The South African Civil Society Information Service

The Green Growth Agenda: Is This the New Hope?

By Saliem Fakir · 21 Oct 2011

It could be argued that the climate change issue has become less about climate justice and more about new profits.

In South Africa, the concept of the green economy is abuzz with nervous energy. There have been numerous conferences on the subject in light of the upcoming United Nations Climate Conference (COP 17) to be held in Durban later this year.

But is “green growth” just about new markets and different types of goods that carry the green label? Is it just about greening an old system or about plugging out of that system?

Looking at the matter more starkly: just because we think we are doing something green, doesn’t mean it will save the planet. It may buy us some time and reduce the impact of our ever-growing ecological footprint, but if we don’t fundamentally shift how we live with nature and if we continue to make demands on it, we remain on track for ecological disaster.

The real elephant in the room is ‘consumption’. It’s been talked about a lot, but little’s been done about it.

Consumption is about desires, many irrational in nature. Desires can only be controlled by individual and collective values that restrain our capacity for over-consumption. If you like, climate change is about psychology and behaviour.

This question of consumption for the sake of it, was recognised by economist John Maynard Keynes himself, as a double-edged sword. Later, critical theorists such as Thorstein Veblen and John Kenneth Galbraith recognised that irrational desires are at the heart of surplus profits and the life-blood of capitalism.

The price we are paying for status envy is the burden of an unsustainable future. Green growth models within the trappings of the old consumptive-led paradigm will change nothing.

The green growth discourse has become the latest fad to be spun out of climate change campaigns.

There is, of course, a green growth story to be told, but we need to tread with caution or our enthusiasm for it will be channelled into misplaced directions.

Systemic green growth is fundamentally about lifestyle changes and that really is an agenda against decadent growth and consumption.

Firstly, growth is useful if the benefits of growth have a sound redistributive mechanism. Millions of people in China and India have benefited from growth and have seen their incomes rise. But there is also the flipside, as recent global protests under the banner of “Occupy Wall Street” vocally highlight: growth has benefited a few.

Secondly, basic levels of consumption are necessary for a good life, but consumption that is not of necessity tends to be driven by a culture of consumptive frivolity that has been damaging to the environment.

Current debates on green growth are placed firmly within the old economic paradigm of corporate driven growth and in essence ‘greening’ consumption, but not changing the way we consume. It continues to latch onto the trappings of brand culture, as Naomi Klein illustrated so well in her book “No Logo.”

The financial crisis and the resultant economic slump that followed worldwide created a notable interest in identifying ‘spare capacity’ for growth through fiscal stimulus. The green sector, especially energy efficiency interventions and energy alternatives, have become the natural allies of green growth.

The underlying reason for this is that demand for energy is growing exponentially. Countries that are protecting their economic advantage are driving demand up. Dependence on fossil fuels and the resultant volatility associated with fossil fuel prices have also given impetus to alternatives.

Realism has prevailed within governments and companies that are concerned about fossil fuel supply and price volatility, as they are implementing efficient use of resources and making investments in substitutes to sustain their long-term interests.

At times this has resulted in perverse outcomes rather than lead to global public good.

Take for instance the US Farm Bill or the EU’s Common Agriculture Policy where subsidies have been shifted from the ‘brown’ to the ‘green’ agenda, only to reinforce the status quo.

This has only led to the protection of EU farmers and the continued protection of the same unsustainable agricultural system. In the US, farm subsidies have encouraged a surge in biofuel production, which has had a knock-on effect on food and feedstock prices. It’s all being done under the banner of green growth.

However, there is still the larger existential issue that never seems to go away and this is the curse of consumption.

Those who didn’t have it before seek to mimic the behaviour of ‘the haves’. In the next twenty years, there will be close to 2-3 billion people classified as middle class (generally applied to people who earn $10-$100 per day). 

If this new billion make the same lifestyle choices that the 400 million middle class people in the developed economies made from the late 1970s onwards, the idea of decoupling growth from unsustainable resource consumption will never materialise.

Green growth without decoupling from consumption will lead to the paradoxical – lack of sustainability with exponential consumption. This was highlighted in the latest economic analysis presented by the Mckinsey Global Institute at the ‘Global Green Growth Forum’ held in Copenhagen on 11-12 October 2011.

For instance, reduction in energy consumption, while good, as it prevents us from building new coal-fired power plants still leads to perverse outcomes such as the “rebound effect.” This is where costs are saved due to less energy consumption, but disposable incomes are increased.

And since people may have no rational restraint over irrational desires for goods and services, energy consumption merely goes up in the general economy with the related growth in production to meet the demand for new goods.

Multiply that exponentially and slowly a picture begins to emerge that consumptive demand itself builds within the system an unsustainable pathway, despite its greening.

It’s clear that the focus on greening the economy led by a clean-tech boom only continues to support the prevailing paradigm, but does little to fundamentally cross-swords with the big elephant in the room: irrational consumption, which in itself undermines the idea of a green economy.

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