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Canada should embrace the degrowth imperative

Our economy can not only survive without growth—it can thrive

Economic CrisisEnvironment

Wind turbines in East Pubnico, Nova Scotia. Photo from Wikimedia Commons.

Something big just happened in Europe, but you probably didn’t hear about it. Major media outlets refused to report on it.

It wasn’t a protest, or an act of climate sabotage, or any of the things you might normally expect to be swept under the rug. It was a three-day conference at the European Parliament, an institution that no one would describe as radical.

But the subject of the conference was radical: building a new, sustainable, and equitable world without economic growth.

Speakers presented on biophysical limits and planetary boundaries, yes. But the conference was dominated not by questions of limits, but rather by questions of a prosperous and equitable future for all, and how we might construct a “social-ecological state.”

The conference, dubbed “Beyond Growth,” delved into policies big and small that, together, could improve lives while simultaneously eliminating Europe’s dependence on economic growth. And speakers didn’t shy away from the complexity of safely and smoothly transitioning our growth-dependent global economy onto a more sustainable path, thinking through how to reshape the international financial system and birth a less brittle macroeconomic environment that can thrive with low or virtually zero growth.

Climate activists in North America are probably used to looking at Europe with envy these days: US and Canadian per-capita emissions have been between two and three times the EU average for some time, while countries in Europe and the EU itself have both consistently set more ambitious climate targets than the US or Canada and made more progress towards them.

So it should come as no surprise that degrowth has, so far, failed to gain much of a foothold on this side of the pond. One recent study on this failure in Canada reported that activists felt “[degrowth] wasn’t considered a politically acceptable position,” an opinion easily corroborated by a review of mainstream media.

But in a country where we are constantly told that new fossil fuel infrastructure is needed for economic growth—with the next logical jump, “growth is needed for wellbeing,” implied—it’s more important than ever that the necessity of economic growth itself comes under the microscope.

Canada’s high reliance on resource extraction puts us in an difficult situation: on the one hand, biophysical limits (including atmospheric greenhouse gas concentrations) could quickly force us into an unplanned degrowth situation—also known as a depression. On the other hand, the status quo’s reliance on extraction might make it more difficult, from a macroeconomic perspective, to build a stable, growth-agnostic economy. For these reasons, Canada has a high-risk economy, and we stand to gain a lot by planning carefully for a future of lower resource use. We also have a lot to lose if we fail to read the writing on the wall.

It’s worth mentioning that resource extraction isn’t our only source of risk when it comes to maintaining the growth our economy currently relies on. Residential real estate investment’s contribution to GDP growth is huge and growing, and we all know how that’s working out.

One of the speakers at the Beyond Growth conference, Tim Jackson, and his collaborator, York University professor Peter Victor, have been working to imagine—and prove possible—a future of low-growth prosperity for Canada. Part of this work has included creating system dynamics models of the Canadian economy, something Victor first did in 2008, and using these models to understand what Canada might look like under a number of different resource and policy scenarios.

The latest version of this model, LowGrow SFC, which Victor and Jackson call an “ecological macroeconomic model,” is most interesting as a tool to compare potential pathways and their impacts on both GDP growth and a wellbeing index that the authors developed called the Sustainable Prosperity Index (SPI). GDP per capita contributes to the SPI, but it also factors in inequality metrics, household debt, average work hours (and unemployment rate), and environmental harm and degradation.

In the second edition of his book, Managing without Growth: Slower by Design, not Disaster, Victor lays out three scenarios that project possible futures for Canada through 2067. Perhaps unsurprisingly, the first scenario—the “base case,” which they describe as a “projection of the past into the future”—sees GDP rise most quickly, but causes a rapidly accelerating decline in SPI: inequality continues to rise, and ecological constraints start to seriously challenge the way we live.

The scenario they call “Carbon Reduction”—which includes a rapidly rising carbon price (reaching nearly double the currently legislated rate by 2030) and other climate mitigation measures—sees slower GDP growth than the base case, but it also sees a slower decline in SPI. Despite the aggressive decarbonization policies, it fails to achieve Canada’s emissions reduction targets and still sees SPI decline.

The “Sustainable Prosperity” scenario is the only one of the three presented that sees SPI rise over time. Not coincidentally, it’s also the only one where GDP growth ultimately ceases and the economy enters something of a “steady state.” These outcomes were the result of just a few notably different policy approaches or assumptions: a significant portion of investment capital is redirected towards “green investment;” the government ramps up efforts to reduce inequality through wealth transfers and a more robust welfare state; and average hours worked declines.

Work hours is particularly worth highlighting because it’s the main driver of the scenario’s GDP stabilization: “labour productivity gains are increasingly taken as reduced work hours rather than as increased production.” It’s a way of getting off what the American sociologist Juliet Schor and her co-authors once called the “work and spend” cycle. The impact this change has on the scenario makes it very clear how different the capitalist conception of a four-day work week is from the degrowth one.

Victor and Jackson, who co-authored a chapter of Victor’s book, are very clear: the scenarios produced by LowGrow SFC are not predictions. Neither are the scenarios produced by any other model. Instead, they are possibilities, and in this case, they are possibilities designed to demonstrate—by their very existence—that Margaret Thatcher was wrong: there are in fact many alternatives.

It’s an approach that the left (and the “climate left”) have, until recently, largely shied away from. But Victor and Jackson think that progressives needs to embrace this kind of modelling, and they aren’t alone. The political scientist Thea Riofrancos, whose work focuses on extractivism and the energy transition, recently called for the left to use “modelling as a world-building tool.” She did exactly that in a new report on how to reduce demand for “critical minerals” while improving mobility and decarbonizing.

We are constantly told by the political class in Ottawa that more aggressive decarbonization—or any number of other progressive goals—is magical thinking. The reality, of course, is that imagining capitalism can continue on its current path with nothing more than an engine swap is magical thinking. And it’s a fantasy based on the quantitative results of modelling rooted in the assumption that nothing can fundamentally change.

Victor and Jackson’s LowGrow SFC doesn’t tell us what the future will look like, even if we follow the prescriptions used to generate their “Sustainable Prosperity” scenario. It is, after all, just another model.

But it does tell us that the Canadian economy can not only survive without growth, but it can thrive. And it throws into question the idea that a growth-focused Canada can actually achieve decarbonization in any meaningful way, even with more aggressive policies than the country is currently pursuing.

Nick Gottlieb is a climate writer based in northern BC and the author of the newsletter Sacred Headwaters. His work focuses on understanding the power dynamics driving today’s interrelated crises and exploring how they can be overcome. Follow him on Twitter @ngottliebphoto.

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