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  June 2, 2016

Debate: Green Economic Growth Vs. Slow Growth (1/2)


Economists Robert Pollin and Peter Victor discuss whether ecological sustainability and economic growth can be achieved simultaneously
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biography

Robert Pollin is Distinguished Professor of Economics and Co-Director of the Political Economy Research Institute (PERI) at the University of Massachusetts-Amherst. He is also the founder and President of PEAR (Pollin Energy and Retrofits), an Amherst, MA-based green energy company operating throughout the United States. His books include The Living Wage: Building a Fair Economy (co-authored 1998); Contours of Descent: U.S. Economic Fractures and the Landscape of Global Austerity (2003); An Employment-Targeted Economic Program for South Africa (co-authored 2007); A Measure of Fairness: The Economics of Living Wages and Minimum Wages in the United States (co-authored 2008), Back to Full Employment (2012), Green Growth (2014), Global Green Growth (2015) and Greening the Global Economy (2015).

Peter Victor is one of the pioneers of ecological economics and an environmental studies professor at York University. He has served as Assistant Deputy Minister of the Environmental Sciences and Standards Division in the Ontario Ministry of the Environment as well as on the Boards of several prominent environmental organizations.


precis

In order for societies to transition away from fossil fuels, a new research field of green economics has emerged to confront the necessity and inevitability of transforming national economies in order to reduce greenhouse gas emissions.

There are, however, two camps in the world of green economics.

Advocates of green growth, such as Robert Pollin of the Political Economy Research Institute at the University of Massachusetts- Amherst, argue that economic growth can accompany reductions in greenhouse gas emissions through the use of cleaner technology and green jobs.

Advocates of degrowth, such as Peter Victor of York University in Toronto, say economic growth will exacerbate efforts to achieve ecological sustainability.

"Degrowth is all about challenging the growth paradigm," says Victor, "which means challenging the priority that's given to the pursuit of economic growth even in the richest of countries, when there are so many indications that the material and energy requirements that are necessary to support economic growth are overloading the capacity of the biosphere when we dispose of those materials and energy as waste."

But Pollin argues that "we simply can't get close to the goal" of reducing emissions "by reducing GDP alone. GDP reduction, degrowth, is not a solution to climate stabilization. What we have to do instead is invest massively in clean technologies, renewable energy, and in high energy efficiency. That in my view is the only way, even if you're a proponent of degrowth for other reasons."

While Victor warns that the production of clean energy technology will require large energy inputs and produce less energy in return, Pollin argues that efficiency and expansion of clean renewable energy can lead to economic growth without an increase in emissions.


transcript

Debate: Green Economic Growth Vs. Slow Growth (1/2)SHARMINI PERIES, TRNN: It’s the Real News Network. I’m Sharmini Peries coming to you from Baltimore.

For the first time since the industrial revolution, we are seeing rising GDP without further increase in greenhouse gas emissions, the stated goal of the United Nations Sustainable Development Agenda. According to a recent report from the World Resource Institute, 21 countries have managed to reduce carbon emissions while growing their gross domestic product. There are, however, two camps in the world of green economics. One says that we can continue to grow our world and national economies while reducing greenhouse gas emissions through the use of cleaner technology and green jobs, and those who say to achieve the stated goals that the scientists say we must achieve to curb CO2 emissions, degrowth is necessary for ecological sustainability.

With us to discuss these two positions are key figures in the debate: Professor Robert Pollin and Professor Peter Victor. For sustainable growth we have Robert Pollin, who is a Distinguished Professor of Economics and co-director of the Political Economy Research Institute at the University of Massachusetts, Amherst. He’s the author of several books, including Greening the Global Economy. And for degrowth position we have Peter Victor. He is an environmental studies professor at York University in Toronto, and he has served as assistant deputy minister of the Environmental Sciences and Standards Division of the Ontario Ministry of the Environment, and he’s a fellow of the Royal Society of Canada. Gentlemen, thank you both for joining me today.

ROBERT POLLIN: Thank you for having me.

PETER VICTOR: Thank you.

PERIES: So let me start with you, Victor, because Bob has done several interviews with us on this topic, and he also has a book that addresses the topic, and he has an article in the Nation magazine. So we have not heard your position on this, Peter. So let me give you an opportunity to address degrowth, and why you think it’s a vital strategy for reducing emissions.

VICTOR: Sure. First of all, I want to say that degrowth isn’t a word that I use in my vocabulary a great deal. However, I’m very close to the people who do like to use the term. So let’s be clear that it’s a more complicated term than simply reducing the growth of the economy as is conventionally measured. Degrowth is all about challenging the growth paradigm, which means challenging the priority that’s given to the pursuit of economic growth even in the richest of countries, when there are so many indications that the material and energy requirements that are necessary to support economic growth are overloading the capacity of the biosphere when we dispose of those materials and energy as waste.

So it’s a much bigger problem than simply greenhouse gases and climate change, and it’s a more complicated set of issues than simply saying do we want GDP to rise or fall.

PERIES: All right. So, Bob, let me give you an opportunity to state your position.

POLLIN: Okay. Thanks again for having me on. I want to say, first of all, that I certainly share a lot of the concerns that Peter and many other proponents of degrowth, or variations thereof, have with respect, first of all, to using GDP as a measure of welfare, thinking that GDP is the be-all, end-all, that economies have to grow to make living standards better. I share all of those concerns.

I want to focus strictly on the issue of reducing greenhouse gas emissions. In particular, CO2 emissions, which constitute about 80 percent of greenhouse gas emissions. And my point is very straightforward. We have to, if we take even the conservative assumptions of the Intergovernmental Panel on Climate Change, the IPCC, we have to reduce emissions somewhere in the range of 40 percent within 20 years, 80 percent by 2050, 35 years, and certainly by the end of this century eliminate CO2 emissions from energy altogether.

In order to do that, we simply can’t get close to that goal by reducing GDP alone. GDP reduction, degrowth, is not a solution to climate stabilization. What we have to do instead is invest massively in clean technologies, renewable energy, and in high energy efficiency. That in my view is the only way, even if you’re a proponent of degrowth for other reasons, it is simply not a solution in terms of climate stabilization.

PERIES: Peter, let’s get your response to Bob’s very pointed argument about the limitations of degrowth for climate stabilization.

VICTOR: Yes, I’m happy to respond to Bob’s point. But let me just say that degrowth isn’t narrow. It’s regarding it as simply a question of reducing GDP, according that degrowth. That’s not what the degrowth proponents are saying at all, and I don’t know of a single degrowth proponent who would say that simply by reducing GDP is the single and best way to deal with climate change. I think that’s a bit of a strawman.

But let’s just talk about this announcement that you mentioned in your introduction, Sharmini. The idea that carbon dioxide emissions didn’t increase, apparently, from 2014-2015, even though global GDP did rise. Okay, a couple of qualifications on that that are really important. First of all, that’s only carbon dioxide. It’s not all greenhouse gases. And as Bob said before, carbon dioxide is only about 80, I’d say slightly less than 80, percent of all greenhouse gases. And secondly, it’s only carbon dioxide from energy sources. When you put those two factors together it’s a statistic of stability that refers to only half of the greenhouse gases emitted that year. We really don’t know yet what happened to the other greenhouse gases, but historically they’ve continued to rise even though carbon dioxide emissions haven’t.

So I think the celebration is far too premature. Second point I want to make, and this is really fundamental, Bob says that you can’t solve this problem of greenhouse gas emissions and bringing them down substantially just by reducing GDP. But I would make the same statement, or equivalent statement, that it’s way too ambitious to think that you can just do it by efficiency. In other words, by reducing greenhouse gas emissions per dollar of GDP. Now, let me just say one more thing on this. If we’re going to reduce greenhouse gas emissions by 80 percent by mid-century, we have to do that at roughly 8 percent a year. We have to reduce the greenhouse gas emissions per dollar at about 8 percent a year. It’s roughly 5 percent faster than the growth rate of the economy.

So what happened between 2014-2015 was that the world’s economy grew about 3 percent, and the greenhouse gas emissions per dollar fell about about 3 percent. So at least the CO2 from energy, that stayed constant. But don’t you realize what that means? It means we’ve actually fallen further behind than we were a year ago. We’ve now got to reduce greenhouse gas emissions per dollar of GDP even faster than we would have had to have done if we’d got it right a year earlier.

So my position on this is very much that we have to look at both components of this problem. We’ve got to look at improving efficiency. And I’m all for plenty of green investment. But we’ve also got to back away from thinking that unless we can expand GDP at the same time we don’t have a viable way forward, and I think that’s a mistake.

PERIES: And Bob, you’ve done a lot of modeling on this issue. Have we fallen behind?

POLLIN: Yeah. Well, first of all, I appreciate what Peter said with respect to the statistics on decoupling. In fact, the numbers that you’ve quoted, and they’ve got a lot of attention a few weeks ago, Sharmini, are accurate, 21 countries did increase GDP at the same time that their emissions, CO2 emissions, at least, were falling. But that is not true for the world as a whole. Over this same period, 2000-2014, overall emissions, CO2 emissions in the world, actually continued rising despite the fact that you’ve got that reduction in CO2 emissions for the 21 countries.

So the magnitude of the problem is immense, and I completely agree with Peter on that. Now, when I say we need to invest in clean energy, efficiency is the single most important source of gain, of investments. And it’s also the cheapest. The other way is expanding clean renewable energy, i.e. solar, wind, geothermal, small-scale hydro, and low-emissions bioenergy. Over time the clean renewables are the most critical, because they are going to start to supplant fossil fuels. At that point you can grow, you can have an economy grow. You can consume energy, as long as it’s clean energy, and it doesn’t generate any emissions.

And yes, from my models what I’ve tried to show, and I’ve modeled it in various ways, is the critical thing is as GDP grows that you link investments and expanding clean renewables and efficiency to growth. So if we say roughly 1.5-2.0 percent of GDP every year, for every country, so if a country--if China’s growing at 6 percent a year, then their investments in clean energy grow at 6 percent each year. They remain at 1.5 percent of the economy every year. If you do that, my models show that you can get to, at the 2035 goal, you can get global emissions down by 40 percent. You can get global emissions down by 80 percent in 35 years. And these are based on pretty conservative cost assumptions coming out of entirely mainstream sources like the U.S. Energy Agency, the National Academy of Sciences, the IRENA International Renewable Energy Agency, and so forth.

So that’s how, basically, I have this optimistic framework in terms of linking clean investments to GDP growth. And that’s the way through which GDP growth does not generate this malign result of higher and higher emissions.

PERIES: And Peter?

VICTOR: Well, I’m happy to respond to that. The 21 country story can be quite misleading, because what that refers to are the emissions that take place within the geography of those countries. But what really matters is the emissions that take place because of the consumption that takes place in those countries. And when you look at that you get quite a different story. You find that countries such as the U.S., even Canada, which is known as a significant emitter of greenhouse gases because of our oil sands industry and other sources, we are responsible for more greenhouse gas emissions because of what we consume, and is imported largely from China where they produce the products, then what we produce domestically.

So it’s not surprising that countries such as Britain, which have had a declining manufacturing sector for a long time, should also show a decline in their own domestic emissions. But it’s a different story when you look at emissions for which they’re responsible through their consumption.

The second point I want to make is I’m, you know, Bob and I of course agree on quite a lot. One of the things we agree on is the importance of a whole variety of green investments to improve the relationship between the economy and the environment. But that doesn’t get away from the point that the faster the economy grows, the more of that investment you simply have to do. And that, I think, is a problem for his side of the argument. My side of the argument, there’s an advantage for the economy to grow more slowly, because it means you don’t have to be quite as successful with your green investment. It’s not such an ambitious, such an ambitious program.

And the third point I’d like to make is that, and it goes back to my opening statement, we’re talking about a much more complicated set of environmental issues than simply climate change. And even to the extent that we can have further growth in GDP at the same time as having cleaner energy sources, we have to worry about all of the other environmental problems that that growth, continued growth, will exacerbate. And that’s why it’s a more complicated problem than just climate change.

And finally, if I could just say this, there is--I can’t even think of one. There is really no ultimate source of ‘clean’ energy. When we talk about clean energy, often people will think of wind turbines, photovoltaics, wonderful technologies. But they all need to be produced. They all need materials in order for them to be produced. And they all need energy for their production. And one of the concerns that’s out there, and I’m sure Bob has given some thought to this, is that the net energy we get from these technologies doesn’t compare with the net energy that we’ve had from fossil fuels in the past, plus the intermittency problem. So the idea of transforming our economy from one based on fossil fuels primarily to one based on these kind of technologies, in a matter of decades, for people at [inaud.] University of Manitoba, he just thinks it’s just way, way to optimistic to think that we can do that and continue to grow the economies as if nothing else has changed.

PERIES: Gentlemen, we are at our halfway point in this discussion, so let’s take a breather and come right back.

End

DISCLAIMER: Please note that transcripts for The Real News Network are typed from a recording of the program. TRNN cannot guarantee their complete accuracy.



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