‘Degrowth’ Is a Misguided Way to Decarbonize the Economy

(Bloomberg) --

Spend any time discussing climate policy and you're sure to discover the “degrowth” movement. Its vocal proponents are hard to miss, online and off. Its core tenets might be harder to pin down, but the tagline captures the gist: Economic growth is the problem. The only way to decarbonize the economy: Degrowth!

Hmm, nope.

To be clear, there is quite a bit to like about the broader sentiment. After all, economic growth alone cannot be the goal. Gross domestic product is a misguided welfare indicator. Pollution gets added instead of subtracted. And aren't we all overworked and underpaid, placing too much value on frivolous consumption and too little on what should truly matter in life?

Cue the “Great Resignation” or the recent Chinese “lying flat” (or “tang ping”) movements, where Millennials and Gen Zs exit the workforce en masse. But the basic sentiment goes back quite a bit farther.

“Economic growth involves a variety of costs that must be recognized,” economist Simon Kuznets argued in 1962, a decade before he would win the Nobel Prize for his work developing the GDP concept. Degrowthers might be forgiven for mistaking some of Kuznets's words as their own: “If urbanization, the formation of large and impersonal corporations…are indispensable adaptations imposed by modern industrialization, the costs are borne by those groups in the population who have to adopt these new patterns of life.”

To understand degrowth and its follies, consider the humble washing machine.

Depending on who's counting, and where, the washing machine appeared three or four generations ago. It was a fix to an important problem, helping free (mostly) women from housework and allowing them to enter the workforce. Nowadays it is hard to imagine a middle-class household without one. Going back to doing laundry before the invention and largescale adoption of the washing machine would, to most, be taking a step back.

The washing machine, of course, is also one of the umpteen household appliances that sit idle for most of their life. And no, there's no concerted “degrowth” effort around getting rid of washing machines. But whenever I mention to a degrowther that my family doesn't have one at home — by choice, I should add — the response is immediate: “Welcome!” After all, it's a tiny example of this broader sentiment: less personal consumption; fewer material possessions; collective ownership of resources; and back to the land. Well, no, quite the opposite.

It's precisely the most central of urban locations — a fortuitous 90-second walk from the full-service cleaners — that makes living without a machine not just possible but desirable. Neither my wife nor I have a comparative advantage in doing our own laundry, much like we don't happen to have one in growing our own cotton or weaving our own clothes. So we don't. (Yes, our pandemic sourdough starter is still alive and well, but that's a different story. It's a fun hobby by now. Doing laundry isn't.)

Is it “degrowth”? Not in any meaningful sense of the term. Or rather: if that is degrowth, everything is, and the term is truly meaningless. For starters, having someone else do your laundry is as much a luxury as paying someone else to make your morning cappuccino.

Does sending out your laundry lower one's carbon footprint? I have no idea. I do know that once decarbonizing our economy comes down to these kinds of questions, we will be in a fortunate situation. I also know that the broader efforts to decarbonize a 200-year-old co-op apartment in New York City come with a steep price tag. That cost comes with jobs and economic growth, and that is the point.

The investments necessary to decarbonize an entire city, country, or the global economy run in the billions to trillions of dollars. Costs are coming down quickly and are likely lower than most realize. But it's precisely the higher costs of cutting carbon, compared with going about our fossil-fueled ways, that pose the core of the climate problem. The Green New Deal is a massive new investment program for good reason. And yes, it's these investments that re-channel market forces and spur the right kind of economic growth. As the “father” of GDP, Simon Kuznets, put it: “Distinctions must be kept in mind between quantity and quality of growth, between its costs and returns, and between the short and the long run.”

Whether the tagline for such an all-out, global decarbonization effort is green, lean, low-carbon, high-efficiency, or smart growth, I don't know. “Degrowth” it is not.

Gernot Wagner writes the Risky Climate column for Bloomberg Green. He teaches at New York University. His book “Geoengineering: the Gamble” is out this fall. Follow him on Twitter: @GernotWagner. This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

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