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Mother Pelican
A Journal of Solidarity and Sustainability

Vol. 18, No. 8, August 2022
Luis T. Gutiérrez, Editor
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Empirical Limits to Growth:
A Social and Environmental Index
to Replace GDP

Stanislas Rigal

August 2022


22.08.Page10.Rigal.jpg
The 2015 Social-Environmental Index (SEI) for the world. Countries in red are further away from the safe and just space than countries in green. No country is currently able to exceed a value of 0.8 out of 1. Click the image to enlarge.


Fifty years ago, the Meadows report[1] was published, which brought the force of modelling to bear on Kenneth Boulding's intuition: "Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist."[2]. There were physical limits to the growth of human activities and depredations that would, in theory, eventually be reached and stop this growth. On another level, in the tradition of Thorstein Veblen[3], Fred Hirsch published his major work on the social limits to growth[4]: in theory, the constant frustration of the middle and lower classes could not be resolved by growth. Economic growth was indeed driven by the dissatisfaction of middle and lower classes with the lifestyle of the richest and their positional goods that were unattainable because these goods used to shows the social position of the richest were constantly renewed. A first empirical observation of social limits to growth was to leave its name to this apparent paradox, the Easterlin paradox[5], which showed the stagnation of well-being in the USA despite sustained economic growth. In terms of environmental limits, alongside the focus on economic growth, another concern had emerged, that of population growth, Paul Ehrlich's famous population bomb[6]. Despite the neo-Malthusianism of the initial thesis, Ehrlich's insight brought to the forefront the potential multiplier effect that an ever-increasing population could have on the environment.

Since then, sustainability sciences have brought together the two critical approaches to economic growth, social and environmental limits, in particular through Kate Raworth's doughnut economics[7]. Growth is no longer an end in itself, but must give way to indicators that improve people's living conditions beyond a floor of basic social needs, while remaining below the ceiling formed by physical or planetary limits. These ceiling and floor delimit a just and viable space in the shape of a ring or doughnut. This could seem simple in theory but, in practice, it constitutes a challenge because of the complexity to define and quantify the environmental limits that must not be transgressed and the minimum social thresholds that must be reached. Based on the principle that biophysical limits are objectively quantifiable and that a set of social conditions necessary for a decent life can be emphasised, research has continued to define what would be a good life within planetary limits. A group of 11 social variables (life satisfaction, health expectancy, sanitation infrastructure, income, education, social support, democracy, equality, employment, nutrition, access to energy) and seven biophysical variables (CO2 emissions, phosphorus and nitrogen use, ecological footprint, material footprint, appropriation of the products of photosynthesis, freshwater consumption) has recently emerged[8] to stabilise the ceiling and floor of the doughnut economy.

However, beyond the theoretical questions that persist for several of the biophysical limits and the relevance of social thresholds for non-Western (or non-Westernised) civilisations, making this concept truly operational means allowing it to replace GDP, the ultimate guide for all public decisions. This is a major problem, since two points required particular attention. The first one it to not erase the depth of analysis provided by the diversity of social and environmental variables. The other one is to stay in the strong understanding of sustainability proposed by ecological economics. It implies that an improvement in living conditions cannot make up for an environmental loss, which would otherwise be akin to weak sustainability, the root of the failure of past environmental policies. The tension between simplicity of use and conservation of information must therefore be resolved in order to provide an operational and useful index that can replace GDP in guiding public policies to reach the socially just and environmentally sustainable space.

The challenge of the demonstration here is not so much to show that such an indicator can be produced (spoiler: it can), but to understand how its use would constitute a paradigm shift that would allow us to no longer be in the growth fetishism and aim at a real improvement of the daily life of the greatest number of people without jeopardising the future of all.

The full method is described in the paper[9] from which this article is derived. In simple terms, the 11 social variables are combined into a social indicator that increases with the improvement of living conditions and the seven environmental variables are merged into a biophysical indicator that increases with the unsustainability of our development. The two indicators obtained are then combined to obtain a social-environmental index that places countries in relation to the safe and just space to be reached and makes it possible to visualise their progress over time.

Here two questions may arise: why yet another index? and what does it tell us? The social-environmental index is not just another index. It allows us to synthesise in one dimension what could previously only be apprehended via multiple variables. In social terms, it is built on direct measures of living conditions. This makes it a measure of well-being, albeit with its shortcomings, but far more accurate than wealth production (i.e. GDP). Moreover, it is not linked to GDP by construction, unlike many existing and widely used indices (such as the human development index), which allows an objective assessment of the link between GDP and social well-being. As an environmental index, it takes into account more facets of sustainability than in existing indices (often limited to CO2 and material used).

As for what this social-environmental index tell us, it is the empirical test of the biophysical and social limits theorised more than half a century ago. And this is where its interest lies, since it shows that there is an optimum of GDP. Below the optimum GDP, economic growth tends to be linked to an improvement in living conditions without too great an impact on the environment, but above the optimum, all countries tend to exceed the biophysical limits. The consequences of the environmental degradation implied by these overshoots risk wiping out any potential welfare improvements. This is therefore an empirical demonstration of the existence of biophysical limits to growth or, more precisely, of the fact that growth always implies an unsustainable lifestyle beyond a certain level of wealth. But more than that, economic growth beyond the GDP optimum may also result in a decrease in certain social variables. There are yet two notes of hope. On the one hand, the average world GDP is already higher than the optimal GDP: to reach the safe and just space, more than a question of increasing wealth, it is a question of how the wealth is distributed that must be addressed. On the other hand, for the majority of welfare variables, the results show that the minimum thresholds can be reached while remaining below or at the level of the optimal GDP.

More concretely, by empirically highlighting the social and ecological limits of growth, the socio- environmental index provides arguments to support or refute the initial theses of the 1960s and 1970s. No link could be found between population density or its increase and that of the biophysical indicator. Since we reason in terms of impact per capita, the fact that the population is increasing tends to lower the environmental impact if the latter remains constant at the country level. This does not mean that population does not matter for the sustainability of a development model, but that its effect is much smaller than that of GDP growth per capita beyond the optimum. Moreover, demographic inertia implies that lowering the population could not be a quick way to deal with the ecological emergency in the short and medium term[10]. So how can we get back into the socially just and ecologically viable space before the destructive lifestyle of a part of the population deprives us of this possibility? A closer look at what is happening socially and ecologically in growing and recessionary countries between 2005 and 2015 shows how important economic growth is for achieving certain social thresholds such as life satisfaction or even a decent level of nutrition in the so-called developing countries. Conversely, only a recession seems capable of bringing down environmental impacts such as CO2 emissions or the ecological footprint sufficiently quickly. Against the claim of sustainable development or green growth theories, the increase in GDP does not seem to be able to be perpetuated together with a reduction in these harmful effects on nature. On the contrary, the recession condemns entire parts of the population to a more difficult life. However, if we look closely at the phenomenon of recession, we understand that the societal changes that lead to a decline in well-being are sudden changes that accentuate inequalities and affect all sectors indiscriminately. This is where post-growth theories come in, and in particular degrowth, which propose organising societal changes by first targeting the most destructive sectors and reducing inequalities, in order to anticipate and mitigate the potential consequences on well- being and to be able to return to Earth without abandoning part of the crew on the way[11]. The social-environmental index can be one of the guides on this new path.

Notes

[1] Donella H. Meadows et al., The Limits to Growth, 1972.

[2] United States Congress House Committee on Government Operations Legislation, Military Operations Subcommittee, and United States Congress House Committee on Government Operations, Energy Reorganization Act of 1973: Hearings, Ninety-Third Congress, First Session, on HR 11510... (US Government Printing Office, 1973).

[3] Thorstein Veblen and John Kenneth GALBRAITH, The Theory of the Leisure Class (Houghton Mifflin Boston, 1973).

[4] Fred Hirsch, Social Limits to Growth (Routledge, 2005).

[5] Richard A. Easterlin, ‘Does Economic Growth Improve the Human Lot? Some Empirical Evidence’, in Nations and Households in Economic Growth (Elsevier, 1974), 89–125.

[6] Paul R. Ehrlich, The Population Bomb, New York, 1968, 72–80.

[7] Kate Raworth, A Safe and Just Space for Humanity: Can We Live within the Doughnut? (Oxfam, 2012).

[8] Daniel W. O’Neill et al., ‘A Good Life for All within Planetary Boundaries’, Nature Sustainability 1, no. 2 (2018): 88–95.

[9] Stanislas Rigal, Social-Environmental Index: Combining Social and Biophysical Indicators Reveals Limits to Growth, Ecology and Society 27, no. 2 (2022).

[10] Corey JA Bradshaw and Barry W. Brook, Human Population Reduction Is Not a Quick Fix for Environmental Problems, Proceedings of the National Academy of Sciences 111, no. 46 (2014): 16610–15.

[11] Jason Hickel, What Does Degrowth Mean? A Few Points of Clarification, Globalizations 18, no. 7 (2021): 1105–11.


ABOUT THE AUTHOR

Stanislas Rigal is currently a postdoc researcher at the Department of Ecology, Swedish University of Agricultural Sciences. He is working on conservation biology with a strong interest in political ecology and ecological economics. He defended his PhD in 2021, entitled "Everything is connected": complex responses of biodiversity to global change and socio-economic determinants" at the Institut des Sciences de l'Evolution de Montpellier, University of Montpellier, France.


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