Good and bad growth?

Recent discussions in Manchester have led to interest in a possible distinction between good and bad growth.coverpic IPOG

We recently clarified our thinking on the nature of growth and post-growth as follows:

…we know that the economy is too big – at least the economy as presently constituted and measured, with its high use of fossil fuels and other non-renewable and polluting materials. But we aren’t actually against some kinds of growth. We like human growth, plant growth, cultural growth, growth in knowledge and skills, and growth in social solidarity. We also recognise that some parts of the economy, some parts of the industrial system, that is, need to grow: hence our concept of the “replacement economy”. SSM blog post: “What do we mean by post-growth?” 29/7/2013

But how do we distinguish more precisely between good and bad growth? Henderson and Capra in a recent report for the Institute of Chartered Accountants suggest that qualitative rather than quantitative growth should be pursued. They go on:  

“Instead of assessing the state of the economy in terms of the crude quantitative measure of GDP, we need to distinguish between ‘good’ growth and ‘bad’ growth and then increase the former at the expense of the latter… From the ecological point of view, the distinction between ‘good’ and ‘bad’ economic growth is obvious. Bad growth is growth of production processes and services which externalise social and environmental costs, that are based on fossil fuels, involve toxic substances, deplete our natural resources, and degrade the Earth’s ecosystems. Good growth is growth of more efficient production processes and services which fully internalise costs that involve renewable energies, zero emissions, continual recycling of natural resources, and restoration of the Earth’s ecosystems.” Fritjof Capra and Hazel Henderson ‘Qualitative Growth’ London, The Institute of Chartered Accountants in England and Wales 2009, p.9

While their definition is helpful, we need to build on it. We might add some social dimensions too. For example, good growth serves to promote equality while bad growth increases inequalities. We also need to take a whole system view of the benefits and dis-benefits. Ecology teaches us that it is not possible to consider anything in isolation: interconnection is one of the key characteristics of ecosystems. Moreover, those interactions give rise to ‘non-linearities’: there are not simple input-output relationships that result from a change in one variable, one process or one product. So in assessing whether the impact of an increase in one element of production is good or bad, we need to understand carefully what follows from it, and be prepared to look widely, expecting the unexpected.

An example might help.
It is decided that an area of good growth is efficient and affordable public transport, so that less fuel is used to get around and people spend less on doing so. As well as these two immediate benefits the change also has the wider social benefit of increasing social contact within neighbourhoods (people get talking at bus stops), reducing road casualties and reducing the rate of respiratory illness. But there are also negative consequences. The money people save by not running cars, or at least using them less, gets spent on other things – things like foreign holidays and plasma screen t.v.’s, eating more imported food. This increases carbon emissions, not here but in places like China, and on shipping and aviation.

Taking the whole system view has a further consequence for decision making. It is the total system impact that has to be considered. Our economy is too large, at least when considered in terms of its ecological impact. What selective growth there is has to be within the setting of absolute limits, which themselves have to progressively decrease until emissions are at a safe level.

So, sorry, the distinction between good and bad growth doesn’t get us off the hook of having to establish a steady state economy In Place of Growth.

This entry was posted in economics, further reading, In Place of Growth, key concepts, rebound effect, theory and tagged , , , , , , , . Bookmark the permalink.

9 Responses to Good and bad growth?

  1. judith515 says:

    These issues will be discussed on Wednesday 2nd October 2013, 11.30am at Manchester City Council Overview and Scrutiny Environmental Sustainability Subgroup meeting, 11.30am. Venue: MERCi, Bridge 5 Mill, 22a Beswick Street, Ancoats, Manchester, M4 7HR (near Holt Town metro stop, 2 stops after Piccadilly on the metro towards Droylsden)

    This sub-group was established for city councillors to consider four recommendations put forward by Steady State Manchester. This meeting will consider Leadership, What do we want from growth? Small and medium enteprises. Everyone welcome

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