Unhinged GDP Growth Could Actually Destroy the Economy, Economists Find

The Intercept December 5, 2018

As COP24 gets underway in Poland, the Institute for New Economic Thinking has released two working papers from prominent economists backing up the increasingly dire warnings from climate scientists. In “Economic Growth and Carbon Emissions,” Enno Schröeder and Servaas Storm find empirical evidence that economies can’t continue to grow their GDPs exponentially and bring down carbon emissions in line with the targets set in the Paris Agreement.

they dismantle a popular notion that carbon emissions can be “decoupled” from economic growth. Traditionally the two have moved together; greater wealth leads to greater energy use and fossil fuel consumption, and economic downturns reduce both. Yet studies in the last few years — including by the World Resources Institute — have appeared to indicate that a number of countries, mostly in the Global North, managed to grow their GDP while simultaneously limiting emissions. Hailing similar results, former U.S. President Barack Obama wrote in a 2017 Science piece that “this ‘decoupling’ of energy sector emissions and economic growth should put to rest the argument that combating climate change requires accepting lower growth or a lower standard of living.”

Taylor and his colleagues map out what they call a “causal loop” that includes the historical tie (“positive feedback”) between rising greenhouse gas emissions and rising economic productivity, as well as a looming negative feedback whereby those rising emissions trigger a global depression if allowed to continue unchecked.

The narrative put forth in these two papers stakes out a kind of middle ground between the doomsday accounts that crop up around new climate reports and the techno-optimism common among some climate advocates — that the renewable energy revolution is already upon us,