Is Degrowth the Best Solution to Climate Change?

Prosperity, Innovation and the Future of Climate Policy

Climate change has become one of the defining challenges of the twenty-first century. While there is broad scientific consensus on the need to reduce greenhouse gas emissions, there is far less agreement on the best way to achieve this objective.

Among the various approaches proposed in recent years, degrowth has gained increasing attention. Its advocates argue that continuous economic growth is incompatible with the finite nature of our planet and that reducing production and consumption is therefore necessary to remain within planetary boundaries.

Others promote sobriety, encouraging individuals and societies to consume less, travel less and reduce their overall energy demand.

These ideas have become increasingly influential in parts of the political, academic and environmental debate.

But are they really the most effective way to mitigate climate change?

The Appeal of Degrowth

The attractiveness of degrowth is easy to understand.

Economic activity requires energy.

Energy production still relies largely on fossil fuels.

Therefore, reducing economic activity should reduce greenhouse gas emissions.

The logic appears straightforward.

Advocates of degrowth also argue that our current economic model encourages excessive consumption, resource depletion and environmental degradation. According to this view, continued economic growth inevitably increases pressure on ecosystems and accelerates climate change.

Sobriety, reduced consumption and lower material demand are therefore presented as essential components of climate policy.

Many of these arguments deserve serious consideration.

Reducing waste, improving energy efficiency and encouraging more sustainable lifestyles are sensible objectives.

However, these ideas should not be confused with economic degrowth.

Climate Change Is a Global Problem

Climate change is not determined by the level of economic activity in a single country.

It is driven by the accumulation of greenhouse gases in the atmosphere at the global level.

A country may reduce its emissions substantially while global emissions continue to increase if production simply shifts elsewhere.

This phenomenon, often referred to as carbon leakage, illustrates one of the limitations of purely national approaches.

Reducing emissions in one economy does not automatically reduce emissions worldwide.

Effective climate policy therefore requires international cooperation rather than isolated national contraction.

Degrowth Raises Important Economic Challenges

A deliberate and prolonged reduction in economic activity would have consequences extending well beyond greenhouse gas emissions.

Lower economic growth generally implies:

• lower investment;
• slower technological progress;
• reduced tax revenues;
• higher unemployment;
• weaker public finances.

These consequences would also reduce society’s ability to finance the very investments required for the energy transition.

Decarbonizing electricity systems, modernizing power grids, developing hydrogen infrastructure, scaling up carbon capture technologies and improving industrial processes all require enormous levels of investment.

Economic prosperity is therefore not necessarily an obstacle to climate mitigation.

It is often one of its prerequisites.

Innovation Has Always Expanded Human Possibilities

Throughout history, humanity has repeatedly overcome apparent resource constraints through innovation.

Agricultural productivity increased dramatically during the Green Revolution.

New materials replaced scarcer resources.

Digital technologies transformed entire industries while reducing the material intensity of many economic activities.

The energy transition itself is largely driven by technological progress.

Solar panels have become dramatically cheaper.

Wind power has expanded rapidly.

Battery technologies continue to improve.

Advanced nuclear reactors are under development.

Artificial intelligence is beginning to optimize energy systems.

Carbon capture and carbon removal technologies are progressing every year.

None of these innovations eliminate the need to reduce emissions.

But they demonstrate that human ingenuity can fundamentally change what appears possible.

The Real Challenge Is Decoupling

The climate debate is often presented as a choice between economic growth and environmental protection.

This is, in my view, a false dilemma.

The real challenge is not to stop growth.

It is to decouple economic prosperity from greenhouse gas emissions.

This decoupling is already taking place in several advanced economies, where emissions have declined while GDP has continued to grow.

The process remains incomplete and must accelerate considerably.

But it demonstrates that economic growth and emissions do not necessarily evolve together.

Climate policy should therefore focus on accelerating this decoupling through:

• technological innovation;
• low-carbon energy;
• carbon pricing;
• investment;
• international cooperation;
• efficient regulation.

These approaches can reduce emissions without requiring societies to embrace permanent economic

Humans Are Not the Problem

Climate change is often presented as the inevitable consequence of human activity.

In one sense, this is true.

Human activities generate greenhouse gas emissions.

But humans also generate ideas.

They develop technologies.

They build institutions.

They create markets.

They solve problems.

The same species that developed fossil-fuel-based industrialization is also developing clean electricity, carbon removal technologies and increasingly efficient energy systems.

The objective should therefore not be to reduce human ambition.

It should be to direct that ambition toward sustainable prosperity.

A Positive Vision of Climate Policy

Climate mitigation should not be based primarily on restrictions.

It should be based on incentives.

It should reward innovation.

It should accelerate investment.

It should encourage technological breakthroughs.

Above all, it should recognize that prosperity and sustainability are not mutually exclusive.

A richer world is also a world that possesses greater scientific, technological and financial resources to address climate change.

Rather than choosing between prosperity and the environment, we should build an economy capable of delivering both.

Conclusion

Degrowth raises important questions about consumption, resource use and environmental sustainability.

These questions deserve careful consideration.

However, making economic contraction the central pillar of climate policy would, in my view, be both economically unsustainable and politically unrealistic.

Climate change is a global challenge.

Its solution must therefore be global.

International cooperation, technological innovation and sustained investment offer a more promising path than permanent economic contraction.

The objective should not be to produce less.

It should be to produce better, consume more efficiently and progressively decarbonize every sector of the global economy.

That is the central argument developed throughout The Carbon Paradox: Prosperity in a Carbon-Constrained World.