The right kind of (green) growth

The challenges facing the new EU Commission are many and varied. But as regards growth policy in particular, they can be reduced to one simple formula: “Less Oettinger!”

The outgoing German EU Energy Commissioner symbolises the path that the European Union should abandon immediately: there must be no going back to a fossil (or worse, nuclear) based energy and growth policy. Not only because fossil fuels are potentially finite; the fact that CO₂ levels in the atmosphere are at their highest in 30 years, despite all the avowals to fight climate change and meet the 2°C target, must also give European industry cause for alarm.

The measures European industry and society as a whole will have to take to adapt to continued global warming will be highly costly if steps are not taken to slow the process down. And they will thus require growth rates that can no longer be achieved. The right path is therefore one that leads to green growth and severs the link between growth and resource use. The aim isn’t zero growth or degrowth. The aim is growth that doesn’t hack off the branch it is sitting on.

Material resources and the resilience of nature and the environment have their limits; the goods and services provided by the ecosystem are finite. That much is obvious. But whether the growth of GDP – the monetised sum of goods and services – has its limits, is a different question.

Could GDP potentially continue to grow without limit, while we cut back on the consumption of natural resources and materials and reduce environmentally harmful, climate damaging emissions? If the right choices are made, the answer is very likely yes. (Although let us be clear: GDP is not the right indicator for prosperity. Prosperity is not tied to GDP, neither directly nor inversely. But that’s a separate issue.) The relevant question is not how much we produce, but how.

We have to sever the links between growth (measured by the operand GDP) and increased resource consumption. Our prevailing economic and social model requires constant growth. This need for growth drives political action and induces governments to promote growth even of an ecologically or socially harmful kind. However, it is possible to dismantle these structural dictates by undertaking political and economic reforms. So that’s what we should do, and now.

In concrete terms, this means maximum severance with regard to energy supply – i.e. a complete shift to renewables. This is not only vital for climate policy reasons, but is also a genuine programme for growth. Talking like the European Commission has done to date, banking on squeezing out the last whiff of gas through fracking, pushes the stated climate targets yet further out of reach, extends our dependence on fossil fuels and thereby entrenches the self-destructive circularity of growth that feeds on its own roots.

Worse still, proponents of fracking totally overestimate the potential this technology has in Europe. Anyone who has accepted that natural resources are finite must, furthermore, champion resource efficiency and the recovery of materials. Recycling and life-cycle management are the alternative to a race for rare earths or metals, for example, they are the alternative to the harmful exploitation of nature, the resulting costs of which surpass any benefit. Nobody can afford simply to bury valuable raw materials in their entirety, as now happens in EU member state Romania – and that’s not even thinking of the environmental damage done. Life-cycle management does not however start when a product reaches the end of its life. It must already be applied at the production stage. The European Commission could set tougher standards for that – if it manages to stand up to the lobbyists from the petrochemical, steel and metal industries.

Last but not least, reducing CO₂ emissions is one of the main tasks for the new EU Commission. But here, too, it is to be feared that Europe will not meet its self-imposed targets. A sustainable growth strategy should include reducing CO₂emissions by at least 30% by 2020 and by at least 55% by 2030, as making energy savings of at least 40%, and increasing the proportion of renewable energy to at least 45%. Yes, disaster can be averted, if we pursue growth that does not destroy the resources it depends on.