A recent report (http://www.boell.de/ecology/resources/resource-governance-ecology-green-growth-rebound-effect-15794.html) explains how energy and resource efficiency measures can backfire leading to a far small reduction in emissions than we anticipate. The report, which is written with admirable clarity, describes and explains the “rebound effect”. Under the rebound effect if you save money on energy costs, then you spend the money elsewhere, causing further economic activity and further use of resources.
The conclusion of the report is the green growth is a fallacy. It’s good that people are saying this and are able to back up the claim with some academic study. The conclusion of Tilman Santarius, the author, is that we have to move to a sufficiency economy if we want to meet our emissions targets.
The size of the rebound effect depends on the amount of energy and resources used in the things that we do with the money we save. So if we spend our savings from insulation on flying to the Canaries, there will be a very high rebound effect. But if we spend it on a course of acoustic guitar lessons from our neighbour, then the rebound effect could be quite low. Of course, that depends on what floats the neighbour’s boat… Is he a calligrapher or a biker?
So, we can have economic growth and a reduction in emissions if we do things with our increased wealth which don’t cause significant net quantities of emissions. Things we can do with our money include buying land and planting trees, buying land to grow food on, getting private lessons in all manner of things, painting and drawing, playing mainly wooden musical instruments (sax players will have to upgrade to the clarinet or the taragot) and so forth. A great service to mankind would be the production of a much longer list of such things which people could choose from.
I think that what we will see in that list is two broad categories. One is material investments which cut emissions (tree planting, reinvestment into even more energy saving). The second is a large number of intellectual, cultural and spiritual economic activities where we pay for the transfer of knowledge, skills and ideas rather than the transfer of matter. This will have enormous implications for the kind of society we live in, but life might well get better.
Because there is an unlimited number of skills and ideas around, there is enormous potential for continued economic growth albeit of a different kind than what we have seen so far.