Increasing economic and social growth with low resource consumption.
Green growth is both possible and desirable. The key to achieving genuine green growth lies in eliminating resource waste rather than sacrificing value creation. Learn more at BI Norwegian Business School Executive program GrønnVekst (Norwegian) or Executive MBA (English)
I understand the skepticism prevalent among many in the environmental movement towards any form of economic growth resembling that of the 20th century, which persists in numerous countries, including Norway. I, too, share concerns about the adverse effects of this ‘gray’ economic growth on both ecosystems and social inequality. My critique of the system stems from my roots in green thinking, drawing from the deep ecological tradition from Arne Næss, among others. I have long been critical of growth, as evidenced in my book Money & Soul from 2007. Additionally, I have collaborated closely for 17 years with one of the foremost critics of growth in economic history, Jørgen Randers, who co-authored Limits to Growth.
In the climate and environmental movement, we share a common desire for an alternative model of societal development to replace gray growth, as it is ultimately self-destructive. But what should we replace it with? I am particularly drawn to Buckminster Fuller’s insight as expressed in the sentence: “You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.” Real, or genuine, green growth is exactly that: A model that renders the old gray growth outdated and unattractive.
The idea is that rapid new green growth can outcompete and displace the gray growth.
— Per Espen Stoknes
The idea is that rapid new green growth can outcompete and displace the gray growth.
The crucial question that everyone engaged in discussing about growth should address is this: Growth in what? Are we referring to growth in resource consumption measured in tonnes? If so, the answer must be no – such growth is unsustainable in the long run. However, if we’re talking about growth in value creation measured in money, then the answer may be yes: We aspire to have more energy-efficient homes, expanded regenerative agriculture, plant-based gourmet meals, smart power grids, expanded electrified transportation, circular material flows, more sports, yoga, coaching, therapy, music, literature, and various experiences that enhance quality of life. All of these contribute to value creation measured in money, without escalating resource consumption. The key to genuine green growth is to eliminate the irrational waste of resources, not hinder value creation.
Advancing proposals on how to develop, measure, and verify genuine green growth involves maintaining a critical stance towards traditional growth, consistent with the history of deep ecology. We critique the gray growth not only by adopting a negative and pessimistic tone, focusing on cuts, reductions, decline, and downfall, but by promoting a tangible, constructive alternative.
This entails that with genuine green growth, prosperous nations can achieve a modest increase in value creation (e.g., approximately +1% annually measured in NOK) alongside a gradual reduction in overall resource consumption (typically measured in tonnes or ecological footprint, e.g., approximately -4% annually).
– Moderate economic growth provides better leeway for implementing
more green investments and achieving social equality.
We can assess and validate this by ensuring that resource productivity (NOK/tonne) surpasses the rate of value creation year by year. This progression must encompass all companies, cities, sectors, and nations. Numerous studies and calculations demonstrate that if businesses, municipalities, and countries can attain >5% enhancement in resource productivity per year (= genuine green growth), it has the potential to address both the climate and ecological crises within 30 years.
In addition to people protesting and demanding halts, shutdowns, and cuts in gray companies, it is likely even more effective for new green players to outcompete them. This can occur through achieving much faster growth in green value creation, thereby displacing and causing bankruptcies in gray value creation. Such creative destruction has already taken place in the coal industry and has begun in the automobile industry. As many critics of green growth point out, it has not occurred in all sectors or countries yet. However, this is not a valid argument to say that it cannot happen in the future, and increasingly so.
A decrease in resource-intensive material consumption can, in principle, be combined either with a decline in national value creation (recession), moderate economic growth (0-2% annually), or maximum growth (>2%). This yields four possible growth models, as shown in the figure.
Recession (degrowth) is undesirable for several reasons, particularly because it leads to rapidly increasing unemployment, heightened social inequality, steeply declining investment levels, and unmanageable debt situations. A policy that triggers recession by abruptly restricting citizens’ air travel, driving, meat consumption, or petroleum production will inevitably result in significant social and political backlash against green policies. On the other hand, maximum growth in Norway is neither desirable nor realistic (wealthy countries neither require nor sustain high growth rates over time, particularly when their gross value creation exceeds NOK 400,000 per person). Moderate economic growth provides better leeway for implementing more green investments and achieving social equality.
Tomorrow's Economy
A Guide to Creating Healthy Green Growth
A balance sheet for the planet: How we can achieve healthy growth—more regenerative than wasteful, instilling equity rather than exacerbating inequalities.
Tomorrow's Economy reframes the hot-button issue of economic growth. Going beyond the usual pro-growth versus anti-growth debate, Stoknes calls for healthy growth. Healthy economic growth is more regenerative than wasteful, repairs problems rather than greenwashing them, and restores equity rather than exacerbating inequalities.
Published: 2022
Earth for All
A Survival Guide for Humanity
The book details the findings of our initiative and details how we can steer humanity away from ecological and social catastrophe and is the result of collaboration between the 21st century Transformational Economics Commission and systems analysts and modelling teams.
By Sandrine Dixson-Declève, Owen Gaffney, Jayati Ghosh, Jørgen Randers, Johan Rockström and Per Espen Stoknes.
Published: 2022
“Optimism and pessimism are tools we can apply when considering the wild different futures lurking beyond the horizon. And they are best used in parallel, like the left and right eye. It's not an either-or, but a both-and.”
— Per Espen Stoknes