Economics and nature: Is growth ‘an idiotic goal’?

Pardon the Interruption

This article is just an example of the content available to mallowstreet members.

On average over 150 pieces of new content are published from across the industry per month on mallowstreet. Members get access to the latest developments, industry views and a range of in-depth research.

All the content on mallowstreet is accredited for CPD by the PMI and is available to trustees for free.

Is it possible to be nature neutral and stop global collapse without letting go of the paradigm of economic growth?
 
Biodiversity loss is as big a challenge as – if not bigger than – climate change, and closely interlinked with it. This is increasingly being recognised by governments. On Monday, the Intergovernmental Conference for drafting a new maritime biodiversity treaty had its fifth session in New York, which resumes on Wednesday. In the UK, the government commissioned a review on the economics of biodiversity from Sir Partha Dasgupta in 2019, which found that around 54% of global GDP is moderately or highly dependent on nature. The UK government wants to halt and reverse global biodiversity loss by 2030. 
 
    

Is constant growth necessary for human welfare? 

 
Biodiversity has been declining at a rapid rate because of human activities, such as land use changes, pollution and climate change, noted chief secretary to the Treasury John Glen, speaking at a natural capital conference organised by nature credits start-up Rebalance Earth on Tuesday. 
 
However, Glen said that “the conflict between growth and the environment is a false dichotomy; the environment is the foundation for our economy and society”. 
 
 
Many or even most people currently see growth as a requirement for their survival and living standard, but some say this belief is flawed, among them the econometrician Gaya Herrington.  
 
Herrington made headlines in 2021 by showing that the predictions of the Massachusetts Institute of Technology from 1972 about global collapse still hold true today. The MIT had been asked by thinktank the Club of Rome to come up with the world’s first system dynamics model, finding that ‘business as usual’ would lead to a catastrophic decline in human welfare levels, following a peak. 
 
Herrington, who now advises the Club of Rome, said there is abundant evidence showing that we are close to a collapse. While we are not following the ‘business as usual’ scenario, she believes we are on a path to BAU2 – a scenario where there is climate breakdown but also unprecedented technological innovation.  
 
“If we assume that, we can avoid collapse,” she said. However, this also “assumes a lot of behavioural changes”, mainly, letting go of the growth focus. A huge shift in mindset will be required, said Herrington. "We probably cannot grow beyond this point,” she added.  
 
Herrington argued that growth is not the natural order of things but a relatively recent phenomenon in the history of humankind. She also denied that there is such a thing as ‘green growth’. 
 
"We have a now or never moment in history to determine our welfare levels for the rest of the century. For that we’d have to change our core paradigms, our core goals, especially our ultimate goal in everything, which is continuous growth. We would have to have a mindset shift from, ‘Never enough’ to, ‘Enough for each’,” she said.  
 
This will require fundamental questions about what humans are – whether they exist in other than economic terms, she suggested.  
 
“Are we this ever-calculating ‘homo economicus’, or are we more? Do we have different desires than ever optimising our own personal benefits?" she said. 
 

Is fear of the unknown holding us back? 

 
The thing that keeps us from moving away from constant growth is fear, Herrington said, mainly that of social unrest and being ‘left out’ - Herrington recounted how one investment banker revealed his concern to her that by adopting a non-growth view, he would need to put himself out of a job. 
 
“Sometimes people fear I propose a permanent recession,” she remarked. “However, recession is the absence of growth in a system obsessed with growth. Absence of growth in a system that is not designed around it probably has way less impact.” She added: “I’m anti-growth. I think it’s an idiotic goal.” 
 
A change is possible without having to actively change the minds of the majority, she said: “That’s not where it starts.”  
 
Instead, Herrington argued system change begins with people connecting, and as the connections grow, there is an emergence point and eventually a social tipping point where change becomes a self-reinforcing process. “Only then does the majority come along,” she said. 
 
How do you feel about letting go of the idea that our economy needs to grow?
Mike Clark
Nick Spencer
Amanda Latham
 
Will Martindale
 

More from mallowstreet