Do we need to ration growth, and if so, who gets what’s left?

September 30, 2009

     By Duncan Green     

Spoke at a Quaker conference on the ‘zero growth economy’ at the weekend. Quaker meetings are different: when I finished speaking to an audience of 350 people, there was total hear-a-pin-drop silence. Instead of clapping, people reflect, eyes closed, on what they have just heard. And no, even though it was after lunch, they weren’t asleep (well, most of them) and it wasn’t just me – the next speaker got the same treatment, despite beginning his talk by acting out the train-wreck metaphor, ending with him running into a closed door at full speed and slumping to the ground. The two pigeons flying round the hall just added to the sense that this was not an average meeting. Actually, I really enjoyed it – free from all the rigmarole of applause, the quiet, dignified exchange and moments of shared silence felt respectful, even intimate. Plus Quakers are great readers – the stock of From Poverty to Power sold out in seconds and I spent the rest of the afternoon kicking myself for not bring more.

As for the discussion, the audience was deeply anti-materialist and apocalyptic (trainwreck man – ‘we are moving into the dying time – the 21st Century will be like working in a planetary hospice’), so I was forced first to defend the importance of growth to poor countries, then talk about whether it needs to be rationed to stay within the limits of climate change. The argument is best illustrated with three country scatter plots:

1. Rate of poverty reduction v growth: 3 points to note: firstly that on poverty reduction v growthaverage, countries that grow faster see greater poverty reduction. Secondly there is a lot of variation above and below the line of best fit, showing that you can get a lot more/fewer poverty bangs for your growth buck depending on the quality of growth (levels of equality, labour intensity, effectiveness of government redistribution and so on). Thirdly, you need 2% growth before you even get into poverty reduction (zero growth corresponds to a 1% increase in poverty rates).

carbon intensity v emissions2. Carbon intensity and overall carbon emissions: global carbon intensity (grammes of carbon per $ of economic output – the blue line) has been improving steadily for decades, but the rate of improvemement is much lower than that of the long term growth trend of GDP. Also, it got stuck around 2000, presumably due to the relative rise of carbon-heavy Chinese production. As a result overall global emissions (the red line) continue to rise, and are even accelerating. That leaves 3 options if we want to stay within two degrees of warming:
a) a drastic improvement in the next few years of the rate of fall of the blue line
b) reduced global GDP
c) a geoengineering magic bullet (a variety of Dr Strangelove solutions like putting tinfoil in orbit to reflect away sunlight, likely to have all sorts of unintended side effects)

Politicians are desperately clinging to (a), but I don’t see convincing evidence that carbon intensity is likely to fall at the speed required, which leaves a real need to at least consider (b), still an almost complete taboo in government circles. But if we are going to reduce the rate of global growth, how do we decide who gets what? Time to click on chart 3.

3. Life satisfaction v GDP: what this shows is that in poor countries, growth life satisfaction v gdpleads to a sharp improvement in people’s reported quality of life. Not surprisingly, being able to feed your family, increase your resilience to sudden shocks like sickness or unemployment, and watch your children grow up healthy and educated makes people happier. But above $20,000 or so (Czech Republic or South Korea), growth no longer adds to happiness.  In fact if you believe life satisfaction surveys in the UK, gross national happiness in my country peaked in the long hot summer of 1976, (ah yes, I remember it well) and has been falling ever since, despite considerable subsequent growth in the British economy.

So there you have it: if you want to maximise happiness (a utilitarian argument which offends the rights-based people, I know, but not a bad start) AND prevent catastrophic global warming, you need to make sure that incomes rise in the poor countries, but are steady or falling in the rich ones. i.e. we need to ration growth – it’s just too precious (and dirty) to waste on the rich countries. Convinced?

However, I suspect that such arguments were excessively rationalist for some in the audience (although there is a Quakernomics blog if you’re interested). Much of the discussion revolved around the role of believers who are neither lobbyists nor scientists. It came down to changing attitudes and beliefs to prepare the ground for more fundamental shifts : ‘We Quakers are being called to be the midwives of a new style of living and being’ one said. Recalling the history of the Quaker-led abolition of slavery, I wouldn’t bet against them achieving something significant. Trainwreck man Alistair McIntosh ended with the words of poet Adrienne Rich:

‘My heart is moved by all I cannot save:
so much has been destroyed

I have to cast my lot with those
who age after age, perversely,

with no extraordinary power,
reconstitute the world.’

Update: train wreck man has now written his own account of the event in the Guardian 

September 30, 2009
Duncan Green