Dispute over Growth

Economists present new consensus proposal

analysis
  • Press Releases 31.10.2018

A new report shows: Green growth cannot serve as the sole strategy for environmental policy action – nor can Degrowth. Scientists from the Institute for Ecological Economy Reserach (IÖW), RWI – Leibniz Institute for Economic Research, and the Wuppertal Institute propose a precautionary post-growth position: Greater independence from economic growth would allow for environmental policy development less hindered by reservations about effects on growth. The conference "Challenge of Growth Independence", in Berlin on 5 November 2018, will explore political ramifications.

The future well-being of humankind depends on our ability to adhere to the so-called planetary boundaries – environmental limits beyond which essential earth and ecosystem stabilities may be greatly impaired. The Intergovernmental Panel on Climate Change's most recent report on the 1.5-degree target reflects the urgency of a corresponding global social transformation. But what will this mean for a wealthy country like Germany? Can its economy continue to grow – or might it even have to shrink? This is the subject of substantial political debate, but so far, there are no widely accepted answers. A study published today by the Federal Environment Agency (UBA) presents a consensus proposal on the controversial issue of economic growth in the sustainability debate.

Overcoming a political standstill

Scientists from the Institute for Ecological Economy Research (IÖW), the RWI – Leibniz Institute for Economic Research, and the Wuppertal Institute for the Environment, Climate and Energy have investigated how a lack of economic growth would affect the stability of important societal systems such as retirement pensions and health insurance – both of which are, so far, strongly dependent on continued economic growth.
"The Enquete Commission on Growth, Prosperity and Quality of Life of the German Bundestag ended in 2013 without achieving any sort of sufficient political impulse or consensus," says IÖW project leader Ulrich Petschow. "So as not to waste valuable time, we therefore focused our attention above all on an analysis to determine those political options for action that do exist. Nothing is more harmful to our planet than a standstill due to political dissent."

Respecting planetary boundaries: Strengthening the precautionary orientation in policy-making

In the debate on economic growth and sustainability, many terms such as Post Growth or Green Economy are being widely circulated; two in particular, Green Growth and Degrowth, are irreconcilable. The joint project team of the three participating research institutes IÖW, RWI, and Wuppertal Institute concludes and is advising policy makers accordingly that none of these positions’ assumptions is sufficiently based on scientific research. In the pursuit of a responsible economic and environmental policy, the authors propose a precautionary approach: The dependence on economic growth must be reduced as far as possible, thus minimizing reservations that have until now often slowed down ambitious environmental policy proposals. The authors present and describe this precautionary post-growth approach in the publication "Social well-being within planetary boundaries."

Three demands with respect to policy

The report makes three requests to policymakers: First, the economic framework conditions must be made more effective by internalising the environmentally harmful effects of production and consumption, particularly through market-based instruments. Secondly, new paths of social development should be explored – through participatory search processes, spaces for experimentation, and new approaches in innovation and research policy. Thirdly, policymakers should make it a central objective to examine how social institutions and processes can become less dependent on growth.

Broadening the debate on growth, linking economic theories

With the results of their new study, the researchers seek to open up the debate on growth to a broad public. In addition, they consider various theoretical approaches and empirical studies, such as those found in mainstream economics as well as heterodox approaches. The Berlin conference Challenge of Growth Independence – Approaches to the Integration of Environmental, Social and Economic Policy, on 5 November 2018, discussed the extent to which the consensus proposal of researchers from the three institutes, who reflect this diversity of perspectives, is sustainable. Stakeholders from politics, business, science, and civil society considered ways of reducing the dependence of important social systems and institutions on growth and the political implications of such measures.

Joint press release of the IÖW, RWI and Wuppertal Institute

Richard Harnisch
Institute for Ecological Economy Research (IÖW)
Phone: +49 30 884 594-16
E-mail: richard.harnisch@ioew.de

Christian Hasken
Wuppertal Institut für Klima, Umwelt, ENergie gGmbH
VisdP: Prof. Dr. Uwe Schneidewind, President
Phone: +49 202 2492-187
E-mail: christin.hasken@wupperinst.org