Economic recovery, carbon emissions and the obsessional defence

July 28, 2013 § 1 Comment

It’s a commonplace in economics that growth in GDP is a good thing. And it’s a commonplace in psychology that awkward topics of conversation will be avoided. If something upsets the status quo – expect a defence.

There are few topics as awkward as the relationship between economic growth and climate change. As economies grow, they use more energy. And sadly, neither improvements in efficiency, techno-wizardry, or a move towards renewables is likely to solve the problem. Carbon savings made in one place free up resources to be used elsewhere. This year’s efficiency improvement is swallowed up in next year’s growth. This is what is known as the rebound effect.

The myth of infinite growth

These facts are not news. The rebound effect has been argued over for 150 years. The idea that infinite growth in a finite world is impossible has been discussed since the 1970s, chronicled in reports from the Club of Rome and analysed in detail in the work of economist Herman Daly. More recently reports from the New Economics Foundation, and books by Tim Jackson and Peter Victor have laid out the awkward truth – economic growth, as we know it, is not compatible with reducing carbon emissions.

This week’s big news is that the UK has seen a second quarter of modest economic growth. In one sense we should all welcome this. Growth should bring jobs. It should free up resources for welfare. It should end the blight of youth unemployment. But, while lack of growth brings all kinds of social ills, as far as climate change is concerned growth itself is a large part of the problem. What is required instead is an economy that achieves a state of equilibrium.

Rather than explore this problem – how to shrink the economy without producing hardship, how to provide equal access to resources, how to ensure meaningful employment – most economists, politicians and commentators focus instead on the small movements up or down that might indicate that the economy is ‘improving’ or ‘worsening’. The problem is so big, calling into question our entire economic system and way of life, that it is preferable to avoid it.

The obsessional defence

Last month I argued that refusing to understand numbers could stop you from seeing your real impact on the environment. With the economy the opposite seems to be true. Here, a preoccupation with numbers, detail, equations and small movements helps protect people from raising the bigger, awkward questions.

Psychologically the defence is obsessional. Anxiety is transformed from an underlying conflict into a preoccupation with detail. The sufferer comes to believe that obeying self-imposed rules and rituals is the only route to security. Have I turned the gas off? Are my hands clean? Did I touch the door the right number of times before leaving the house?

Similarly our economic commentators argue over the fractions of percentage points up or down that will make them feel safe and fret over the rituals of cuts or investment that will bring security. The underlying conflict and the really serious anxiety – that the entire system is no longer fit for purpose – can, by these means, be comfortably ignored.


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§ One Response to Economic recovery, carbon emissions and the obsessional defence

  • Astrid Horward says:

    It’s the change of focus from quantity of (linear) growth to quality of (circular) growth that characterises the concept of Cradle to Cradle and the circular economy (promoted by the Ellen MacArthur Foundation). Personally I think this could prove to be the non-threatening transition we so desperately need toward a different kind of economy altogether. It might not be the answer we need in the end, but at least offers business a course of action now that they understand and can work with. It does not challenge growth per sé (growth being essential in nature) but challenges the very definition of growth our current economic system uses. And it looks to nature for the (intelligent) answers. It does not ask ‘not to do things’, it asks to ‘do things differently’.

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