The burning of fossil fuels and destruction of ecosystems through the extraction of resources has led to the precipice of a catastrophe. How do we step away from the precipice? Catherine Knight examines what 'degrowth' would look like in a New Zealand context.
Many of us are aware by now that we are facing multiple crises: climate change being just one – warming and acidifying oceans, depleted soils, global habitat and biodiversity loss are among the others in this ‘polycrisis’. The Auckland floods have made us acutely aware of how vulnerable our cities are to the ravages of extreme weather, events predicted to become more extreme and frequent as the effects of climate change bed in.
We know that this is not going to get better any time soon. There will be more floods, droughts and other weather events that will cause destruction, economic loss and human distress on a scale that we cannot yet imagine. Even the issues that affect us day to day, such as the cost of living, have at their root the unsustainability of our current economic system.
READ MORE: * Food security at the heart of our cost of living crisis * Embrace more economic growth at our peril
The realisation is dawning among many of us that we cannot solve this problem following the same path that led us here – that is, an extractive growth-oriented economy dislocated from the realities of a finite planet.
But the rejection of a growth-oriented economy is a huge paradigm shift. For many of us a growth-based economy sounds normal and healthy. Surely growth is a good thing – it is what children and plants do. But in fact the economy that we have now – one based on the exponential extraction of resources and of capital accumulation among a concentrated few – is a mere blip in human economic history. We have long had market economies based on the exchange of goods and services and yes, there have always been the wealthy, land-owning classes, but the year-on-year exponential growth of both national and global economies has only been enabled by the one-off windfall discovery and exploitation of fossil fuels – oil and natural gas. This has been the life-blood of our economy for the last century.
But the burning of fossil fuels and the destruction of ecosystems and ‘natural commons’ – our oceans, air, land and freshwaters – through the extraction of resources has led us here, to the precipice of a catastrophe, or ‘Great unravelling’ as it has come to be known. How do we step away from the precipice? Even if we agree that it cannot be through more growth – more extraction of resources, further degradation of the biosphere, the life-supporting system for human civilisation (whether or not in the guise of ‘green growth’ or ‘sustainable growth’ ) – what other way is there?
One pathway that is garnering increasing attention, including in the business sector here in New Zealand, is degrowth. In Europe especially, degrowth is gaining broad traction, with leading researchers awarded 10 million euros by the EU’s European Research Council last year to investigate pathways to a post-growth economy and society.
And in Europe and beyond, many countries, regions and cities are implementing policies aligned with degrowth. For instance, late last year, France announced it was banning domestic flights for routes that can be travelled by rail, while nearly 100 cities worldwide offer free public transport, and several countries have trialed or implemented a form of universal basic income, including Finland. And arguably, New Zealand is well along the spectrum already in respect to post-growth economy policies, with our publicly funded healthcare and education systems.
So what is degrowth exactly? Despite the name, degrowth advocates do not suggest the carte blanche reduction of economic activity. They propose the downscaling of parts of the economy that do little to contribute to human wellbeing while causing enormous harm to the environment. Examples of such sectors are industrialised meat and dairy production, fast fashion, advertising, cars and SUVs, and aviation. They argue for the need to lengthen the lifespan of products by phasing out single-use products and the regulation of designed-in obsolescence of electronic and household appliances.
On the other hand, advocates of degrowth propose the expansion of sectors of the economy that will support our transition to an economy that operates within planetary boundaries. Such sectors include renewable energy generation, public transport, social housing, the health and care sectors, education, environmental restoration, and sustainable food production, among others.
Degrowth advocates argue that whether we like it or not, we will get to a point (and it may be sooner than we realise) when current growth rates are no longer viable, and our existing economic system will collapse. Rather than a chaotic collapse leading to unimaginable human suffering and social disruption, they advocate a planned transition to a post-growth economy, in which the economic system is redesigned to put human and planetary wellbeing at the centre, rather than (unevenly distributed) wealth creation. This would be a more rational and efficient economy because it would be centred on producing goods and services that we actually need, not ones that we have been convinced that we need through increasingly sophisticated marketing.
Degrowth advocates propose a suite of policies including the scaling down of ecologically destructive industries, the decommodification of public goods such as public transport, healthcare, education and electricity, and a shift from an ownership-oriented economy to one oriented around usership, where appropriate. Degrowth proponents acknowledge that these sort of down-shifts of substantial parts of the economy will mean less paid work for those working in ‘sunset’ industries, and propose policies such as a universal basic income, publicly-funded retraining schemes and a four-day week to address this. These and other policies would enable more people to contribute to society in ways that are not rewarded by direct income, including in care-giving, environmental restoration, or work that contributes in other ways to social or community wellbeing.
Clearly such a fundamental redesign of the economy would have major financial implications. There would be less revenue produced by energy-intensive, ecologically damaging sectors. But it needs to be remembered that – despite the myth of trickle-down economics – the bulk of this wealth currently goes back into the pockets of a wealthy few, with very little made available to be invested in public goods or services.
Moreover, under our current economic system, the ‘externalities’ of harmful industries fall on the taxpayer to deal with – examples include the Tui Mine clean-up and the remediation of countless other contaminated sites (and we have the billion-dollar Tiwai Point clean-up to look forward to); recovery from floods and landslides exacerbated by poor forestry practices; restoration of degraded waterbodies (such as Lake Taupo) as a result of historical and current land-use practices; and of course the escalating cost of recovery from weather events made more frequent and extreme by climate change (an externality of the ‘obscenely’ profitable fossil fuel industry).
There is no doubt that any attempt to redesign the economy to put human and environmental wellbeing at the centre will be challenging – it will be disruptive and require fundamental changes in the way we organise public finances, the broader finance system, and how we value work and public goods. However, not planning for such a transition, and simply reacting haphazardly to the seismic social and economic disruption that is tracking towards us as a result of climate change, ecological collapse and energy descent will be many times more destructive and harmful to people and society.
There are still many more questions around how we might design and achieve a truly wellbeing-centred economy – and the degrowth scholarship is alert to these unknowns – but isn’t now the time to be asking and exploring these questions? There are numerous bright minds in government, industry and in academia who are thinking deeply about these issues. Why not bring these people together to undertake an honest and robust examination of the pathways offered by degrowth and other postgrowth economic scholarship and how policies might be designed to guide us away from the precipice and towards a future where our economic system is in balance with the natural world?
