Q+A: How can economic growth be decoupled from carbon emissions?

Mon Nov 2, 2009 6:36am EST

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(Reuters) - Growing economies without emitting carbon is the biggest dilemma of our times, sustainable development guru Tim Jackson argues in "Prosperity Without Growth: Economics for a Finite Planet," published on Monday.

The economics commissioner for the UK government's Sustainable Development Commission, Jackson advises that sustainability won't be achieved through relentless material consumption growth. Instead, a rewriting of the economic rule book is needed to meet the linked challenges of climate change, ecological degradation and resource scarcity.

Following are some questions Jackson answered about his blueprint for low-carbon growth in an email interview.

CAN ECONOMIC GROWTH BE DECOUPLED FROM CARBON EMISSIONS?

A few countries have made more progress in reducing carbon emissions than others, not just through accidents of fuel history, like the UK's dash for gas, but also through developing renewable energy, like Denmark's wind industry.

However, in both cases, growth still increases carbon emissions. We won't get a true decoupling until we've transformed our economies into real renewable energy economies. Achieving that requires a massive investment. If we fail to make that investment, sooner or later we'll run our economies off an ecological cliff.

WHAT ARE THE MAIN RESOURCE DEPLETION THREATS WE'RE FACING?

Those associated with oil. Some analysts believe the peak in extractable oil reserves has already been passed... Even the International Energy Agency foresees real shortages by 2020.

The carbon crunch could come over the same sort of timescale if the worst predictions of climate science turn out to be true.

At the very least, we seem to be on track for a 6 degrees (Celsius) warming by the end of this century. Human life in such a world would be considerably harsher than it is today.

AND TRADE-RELATED CARBON EMISSIONS ARE A MAJOR "HIDDEN COST?"

(They are) the biggest emissions source left unaccounted for in national accounts. Aviation and maritime 'bunker emissions' are also considerable. Taken together they already wipe out the apparent gains in carbon reduction achieved in the UK since 1990.

A fifth to a quarter of China's emissions may be associated with goods destined for consumption in developed nations.

The most likely policy intervention to offset the impact of traded carbon emissions is either a global financing mechanisms funded by the developed nations to reduce carbon emissions in the industrialising nations, or some sort of border tax or tariff on high carbon goods with the proceeds recycled back to the producing country to reduce carbon intensities.

SOLUTIONS INVOLVE SCRAPPING GDP AND GREENING INVESTMENT?

The most important thing is to establish an international consensus about a new national accounting framework -- similar to the postwar consensus established around the GDP. (For example) three headline indicators measuring 1. GDP adjusted for some of its most obvious economic deficiencies, 2. carbon footprints, and 3. some measure of social wellbeing.

The new ecological macroeconomics would focus on 'ecological' investment: targeting capital at resource efficiency, low-carbon technologies, demand management and sustainable infrastructures (transport systems for instance).

It's extremely unlikely that such investments will happen without significant changes to capital markets. There is a need for a radical rethink of both financial and commodity markets, to re-localise some elements of financial markets to encourage local investment in community infrastructure.

HOW OPTIMISTIC ARE YOU THAT ECOLOGICAL REALISM WILL PREVAIL?

I am optimistic. It's an optimism based in two things. Firstly, pragmatism. Optimism is a more pragmatic position to take than defeatism or pessimism, which would have us accept the status quo and abandon the search for solutions.

Secondly, realism. My experience delving into the supposed 'impossibility theorems' around economic structure, consumer logic and governance suggests that most of the road-blocks are socially constructed. Alternatives abound.

Source: Reuters

(Download Prosperity Without Growth from the Sustainable Development Commission website here)

(Editing by David Fogarty)

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