Sustainable growth

What Kind of Growth is Sustainable?

Argumentary and Expert-Workshop for an “alternative growth”

Sustainable growth addresses the provision of services and utilities which increase human well-being without reducing a comprehensively defined capital stock. An increasing quality of life along with a positive subjective perception of the people should become the focus and the objective of an alternative, qualitative growth.

Is economic growth solving our problems (e.g. unemployment, poverty, environmental damage) or is it rather the cause of these problems? Whoever is concerned with an absolute reduction of the global resource consumption, will have to face this issue: the more efficient we use our resources and energy, the more we consume. At the recent annual meeting of the Club of Rome in Madrid, the outgoing managing director of the IMF (International Monetary Fund) Rodrigo Rato mentioned three serious threats to the global economic growth:

• the instability of the financial markets,

• the climate change and

• the demographic change.

The possibilities of a qualitative growth are in the center of this project – an alternative growth which complies with a sustainable development. This means the provision of services and utilities, which increase human well-being, without reducing the capital stock per capita. However, in order to overcome a purely market oriented consideration of economic activities, an approach has to be chosen, which besides real and financial capital also includes natural, human and social capital. An increasing quality of life along with a positive subjective perception of the people should become the focus and the objective of qualitative growth.

The need for everlasting economic growth, for competition in markets and for social status boosts our resource consumption and may actually lead to addictive behavior. Thus, a permanent state of dissatisfaction is created, which cannot yield sustainable happiness.

Economic growth is securing jobs, international competitiveness and tax revenues of a state. In a traditional understanding of economics this is obvious and cannot be ignored. Hans-Christoph Binswanger claims that money poses a permanent pressure on the economy to grow. The dynamics of growth are actually driven by money, energy and imagination. The question is, how would an economy develop if natural constraints are considered, and which alternative financial boundary conditions are compatible with a – possibly ecologically induced – lower rate of growth?

The main outcome of this project is a paper of about 30 pages easily readable by laypersons. Starting from the sustainable development strategy of the EU, arguments of such an “alternative growth” were compiled, whereby an emphasis is placed upon concepts of human quality of life and well-being.

This „argumentary“ was presented to and discussed with stakeholders and experts on 9 September. In the course of the workshop Ina Meyer from WIFO gave a lecture on successes and limits of raising efficiency in the Austrian energy sector. She depicted that part of the substantial technological efficiency gains were in the past overcompensated by economic growth and the rebound-effect. That means, due to ever-increasing growth rates high levels of energy consumption/greenhouse gas emissions could not be absolutely reduced. Niko Paech from the University of Oldenburg spoke about the future of growth. Themed: “Living well instead of owning much” he presented a model of a post-growth economy as a prerequisite for sustainable development. Paech frankly stated: “It is impossible to design growth in a sustainable way”. He advocates a deceleration of society, in order to save money, time, space and resources. Workshop participants finally discussed how much growth we need and the role of stakeholders in this process.

SERI created the website www.wachstumsargumentarium.at to present the possibilities for an alternative growth, one that coincides with sustainable development. The Website serves as a discussion forum and information platform.

In order to promote the debate on growth, SERI organises a high-level international conference in Vienna in January 2010.

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