Academic FEDERICO DEMARIA will be addressing staff at the European Commission today in a keynote speech about the crucial issues of economic growth and environmental degradation. He asks, is the well-being of the individual, societies and nations possible beyond economic growth?
‘Growth for the sake of growth’ remains the credo of all governments and international institutions, including the European Commission.
Economic growth is presented as the panacea that can solve any of the world’s problems: poverty, inequality, sustainability, you name it. Left-wing and right-wing policies only differ on how to achieve it.
However, there is an uncomfortable scientific truth that has to be faced: economic growth is environmentally unsustainable. Moreover, beyond a certain threshold already surpassed by EU countries, socially it isn’t necessary. The central question then becomes: how can we manage an economy without growth?
Enough is enough
Kenneth Boulding, the economist, famously said that: “Anyone who believes that exponential growth can go on forever in a finite world is either a madman or an economist”.
Ecological economists argue that the economy is physical, while mainstream economists seem to believe it is metaphysical.
Social metabolism is the study of material and energy flows within the economy. On the input side of the economy, key material resources are limited, and many are peaking including oil and phosphorus. On the output side, humanity is trespassing planetary boundaries.
Climate change is the evidence of the limited assimilative capacity of ecosystems. It is the planet saying: ‘Enough is enough!’.
Mainstream economists – finally convinced by the existence of biophysical limits – have started to argue that economic growth can be decoupled from the consumption of energy and materials.
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