What sort of growth do we want?

by Rosalind Dean

As the year turns, we start to think about new growth. Already, I can see snowdrops poking through.  But growth also depends on replenishment, the previous year’s growth rotting into the soil to create the nutrients for next year’s growth.  We need to make sure that the growth we celebrate can continue and can renew itself.

Unfortunately, the idea of growth has been hijacked, so it is sometimes presented as an infinite upward trajectory of perpetual production and consumption with no limits, with the economy and GDP getting bigger forever – a fairy tale if ever I heard one.

So I was cautious about a book entitled “The Growth Story of the 21st Century”.  I need not have worried.  Its subtitle, “The Economics and Opportunity of Climate Action” firmly embraces sustainable growth, that is, growth that only uses what can be renewed, recycled or reused, leaving at least as much for the next generation as we ourselves received.  The key idea, for doubters, is that growth and development do indeed require energy, but we can step away from the dirty fossil fuel-based energy that is polluting our land and seas and air, and developing countries, especially, can leapfrog into clean renewable energy.  

Optimism

It is an optimistic book, not least because the vast majority of people around the world and in the UK believe that climate change is happening and that humans are responsible (around 85%).  Around 70% of us support active climate action, with many willing to help pay for it.  

Hope also comes from the development of political action and youth activism, a reinforcing legal framework, transforming energy systems, innovations in the private sector and international action. This means we can play a part, bringing our shared concern to bear, as households, citizens, voters, workers, investors and pensioners.

The author is my old friend Nick Stern (now Lord Stern of Brentford), who is an eminent economist, though critical of his profession’s response to climate change and biodiversity loss.  He sees six key drivers of growth to achieve a new form of sustainable development. Lots of examples suggest it is achievable.  And he points out over and over again that the cost and suffering of not taking action is so much higher than taking action.

Rapid Innovation in Cleaner Technologies

The pace of lower costs, learning-by-doing and induced innovation in clean technologies has been extraordinarily rapid and far exceeded expectations.  Wind, solar and battery costs have all gone down by 70% or so in the last 10 years.  Investment is exploding, and new opportunities are being seized, like decentralised power for small rural villages.  Other technological tipping points look as if they are approaching, for example in textile recycling, alternative proteins and container handling.

Increasing Returns to Scale in New Technologies

Economies of scale can result from public or private sector action.  I liked the example from India, where the price of LED lightbulbs went down by 85% in 4 years through large-scale public procurement.  India is now working on electric buses.

Greater Resource Efficiency

Amongst the G20 richer countries resource productivity grew by about 40% between 2000 and 2017.  Lots of other opportunities have been identified in insulating houses, shared heating systems, avoiding food waste and recycling and reusing materials like plastic, steel, aluminium and cement.

Better Functioning Systems 

Energy, cities, land, transport and water are all examples of systems that can work better if the different elements are integrated. Here in Sheffield, we see how our council is trying to facilitate cycling and walking, integrate public and private transport, and provide cleaner air by reducing speed limits on cars.  Examples from cities like Barcelona, Bogota and Lagos show that we are on the right track, with reduced emissions and improved mobility leading to better economic opportunities and quality of life.

Improved Health 

Air pollution from burning fossil fuels is a severe global health crisis, leading to measurable increases in deaths in the UK and Pakistan, to name but two.  This creates direct health costs, as well as suffering for the people concerned, but it also effects productivity.  So here is another win from clean development, creating a positive spiral.

Increase in Investment

Investment is central to the new growth story for transitioning to the net zero path and building resilience.  A combination of strategic public funding and massive private sector funding is required to overcome years of decline around much of the world.  Stern discusses how this might be achieved, and the rewards are massive, if the investment is designed to improve our immediate well-being, as well as safeguarding all our futures.

The Growth Story of the 21st Century is a monumental book.  It spans economics, science from many disciplines, politics, the respective roles of the state and the private sector, the responsibilities of the social sciences, poverty reduction, just transitions, international collaborations and conflicts, ethics and moral philosophy.  It is also monumental in the sense it is very large.  Fortunately, it is segmented into 11 Chapters, that are almost like self contained books, and you can download it for free.  Or you can get it for £35 on paper from booksellers!