacts of climate change and preserve a livable planet, global temperature increase needs to be limited to 1.5 degrees above pre-industrial levels. Currently, Earth is about 1.1 degrees warmer than it was in the late 1800s, and emissions continue to rise.

While the service industry now accounts for the largest chunk of the GDP, the fossil fuel industry still accounts for 7.6 per cent of the economy, making Canada the fifth-largest producer of natural gas and the fourth-largest producer of oil in the world. And while climate change has become a devastating reality for many communities trapped by wildfires and weather events that are becoming more frequent and violent, change seems slow to come.

Just last week, the Canadian government proposed to cap 2030 emissions at 35 to 38 percent below 2019 levels, in an effort to support “sustainable growth.” Experts say it is a groundbreaking policy and a welcome step forward, but unfortunately does not nearly go far enough.

So what should Canada be doing?

Instead of trying to achieve “sustainable growth,” an increasing number of economists suggest that the answer should be to stop focusing on economic growth at all, at least when it comes to high-income countries.

Indeed, the Global North is responsible for 92 per cent of the world’s excess carbon dioxide emissions and 74 per cent of excess material use (half of which is extracted in the Global South), Open Democracy reports.

In low and middle-income countries, GDP growth results in a better quality of life and can be channeled “into creating economies that are distributive and regenerative by design,” writes Oxford economist Kate Raworth. Meanwhile, in higher-income countries growth has been sluggish for decades and has been accompanied by increasing inequality and excessive ecological footprints.

Yet, as the most recent G20 summit shows, with three out of 12 commitments mentioning growth, the supremacy of the metric still holds sway. An alternative approach is possible.

In Canada, for example, the City of Nanaimo has implemented an innovative system balancing the social needs of the community with its environmental impact.

Since 2020, the city has been working on “building an economy, a community that can meet people’s needs within the means of the planet,” explains City Councillor Ben Geselbracht.

The foundation on which the approach is built are Canada’s Sustainable Development Goals, which the city is using as a benchmark to build its response to the most urgent environmental and social targets, among which Geselbracht counts reducing per capita emission, eliminating homelessness, ensuring a minimum income or improving the walkability of a neighborhood.

The fallacy of growth

In his book “The Age of Resilience,” economist Jeremy Rifkin, whose work was the basis for the European Union and China’s shift towards more environmentally-friendly policies, reminds readers “of how utterly absurd a metric like GDP is.”

His warning echoes that of Raworth to “be agnostic about growth.” Raworth reminds economists and policy makers that we need “economies that make us thrive, whether or not they grow,” rather than the opposite.

But our current default metric, GDP growth, does not account for thriving. GDP is defined by the OECD as the standard measure of the value added created through the production of goods and services in a country during a certain period. Basically, it represents the value of all products and services sold within a country, which means it does not measure many of the social and environmental variables determining one’s quality of life.

“Growth right now is not delivering the benefits and the so-called promised land to the majority of the population,” says Nicolas Kosoy, a McGill professor in Ecological Economics. “And that’s now at present, let’s not even discuss the future population and the kind of world we’re leaving them.”

Kosoy joins an increasing number of economists arguing that we should step away from GDP growth as the one and only variable of success not only for our economy but for our society overall. They advocate for what has come to be dubbed “degrowth,” a term that has its origins in the French word décroissance. Unlike what the term seems to suggest, the goal is not to pursue negative GDP growth, but rather to adhere to a completely different set of variables. Recently, in order to better reflect this goal, the movement has taken on a new label, “Beyond Growth,” adopted even by the European Union.

There was one small panel at COP28 discussing degrowth. It was not well attended. Arnaud Schwartz on X

The basic assumption behind the movement is that “consumption at our current rate is not sustainable,” explains Julie Segal, Senior program manager of climate finance at Environmental Defence.

Sustainable here takes on two meanings. There is the social perspective, as “really high levels of inequality are separating the people who have the power from the people who are most vulnerable, and that needs to change,” says Segal. Moving beyond growth would thus allow us to set metrics and variables that target specific needs in the community.

And then, there are the environmental implications. “Economics comes from the Greek, it means the rules of the house,” reminds us Dayna Baumeister, co-founder of Biomimicry 3.8, (biomimicry is an analytical approach focused on putting nature’s lessons into practice). “If the house is planet Earth, what are the rules of planet Earth? And should our economics actually follow those rules?”

Right now, the answer to her question is negative.

As Rifkin writes, GDP “does not begin to account for the costs in terms of the depletion of Earth’s energy reserves and other natural resources and the entropic waste that accompanies each step in the value chain.”

“It’s not that we live in a world of scarcity, it’s that we created a world of scarcity with insatiable needs,” reckons Kosoy, adding that “an economy that grows at seven per cent doubles its size in 20 years… Double in size, in terms of material, energy consumption and outflows, and hence waste.”

Imagining a new world

Looking into the future, it’s clear that it will not be possible to maintain the current rate of consumption in Canada, and other Global North countries.

“We might want to imagine a different world, a different world where we can live, and where we can satisfy our needs without the requirement of constant and perpetual economic growth,” wishes Kosoy.

Getting there will require a complete upheaval not only of our economic system but also of our social and political institutions, to ensure that they are reflective of reality and adapting to changes as ethically as possible.

Such a world won’t come by of its own accord, but will require a conscious and global collective effort. But there will need to be nudges to make it happen: according to Baumeister, “unfortunately, there’ll be some more catastrophes that will probably cause people to think a little bit differently.”

This, says Segal, will help bring “the economy back under democratic accountability,” to ensure that “financial institutions are serving the best needs of people on the planet and recognizing that policy makers can step up to that.”

The result would be a world where human needs are balanced with the environment, where nature is not seen as an unlimited resource to exploit, but rather, as an essential piece of our ecosystem and existence.

In such a world, priorities are different: “let’s think about what services people need, how to deliver good health care, well-paying jobs, affordable housing and put food on the table, and about what the planet needs,” proposes Segal. “Let’s start with that and then build the economy around it.”

In practical terms, this would mean to acknowledge that every action has a future impact and redirect our current resources to create something for the future, with environmentally and socially productive investments, “delivering good outcomes for communities, workers, nature and environment,” she states.

At the moment, that is not the case in Canada, where climate and finance are treated as two separate issues, with no overlap.

Doughnut Economics

And yet, Segal’s vision has already been articulated, in a model that has been scaled to cities and countries all over the world, that is, Raworth’s Doughnut Economics. This approach offers a complex, and complete, alternative to the growth paradigm. The Doughnut represents a regenerative and redistributive economy, where the 12 basic social needs of people are met, while Earth’s ecological ceiling is respected, to create a “just and safe space for humanity.”

In 2012 Oxford University economist Kate Raworth published an article introducing her Doughnut Economic Model to the world. Her model aimed “to eradicate poverty and achieve prosperity for all within the means of the planet’s limited natural resources.” Now, Raworth’s model has been adopted by one Canadian local government, Nanaimo, where the new city plan was developed using Doughnut Economic principles as its framework.

Kosoy takes it a step further, as he develops what he has called “Relational Economics” (also the title of his upcoming book), which sees the economy as a system with many different agencies, both human and non-human.

To achieve an “economics of abundance,” he first invites economists to embed their models in the entropic reality, accounting for “material and energy flows.” The second step, he adds, is to recognize that agency is not only a human domain and that “animals and plants have actionable values.”

This last element echoes Baumester’s approach. Through her work with Biomimicry 3.8, she teaches how to emulate nature and apply its teaching to all facets of human life. “One of the principles [nature shows us] is to be locally attuned and responsive. Another one is about adapting to changing conditions. We need to have models that adapt to the changing conditions, that have resilience built in them.”

Instead, what we have is a model adhering to standards and dogmas two centuries old and whose main goal is a metric, GDP growth, that was criticized even by the man who came up with it.

An innovative Canadian example

In our current state, then, and in light of Canada’s slow transition to a more sustainable economy, talking about different economic and social systems may seem an exercise in creativity and wishful thinking.

And yet, Nanaimo shows us that Kosoy is onto something when he says that “there was a world before capitalism, there was a world before economic growth, there will be a world after capitalism and after economic growth.”

Anna Aglietta
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Anna Aglietta is a journalist and visual storyteller covering social and environmental issues. She holds a bachelor’s in Economics and Finance, a master’s in arts management and a graduate diploma in visual journalism.

Anna Aglietta
Anna Aglietta
  Anna Aglietta is a journalist and visual storyteller covering social and environmental issues. She holds a bachelor’s in Economics and Finance, a master’s in arts management and a graduate diploma in visual journalism.
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