This is the dilemma we are facing: there is more and more evidence that we cannot keep growing but at the same time our economic system breaks down without growth.
A landmark report commissioned by the UK’s treasury did something unexpected and timely. The so-called Dasgupta Review went against decades of economic orthodoxy to argue that our economies were inflicting a “devastating cost” on ecosystems.
The report went beyond the narrow focus on climate and emissions to explore the destruction of ecosystems and biodiversity, urging governments to move beyond their narrow focus on GDP.
While the review’s approach of allocating nature an economic value needs to be regarded with a critical eye, the report does warn that ecological destruction presents “extreme risks” and that large swathes of nature, such as the rainforests, have to be put off the limits for markets.
Grow
The Dasgupta Review comes hot on the heels of another groundbreaking document titled Growth without economic growth, which was recently released by the European Environment Agency (EEA).
It provided an institutional vote of confidence to arguments that some segments of civil society, academia and citizens groups have been making for years, that unfettered economic growth was destroying the natural environment, fanning the flames of global warming and damaging human health.
This threatens our future and that of our children and grandchildren. In fact, Europe is far from achieving its environmental objectives. It did not achieve those for 2020 and is on track to miss those for 2030 and even 2050.
This is the dilemma we are facing: there is more and more evidence that we cannot keep growing but at the same time our economic system breaks down without growth.
The report, a part of the EEA’s Narratives for Change series, argues that the full decoupling of economic growth from resource consumption on a global scale is not occurring and may not be possible.
This confirms a growing body of scientific evidence. For example, an EEB report provided empirical evidence that so-called ‘green growth’, which supposedly enables the economy to grow while reducing its environmental impact, has failed in its mission, as reflected in our constantly growing appetite for resources.
Treadmill
Yet the imperative of economic growth remains deeply ingrained in the minds and actions of policymakers all across Europe and the political spectrum.
This is not surprising. After all, a dip in economic growth such as the one caused by the Covid-19 pandemic has devastating consequences for people and the planet as our system is dependent on economic growth.
In Europe alone, 5.5 million jobs were lost by the summer of 2020 and the unemployment rate among the under 25s went up three times as fast as the overall EU unemployment rate and is now around 17 percent.
In our latest report, the European Environmental Bureau and the European Youth Forum described this system as an endless treadmill: we need to be more and more productive, to produce more and to expand our economies to avoid unemployment.
Essentially, you must keep going if you don’t want to fall off the treadmill. What’s worse, given the impacts on our ecosystem, we are running straight into an abyss. While, as individuals, we are burning out from the pressures of overproduction and overconsumption, as is our planet.
Inequalities
This is the dilemma we are facing: there is more and more evidence that we cannot keep growing but at the same time our economic system breaks down without growth.
Therefore, in order to "build back better" in the wake of the pandemic we need to reduce the structural dependence of our economic system on growth and job creation. Avenues for rethinking growth and progress must mean rethinking and reinventing our conception of – and relationship to – work.
In our report, we lay out four ideas to make work work in a post-growth economy.
First, the introduction of a Universal Basic Income (UBI) provided by the state to every citizen would cover the basic costs of living and provide financial security. This would ensure that unemployment is no longer a ticket to poverty and destitution.
It would also reduce the widening wealth inequalities tearing our societies apart. Societies with higher inequality tend to experience greater insecurity, poorer health and are less able to cope with collective challenges such as climate change.
Stability
Reduced inequality has, in turn, environmental benefits. According to academics, wealth redistribution, such as through UBI, can lead to the reduction of consumption of scarce natural resources as environmental degradation and income inequality are highly interlinked
Second, work time reduction would stabilise our economic system in the face of the fact that fewer and fewer working hours are needed to produce the output we need. There exist different ways of achieving this, such as shortening the working week, month or life, but with no reduction in pay. This enables us to distribute the freed up hours more evenly among workers.
Shortening working hours could also bring environmental and wellbeing benefits. Studies show that long working hours are associated with higher ecological footprints. For example, one study found that a 1% decrease in working hours can lower energy, environmental and carbon footprints by around 1.2 percent.
Less time spent at work is good for the wellbeing of workers too. It can reduce stress and the risk of burnouts. It frees people to pursue leisure and creative activities, take on more unpaid but vital care activities or increase political participation which would then also have positive effects on democracy.
Third, enhanced democratic structures at work can contribute to more equal societies and guarantee economic stability.
Ideological
Democracy at work can be achieved by increasing the control and power of workers over processes and decisions, general working conditions and environment, as well as the mission, goals and operational direction of the enterprise. Studies have also shown that more democratic workplaces increase companies overall sustainability performance, as the greater say and participation of workers leads to increased implementation of environmental and social policies.
Finally, job guarantee schemes offered by governments as an employer of last resort aim to provide everyone who is seeking employment with a decent and suitable job.
The idea is to shift work from being a duty to a right and would eliminate involuntary unemployment. Such jobs can be used to expand wellbeing sectors such as art, culture, civil society and environmental services that are not profitable from a market perspective.
For example, job guarantees can generate work in nature protection, conservation and restoration.
There is certainly no one size fits all solution, but regardless of their ideological beliefs, governments have to start experimenting with these different policy ideas to get us on a sustainable trajectory.
This Author
Katy Wiese is an economist and environmental scientist by training and works for the European Environmental Bureau as Policy Officer for economic transition. This article was written with the collaboration of Jan Mayrhofer, a Senior Policy Officer at the European Youth Forum.
