‘Total economic transformation’ — getting from here to there on climate change
The climate impact of economic growth is putting the ability to live at risk. But growth is also necessary to improve living standards, especially in poorer nations. Experts say there is a way out of the downward spiral.
In his 2012 science fiction novel, “News From Gardenia,” author Robert Llewellyn peers into a world that turns out OK. Humans live harmoniously with the natural environment around them. Heavy-handed capitalism appears to have collapsed, replaced by a local exchange of goods and services. Communities seem healthier and happier, but it’s a nonspecific global catastrophe in the story’s history that forced the change.
The narrative arc is one Greta Thunberg might subscribe to. Economic growth is a “fairy tale” killing the planet, she said in September. Slow down by choice now, she told leaders at the UN Climate Action Summit, or climate change will force us to — maybe sooner rather than later.
Underscoring her point, Thunberg’s Fridays For Future movement is calling for a Buy Nothing Day on November 29, Black Friday, a post-Thanksgiving commercial tradition in the US that kicks off the Christmas shopping season.
To grow or not to grow
For the majority of economists, however, a low- or no-growth solution to climate change is not a serious one, and certainly not one applicable on a global scale.
“The Greta camp is very much an advanced economy phenomenon,” Adam Tooze, a history of economics professor at Columbia University, told DW. “It’s within the realm of reasonable politics for advanced economies to say we need no further growth.”
Not so for poorer and developing economies, which face a “genuine hard choice” between meeting “existential human needs” — such as clean water, sanitation and medical care — and pursuing the rapid decarbonization necessary to meet Paris Agreement targets on global warming.
That puts most of the decarbonization burden on rich countries, Tooze said, where the challenge is a less formidable, but by no means easy matter of technology and politics. Instead of a radical shift to no growth, economists like Tooze advocate pulling existing levers of global capitalism to achieve growth without the carbon footprint.
One such lever is central banks, which Tooze argues could design monetary policy that favors climate solutions like renewables, battery technology and carbon capture on a large scale, while making dirty investments less attractive.
With quantitative easing (QE) back in the central bank toolbox for spurring sluggish economies, Tooze wants the European Central Bank to “commit to buying as many green bonds as it can without crowding out private investors,” he said. “There is really no case for central banks or managers of foreign exchange reserves to still be underwriting a fossil fuels status quo, which we know is not sustainable.”
Source: dw.com