Prosperity versus the planet: can we have both?

Humanity needs economic growth – but we also need a habitable planet. We can have both, but not if we go on doing the same things.

Growth has come at a staggeringly high environmental cost. That price can, and must, come down

It’s an old conundrum: can a finite planet support infinite growth? But that simple statement evades a critical question: what sort of growth can it support?

For most of the 300,000 or so years since Homo sapiens began, the world population remained relatively flat. The dips during drought, war and pestilence, and the peaks in times of plenty, peace and health didn’t make much difference in the long term.

Then, from about the 12^th century, almost imperceptibly at first, population growth began. After another 500 years, the graph began to rise. It took another 200 years to go from 600 million to a billion. The overcrowded world which we now face is the product only of the past century.

Economic growth follows the same pattern, with a difference. Economic output for each average human also rose exponentially since the late 19^th century.

But to understand fully the impact of those twin changes – more people and more money for each – we must multiply the two together. The result of doing that is quite staggering. Between 1900 and 2023, global GDP adjusted for inflation rose from $6 trillion to $169 trillion, an increase of 3,255%.

But those thousand-year charts don’t show what’s happening now. Over the most recent three or four decades, that scarily exponential population rise has levelled out and by mid-century, according to the UN’s population experts, will go into long-term decline for the first time in the history of humanity. Every world region except sub-Saharan Africa is either near or past its peak.

China’s population has already peaked and by the century’s end is projected to drop by around 55% – from 1.4 billion today to 633 million. India will peak later, around 2060, but will end the century with about the same number of people as it has today. Europe is projected to decline by 20%, South America by 13% and the United States by 22%.

These immense decreases have been possible because most of the world is getting more prosperous, and richer people have fewer children. You can see this clear trend by comparing national birth rates with GDP. People in Western Europe, North America and Australia have small families; people in Africa and the poorest parts of Asia have large ones.

Population decline, then, is driven by economic growth. The two go inseparably together. If growth slows or – worse – starts to go backward, plunging billions of people back into poverty, we could expect population figures to increase. There would be many more mouths to feed.

But economic growth – prosperity – also has its downside. As people get richer, they change their diets: less plant-based food and a lot more meat. Poorer countries – India, East Timor, Indonesia – eat a lot less meat than people in Western Europe, North America and Australia.

So as poor countries benefit from economic growth, as their people have more money to spend and can afford to eat differently, can the planet support that?

The answer, as this map shows, is that it clearly cannot. If the whole world ate the same way as people in Australia or Argentina, the Earth would need 60% more arable land than it has. An American diet would need would need 37% more and a Canadian diet would need 30% more. People who require less arable land because they eat less meat (in countries coloured green on the map) make it possible for rich countries (orange and red) to live as we do.

Meat production is such a profligate use of land that the world cannot afford to consume much more than it already does.

Another way of looking at that graph is that you can get the same amount of nutrition from a single hectare of wheat as you can from 85 hectares under beef production. And the effect on carbon emissions is equally dissimilar. A hectare under beef produces as much greenhouse gas as 60 hectares under wheat for the same amount of nutrition.

Governments will be at the heart of addressing this problem. The land made available for grazing needs to be limited. Stopping the clearing of forests to make way for cattle would have three benefits: it would put upward pressure on the price of beef, thereby controlling demand; it would help limit carbon emissions; and it would help prevent the new pandemics which can emerge when humans interact with wildlife and bring viruses out of rainforests into the wider world.

If we want the peoples of the world to continue to improve their standards of living, and continue to defeat the poverty and squalor in which so many still live, economic growth is essential. But what is growth, exactly?

The growth enigma

Nobody quite knows what growth actually is. That’s a problem when the world badly needs to understand what things we can rely on to provide the prosperity of tomorrow, and what would come only at the continued cost of ruinous environmental harm.

The most obvious answer – Gross Domestic Product, or GDP – tells us much less than we usually think it does. GDP attempts to calculate the monetary value of what is produced in an economy, usually over a year. But it only includes things that have a price, so it excludes any product that isn’t sold. And it does not recognise any difference between production that’s good for humanity and the world, and that which is purely destructive.

If you eat a meal in a restaurant, that’s theoretically included in GDP. Cook the same meal at home, and it’s not. If you volunteer to clean someone’s house, it’s not included; if you are paid, it is.

GDP is very bad at measuring production from government-funded organisations that are not sold, such as public hospitals and government schools. How do you put a price on court systems? Or police, garbage collectors, building inspectors, medicines regulators, water supplies, financial watchdogs, electoral commissions … and so on?

When a public hospital treats more patients this year than last, a school educates more kids, or building regulators get better at ensuring apartment blocks don’t fall down, that’s growth. And it’s growth comes at far less environmental cost than, say, a factory increasing its widget production.

That’s one of the big differences between goods and services. Both represent economic production, but their impact on the planet is very different. Here, history shows a comparatively optimistic trend. The proportion of national economic output – particularly in the developed world but also in emerging economies – show a hefty increase in the relative contribution of services to total economic output since the middle of last century. This means that a disproportionate and increasing share of output is coming from industries which, on average, are likely to have a reduced impact on the environment.

The historical shift in employment is even more impressive. In the developed world, service industries are by far the dominant employers. Some of that shift is due to technological change and the decline in manufacturing, but most can be attributed to far greater demand for services, particularly in health, education and finance.

None of this means the task of living within our environmental means is being adequately addressed, or anything like it. But it does mean the growth we’re getting now is more sustainable than the growth of 50 years ago. The difficulty is in the size of each year’s economic expansion, which threatens to wipe away those structural gains.

Degrowth won’t work

Degrowth – the idea that we should get by with less, not more – has understandably become popular in environmental circles. But this apparently simple idea is more troublesome than it looks, though there’s a good case to be made against the sort of growth we’ve had in the past. It has, as we’ve seen, exacted an unaffordable environmental price.

Degrowthers and others have often blamed growth for increased inequality and the resultant social dislocation, but that’s a bad rap. There has been immense growth over the past century-and-a-quarter and for most of that time, inequality fell. Only when the market fundamentalist neoliberal era began with Reagan and Thatcher did that trend towards greater equality and fairness end. Growth wasn’t the problem. Politics was the problem.

Reversing growth won’t improve equality: it will just make everyone poorer. By definition, economic contraction results in recession or depression. The popular rule-of-thumb is that two quarters of declining GDP indicates recession. The Great Depression following the 1929 crash saw GDP in most nations falling for four consecutive years.

The social results of these downturns are well known and devastating. The recession of 1991 lasted eight months in the US. Even though real GDP fell by only 1.3%, unemployment soared to 7.8% and 1.6 million jobs were lost. Canada’s experience was much worse, with its recession lasting four years and unemployment reaching 12%. It was just as bad in western Europe. Youth unemployment was even worse, hitting 17% in Australia. That was a recession, not a depression: but a depression is only an extended recession.

It is magical thinking to believe that global economic output could be set, universally and permanently, at zero. The political and technical means of achieving this do not exist. In a world reliant on relatively free flows of trade and capital, it is impossible without significantly disrupting those flows, and the resulting economic slump could be as great as anything the modern world has seen.

An end to growth would also mean an end to the hopes of billions of people currently living in poverty. In just 35 years, according to World Bank data, the number of people living in extreme poverty has declined from 2.2 billion in 1990 to 800 million today. Stopping growth would stop that trend. Only in Sub-Saharan Africa, where economic growth is low and populations continue to increase, is poverty still worsening. Degrowthers have no answer for those people.

Degrowth represents not only a failure of common decency but also a failure of imagination. It refuses to countenance the idea that growth need not come at the cost of continued environmental destruction.

Growth we can afford

Just two major interventions would be enough to broadly reconcile economic growth and environmental security. Those are replacing fossil fuels with renewables, and limiting the amount of land available for meat production.

The trend to renewable energy is already well under way and, though it has been much too slow, the trend has been supercharged by Trump’s ill-considered war on Iran. Limiting land available for meat production would increase prices of the most environmentally destructive food sources – beef and sheepmeat – in favour of more sustainable foods. Those include grains, pulses, fruit and vegetables but also less-wasteful meat products, such as poultry and aquaculture. Currently, those are often controversial – salmon is the leading example – but only if they are poorly managed. Limiting grazing land would prevent much land clearing, safeguard mature forests, improve biodiversity and reduce the likelihood of future pandemics.

Those are the two big things. There are a lot of little ones too, mostly about the more efficient use of environmental resources: increasing output while decreasing impact. Farmers are already conserving topsoil, using fertilisers and pesticides more effectively, and employing new and more productive plant varieties.

Recycling is part of modern life, but it’s too often cheaper to produce new items rather than re-using old ones. That demands regulatory intervention, such as mandating the use of recycled materials. Plastic pollution is both an environmental scourge and a massive waste of resources.

In short, we need to get better at a lot of things we’re already doing, but doing inadequately.

In the end, we have no choice. If humanity is to secure a better future and to decrease the misery and deprivation under which billions of people still live, economic growth is indispensable. But we only have one Earth. We can reconcile those apparently contradictory imperatives, and we must. There is no choice.