Is Green Growth Possible?

As more and more economists analyse the green growth policy formulated in the reports of the World Bank, OECD and UNEP, they express doubts about the path of economic growth which uses natural resources in a sustainable way. Having tested the theory of Sustainable Development in the light of existing empirical evidence and relationship models of GDP versus material footprint and CO₂ emissions, they conclude that this is not a straightforward way out of the environmental risk situations.

Their research shows that empirical forecasts do not prove there is a genuine possibility to separate GDP completely from the use of resources on a global scale even if very optimistic assumptions are made. Even though some of the models developed for high income countries – in the most favourable scenarios – reveal such a possibility, at the same time, they lead us to find that, given the efficiency improvement constraints, such a trend cannot be maintained over the long term.

Achieving a strict cut in resource use when the GDP growth rate is below 1% per annum seems possible. However, to achieve reductions which are quick enough for us to reach safe thresholds, it would be necessary to implement degrowth strategies, i.e. reduction of production and consumption.

CO₂ emission can be reduced at the 2℃ level only when the global GDP growth slows down to below 0.5%. Reductions at the 1.5℃ level are possible only in a scenario assuming that production and consumption are substantially cut. These estimations are true even in conditions of advantageous policies which are characterised by high coal tax and high technological innovation coefficients. In other words, although we need an interventionist governmental policy and technological innovations, each successful attempt at achieving sufficient emission reductions will require decreasing the scale of aggregate energy demand.

Author:

Krzysztof Żarnotal, Plenipotentiary of the Board for the Circular Economy, Synthos S.A.

Last Updated on March 31, 2021 by Karolina Ampulska