Less is more? Degrowth, green growth and the future of our economy

By Ana Birliga Sutherland (Writer & Editor, Circle Economy Foundation)

This article was first published by Renewable Matter.

‘We don’t need a new growth model—we need a new economic model,’ says álvaro Conde, Researcher at Circle Economy Foundation

Imagine a world where overwhelming narratives on climate change are a thing of the past, with healthy air, clean water and fertile soil. And no one’s had to suffer for it—people around the world live good lives.?

This isn’t a pipe dream. According to the recently launched Circularity Gap Report 2024 , we can fulfil the world’s need for basic societal needs—housing, food, transport and manufactured goods, for example—with just 70% of the materials we use now. This highlights the massive volume of materials wasted by the global economy: the way we extract, process, use and dispose of materials is riddled with inefficiencies—and in addition, we’re consuming far too much. Now, academics from all corners are calling for an overhaul of the system.

Degrowth—an answer to our calls for environmental action—is now seeping from the fringes of political thought into the mainstream. Last May, for example, saw European MPs convening at the Beyond Growth conference, which brought together more than 2,000 participants to create an action plan for our addiction to consumption. But what does degrowth really mean—and what other alternative economic narratives are gaining steam??

Defined as a ‘planned reduction of energy and resource use to bring the economy back into balance with the living world’, degrowth is inherently centred on wellbeing. The movement aims to upend the engine of capitalism —by, for example, rolling out basic income grants and four-day work weeks, and restricting advertising—while exempting the Global South. In essence, its goal is to lessen the activities driving socially-unnecessary growth—and the environmental damage these cause. This means shifting away from the ubiquitous use of GDP as the North Star of development, replacing it with a new, well-being-centred model that brings human activity back within planetary boundaries. Once disparaged or deemed utopian, the concept has shot to relative fame in the wake of rigorous scientific attention—now, it’s the subject of around 600 studies, with the EU funding further research on the topic through its Horizon 2020 programme.

Degrowth was born as a reaction to green growth—championed by some as a way to green business as usual, without rethinking the current economic system. Opinions of the merits of each differ vastly, however. Last year, we sat down to chat with researcher álvaro Conde about all things degrowth, green growth and circular economy. This conversation busts degrowth and green growth myths, exploring how—and whether—they could become a reality.??

It’s time to redefine prosperity and put people and planet above profit

In the minds of many, a shrinking economy invites wariness, bringing to mind skyrocketing costs of living and pay that falls well below inflation. But although a reduction in GDP may be a side effect of the concept, degrowth isn’t a recession—and nor does it need to threaten livelihoods . Instead of centring its definition on a shrinking GDP, we have to remove the goalposts of GDP completely, according to álvaro. The concept takes a wholly different approach and aims to redefine prosperity: it’s about building an economy that works for people and planet, rather than one in which people work to build a growing economy. Beginning to question how this economy is structured and who it benefits is also key.

This is especially relevant as economic growth continues to be conflated with prosperity—and continually pushed for despite ample evidence to the contrary, even against the backdrop of the fading American dream. While increased material use—and economic growth along with it—have long propelled human affluence, this progress has come at a staggering cost; and while some nations massively overconsume, others still fail to meet basic living standards. And despite growth around the world, inequality within countries is worsening , with nearly three-quarters of the world population living in countries where this is the case. This means that while a country may get richer, it doesn’t always say a lot about the state of its residents: the richest 10% of Americans , for example, have the world’s highest top-decile disposable incomes, while the poorest 10% have lower living standards than the poorest residents of 14 European countries.?

Ultimately, growth has long been built on a foundation of exploitation, becoming unmoored from wellbeing. So why is it still being used as the gold standard for development?

What about green growth?

Degrowth naysayers tout another solution: green growth. Here, the GDP focus remains: proponents claim economic output can be decoupled from its environmental impact, citing evidence of some Global North countries that have cut consumption-based emissions while growing their economies. Emissions, however, aren’t everything—research proves that material use is a proxy for a range of environmental blights, of which excess carbon is only one. In spite of the progress made to decouple emissions and economic growth, along with other promising reductions in air and water pollution, for many countries, consumption simply remains too high. Although Sweden , for example, has grown its economy at a higher rate than its material consumption, this remains staggeringly high —more than three times the estimated sustainable level.

Green growth advocates envision a world where we have it all: economic growth and a livable planet. Here, Hickel’s ‘less is more ’ is flipped into the pithy ‘more from less ’: a nod to green growth’s focus on efficiency improvements and technological solutions instead of an absolute reduction in material consumption. According to álvaro, however, the tenet leaves out a crucial challenge in the race against climate breakdown: time. And time is exactly what we lack most.

Green growth’s success would depend on the decoupling of growth from all environmental pressures—from emissions and material use to biodiversity loss—in all countries, at a quick and continuous enough pace to prevent ecological collapse. ‘All’ is the key word here: while many countries have decoupled emissions and growth, others have emitted more year on year—in Spring 2023, atmospheric carbon reached the highest level ever recorded. Even countries successfully cutting their emissions are also moving far too slowly , at a rate of 1–2% per year—a far cry from the 8–10% needed to limit warming to 1.5-degrees. Time is in short supply: with the need to take concerted action now, de-prioritising GDP growth is essential, degrowth advocates urge. Climate experts agree: recent research nods to growing scepticism of green growth’s potential.

Where the circular economy comes into play

Although degrowth has been criticised as ‘mythic’, many of the strategies we need to operationalise it and sharply reduce material use are already in place. This is where the circular economy comes into play: with its toolbox of strategies that design out waste and keep products and materials in use for as long as possible at their highest possible value, the circular economy can be the vehicle for degrowth’s practical realisation.?

By tackling sectors that use vast quantities of virgin materials—think energy, construction and agriculture—sufficiency-based circular strategies can help us both boost efficiency and cut material demand and consumption, in a way that benefits people. This will mean rethinking how we provide people with the things and services they need. While some changes will impact the way we live and work (eating less meat or not owning an SUV, for example) others will hardly be felt in our day-to-day lives: prioritising wood over concrete in building, for example, or ensuring that heavy machinery and capital equipment is made to last and can be repaired and remanufactured. Ultimately, policies for degrowth —better public services, from transport to education, green jobs guarantees to tackle unemployment and even shorter working weeks—will be overwhelmingly positive.

These solutions aren’t new and aren’t overly reliant on technology, but rolled out at scale their impact could be massive . Take Ecopower, the biggest energy cooperative in Belgium, as an example: contrary to the average energy business, its aim is for customers to use the littlest energy possible—and benefits members by reinvesting profits in local communities. Renewable energy is supplied in a way that puts the prosperity of users and the planet—rather than shareholders—front and centre.

It’s time for a new economic paradigm to shepherd us through this time of transition—and circular economy strategies will underpin this: ‘We want to end up with a thriving, regenerative and distributive economy, and degrowth is the means for getting there,’ notes álvaro.

Learn more

Circle Economy Foundation advocates for sharp reductions in material use, and we work with cities and nations to make this a reality. Get in touch to learn how your city or nation can cut its consumption and lessen its environmental impact. Curious to learn more about the role of policy, finance and labour in enabling the circular transition? Read the Circularity Gap Report 2024 to learn more about how we can make this a reality. Want to learn more about all things degrowth? Listen to our podcast Talking Circular here .