Degrowth versus Green New Deal: Response to Juliet Schor and Andrew Jorgenson

Juliet Schor and Andrew Jorgenson are correct that the global Green New Deal project that I advocate is focused around absolute decoupling. Under absolute decoupling, fossil fuel consumption falls dramatically while large-scale investments in energy efficiency and renewable energy enable people to continue consuming adequate amounts of energy resources.

It is important that economic growth is able to proceed under the Green New Deal. But as I emphasized in my initial contribution to this debate, I certainly do not advocate economic growth for its own sake. Rather, the Green New Deal offers the only approach to climate stabilization that can deliver an expansion of good job opportunities and rising mass living standards. The Green New Deal is therefore the only viable climate stabilization framework that can also reverse the rise in inequality and defeat both global neoliberalism and ascendant neofascism.

Since I drafted my initial contribution in July 2018, the Intergovernmental Panel on Climate Change (IPCC) issued a new report emphasizing the importance of limiting the rise in the global mean temperature as of 2100 by 1.5°C only, as opposed to 2.0°C. The IPCC now concludes that limiting the global mean temperature increase to 1.5°C will require global net CO₂ emissions to fall by about 45 percent as of 2030 and reach net zero emissions by 2050. Based on these latest IPCC findings, the global Green New Deal program that I summarized in my initial contribution needs to be somewhat accelerated. Specifically, global CO₂ emissions will need to be eliminated altogether within thirty years as opposed to the 40–50 year period that I previously presented. This will require that the net increase in global clean energy investments will need to average 2–2.5 percent of global GDP per year between now and 2050, as opposed to the 1.5–2 percent range I stated in my initial contribution.

In criticizing my Green New Deal framework, Schor and Jorgenson correctly emphasize that “almost no countries have achieved absolute decoupling.” Nevertheless, I contend that we have no alternative to absolute decoupling in advancing a viable climate stabilization path. I emphasize that absolute decoupling must proceed in the Global South as well as the advanced economies.

Schor and Jorgenson do not present any evidence that contradicts this central conclusion. They argue for measures to reduce inequality and working hours and focus emissions reductions on the heaviest emitters. But even they recognize that such measures can only “complement technological change” and “might help” to advance a viable climate stabilization project. I agree with their assessments, but would stress more that their proposals can be only supplements within an overall absolute decoupling framework.

This becomes clear when we consider in a bit of detail Schor and Jorgenson’s observation that “some capitalist countries have had low or near-zero growth for extended periods of time.” Japan is the most important contemporary case in point. Between 1996 and 2015, GDP growth in Japan averaged an anemic 0.7 percent per year. This compares with an average growth rate of 4.8 percent per year for the thirty-year period 1966–95. Despite the fact that Japan has been close to a no-growth economy for twenty years, its CO₂ emissions remain among the highest in the world, at 9.5 tons per capita. Moreover, Japan’s per capita emissions have not fallen at all since the mid-1990s. The reason is straightforward: as of 2015, 92 percent of Japan’s total energy consumption comes from burning oil, coal, and natural gas. Hydro power supplies 5 percent of Japan’s total energy needs and all other renewable sources supply only 3 percent. Thus, despite its near-zero growth trajectory since the mid-1990s, Japan has accomplished virtually nothing in terms of reducing emissions.

Schor and Jorgenson oppose degrowth for the Global South. But they do not recognize the centrality of absolute decoupling for developing economies. Consider the case of India. According to the International Energy Agency (IEA), if India grows at 6 percent per year from now until 2035, as the IEA forecasts, and maintains its existing energy policy framework over this growth period, CO₂ emissions will increase by 135 percent. The same pattern will be true for all rapidly growing developing economies. Climate stabilization will become virtually impossible through any such fossil fuel-dominant growth scenario for the Global South. But Chakraborty and I (2015) show how India can still grow at 6 percent per year through 2035 while basically stabilizing its total emission levels through investing 1.5 percent of GDP per year in a clean energy transformation. India could lower its emissions level absolutely while still growing rapidly through investing 2–2.5 percent per year of GDP in clean energy.

Schor and Jorgenson favorably cite the degrowth modeling work of Peter Victor that aims to demonstrate how advanced economies could function effectively within a degrowth framework. Let us consider Victor’s findings. In a 2011 paper, Victor develops a series of models for evaluating the relationship between economic growth and CO₂ emissions for Canada between 2005 and 2035. Under Victor’s baseline scenario, Canadian GDP grows on average by 2.3 percent per year between 2005 and 2035, with Canada’s per capita GDP doubling by 2035 relative to 2005, while CO₂ emissions rise by 77 percent. Victor then shows how under degrowth, CO₂ emissions fall by 88 percent relative to the 2035 business-as-usual growth scenario. But Canada’s per capita GDP under degrowth would fall to 26 percent of the 2035 level reached through the business-as-usual case (Victor 2011: 7).

Victor does not flesh out his results with actual data on the Canadian economy, but it is illuminating to do so. In 2005, Canada’s per capita GDP was $53,336 (expressed in 2018 Canadian dollars). Under business as usual, per capita GDP rises to about $107,000 as of 2035. Alternatively, under degrowth, Canada’s per capita GDP in 2035 would plummet to $28,000. This per capita GDP level for 2035 is 48 percent below Canada’s actual per capita GDP for 2005. In other words, under Victor’s degrowth scenario, the emissions reduction achieved over a thirty-year period is only modestly greater than what can be achieved under a Green New Deal with clean energy investments at 1.5 percent of annual GDP. But under the Green New Deal, average incomes would roughly double, while under degrowth average incomes would experience an historically unprecedented collapse. Victor does not consider whether an economic depression of this magnitude under degrowth, in Canada or elsewhere, is either economically or politically viable. Among other things, he doesn’t examine what impact this loss of national income will have in areas such as funding for health care, education, and, for that matter, environmental protection.

Overall, this debate has solidified my belief that we have before us only one viable approach to climate stabilization. The centerpiece of the program is a massive global clean energy investment project that is capable of delivering absolute decoupling within the framework of a global Green New Deal.