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Miklós Antal, Green goals and full employment: Are they compatible?  In: Ecological Economics, 107: 276–286 (2014). doi: 10.1016/j.ecolecon.2014.08.014

Miklós Antal and Jeroen van den Bergh, Green growth and climate change: Conceptual and empirical considerations. In: Climate Policy, published online Dec. 23rd, 2014. doi: 10.1080/14693062.2014.992003

Ardjan Gazheli, Miklós Antal and Jeroen van den Bergh, Sector-level tests of the feasibility of green growth: Carbon intensity versus economic and productivity growth indicators. WWWforEurope Working Paper No. 81, January 2015

Bernhard Rengs, Manuel Scholz-Wäckerle, Ardjan Gazheli, Miklós Antal and Jeroen van den Bergh, Testing innovation, employment and distributional impacts of climate policy packages in a macro-evolutionary systems setting. WWWforEurope Working Paper No. 83, February 2015

Jeroen van den Bergh, Green agrowth as a third option: Removing the GDP-growth constraint on human progress. WWWforEurope Policy Paper No. 19, January 2015

Green goals and full employment: Are they compatible?

Environmental issues seem to be high on the European agenda; there are dozens of declarations of intent stressing the need to "green" our economy. But very seldom concrete measures and their effects are discussed in relation to growth strategies.

Jeroen van den Bergh and Miklós Antal, together with other WWWforEurope researchers, have contributed highly valuable work to this discussion and their findings are not too optimistic. There is no way around talking about trade-offs, about changing our economic model and opening up the option of green contraction rather than growth – temporarily or for a longer time – if we really want to lower greenhouse gas (GHG) emissions and stop climate change.

Miklós Antal published a survey on "Green goals and full employment: Are they compatible?" in Ecological Economics. Based on economic literature and empirical facts he shows two important and non-disputable correlations. Number one: So far, we have not witnessed any global decoupling of economic growth and the drivers of several important environmental problems. To the contrary, as more than half of the growing world population right now are on the brink of a much more resource intensive lifestyle, global energy and resource demands are set to grow rapidly in the next decade. There is no reason to hope that technological change will be fast and effective enough to compensate global economic growth. Number two: Capitalist economies show a strong correlation between growth and unemployment. If growth slows down or even becomes negative, unemployment will rise to unsustainable levels (if it is not already there). Policies mitigating this effect exist but these again have trade-offs and it is doubtful if they are politically or culturally feasible (e.g. higher public expenses, drastic reduction of working time).

In "Green growth and climate change: Conceptual and empirical considerations" (Climate Policy) Miklós Antal and Jeroen van den Bergh cite a number of obstacles on the way to greening the economy and society and show that a process of fast decoupling of growth and climate emissions will be very difficult: Several emerging economies are only at the beginning of an energy- and carbon-intensive growth trajectory; there is no chance that existing long-lived pollutive infrastructure will be replaced fast enough; environmental agreements and strict regulations are prone to be diluted by vested interests from various stakeholders, making policies rather ineffective; the costs of reducing emissions are increasing on a rising scale; and last but not least, environmental progress too often is accompanied by rebound effects (e.g. "if this product is greener, it is okay to use more of it").

These findings are further elaborated in two WWWforEurope working papers: In "Sector-level tests of the feasibility of green growth: Carbon intensity versus economic and productivity growth indicators“, Antal and van den Bergh, together with lead author Ardjan Gazheli, show by using data from Germany, Spain, and Denmark that although carbon intensity on the whole decreased in the years since 1995 there has been no absolute decoupling of emissions from growth. "Dirtier" industry sectors have grown as well as "cleaner" ones, and net emissions have grown as a result. Therefore, the authors conclude that there is no clear indication of a shift to green growth.

"Testing innovation, employment and distributional impacts of climate policy packages in a macro-evolutionary systems setting" is another Antal, van den Bergh and Gazheli working paper, in which the lead authors are Bernhard Rengs and Manuel Scholz-Wäckerle. The team models an artificial economy (with a variety of behaviours of consumers and firms observed in reality) and compares different policy packages of how to use the revenues out of a carbon tax to mitigate its potential detrimental effects on employment and growth. In the long-run the most promising way of using these revenues is to support green innovation, as this helps growth and employment while at the same time reducing the carbon-intensity of the economy. But even in this optimistic scenario, carbon emissions in the future will be higher than today, thereby aggravating climate change.

Another WWWforEurope paper "Green agrowth as a third option: Removing the GDP-growth constraint on human progress", by Jeroen van den Bergh, also considers the connection between environment, climate change and growth. It is motivated by the old debate on growth versus the environment which tends to oppose optimists believing in limitless growth to pessimists seeing environmental and resource limits to growth. This opposition defines the main strategies, namely striving for green growth and some anti-growth approach. The paper argues that we should not feel obliged to choose between these polarised opinions, as there is in fact a third option. Van den Bergh calls this the "agrowth" strategy, and it offers a way out of the impasse that characterises the growth-versus-environment debate. The paper defines and examines this agrowth strategy. It is suggested to follow logically from accepting the shortcomings of GDP (per capita) as an indicator of social welfare. The central insight, graphically illustrated, is that both anti-growth and pro-growth goals represent avoidable, unnecessary constraints on our search for human betterment, which lead to lower realisations of social welfare than are in fact feasible.

So, the bottom line of this research work is: There are policies which support a more climate-friendly economy but there are no easy solutions, and at the end of the day we will have to consider possible strategies to reduce the growth-dependency of our economic model altogether.