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Are Solving the Climate Crisis and Ending Poverty Compatible Goals?

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There appears to be an impossible equation at the heart of efforts to achieve a sustainable society

Efforts to overcome the climate crisis are all about decarbonising the economy so that we achieve net-zero by 2050. Ending poverty is all about stimulating economic growth in developing countries. The idea is that by doing both, we’ll lead to a sustainable society where human needs are met within environmental limits. The issue with doing both is that social development tends to come with some rather nasty impacts — emissions increase. The two goals seem to contradict one another. So why is this the case, and what needs to be done so that both can be achieved simultaneously?

Since the industrial revolution, the higher living standards that have accompanied economic growth mean it’s become the secular goal pursued by all governments. More growth means more wealth, and more wealth means higher incomes. Higher incomes leave everyone better off, so the argument goes. It’s for this reason that globalisation is considered so pivotal to ending poverty.

With one in eight people still living in chronic poverty, calls for more economic growth seem justified. A more connected economy will stimulate growth in developing countries, leading to the aforementioned rising tide that raises all boats. The issue with this argument is that growth is accompanied by increasing environmental impacts. 

Growth in market economies is achieved by companies making more goods and services. If companies make more, revenues increase, and so do incomes. But they can only make more stuff if people are continually buying it. The outcome is production and consumption must increase. This equates to increasing output. We depend on energy and resource inputs to make all the stuff sold to consumers. The result is that as an economy grows, so do environmental impacts like carbon emissions. 

The only way continued economic growth can remain viable is if economic growth is disconnected from the environmental impacts of that growth. The desired outcome is to reach a point of absolute decoupling, where the environmental impact of future growth is negligible. The authors of Cents and Sustainability suggest that to “achieve such a future, we need to absolutely disconnect or ‘decouple’ economic growth from a wide range of environmental pressures.” 

It’s no good decoupling growth from a single environmental pressure, like reducing the economy’s carbon intensity. What’s necessary is to decouple growth from a “range of environmental pressures to ensure that ongoing economic growth does not push some ecosystems past ecological thresholds to collapse.” The IPAT formula reveals the potential impacts decoupling efforts can have, where;

I = A x P x T

This is where I represents the total environmental impact; P represents the population; A represents affluence; and T represents the environmental impact per unit of product/service consumed.

Population growth is forecast to increase throughout the twenty-first century. While economic and political success is wrapped up in higher incomes that allow people to consume more. So the only viable political and economic option to reduce the total environmental impact is to focus on T — the environmental impact per unit of product or service consumed.

Many companies have embraced a ‘whole system design’ approach, which allows them to create efficiencies in the manufacture of products. This process is known as dematerialisation and involves making the same product or service with fewer materials. The process creates a win-win-win where costs are reduced for businesses, environmental impacts decrease, and consumers pay a lower price.

But that third win can induce a rebound effect, where an efficiency that reduces the impact per unit of product/service consumed actually ends up increasing the total environmental impact. This can happen for a few reasons. If a product is cheaper to produce, the company can sell it at a lower price, encouraging more people to buy it. So while ‘T’ decreases for each unit produced, with greater demand for a cheaper product, ‘I’ increases because more products are sold. The rebound effect can get even worse because those who buy the product at a lower price now make savings and can use that disposable income to buy other products. 

When looked at in isolation, making a product with fewer materials or less energy is a cause for celebration, but when viewed from a systems perspective, the potential knock-on effect is that ‘I’ increases because it allows more people to consume more. This type of innovation can’t reduce ‘I’ in isolation because the underlying problem is that affluence and social success are intertwined with a materialistic lifestyle. A culture of consumption means the drive to make more, have more, want more, is ever-present.

Clearly, businesses operating in markets only have so much influence over what they can do. They can’t control the population, and they have no desire to question consumerism because their success and ability to continue to increase revenue are wrapped up in a materialistic lifestyle. While many companies are well-intentioned in efforts to dematerialise products, doing so illustrates how technological innovation can lock us into a path of further environmental destruction.

A culture of consumption directly threatens ambitions to achieve net-zero. This is the central contradiction of our time. On the one hand, economic growth continues to drive all human activity, meaning everything is arranged around people consuming more, and inevitably society creates more emissions. On the other hand, we have a goal to reduce emissions. 

To add another layer to this impossible equation, economic growth must be pursued in developing nations so that they reach a standard of living where needs can be met. But doing so would be disastrous in terms of dealing with the climate crisis because developed nations have resource and energy demands far exceeding Earth’s carrying capacity. This makes it impossible for developing nations to meet the needs of their people without exacerbating the problem.

At present, the richest 20 per cent of people account for 80 percent of consumption, and the poorest 20 per cent, 1 percent. In other words, the richest consume too much, and the poorest don’t consume enough. The only way developing nations can overcome poverty is if developed nations initiate a de-growth process of planned contraction. This would involve developed nations significantly decreasing resource and energy demands. Developing nations can then use some of those resources and energy as inputs to meet the needs of their people.

Intentionally degrowing economies would involve reimagining social success. Rather than life revolving around making more money and buying more stuff, it would be necessary to “develop new conceptions of human flourishing based on sufficiency, moderation, frugality, and non-materialistic sources of meaning and satisfaction.” This may sound like a pipedream, but a mountain of evidence shows materialism doesn’t increase social well-being or make people happier. So, there is a compelling argument for why we would be better off reimagining social success. 

It would be beyond naive, though, to imagine rich nations will voluntarily initiate a process of planned contraction. It’s also highly unlikely people living in developed nations would accept any limits on consumption, as it would involve making sacrifices to living standards. So we’re left with our impossible equation, where a belief persists that economic growth will end poverty while also reducing environmental impacts. We can’t have it all. It seems the only way a compelling argument will be created for people to reduce consumption is when the climate crisis starts to feel like a crisis. At that point, when we’re consumed by weather extremes that lead to social unrest, we’ll no longer have a choice whether we reduce consumption; it will be forced upon us.

This Post Has 2 Comments

  1. Dawn G.

    Not often do I see anyone make as much sense as you do. Please keep writing! I wish more people understood these things.

    1. Paul Abela

      Thanks for the kind words Dawn, I will!

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