In July 2019 came out a report from the European Environmental Bureau which perfectly exposes all the evidence not only against green growth but also against the trendy concept of circular economy.
This article intends to summarize the main findings and arguments. If you have doubts about them or if you need more details and data we invite you to refer to the full report. All quotes are from the report itself.
“Is it possible to enjoy both economic growth and environmental sustainability? This question is a matter of fierce political debate between green growth and post-growth advocates. Over the past decade, green growth clearly dominated policy-making with policy agendas at the United Nations, European Union, and in numerous countries building on the assumption that decoupling environmental pressures from gross domestic product (GDP) could allow future economic growth without end.”
So what is the reality on the matter?
What kind of decoupling?
First of all, we need to define clearly what we are talking about. Here we will not talk of partial decoupling but rather about overall decoupling, which is the kind of decoupling that is relevant for sustainability.
- In fact decoupling can be relative. For example the part of CO2 emissions relative to GDP can be decreasing but still increasing in absolute terms. What is relevant is rather absolute decoupling: more GDP going together with less emissions.
- Decoupling should be considered in light of environmental targets. If GDP growth means 0,02% drop in CO2 emissions, there is absolute decoupling but this is not enough.
- Decoupling should take into account the overall impact on the environment, and not only the resources extracted to fuel growth. For example, if we produce less carbon emissions thanks to innovative technology but at the same increase biodiversity loss then there is no overall decoupling.
- Decoupling should be global, not only local. Saying that one country is decoupling GDP growth from environmental impacts is not relevant if this country has just “exported” negative environmental impacts in another country.
- Decoupling should also be permanent, not temporary.
- To finish, decoupling should be socially just. “Decoupling needs to be sufficiently large in rich countries in order to free the ecological space necessary for production and consumption in regions where basic needs are unmet.”
If one of these parameters is lacking, decoupling can not be considered relevant for sustainability.
Is decoupling happening?
Directly drawing from the conclusion:
“In light of the present review, we can safely conclude that there is no empirical evidence supporting the existence of a decoupling of the type described as necessary in the first section of this report – that is an absolute, global, permanent, and sufficiently fast and large decoupling of environmental pressures (both resources and impacts) from economic growth.”
“Yet, even though the success of the green growth strategy is nowhere to be seen, this lack of empirical support does not allow to completely dismiss the decoupling hypothesis.”
With the correct range of measures, some argue a decoupling could happen. For example, it could be “by increasing the geographical coverage of emission trading systems (Stiglitz et al., 2017) in combination with phasing out subsidies for fossil fuels (Schwanitz et al., 2014), directing investments into sustainable infrastructure (Guivarch and Hallegatte, 2011), and a number of other decoupling policies (Smith et al., 2010; UNEP, 2014a).”
Is decoupling likely to happen?
This section investigates if any change of measures and policies for green growth could make decoupling happening. Unfortunately 7 factors make decoupling scientifically very unlikely to happen.
- Rising energy expenditure
“All available evidence points towards increasing costs of extraction for both energy sources and materials. If economic growth requires more energy and material, and it takes increasingly more energy and material to extract energy and material, then rising energy expenditure acts as a limit to growth and constitutes a barrier to decoupling. In order to argue that decoupling is possible, one must show how to deal with the increasing marginal cost of energy and material extraction.”
- Rebound effects
“Improving resource efficiency is probably the most common argument put forward in defence of decoupling.” However, every action that responds to savings in resources is prone to rebound effects, that is the increase of absolute energy use due to the implementation of the energy-saving technology.
Rebound effect can be direct. “For instance, driving a more fuel-efficient car more often, faster, or over longer distances; the petrol that was saved in efficiency by the car rebounded into more usage of the car. Direct rebound effects can also occur in production, for example when the acquisition of a more energy-efficient machine motivates additional production (output effect).”
It can be indirect. “For example, driving a more fuel-efficient vehicle (efficiency) or deciding to use it less often (sobriety) could save money (income effect), which can then be spent on impactful products or services (e.g. a far-away holiday trip by plane) or invested on problematic financial products (e.g. related to fossil fuel extraction). For producers, profits resulting from productivity gains can be reinvested into expanding production capacity (re-investment effect)”
Finally, it can be economy-wide. For example “more fuel-efficient cars reinforce the hegemony of cars at the expense of more sustainable modes of transportation like trains and bikes.”
The report provides a wide range of empirical evidence showing that rebounds effects are more a norm than an exception.
- Problem shifting
“An additional argument to be considered alongside rebound effects is that efforts to solve one environmental problem can create new ones and/or exacerbate others.”
The report shows how three different sources of energy (renewable energies, nuclear energy, and natural gas) often considered as solutions for green growth merely change the form that the environmental burden takes.
“[…] piecemeal solutions are likely to fall short in addressing a complex, systematic environmental crisis with many interdependent factors at play. Substituting one problem like climate change for another such as biodiversity loss cannot be considered problem solving. In order to argue that decoupling is possible, one must show that a decoupling in one type of environmental pressure will not translate into significantly increasing another type of pressure”
- The underestimated impact of service
“The so-called “service economy” carries a heavier biophysical backpack than one would think. In the countries with the most urgent mitigation imperatives, the service sector has already been developed to its maximum without the benefits of absolutely decreasing environmental pressures. Services have a footprint, that even though lower than manufactured products, is often only added on top of the environmental pressure pile without many substitutions occurring. This is because the service economy can only exist on top of the material economy, not instead of it. Moreover, services such as advertising or financial products do sometimes actively foster more polluting production, which results in an overall rise in environmental pressures. Again, we are not arguing against services; on the contrary, it is crucial to replace jobs in resource-intensive sectors with more labour-intensive work. Rather, the point we make is that directly reducing output in the problematic sectors would be more effective than developing activities around them hoping that substitution would somehow occur.”
- Limited potential of recycling
“Recycling is a common strategy advocated for decoupling often associated with the idea of a circular economy.” Yet, recycling has very important limits.
First of all, recycling itself needs new materials and energy. “Perpetual motion machines do not exist in reality. Even though significant gains can be expected from better recycling, the process of recycling itself necessitates energy and, most of the time, new materials, which would then also need to be recycled at some point, requiring the use of additional new material, and this ad infinitum (Georgescu-Roegen, e.g. 1971, p. 132, spoke of an “infinite regress”). This means that because of unescapable laws of nature (here the entropy law), the technically feasible recycling rates are always below the theoretically possible ones.”
“Since materials inevitably degrade through time (2nd law of entropy), they can only be recycled into the same products for a limited number of times before they have to be used to produce other products with lower “quality”. Put another way, sooner or later, any recycling is necessarily downcycling. For instance, plastic bottles can be recycled into plastic fibre for clothing but not back into plastic bottles, and they can finally end up in the noise protection walls along motorways. Paper cellulose fibres can only endure 3 to 6 cycles, for which they need to be mixed with new fibres, and until they become too fragile to be used for paper before being used for cardboard and later as housing isolation and finally as biofuel. Just like for energy, this wearing down of materials sets absolute limits on how circular any economy can be.”
On top of technical impossibility, recycling at 100% is economically impossible. The cost of recycling goes higher and higher with the amount of recycling we want to perform (see factor 1), making increasing complexity of recycling become a pure financial loss.
Moreover, “as shown by Grosse (2010), in an economy where material consumption increases, recycling can only delay resource depletion. The author takes the example of steel, the best-recycled material worldwide. At a current 62% recycling rate and with a yearly rise in consumption of 3.5%, recycling is only delaying depletion by 12 years. If we keep consumption rates steady, even increasing recycling rates to 90% would only add an extra seven years before depletion.”
In conclusion, “an infinitely growing circular economy is an arithmetical impossibility, and a contradiction in terms.”
- Insufficient and inappropriate technological change
“Technology is no panacea. […] the reasons to be sceptical about the potential for technological change to foster the type of decoupling we described as necessary are multiple and serious.
First, many technologies that could have severed part of the link between GDP and environmental pressures have been here for several decades now with only minimal effects.
More importantly, all innovations do not go in the direction of more ecological sustainability. In a capitalist and growth-oriented economy, innovation is most often strongly dependent on profit-making opportunities, hence partly oriented to this aim. In such a context, most innovations may result in GDP increase but only a few of them might help mitigate environmental pressures.
Future technological changes may perhaps bring some additional improvements, provided these are not cancelled by rebound effects (cf. Reason 2) and provided they do not result in problem shifting (cf. Reason 3).
Past and current paces of technological evolutions are clearly at odds with the urgent and radical changes that the environmental crises call for and declining marginal rates of improvement (cf. Reason 1) give little reason for optimism about the future.”
- Cost shifting
“There are strong theoretical reasons to believe that the few cases of local decoupling that are celebrated (which remain exceptions) are mostly a displacement of environmental pressures elsewhere,” from richer regions to poorer regions.
“If that is so, it means that ecological sustainability can only be achieved via a downscaling of polluting production. This reason is perhaps the most problematic of all. As long as individuals, firms, and nations stay engaged in cost-competition, there will be incentives to swipe ecological costs under the rug, with the lightening of footprints remaining a mere statistical trick.”
“Each of [these factors] taken individually casts doubt on the possibility for decoupling and thus the feasibility of “green growth.” Considered all together, the decoupling hypothesis appears highly compromised, if not clearly unrealistic. It is urgent to draw the consequences in terms of policy making, and following the precautionary principle, to move away from the continuous pursuit of economic growth in high-consumption countries, in particular in the EU. Following the arguments we have discussed, the burden of proof rests on decoupling advocates. Unless adequate and convincing demonstrations are brought against each and all of the above-mentioned arguments, the concept of decoupling remains an act of pure belief with little relevance for policy making.”
“The problem is that, even if decoupling could be definitely proven impossible, it will take some time for this to be demonstrated to the satisfaction of its proponents. As argued by Fletcher and Rammel (2017), decoupling acts as a distracting fantasy that warrants a (continuously more) destructive path with both the promise of success and demonstration of its impossibility deferred into the future. But as decoupling fails to materialise, natural resources deplete and ecosystems collapse. In that sense, decoupling is not an opportunity but a threat.
Ultimately, until GDP is actually decoupled from environmental pressures, any additional production will require a larger effort in reductions of resource and impact intensity to stay away from resource conflicts and ecological breakdown. In that sense, trying to reduce impacts while growing makes as little sense as trying to brake while accelerating in front of an obstacle.
The least impactful production and consumption is the one that does not occur. In one of their decoupling reports, UNEP (2014a, p. 48) spends a full page describing all possible technologies to improve trucking fuel efficiency, from full roof deflectors, sloped hoods and aero bumpers, to curved windshields. Options they do not mention include simply reducing the speed of these trucks or substituting rail transport to freight by trucks, or even more effective, reducing the need for freight altogether by relocalising production and consumption. The fact that such common-sense solutions are not even considered in a comprehensive report focused on policy options is telling evidence of how dominant the unidimensional emphasis on eco-efficiency has become.
In contrast to hydrogen cars, region-wide smart-grids, and well-functioning carbon markets, reducing production and consumption is not an abstract narrative. In the last two decades, movements in the global North (transition towns, degrowth, eco-villages, slow cities, social and solidarity economies, economies for the common good) have started to become organised around the concept of sufficiency, which could inspire a cross-cutting policy approach. What they say is that more is not always better and that in a climate-constrained world, enough can be plenty. As argued by many of these actors, the choice of sufficiency is not one of sacrifice, unemployment, rising inequality, poverty, and shrinking welfare States. Instead, it is the choice of a fair economy that remains within the carrying capacities of the biosphere or, as the EU 7th Environmental Action Programme has called it, “living well within the planet’s ecological limits.” Listening to these alternative options, we should reframe the debate altogether: what we need to decouple is not economic growth from environmental pressures but prosperity and the “good life” from economic growth.
This work highlights the need for a new conceptual toolbox to inform environmental policies. In this perspective, it appears urgent for policymakers to pay more attention to and support the existing diversity of alternatives to green growth. Drawing lessons from the diversity of people and frameworks engaged in imagining and enacting alternative ways of life is a promising way to solve what we perceive as a crisis of political imagination. The success of that initiative matters for what is at stake is nothing short of the future of our children and grandchildren if not to say the human civilisation as such.”