Post Carbon Institute Calls on Environmentalists to Embrace Post-Growth Economics

A new policy paper from the Post Carbon Institute, a nonprofit think tank, argues the environmental movement must embrace what the authors have deemed a “new normal” of declining economic growth while building solidarity with the so-called new economy movement, emphasizing community-based, sustainable solutions in an era of globalization.

The paper, “Climate After Growth,” was co-written by Post Carbon Institute’s executive director, Asher Miller and Rob Hopkins, founder of the Transition Network, which supports community-led responses to climate change and helps to build strong, sustainable local economies.

The paper hopes to put to rest the false dichotomy between the imperative of economic growth over environmental protection once and for all by making the case that the over-arching paradigm of economic growth is coming to an end in any case, regardless of the ongoing climate crisis.

“There’s an opportunity for environmental groups and others to offer up an alternative, and that alternative, we argue, could be emphasizing community resilience,” Miller told Truthout. “If we can address climate issues while improving quality of life, we can build resilience, which we need to do; we can reduce our dependence on fossil fuels; and we can offer up a different way of creating goods and well-being that aren’t relying upon globalized [economic] growth.”

By community resilience, Miller and Hopkins are referring to the ability of a community to “bounce back from disruption to a normal state of being,” according to the paper. The amount of resilience in a community is defined by the amount of change the community can undergo and still retain its basic structure, the degree to which the community can self-organize and the ability of the community to build the capacity for learning and adaption.

The authors argue the concept of community resilience will become more popular as environmental shocks to economic systems and local communities become more commonplace heading into another new normal — an era of frequent extreme weather events caused by climate change.

The authors don’t believe that any meaningful climate policy can be enacted while elected officials continue to prioritize economic growth above all else, and they also doubt that government efforts to stimulate the economy can be successful because there has been a more fundamental shift in the global economy.

Miller and Hopkins argue that without programs like the Federal Reserve’s quantitative easing, the U.S. economy would be in a “tailspin” and that the argument between austerity or stimulus as a means of getting back to sustained economic growth is now beside the point:

Unfortunately, it’s taking more and more debt to create each dollar of growth in the US — from $1.74 in the 1970s to $5.67 in the 2000s. The World Economic Forum projects that global credit will need to nearly double by 2020 — from $109 trillion in 2009 to $213 trillion — just to maintain the current, low level of GDP growth.

How long can this be maintained before the other shoe drops — massive defaults, lending dries up, or “haircuts” become mandatory? In September 2013 William White, the former chief economist of the Bank for International Settlements (BIS) — famous for being the only head of a major global institution who foresaw the 2007/2008 global banking crisis — warned that exuberance in the credit markets “looks to me like 2007 all over again, but even worse.” According to the BIS, the share of “leveraged loans” (those used by the weakest borrowers) has jumped to 45 percent of all loans — 10 percent higher than in the peak of the bubble in 2007 to 2008.

A major reason the U.S. economy can never get back to an era of sustained growth in the gross domestic product is because we have come up against the end of the era of cheap energy.

As the authors cite, oil fields are declining at an average rate of 4 million barrels per day, which must be replaced each year just to maintain current levels of oil production. Those traditional oil fields are being replaced with expensive and risky forms of extraction, such as fracking and deepwater drilling to reach less conventional forms of energy such as shale gas and Canadian tar sands.

“What we’re putting out to environmental [non-governmental organizations] … is that we don’t necessarily expect people to change their strategies or change their communication. What we want is just for them to try to internalize these new realities and recognize that whether or not they’re talking about the end of economic growth publicly, that is what we’re dealing with.”

Miller and Hopkins hope the small but growing new economy movement can get a boost from the well-established environmental movement in what they see as a practical path forward in a hectic future that will be defined by the new normals the authors outlinedin the paper.

The ongoing divestment campaign, which pressures universities, churches, cities and business leaders to divest their stock holdings from the top 200 fossil fuel companies, was an example the authors mention of a way the environmental movement could build the connection between strong local economies and sustainability issues. The divestment campaign has been championed by 350.org and student leaders on college campuses across the nation.

The authors suggest that the campaign could not only urge leaders to divest their shares from the fossil fuel industry, but reinvest those shares in community resilience efforts, such as community-owned renewable energy projects, which need the capital.

“It is more resilient and creates a benefit for communities when there’s renewable energy projects that are on a smaller scale; they’re distributed, they’re owned by the community and they’re appropriate to that ecosystem, the ecology of the community that they’re in,” Miller said.

But the reinvestment strategy is just one small step in connecting the environmental movement to efforts to create resilient local economic measures. The burgeoning community resilience movement is still working to build its capacity and network, according to the authors.

But what could really give the new economy movement the platform it needs to be successful, the authors say, is for leaders in the climate justice community to acknowledge the “elephant in the room” — that the economic growth paradigm is coming to an end in the 21st century.