Green Growth in the Global Crisis – Fairytale or Strategy?

A Climate Lecture and Debate by  Prof. Jackson and Prof. Edenhofer

A debate by Prof. Otmar Edenhofer, Petra Pinzler and Prof. Time Jackson (from left to right)

The Technical University (TU) Berlin held its fourth climate lecture on December 3rd, 2012. This year’s topic was Green growth in the global crisis – Fairytale or strategy?. The lecturers of the event included Prof. Jackson and Prof. Edenhofer. Tim Jackson is Professor of Sustainable Development at the University of Surrey as well as founder and director of the ESRC Research Group on Lifestyles, Values and Environment. Ottmar Edenhofer in turn is Professor on the economy of climate change at the TU Berlin and director of the Mercator Research Institute on Global Commons and Climate Change.

The event was held in the Audimax lecture hall of the TU Berlin which is a gigantic lecture hall with two floors. Such an environment was indeed needed as demand for the event was enormous with hardly any free seat to be found in the entire lecture hall. In total, the lecture itself lasted for more than two hours with a reception following afterwards. The event began with a brief introduction from Professor Jörg Steinbach, the president of the TU Berlin, and Petra Pinzler, the moderator of the evening. Afterwards a short speech was given by Dr. Franz May, chairman of Vattenfall Europe, on the importance of green growth. Vattenfall itself has served as main sponsor of the event. Next, Prof. Tim Jackson provided a 20 minutes lecture themed as „Where is the green economy? Prosperity, sustainability and work after crisis“. This was followed by another 20 minutes lecture by Prof. Otmar Edenhofer on the topic of „Growth, de-growth or green growth? In search of a better paradigm“. The event closed by a debate of approximately 45 minutes between Prof. Jackson and Prof. Edenhofer, being moderated by Petra Pinzler.

As already mentioned above, the main theme of the evening was on green growth. So what is meant by that phenomenon? To put it in simple terms, green growth refers to economic growth which employs natural resources in a sustainable matter. According to the OECD “green growth is about fostering economic growth and development while ensuring that natural assets continue to provide the resources and the environmental services on which our well-being relies” (OECD, 2011, 4th Climate Lecture). The logic behind this is as follows: Even though economic growth often comes along with an increase in welfare, it generally also implies a further destruction of the environment and an acceleration of climate change. Therefore the phenomenon of growth itself is accompanied by a certain duality: “Growth increases the demand of and the pressure for natural resources” (Dr. Frank May, 4th Climate Lecture). Along these lines, the notion of green growth arose, so that one would ideally be able to capture the best of both worlds. This notion has gained in popularity lately. Whereas consensus has widely been reached on the fact that green growth is needed, controversy remains on how green growth can best be achieved. Numerous publications on the subjects have followed in order to address this issue.

A lecture on green growth by Prof. Tim Jackson

One of these publications is Prof. Jackson’s famous book „Prosperity without Growth“, which builds the basis for the aspects discussed in his lecture. Accordingly, Prof. Jackson argues that growth does not necessary lead to an increase in human well-being. Whereas growth in its general sense can be considered unsustainable, its opposite – de-growth – is considered unstable. Simply employing technological advances to reduce the effect on growth on climate change and make growth thus more sustainable cannot be sufficient either. Adding to this is the problem that the current social logic of never-ending consumption and the status-oriented ways of thinking makes a sustainable community difficult to achieve. So what should be the solution to the question on green growth? In Jackson’s point of view, green growth has to entail three building blocks: The enterprise as service, sustainable investments and ecological macroeconomics.  First, the notion of enterprises as service implies that firms should engage people to create the conditions for a good life and thereby provide services from one set of people to another set of people. He thereby reasons that beyond material basics, human needs are primarily social and ideological in nature. Second, sustainable investments refer to investments with a lower focus on financial aspects but a higher priority on social and ecological returns. Third, ecological macroeconomics is needed to balance between the other two aspects. Jackson concludes his lecture by saying that a “green economy must accommodate trade-offs in the money economy [which are] value-laden and ecologically driven”.

The speech by Prof. Edenhofer, in contrast, first investigates the question whether continued growth is feasible. He begins by stressing three major reasons for economic growth: Competition, forced private property rights and industrialization. According to the gross domestic product (GDP), an increase in growth generally correlates to an increase in well-being. Hence, growth per se is not negativity in itself, as long as it does not reach excessive, destructive levels. With respect to poverty alleviation in developing countries, growth might be beneficial. However, economic growth is also the biggest contributor to increasing emissions. Hence, higher economic growth has to be compensated by energy and carbon intensity improvements as well as efficiency improvements and renewables. According, to Prof. Edenhofer technological innovations are required to attain green growth.  Policy instruments which foster sustainability (i.e. carbon pricing or technology policies) are needed additionally. Consequently, growth can be feasible, if its externalities are properly addressed, but should growth be desirable? In this regard, Prof. Edenhofer concludes that growth should not be a goal in itself but – if managed sustainably – can contribute to increased well-being. However, in his eyes the “wealth of nation” does not solely consist of privately produced capital but instead needs to account for human, social and natural capital as well, and all these capital sources should be equalized over time. Public policy should therefore be concerned with welfare and not growth as a goal per se, as the wealth of nation will ultimately depend on the wealth of commons.

To conclude, Prof. Jackson and Prof. Edenhofer both agree that growth in the way that it is currently designed is unsustainable over the long run. The greening of growth is therefore required. The two are further in accordance on the matter that the commons are important, and that increasing the GDP should not be a goal in itself. Instead politicians need to focus more on welfare as an aim. However, Prof. Jackson – in contrast to Prof. Edenhofer – does not view technological innovations as sufficient to compensate for the negative impact of inceasing growth on climate change. In lieu thereof Prof. Jackson emphasizes the additional importance of social and environmental innovations. Moreover, whereas Prof. Edenhofer regards growth as “part of the problem and part of the solution”, Prof. Jackson solely considers growth a “part of the problem and not a part of the solution”. All in all, the event served as an inspiration for further reflections upon different ways in which green growth can ultimately be achieved.

Similar to this:
Tim Jackson  | Wohlstand ohne Wachstum?
Blog posts on „growth“

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