Changing Pathways

Continuous economic growth has become, for many people, a fact of life. There may be doubts now and again, but generally the economy is expected to continue to grow, incomes are expected to rise and quality of life is expected to improve. Indeed, in the minds of many, continuously rising incomes and high quality of life are inextricably linked. This assumption is not always true in reality, however, and decoupling income and quality of life in people’s minds is one of the central challenges of promoting sustainable development.

Why do these two ideas need to be separated? Because despite fairly consistent declines over the last 30 years in the amount of natural resources required to produce a dollar of GDP, growing the economy from a resource perspective is still costly. Look at carbon emissions: the US economy has reduced emissions from 1 ton of carbon per $1,000 of GDP in 1960 to 0.4 tons of carbon per $1,000 in 2010. The issue is that even 0.4 tons is still far from the 0 tons that would be necessary to have a continuously growing economy without contributing to global warming. While this example is specific to carbon emissions, the same general story can be told of nearly any natural resource, from precious metals to water to available land: the environmental impact of the modern economy is unsustainable.

From Steinberger et al in Nature Climate Change 2, 81-85 (2012)

Unsurprisingly, recent research has empirically confirmed that a low carbon emissions pathway is incompatible with per capita incomes over $12,000. Using a consumption-based measure of emissions, rather than the conventional measurement of emissions based on territories, a recent letter in Nature Climate Change (subs. req’d) highlights the carbon intensive nature of high per capita incomes. By using a consumption-based measure, the authors are able to account for more developed countries ‘off-shoring’ their most carbon intensive industries, therefore artificially lowering their territorial emissions. Figure 1 shows how the carbon emissions of carbon importing and carbon exporting countries shift when consumption measures are used instead of conventional measures. When this consumption-based measure is used, no high-income country has carbon emissions below 1tC per capita. Thus, the critical finding of the study is that moderate incomes are a requirement for environmental sustainability.

When measuring emissions versus life expectancy, however, the same study finds that a low-emissions pathway is compatible with high life expectancy. While not causal, this relationship provides some evidence that a high quality of life can be found even with low per capita emissions.

Enjoying a high quality of life with a moderate level of per capita income is the central message of Tim Jackson’s 2009 report to the Sustainable Development Commission, “Prosperity without Growth.” In particular, he highlights several studies that suggest that once per capita income reaches $10-$15,000, further increases do not significantly improve happiness. Rather, well-being is guaranteed once income can adequately provide for immediate needs and further increases in income improve happiness only slightly.

Jackson goes on to suggest that for sustainable development to be successful, prosperity must be redefined to separate economic growth and increases in income from improvements in quality of life, namely, to decouple well-being from high incomes.

The Nature article discussed above underscores both the importance and the possibility of this decoupling. If high incomes cannot be achieved without high environmental impacts — which, given current levels of technology and cleantech adoption, they cannot — then reducing environmental impact requires reducing income levels. At the same time, high-levels of well-being — measured by life-expectancy — are still compatible with a low carbon pathway. If Jackson is to be believed, low to moderate per capita incomes are also compatible with high levels of happiness. Thus, the challenge is one of perception — convincing individuals that a high income is not required in order to be happy.

Absolute decoupling — the production of GDP with no environmental impact — is a dream of many techno-optimists. But today it remains just that — a dream. Until it becomes a reality, an increasing global population on a finite planet means that there is less to go around for everyone. Acknowledging this, both Jackson and Nature have the same message: forever increasing incomes are not possible, and therefore happiness must be attained through other means. This does not mean, however, that well-being must suffer. Now, the challenge is to convince the world.