Green Growth: Ideology, Political Economy and the Alternatives
336
Green Growth: Ideology, Political Economy and the Alternatives
336Paperback
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Overview
But the green growth project is deeply inadequate, whether assessed against criteria of social justice or the achievement of sustainable economic life upon a materially finite planet. This volume outlines three main lines of critique. First, it traces the development of the green growth discourse quaideology. It asks: what explains modern society's investment in it, why has it emerged as a master concept in the contemporary conjuncture, and what social forces does it serve? Second, it unpicks and explains the contradictions within a series of prominent green growth projects. Finally, it weighs up the merits and demerits of alternative strategies and policies, asking the vital question: 'if not green growth, then what?'
Product Details
| ISBN-13: | 9781783604876 |
|---|---|
| Publisher: | Bloomsbury Academic |
| Publication date: | 02/15/2016 |
| Pages: | 336 |
| Product dimensions: | 5.40(w) x 8.40(h) x 0.80(d) |
About the Author
Manu V. Mathai is assistant professor in the School of Development at Azim Premji University. He received his PhD in energy and environmental policy from the Center for Energy and Environmental Policy at the University of Delaware. He researches and teaches about the intersection of energy, environment and human development.
Jose A. Puppim de Oliveira teaches at the Getulio Vargas Foundation (FGV-EAESP and FGV-EBAPE) as well as the Federal University of Rio de Janeiro (COPPEAD-UFRJ) and Fudan University, Shanghai. He is also a visiting research fellow at United Nations University (UNU-IIGH), Kuala Lumpur. He was assistant director and senior research fellow at the United Nations University (UNU-IAS) from August 2009 to 2015. His academic interests are in the political economy of sustainable development, particularly in patterns of environmental governance and in the implementation of global policies at the local level.
Gareth Dale teaches politics at Brunel University. His publications include books on Karl Polanyi, the GDR and Eastern Europe, and international migration.
Manu V. Mathai is assistant professor in the School of Development at Azim Premji University. He received his PhD in energy and environmental policy from the Center for Energy and Environmental Policy at the University of Delaware. He researches and teaches about the intersection of energy, environment and human development.
Jose A. Puppim de Oliveira teaches at the Getulio Vargas Foundation (FGV-EAESP and FGV-EBAPE) as well as the Federal University of Rio de Janeiro (COPPEAD-UFRJ) and Fudan University, Shanghai. He is also a visiting research fellow at United Nations University (UNU-IIGH), Kuala Lumpur. He was assistant director and senior research fellow at the United Nations University (UNU-IAS) from August 2009 to 2015. His academic interests are in the political economy of sustainable development, particularly in patterns of environmental governance and in the implementation of global policies at the local level.
Read an Excerpt
Green Growth
Ideology, Political Economy and the Alternatives
By Gareth Dale, Manu V. Mathai, Jose A. Puppim De Oliveira
Zed Books Ltd
Copyright © 2016 Gareth Dale, Manu V. Mathai and Jose A. Puppim de OliveiraAll rights reserved.
ISBN: 978-1-78360-487-6
CHAPTER 1
Can green growth really work? A reality check that elaborates on the true (socio)economics of climate change
Ulrich Hoffmann
Introduction
In the run-up to the Rio+20 Conference in June 2012 and the UN Climate Summit on 23 September 2014, virtually everyone from multilateral agencies to politicians, to businessmen, and to NGOs has advocated a fundamental shift towards 'green and inclusive growth' as the new, qualitatively different growth paradigm, which would considerably improve the energy efficiency of the economy and lead to drastic changes in its energy and material mix (replacing exhaustible by renewable materials), with corresponding structural changes. 'Green growth' advocates argue that such paradigm change would unleash new wealth creation and employment opportunities; provided that there was sufficient investment and companies had better information and supportive incentives. In other words, the impression occurs that the 'green growth' concept is flawless; just the enabling conditions for it are lacking. 'Green growth', which should be rather seen as a process of structural change, may indeed create some new growth impulses with reduced environmental load, in particular at microeconomic level. But can it also mitigate climate change at the required scale and pace (i.e. significant, absolute and permanent decline of GHG emissions in a historically very short period of time) at macroeconomic and global level?
The reality check below casts a long shadow on the 'green growth' hopes. Our analysis argues that the arithmetic of economic and population growth, energy/resource/material efficiency limits related to the rebound effect and horizontal shifting of problems, governance and market constraints, as well as systemic limits call into question the hopes of decoupling GHG from economic growth. Rather, one should not deceive oneself into believing that such an evolutionary (and often reductionist) approach will be sufficient to cope with the socio-economic complexities related to climate change (and some other global environmental problems, such as loss of biodiversity). 'Green growth' may give much false hope and excuses to do nothing really fundamental that can bring about a U-turn on global GHG emissions. The approach is largely reduced to a technocratic and technology-fetishized one, because changing technologies is much easier than altering societies and their socio-economic drivers.
'Green growth' proponents need to scrutinize the historical macro-(not micro-) economic evidence, in particular the arithmetic of economic and population growth, the colossal reductions required in the GHG-emission intensity of economic growth as well as the significant influence of the rebound effect. Furthermore, they need to realize that the required transformation goes far beyond innovation and structural changes to include better distribution of income and wealth, power over markets, and a culture of sufficiency. Against this very background, an attempt is made below to elaborate on the true economics of climate change. Global warming also calls into question the global equality of opportunity for prosperity (i.e. ecological justice and development space) and is thus a huge developmental challenge for the South and a question of life and death for some developing countries.
Limits set by the arithmetic of economic and population growth
In the last few years, the fossil-fuel-related CO2-emission trajectory has followed a trend that is worse than the worst-case scenario used in the 4th assessment report of the Intergovernmental Panel on Climate Change (IPCC) of 2007. If current GHG-emission trends continue unabated, according to the 5th IPCC assessment report of 2014, we are likely on course for temperature increases of 4–6°C and even more, which would undoubtedly have apocalyptic implications. The 4th IPCC assessment report concluded that GHG reductions in the order of 85 per cent for developed countries and some 50 per cent for developing countries would be necessary by 2050 to keep global warming at a range of 2 to 2.4°C.
It is, however, highly questionable whether the required drastic GHG-emissions reductions are really achievable under the prevailing growth paradigm. By way of illustration, global carbon intensity of production fell from around 1kg/$ of economic activity to just 770g/$ (i.e. by 23 per cent) in the 28 years between 1980 and 2008 (a drop of about 0.7 per cent per annum). Even if recent trends of global population (at 0.7 per cent per annum) and income growth (at 1.4 per cent per year) were just extrapolated to 2050, carbon intensity would have to be reduced to 36gCO2/$ – a 21-fold improvement on the current global average to limit global warming to 2 degrees. Allowing developing countries to catch up with the present level of GDP per capita in developed nations would even require a much higher drop in carbon intensity of almost 130 times by 2050 (see Figure 1.1). More recent analysis of global carbon intensity dynamics by Pricewaterhouse-Coopers (PwC) as part of its annual Low Carbon Economy Index supports Jackson's projections. According to the PwC experts, carbon intensity of the global economy would have to be reduced by 6.2 per cent a year between now and 2050. Even a doubling of the current rate of decarbonization (some 1.2 per cent in 2013) would still lead to emissions consistent with 4–6°C of warming by the end of the century.
Not once since World War II has humankind achieved the rate of reduction of carbon intensity of GDP required for limiting global warming to 2°C. In retrospect, apart from Germany just for a short period of two years after reunification in the 1990s, the Russian Federation is the only large economy that has reduced emissions substantially since 1990, mostly caused by a breakdown of its heavy industry (an example of degrowth). The country's carbon emissions fell by almost 3 per cent annually in 1990–2005. The world (not only a handful of technologically very advanced countries) would have to repeat the Russian experience at a roughly three times more drastic extent (and even that would only result in limiting global warming to about 3°C degrees). The closest the world came to the required decarbonization levels was during the recessions of the late 1970s/early 1980s (with almost 5 per cent reduction in 1981) and the late 1990s (with a reduction of 4.2 per cent in 1999). This seems to suggest that, historically, drastic rates of decarbonization have been linked to recessions and thus phases of stagnation or contraction. The highest decarbonization rate ever achieved in a planned fashion was 4.5 per cent per annum in 1980-1985, when France implemented its nuclear energy programme.
The rise of global population by about 30 per cent, from 7.2 billion now to about 9.3 billion by 2050, will drive the scale effect of production and consumption (i.e. their absolute physical expansion). This growth, combined with a three-fold increase in per capita consumption (from about US$6,600 to 19,700) (and even assuming that the rich world grows not much more) would jack up the size of the world economy by four times, requiring 80 per cent more energy. While it is a fact that (with the exception of some oil-producing Arab countries) the countries with the highest population growth have contributed least to GHG emissions thus far, this is only because their populations continue to live in extreme poverty. In other words, population growth does not matter for resource consumption and GHG emissions as long as one accepts that people remain poor, with minimal levels of consumption. But it begins to matter a great deal if the international community has the ambition to reduce poverty amidst rapidly growing populations (if the 1.5 billion people currently without access to basic energy supply obtained that access and had the current average per capita CO2 emissions, this would increase global carbon emissions by 20 per cent and double those of the developing world).
It is often also overlooked that the drastic reductions in GHG intensity of GDP have to happen in a historically very short period of time, i.e. the next 20–30 years. According to McKinsey researchers, the 'carbon revolution' needs to be three times faster than the industrial labour productivity rise in the industrial revolution. 'During the Industrial Revolution, the United States achieved an increase in labour productivity of ten times between 1830 and 1955. The key difference is the timeframe. The tenfold increase in labour productivity was achieved over 125 years; the carbon revolution needs to happen in only 2–3 decades.'
The asymmetry between carbon intensity, scale and structural effects of economic growth
To really come to grips with ballooning GHG emissions, the global economy needs to decouple GHG emissions in absolute, not relative terms from GDP growth. This absolute decoupling needs to be significant, fast, global and permanent.
The relatively modest progress achieved in reducing GHG intensity of GDP is related to the fact that technological progress in reducing GHG intensity and concomitant structural change has been outpaced by the scale effect of growth. To decouple GHG emission from GDP growth (and thus a qualitatively different economic growth) implies that the technology effect and the composition/structural effect of growth lead to higher GHG-emission reductions – in particular crystallized as higher energy (and related material and resource) efficiency and the more pronounced use of renewable material and energy – than GHG-emission growth fuelled by the scale effect of economic growth. However, there are only very few examples where such decoupling has actually happened, one being the case of refrigerators in some developed countries; another example concerns modern lighting systems. Much more typical, however, has been the case of fuel efficiency of the private car population in the European Union in the last 20 years. Savings through more fuel-efficient cars were outweighed by the strong increase in the car population and the total mileage travelled. Whereas fuel consumption per privately owned car decreased by about 15 per cent in the period 1990–2007, car population and total mileage travelled increased by over 40 per cent. Consequently, total fuel consumption of privately owned cars rose by more than a quarter.
Interestingly, structural changes have also been far less effective in countering the scale-effect-induced GHG-emission dynamics than hoped for. Generally, for restructuring to be effective, GHG-intensive sectors and activities would have to shrink faster than the expansion of GHG-efficient ones, which actually has not happened. 'Ecological' restructuring of the economy is a structural change of gigantic dimension and, as pointed out above, required at break-neck speed, which implies a huge loss in fixed-capital stock. Rather, entrepreneurs tend to gradually replace the fixed capital as a function of amortization cycles (which can be influenced by finance and fiscal policy measures of governments).
Finance capital also plays a key role in ecological restructuring. On the one hand, finance capital provides the loan or share capital for required changes in the fixed-capital stock, which on its own puts pressure on productive capital to generate surplus value (i.e. profit for paying interest or revenues on shares) and thus expands the scale of production. On the other hand, finance capital tends to have a rather short-term interest in the profitability of its invested capital. At the same time, it is risk averse as regards investing in technology for paradigm shifts or revolutionary changes. Hence a preference for supporting investment projects, based on evolutionary or incremental changes as regards energy (and related material and resource) efficiency and changes in the energy mix, which generally fall short of the required quantum-leap changes in a historically short period of time. In essence, scale effects, new technology and structural change all require active use of external finance capital, which on its own requires economic growth to pay interest and revenues on shares.
Also, the structural shift into a service-dominated economy has generated far less GHG-emission reductions than hoped for. This is caused by the fact that quite a number of service sectors, such as transport, health, IT services or tourism, are rather fixed capital and thus energy, material and resource intensive when it comes to setting up their infrastructure or operating base (conversely, operationally, most service sectors are labour-intensive). What is more, emissions from the private consumption of a person are relative to his/her income and not the occupation. So, while shifting jobs into the service sector might reduce emissions in production somewhat, the people working there will drive their car to work, eat meat and go on vacation in the same way as a factory worker. A stockbroker earning a million dollars or more probably uses little resources at work, but she/he will use a lot more resources and energy for private consumption than a worker in manufacturing.
Increasing the use of renewable energy – easier said than done
Much hope was put on the contribution of changes in the energy mix to reducing GHG emissions. However, evidence suggests that a complete or significant replacement of fossil fuel by renewable energy (RE) is very challenging on a number of fronts:
• There is the need for compacting RE.
• One needs a significantly modified, renewed or new transmission infrastructure.
• There is a reduced energy return on energy input (EROI).
• Certain REs have to face up to material scarcities.
• There is not yet a really sustainable alternative for conventional transport fuel.
Wind and solar, the two most promising RE sources, are variable and intermittent, and therefore cannot serve as 'base-load' electricity, requiring substantial conventional electricity capacity as backup. They also require significant material input into the production of solar panels and wind turbines and a major upgrading of storage capacity, transmission lines and the creation of intelligent grids, all set to drive up material consumption (and related costs), in some cases completely exhausting the supply of strategic materials. Furthermore, two-thirds of fossil fuel is used as transport fuel, for which there is no real substitute within sight (biofuels cannot meet more than a small fraction of the world's transport fuel demand).
Hänggi cautions that a change in the energy mix does often not lead to a straightforward replacement of fossil by renewable fuel. Rather, the new energy is likely to be used in parallel with the old one for quite some time (a phenomenon that applies to many social innovations), both for technical reasons, but also linked to the rebound effect (see below). For instance, the present global consumption of coal is higher than that before the oil age; so is the current consumption of fuel wood compared to what was used before the coal age. Also, to assure reliable electricity supply, gas-reliant power stations are likely to play an important role in backing up wind and solar power facilities.
It should also not be overlooked that, unlike conventional fuel, renewable energy is usually only available in non-concentrated form; it has to be 'compacted' to generate sufficient power. This 'compaction' or, in technical terms, the reduction of entropy of a system, can only be achieved by increasing the entropy in other parts. In practical terms of renewable energy, this means that one can only compact wind, solar, bio or hydro energy by increasing the use of conventional fuel or raw materials.
As a result, EROI is low and sometimes even negative (in fact, even for conventional fuels the EROI has dramatically declined in recent decades). According to Hall et al., it is not important to have renewable energy alternatives per se, but that they have:
• a sufficient energy density;
• an appropriate transportability;
• a relatively low environmental impact per net unit delivered to society;
• a relatively high EROI; and
• that REs are obtainable on a scale that society demands.
Hall et al. stress that 'we must remember that usually what we want is energy services, not energy itself, which usually has little intrinsic economic utility'. MacKay adds that 'for a sustainable energy plan to add up, we need both the forms and amounts of energy consumption and production to match up. Converting energy from one form to another ... usually involves substantial losses of useful energy ... Conversion losses (in the United Kingdom, for example – added by the author) account for about 22 per cent of total national energy consumption.'
(Continues...)
Excerpted from Green Growth by Gareth Dale, Manu V. Mathai, Jose A. Puppim De Oliveira. Copyright © 2016 Gareth Dale, Manu V. Mathai and Jose A. Puppim de Oliveira. Excerpted by permission of Zed Books Ltd.
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Table of Contents
Acknowledgements Contributors Introduction Gareth Dale, Manu V. Mathai and Jose A. Puppim de Oliveira Part I: Contradictions of green growth 1. Can green growth really work? A reality check that elaborate on the true (socio-)economics of climate change Ulrich Hoffmann 2. What is the “green” in “green growth”? Larry Lohmann 3. The how and for who of green governmentality Adrian Parr 4. Degrowth and the roots of neoclassical economics James MeadwayPart II: Case studies 5. Giving green teeth to the Tiger? A critique of “green growth” in South Korea Bettian Bluemling and Sun-Jin Yun 6. Lessons from the EU: why capitalism cannot be rescued from its own contradictions Birgit Mahnkopf 7. The green growth trap in Brazil Ricardo Abramovay 8. Green jobs to promote sustainable development: creating a value chain of solid waste recycling in Brazil Anne Posthuma nd Paulo Sergio Muçouçah 9. Trends of social metabolism and environmental conflicts: a comparison between India and Latin America Joan Martinez-Alier, Federico Demaria, Leah Temper and Mariana WalterPart III: Emerging alternatives? 10. Beyond ‘development’ and ‘growth’: the search for alternatives in India towards a sustainable and equitable world Ashish Kothari 11. Reconsidering growth in the greenhouse: the sustainable Energy Utility (SEU) as a practical strategy for the twenty-first century Job Taminiau and John Byrne 12. Alternatives to green growth? Possibilities and contradictions of self-managed food production Steffen Böhm, Maria Ceci Araujo Misoczky, David Watson and Sanjay Lanka Notes Index