Creating global prosperity without economic growth

Make the right choice when economy and sustainability collide

by Robert Hoglund and Erik Pihl on 1st October 2015

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Written by Robert Hoglund and Erik Pihl, this article was originally published in Swedish in the national newspaper Svenska Dagbladet.

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The UN’s new development goals that will replace the millennium goals were put into place last Friday by the UN member states. The goals will be guiding the whole world’s development work for the next 15 years, so they’re extremely important. Overall, reading the new goals is a very encouraging experience. They aim to terminate poverty and hunger, to tackle climate change, to give everyone the right to healthcare and education, to achieve gender equality, make consumption sustainable and protect ecosystems. But among all these fantastic goals there is one that threatens the fulfilment of several of the other goals.

Sustainable Development Goals

Goal number 8 stipulates that all the world’s countries shall have a strong GDP per capita growth. It is somewhat understandable since many poor countries still need economic development. But the goal risks creating the wrong effect and counteracting several of the other goals.  In the text it says that the growth should be sustainable and inclusive, but that is already demanded by the other goals. Growth that is at best a means to reach certain welfare goals is redundant as a development goal in itself.

Increased GDP is normally connected to increased wealth, welfare and employment. That connection however is not a law of nature. So called jobless growth is seen in many countries and growth often fails to increase the standard of living for the poor and instead benefits the already rich. In the rich countries, there is no reason to prioritize increased GDP per capita. Poor countries can benefit from growth but not even for them should it be seen as a goal, but as one of several means that can improve poor people’s living conditions. As we know there are also other such means like redistribution of wealth, something that is not highlighted in the new development goals.

The biggest problem with making growth a goal is that it risks conflicting with other much more important goals. GDP-growth is historically and globally very closely connected to increased emissions of greenhouse gases, environmental destruction and increased usage of natural resources. To make growth sustainable the emissions and negative effects of growth must decrease fast at the same time as GDP rises. That has never happened before.   Preliminary estimates said that emissions laid flat in 2014 as the world economy grew but unfortunately that turned out not to be true. Emissions and the use of fossil fuels continued to increase last year. It is technically possible to turn this development around, at least when it comes to greenhouse gas emissions and GDP, but it’s very uncertain whether it is possible in practice.

The point that is being suggested, that a nation has failed to reach the development goals unless they increase their GDP per capita, builds on a conviction that growth must be able to combine with a sustainable future. Even though measures for creating long-term welfare and a healthy economy, like increased protection of nature and reduced emissions might just as well slow down growth. At many occasions the goals will collide. Nations then will have to choose which goal to prioritize. It is a safe guess that many will continue to prioritize growth, just as they have been doing for the last couple of hundred years.

Making means into goals and demanding increased growth in all the world’s nations is counter-productive. The fixation with increasing GDP has no place among the important development goals that are supposed to safeguard an equal and sustainable future. Now these goals are what we have. Therefore hope lies with decision-makers making the right choices and choosing to prioritize social and ecological sustainability when conflicts of interest arise.

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Robert Hoglund: Coordinator for the Swedish idea network Steg 3 (Step three).
Erik Pihl: Doctor of Technology, Energy and Environment, member of Steg 3.

Steg 3 is a network that gathers Swedish politicians, scientists, journalists, authors and others that want to problematize society’s current view on economic growth.

Image: Graphic made by Tegan Tallullah / Post Growth Institute. Background image has Creative Commons licensing, photographer unknown.

{ 1 comment }

avatar Spamlet October 5, 2015 at 18:49

Certainly with you in practice–especially as averaging out GDP among a whole population tells you nothing about the actual distribution of the wealth. It could still increase hugely for a minority, as now, whilst the mode shifts further and further downwards.

However, if this was a flagship indicator it would serve to highlight the fact that no progress could be made without stabilising population sizes. In that respect, it is a good indicator to be up there for all to see, especially when so many campaigners have such unrealistic expectations of the possibility of ‘redistributing wealth equally’.

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