The climate emergency: Why it’s time to ditch the language of economic growth

This is the first in a 4-part series exploring climate change and economic growth, green or otherwise.

In The Handmaid’s Tale, Margaret Atwood’s 1985 dystopian novel set in a near-future totalitarian state, the women are subjugated in various horrific ways including that they are allowed to move around anywhere within town but are unaware that they are actually in a maze and are trapped. Atwood makes this comparison: “A rat in a maze is free to go anywhere, as long as it stays inside the maze.”

I was reminded of this rather troubling notion of freedom when I read the recent Gardner Pinfold report commissioned by the Halifax-based environmental organization the Ecology Action Centre, which basically said that shifting to renewable energy, which is crucial to fighting climate change and meeting meaningful greenhouse gas emissions targets, would grow the economy, create jobs, and boost the Gross Domestic Product (GDP). Specifically, it stated that by 2030, 15,000 jobs per year would be created in the “green economy” and $9.7 billion would be added to the GDP.

That all sounds well and good, if you accept as fact that you’re in a maze, and there’s no way out. These kinds of conventional economic claims are the same ones that have always been made by extractive industries too, and we know where they’ve gotten us.

Destroying the Earth Has Been Great for the Economy

Adding to the GDP, which is what the EAC claims its proposal will do, isn’t necessarily a good thing, but goodness is implicit in the claim since no other interpretation is discussed.

A growing GDP can actually be bad, depending on what’s growing. The GDP represents the economic value of the total quantity of goods and services produced in the market economy, as well as the total amount of money earned and spent. But it does not tell us anything about societal progress, environmental health, or wellbeing. In fact, things like crime, pollution, clearcutting, ill health, and war, all make the GDP go up! When we trash a forest, the GDP goes up (rather than down) because forests are only given a monetary value when they’re cut down.

And that’s the other big problem with the GDP — we don’t put any economic value on all the things that are lost in a clearcut: habitat, soil health, biodiversity, and services that the forest provided us for free. These costs are all externalized, not paid for by the forest company (in this case) but by the rest of us and by future generations.

There is no shortage of literature out there today about how using the GDP as a measure of progress is totally inaccurate. There’s also no shortage of evidence linking economic growth with increasing GHG emissions.

The financial collapse that began in the summer of 2007 — the result of the hollowing of government regulation of the financial sector — and that by 2009 had engulfed nearly every aspect of the global system of finance including the financial stability of entire countries, revealed the inextricable connection between our addiction to fossil fuel consumption and economic growth. As gross domestic product (GDP) tanked all over the industrialized world — taking work hours and employment with it — so did our greenhouse gas (GHG) emissions. In just two short years in Canada, for instance, emissions plummeted from somewhere around 750 megatons to less than 700 megatons, levels we hadn’t seen since the late 1990s.

For a brief shining moment, the fact that economic growth is one of the main drivers of climate change was, well, a fact.

But even though it’s proven to be true, there continues to be a chorus — even during this current federal election campaign period — of those claiming that GHG emissions are not connected (or “coupled” as they say in the lingo) and that you can “grow the economy” and reduce emissions at the same time. But these kinds of statements can only be true when fraudulent emissions accounting techniques are applied.

For instance, as I’ve written elsewhere, with “production-based” accounting a country need only count emissions that are created inside its borders and not those emissions that are embedded in consumption, where the manufacturing of goods takes place elsewhere. This kind of accounting was employed by the Kyoto Protocol and continues to be used with the Paris Agreement.

Problem is, we should be using “consumption-based” accounting, which counts what the emissions created by something you consume, even if it wasn’t produced in your country. In other words, moving production of domestic consumption overseas is a good way to reduce a country’s GHG emissions. The UK-based New Economics Foundation refers to this as “carbon laundering,” and contends that the only way to more accurately account for these displaced emissions is to measure domestic emissions on a per capita basis based on an individual’s average carbon footprint.

The Disconnect

Last summer more than 40 organizations, including The Ecology Action Centre, signed on to the 2030 Declaration, which calls for reducing GHG emissions 50% below 1990 levels by 2030, a target value provided by the Climate Action Tracker for Canada.

Stephen Thomas, the Energy Campaign Coordinator for the EAC, says the current Canadian targets, our Nationally Determined Contribution (NDC), is not based in science, nor is it based on meeting the Paris Agreement targets. It’s also not what Canada’s fair share of emissions reductions should be. “Right now we’re on track to way overshoot the 2 degrees and 1.5 degrees,” Thomas says.

In fact, when analysts tallied all the targets that came out of the Paris Agreement they found that even if all of the targets were met, there would still be 3-4 degrees of warming.

“The targets we have now don’t really get us anywhere close. So, in Canada and in rich countries all around the world we have a lot of work to do in a very short period of time,” says Thomas.

The EAC plan to reduce GHG emissions will be achieved in part by “dramatically decarbonizing” the province’s electricity grid by supplying 90% of the province’s energy needs with wind, solar, hydro, small scale biomass, and community-scale projects instead of coal, oil, and large biomass. The other big piece of the plan is energy efficiency, which Thomas says will effectively reduce demand by reducing the amount of energy we’ll need to use.

There is no question, we have to make this shift as a society.

But my question is this: Can we make the drastic improvements to the environment — essentially making serious inroads in avoiding runaway climate change — while we continue to embrace the growth model and the flawed assumptions that underpin GDP as an economic measure of progress?

I pose this question to Thomas. “I don’t think so,” he answers. “In the long term we are going to have to do things very differently. In the long term we shouldn’t and can’t repeat the mistakes of today’s economy when we’re dreaming and imagining what tomorrow’s economy can look like.”

Thomas really seems to get it. He tells me there is “no part of industrial capitalism that is good for the environment,” and that “this whole system of limitless growth, of accumulation of most of the profit in a very small number of people, have much more to do with the cause of climate change than with any one of us who are driving our cars and getting back and forth to work and heating our homes.”

Thomas even recognizes that the drastic shift to renewables and the manufacturing that will be required will still have environmental impacts but he says, “We’re feeling very confident and comfortable that although there are impacts to the broad manufacturing of all the solutions in renewables and transportation, those impacts are so much less than the way we currently meet our needs with extractive fossil fuel production, and with the impacts of climate change itself.”

So I ask him the question that appears obvious to me, anyway: You say that we can’t continue to embrace the growth model, so I wonder then, why use the language of the growth model?

“We do speak the language of GDP,” he answers. “That’s the language that’s spoken in this province as we try to put forward goals and make the jobs and overall economic case for this shift.”

But Thomas is careful to distinguish between overall growth, which he doesn’t favour, to “green” growth, which he does. “We’re going to have to change the way we heat our homes and the way we use electricity and the main point I feel the [Gardner Pinfold] report puts forward is there are economic opportunities in doing that, and that there are job opportunities in doing that and we are putting people in Nova Scotia to work as we’re re-localizing those energy systems.”

But if putting credence in the GDP is delusional (which it is), and if the EAC (or at least Stephen Thomas) recognizes that economic growth overall isn’t something to champion, then why not take a more critical stance of GDP as a measure of economic progress?

Is it because you feel you have to use the conventional language in order to be heard? I ask Thomas. “Yes,” he answers. “We have been campaigning on stronger climate goals in this province for years and years and years. Taking action on climate change and reducing emissions in any way that we can is a good idea, entirely outside of the economic conversation, it’s a good idea simply because it’s our one shot to survive.”

Agreed. But here’s the thing. Nothing is outside the economic conversation. The economic imperative pushing for infinite growth is what is driving us to the brink of oblivion. So there has to be an economic conversation, and it has to be started by those who care about the environment.

What Thomas tells me next illustrates perfectly why our adherence to GDP makes no sense.

He says that shifting away from coal and fossil fuels will reduce pollution, which “makes us more healthy in our communities and drastically reduces the health care burden.” But, I counter, pollution and sickness boost the GDP! Did Gardner Pinfold account for that?

“The short answer is no, and you’re bringing up a very fair point, I’ll say that for sure.”

There’s a lot that wasn’t explored in this report — we were very tight around just the economic shift of shutting down coal plants and turning on renewables, and just the shift of using less [sic] cars in Nova Scotia and changing over to electric buses and electric vehicles. This report also doesn’t say anything about the avoided costs of catastrophic storms, the avoided costs of sea level rise, the avoided costs of droughts and fires and floods, so many things that come along with the climate changed world. This report is entirely silent on those things too and is only a very small piece of the picture. We’re excited about it from the jobs perspective — but we’re really not trying to say it’s the only reason why taking this action is a good idea. 

Fair enough. You can’t do everything. But why not at least mention these things? I suspect it’s because it’s not within the realm of conventional economics. Gardner Pinfold, a consultancy firm that specializes in economic impact statements and cost-benefit analyses, isn’t exactly known for being un-conventional.

I could be wrong, but here’s what I suspect. The EAC and many environmental groups like it rationalize using the conventional language and pretend to buy into what they know to be flawed assumptions because they believe the ends justify the means: That in playing the game, as delusional as it is, they might be able to convince policy-makers (who actually believe that “growing the economy” is their job despite the fact it’s destroying the planet) that these necessary changes won’t pose an economic risk.

But given that our economic system is what’s driving the trajectory we are now on, it’s a language we must start challenging. Otherwise, it’s a lot like Atwood’s handmaids, except worse. The handmaids thought they were free to go anywhere because they were unaware that they were in a confined space, a maze. We, on the other hand, actually know it’s a maze, are free to go anywhere, but are agreeing to remain trapped.