Is humanity doomed to choose between economic growth and the fight against climate change? Probably. At least in part. And for a while.
The two visions are found as for the urgency to accelerate the work on the climate plan, but differ completely as for the consequences of this undertaking.
On the one hand, there are those who think that we are harboring a dangerous illusion in believing that we can aspire to the pursuit of economic growth when it is precisely this growth that plagues the planet. They do not understand that we do not understand that the increase in production can only have an end on a planet, whose natural resources and the capacity to take blows are not infinite. Taking note of the growing environmental and existential peril, they deduce that it is necessary to jump off this crazy train and enter into a new logic of degrowth.
On the other side, there are those who do not see how we will convince the nations, especially the poorest, to stop improving their material conditions. Comforted, since Thomas Malthus, by at least three centuries of erroneous predictions on the end of growth, they believe in particular that with the right rules and the right economic signals, such as carbon pricing, the capitalist economy will be able to adapt. and invent new ways to continue to create more wealth, but this time without destroying the planet.
Partial decoupling
It is true that with the growth and dematerialization of the economy made possible by technological innovations, the goods sector is giving way more and more to that, much less taxing for the planet, of services, observed in September the European research center Bruegel in an analysis of these questions. Sign of this growing decoupling between economic activity and pollution, the total quantity of CO2 issued as a proportion of the size of the global economy declined on average by 1.8% per year from 1995 to 2018, and even by 2.1% in the second half of this period.
The problem, say Bruegel experts, is that this decoupling would have to be at least four times faster (8.7%) for per capita economic growth to remain the same and for the world to reach carbon neutrality in 2050 as we wish.
Those who believe in green growth will argue that the fight against climate change was only beginning when these measures were taken, that European countries were already, at that time, at an annual rate of reduction of 3.7%. and that since then the price of green energies has fallen to the point of being lower than that of fossil fuels.
However, Bruegel researchers point out that it will not be enough to massively increase investments in green infrastructure (from US $ 2,000 to US $ 5,000 billion per year) to reconcile economic growth and the fight against climate change. It will still be necessary to know where to spend this money, the technologies existing today making it possible to reach 85% of the greenhouse gas reduction targets that we have set for 2030, but this proportion falling to 54% for the period from 2031 to 2050.
The price of inaction
A change in preferences and behaviors could help go part of the way. It is not only possible, but probable, that, “helped” in particular by a much higher carbon price, households adopt and even learn to appreciate other, less polluting forms of consumption.
However, Bruegel does not see how all this could not weigh on economic growth in the coming years. But natural disasters attributable to climate change are also weighing on the economy, he notes, with damage costing $ 210 billion last year alone.
In Canada, the economic benefits of the climate transition will be much greater in sectors such as energy, mining and transportation, as well as in provinces such as Alberta and Saskatchewan, the Deloitte Economic Institute observed in another. analysis, Thursday. Also counting on the help of future technologies in terms of carbon capture and green hydrogen production or even small modular nuclear reactors, its authors globally estimate that the transition costs will amount to a maximum of nearly 1% of Canadian gross domestic product by 2037, before declining and turning into a net gain of 0.4% by 2070, which is equivalent to 30 billion more per year “compared to a world marked by ‘climate inaction’.