Uneconomic growth 170826 223541873 2008-07-04T15:05:28Z Ecureuil espagnol 5920021 /* See also */ '''Uneconomic growth''' (or economic degrowth), in [[human development theory]], [[welfare economics]] (the economics of social welfare), and some forms of [[ecological economics]], is [[economic growth]] that reflects or creates a decline in the [[quality of life]]. The concept is attributed to the economist [[Herman Daly]], though other theorists can also be credited for the incipient idea.<ref>Daly, H. 2007. Ecological economics: the concept of scale and its relation to allocation, distribution, and uneconomic growth. Pp. 82-103 in H. Daly. ''Ecological Economics and Sustainable Development: Selected Essays of Herman Daly''. Cheltenham, UK: Edward Elgar.</ref><ref>Daly, H. 1999. Uneconomic growth and the built environment: in theory and in fact. In C.J. Kibert (ed.). ''Reshaping the Built Environment: Ecology, Ethics, and Economics''. Washington DC: Island Press.</ref> The cost, or decline in well-being, associated with extended economic growth is argued to arise as a result of "the social and environmental sacrifices made necessary by that growing encroachment on the eco-system."<ref>Daly, H. 1999. Uneconomic growth in theory and in fact. The First Annual Feasta Lecture, Trinity College, Dublin, 26th April. Available from: http://www.feasta.org/documents/feastareview/daly.htm. Accessed 28 March 2008.</ref><ref>Daly, H. and Farley, J. 2004. ''Ecological Economics: Principles and Applications''. Washington: Island Press.</ref> In other words, "[u]neconomic growth occurs when increases in production come at an expense in resources and well-being that is worth more than the items made."<ref>Daly, H. 2005. Economics in a full world. ''Scientific American'' 293(3): 100-107.</ref> ==Good vs. bad growth== [[Image:Gilad Rom - No Fish Today (by).jpg|thumb|Abandoned ships in [[Moynaq]], Uzbekistan. This former beach is now 150 km away from the [[Aral Sea]]. From the 1930s the Soviet authorities diverted the rivers for cotton irrigation. Already in 1968, the desiccation of the sea was seen as "inevitable".<ref>[[Tom Bissell|Bissell, Tom]]. "Eternal Winter: Lessons of the Aral Sea Disaster". [[Harper's]], April 2002, pp. 41–56.</ref>. The Uzbekistani authorities still prefer exportable cotton and oil prospecting over restoring the South Aral Sea<ref name="timesonline1975079">[http://www.timesonline.co.uk/tol/news/world/europe/article1975079.ece The return of the sea], [[Times Online]], June&nbsp;23,&nbsp;2007</ref>.]] Uneconomic growth often reflects poorly developed or poorly planned growth, rather than growth that is inherently bad. For example, if one assumes that Atlantic [[hurricane]]s and Pacific [[typhoon]]s have intensified in recent years due to human-caused [[global warming]], then a rapid surge in [[automobile]] ownership in [[China]], [[Brazil]], and [[India]] could be seen as uneconomic growth. This is based on the assumption that significantly increasing the number of [[internal combustion engine]]s worldwide would increase global warming, and that the economic damage from global warming would more than offset any economic growth brought about from the increase in automobiles; however, if the new automobiles were [[ethanol]]-<!-- Ethanol is a greenhouse gas producing energy source. -- Yes but it may be a sustainable energy source if the plants from which ethanol is produced absorb these greenhouse gases (mostly CO2). -->fuelled or [[Hydrogen fuel|hydrogen-fuelled]] from non-greenhouse-gas-producing energy sources such as solar, wind, or nuclear instead of [[petroleum]]-fuelled, the effect on global warming might be very minor and not uneconomic at all. Note that the hypothetical surge in [[automobile]]s might be 'uneconomic growth' from a global perspective, but 'good economic growth' from those countries' perspective (an example of an [[externality]]). ==Difficult to detect== However, this demonstrates two central problems with theories of uneconomic growth. First, they are necessarily global in scope while nations are not, and second, typically they rely on long-term [[longitudinal studies]] that can be performed only looking backwards across relatively long spans of time, while many political decisions must be made quickly with limited data. ==The limits to growth== The "limits to growth" debate is essentially a form of 18th-century [[Malthusianism]]. Much of the debate in recent times was prompted by the 1972 [[Club of Rome]] study ''[[Limits to Growth]]'', which considers the [[ecology|ecological]] impact of growth and wealth creation. Many of the activities required for economic growth use non-renewable resources. Many researchers feel these sustained environmental effects can have an effect on the whole [[ecosystem]]. They argue that the accumulated effects on the ecosystem put a theoretical limit on growth. Some draw on [[archaeology]] to cite examples of cultures they say have disappeared because they grew beyond the ability of their ecosystems to support them.<ref>{{cite journal | last = Brander | first = James A. | authorlink = James A. Brander | coauthors = Taylor, M. Scott | year = 1998 | month = March | title = The Simple Economics of Easter Island: A Ricardo-Malthus Model for Renewable Resource Use | journal = The American Economic Review | volume = 88 | issue = 1 | url = http://papers.ssrn.com/sol3/papers.cfm?abstract_id=57468 | accessdate = 2006-03-12 }}</ref> The argument is that the limits to growth will eventually make growth in resource consumption impossible. Others are more optimistic and believe that, although localized environmental effects may occur, large-scale ecological effects are minor. The optimists suggest that if these global-scale ecological effects exist, human ingenuity will find ways of adapting to them. The rate or type of economic growth may have important consequences for the environment (the [[climate]] and [[natural capital]] of ecologies). Concerns about possible negative effects of growth on the environment and society led some to advocate lower levels of growth, from which comes the idea of [[uneconomic growth]], and [[Green parties]] which argue that economies are part of a global society and a global ecology and cannot outstrip their natural growth without damaging them. [[Canada|Canadian]] [[scientist]] [[David Suzuki]] argued in the 1990s that ecologies can only sustain typically about 1.5&ndash;3% new growth per year, and thus any requirement for greater returns from [[agriculture]] or [[forestry]] will necessarily cannibalize the [[natural capital]] of [[soil]] or [[forest]]. Some think this argument can be applied even to more developed economies. ==The role of technology, and Jevon's paradox== Mainstream economists would argue that economies are driven by new technology&mdash;for instance, we have faster computers today than a year ago, but not necessarily physically more computers. Growth that relies entirely on exploiting increased knowledge rather than exploiting increased resource consumption may thus not qualify as uneconomic growth. In some cases, this may be true where technology enables lower amounts of input to be used in producing the same unit of product (and/or it reduces the amount or hazardousness of the waste generated per unit product produced) (e.g., the increased availability of movies through the Internet or cable television electronically may reduce the demand for physical video tapes or DVDs for films). Nonetheless, it is crucial to also recognise that innovation- or knowledge-driven growth still may not entirely resolve the problem of scale, or increasing resource consumption (see [[Jevon's paradox]]).<ref>Jevons, W.S. 1865. ''The Coal Question: An Inquiry Concerning the Progress of the Nation, and the Probable Exhaustion of Our Coal-Mines''. London: Macmillan and Co.</ref><ref>Czech, B. 2006. If Rome is burning, why are we fiddling? ''Conservation Biology'' 20 (6): 1563-1565.</ref> For example, given that expenditure on necessities and taxes remain the same, (i) the availability of energy-saving lightbulbs may mean lower electricity usage and fees for a household but this frees up more discretionary, disposable income for additional consumption elsewhere (an example of the [[Rebound effect (conservation)|"rebound effect"]])<ref>Binswanger, M. 2001. Technological progress and sustainable development: what about the rebound effect? ''Ecological Economics'' 36(1): 119-132.</ref><ref>Herring, H. 2000. Is energy efficiency environmentally friendly? ''Energy & Environment'' 11(3): 313-325.</ref> and (ii) technology (or globalisation) that leads to the availability of cheaper goods for consumers also frees up discretionary income for increased consumptive spending. ==See also== {{col-begin}} {{col-2}} *[[Zero growth]] *[[Economic growth]] *[[Measuring well-being]] *[[Genuine Progress Indicator]] {{col-2}} *[[Moral purchasing]] *[[Human development theory]] *[[Ecological economics]] *[[De-growth]] {{col-end}} ==References== {{reflist}} ==Related reading== *{{cite journal | last = Baker | first = Linda | year = 1999 | month = May&ndash;June | title = Real Wealth: The Genuine Progress Indicator Could Provide an Environmental Measure of the Planet's Health | journal = E Magazine | pages = 37&ndash;41 }} *{{cite journal | last = Cobb | first = Clifford | coauthors = [[Ted Halstead]], Jonathan Rowe | year = 1995 | month = October | title = If the GDP Is Up, Why Is America Down? | journal = Atlantic Monthly | pages = 59&ndash;78 }} *[[Takis Fotopoulos]]: "The Multidimensional Crisis and [[Inclusive Democracy]]", Athens 2005. English online version:[http://www.inclusivedemocracy.org/journal/ss/ss.htm] *{{cite journal | last = Rowe | first = Jonathan | coauthors = Judith Silverstein | year = 1999 | month = March | title = The [[Gross domestic product|GDP]] Myth: Why 'Growth' Isn't Always a Good Thing | journal = Washington Monthly | pages = 17&ndash;21 }} *{{cite journal | last = Rowe | first = Jonathan | year = 1999 | month = July&ndash;August | title = The Growth Consensus Unravels | journal = Dollars and Sense | pages = 15&ndash;18, 33 }} ==External links== *[http://www.steadystate.org/PositiononEG.html Center for the Advancement of the Steady State Economy] *[http://www.degrowth.net R&D : Research & Degrowth] *[http://worldinbalance.net/agreements/ec-degrowth.html Declaration on Degrowth] at the Center for a World in Balance [[Category:Macroeconomics]] [[Category:Anti-globalization]] [[Category:Welfare economics]] [[Category:Economic problems]] [[ca:Decreixement]] [[de:Nachhaltige Wachstumsrücknahme]] [[es:Decrecimiento]] [[eo:Daŭripova nekresko]] [[fr:Décroissance (économie)]] [[it:Decrescita]] [[pt:Decrescimento sustentável]]