From ... in Environmental Economics Managed Decline Opinion — Dec 19, 2024

Beyond Growth: The promise of a wellbeing economy

In this guest blog, econometrician and sustainability researcher Gaya Herrington considers whether a transition to a Wellbeing Economy is possible and what that would mean for our society and how we interact with the natural world.

Why, despite all our innovative capabilities, do problems like poverty, hunger, and environmental destruction keep plaguing humanity?

Why, despite astonishing technological achievements in renewable energy and resource efficiency, is global fossil fuel use at an all time high – as is our ecological footprint?

And why, despite being responsible for the majority of that footprint, has wellbeing in the rich countries been stagnant, if not declining, for decades?

The answer is simple. Solving poverty, caring for the environment, or fostering wellbeing is not the ultimate goal of our current economic system. Its goal is growth.

Sometimes growth contributes to wellbeing, but in other situations, especially when we already have a sufficient amount to meet everyone’s needs, it’s better to share what we have more equally.

Revisiting “Limits to Growth”

My research went viral a few years back, with the publication of a journal article on my data comparison on the Limits to Growth: a 1972 bestseller published by a team of MIT scientists. It was their answer to this question: why do we keep being plagued by these social and environmental woes despite all our progress?

The Limits to Growth

The Limits to Growth – first published in 1972

To answer this question, the MIT scientists created a first of its kind world model, and ran scenarios with it. The model’s business-as-usual scenario ran on historical averages only and ended in collapse, starting to set in around the present time. Collapse doesn’t mean the end of humanity, but a steep decline in wellbeing nonetheless.

There was no scenario in which wellbeing levels were able to keep rising indefinitely, but there was one in which current wellbeing levels were maintained. This scenario, however, assumed significant deviations from historical behaviour. In it, humanity consciously chooses its own limits, redirecting resources away from industrial output growth towards human health, education, and combating pollution. As a result, current wellbeing levels were maintained for the remainder of the century.

Insights from Projections

I compared their now decades-old projections with what has happened since. I found a close alignment of real-world data with the model’s business as usual scenario, which shows growth grinding to a halt around 2040 or so, followed by steep declines in things like industrial output, food production and wellbeing. My analysis also revealed that this collapse could be avoided, because we’re not too far off yet from the scenario in which wellbeing levels are maintained. This indicates that what we do in the next five to 10 years will determine our wellbeing for the rest of this century.

We live in a now-or-never moment in history to preserve what we have, or lose a good chunk of it with doomed attempts to grow further. Either we choose our own limits, or we’ll have them forced upon us. Now that humankind has attained global reach and unparalleled power, limits to growth confront us with a question we’ve never faced before: who do we want to be and what world do we want to live in?

Shifting to a Wellbeing Economy

I think the only realistic plan to avoid breakdown, and maintain global wellbeing, lies in the mindset shift from “never enough” to “enough for each”. Change the goal of our economic system from growth, to human and ecological wellbeing: a wellbeing economy.

In a “wellbeing economy”, government policies, business activities, and citizens’ behaviour are aimed at meeting our physical, social, and spiritual needs within planetary boundaries. It doesn’t mean we’re anti-growth; we’re just more selective about it. We differentiate between what should or should not grow, depending on whether it contributes to wellbeing.

Photo by Nick Fewings on Unsplash.

This implies different pathways towards a wellbeing economy for the Global South and North. At small material footprints, economic growth more often correlates with wellbeing. So in low-income countries below their share of Earth’s carrying capacity, “green growth” – economic expansion driven by clean technologies – may still be needed.

While high-income countries should focus on shrinking their ecological footprint to sustainable levels, while safeguarding livelihoods by sharing more equally.

Breaking Growth Dependency

Let me stress, because this is a common misunderstanding: de-centering growth doesn’t mean shrinking the economy until it crashes. It means reducing our environmental impact to within a safe operating space for life as we know it. That’s not going back to a poorer past, that’s changing the forward direction away from a cliff. Right now growth feels like an imperative, understandably, because most people’s livelihoods depend on it through jobs. Unemployment makes us anxious, on an individual basis, but also for fear of social unrest. But livelihoods can be secured regardless of growth, with policies like living wages, adequate pensions, and universal basic dividends.

We’ll still have jobs in a wellbeing economy, and houses with fridges, and access to health care. Businesses can still be profitable if they contribute to wellbeing; some will even grow, for example in the renewable energy sector. But collective norms and economic dynamics will change. We’ll redefine what has value, or what work we call productive. With our basic needs securely met, there’s no longer any reason to oppose stringent environmental protections. And healthy ecosystems in turn will further human well-being.

Transformative Benefits of a Wellbeing Economy

We can expect more such synergies, such as fresh local food from regenerative agriculture that restores the soil and improves our health.

Sharing more equally means less income and wealth inequality, improving social cohesion and reducing wasteful consumption done purely to display social status.

Using efficiency improvements to reduce work hours instead of increasing output gives us more time to sleep, exercise, and connect with loved ones, which improves health, and obviates the things we buy to save time or relieve loneliness.

By not pursuing growth at all costs, we can avoid a lot of costs, like expenditure on cleanups and healthcare due to pollution.

Admittedly, some things will not make economic sense anymore, like mega yachts. And I think we can live with that.

Moving to a “post-growth” society isn’t choosing permanent recession, it’s flexing our free will to change our notion of prosperity from ever-more to better.

The Feasibility of Economic Transformation

How probable is this economic transformation? Half the answer is that it is feasible.

Several countries are already exchanging such policy practices in WeGo, a partnership of self-proclaimed wellbeing governments, including Finland, New Zealand, Scotland, and Iceland. Dozens of cities are piloting “postgrowth” frameworks to operate within explicit social and environmental boundaries, with practices like universal basic incomes.

The underlying values, like equality, sufficiency, and care, also align with what most people say is important. Collapse is not unprecedented, but there have also been many societies that avoided it by adopting new goals and values.

Companies that put people and planet strictly above profit generate billions each year. Experiments with shorter workweeks for the same pay have had such positive results that most companies have made it permanent. And around the world, communities are taking back stewardship of their commons with co-operatives for renewable energy, water or food.

Photo by Toa Heftiba on Unsplash

That’s not to say we’re on track for a wellbeing economy. But systems change is not a linear process. It happens when people, disjointly at first, build a different narrative. Over time, they form connections until a critical minority mass is reached. At that “social tipping point”, the change becomes self-reinforcing.

The Missing Link in Technology

But let me be clear: this social tipping point is indispensable. Technology, by itself, will not save us, despite aspirational talks of decoupling: the idea that the economy can grow without resource use and pollution growing along with it. There is no decoupling. Certainly not for our full impact on the Earth: the total amount of raw materials we consume has been around 1.2 kg per dollar GDP for two decades, while things like biodiversity loss, plastic pollution, and water scarcity are worsening.

But even just considering carbon emissions, which have reduced in intensity, sufficient absolute decoupling – which is what we would need – is nowhere in the data. Even the handful of countries that have achieved some absolute decoupling of carbon emissions from economic output, like Sweden or the Netherlands, are nowhere near to staying within the Paris agreement.

Not because we aren’t innovative, that part is true. But because in a growth-based economy, new technologies are used for more of what we want, instead of the reductions we need. Renewable energy, for example, has been wholly added on top of fossil fuel use, instead of replacing it.

A Better Future Through a Wellbeing Economy

So, if there is technological progress, but its deployment does not yield results anywhere near sufficient of what we need to avoid ecosystem breakdown, this techno-optimist argument basically comes down to “things could have been worse”. And that’s true. Things could have been worse. But also, they could be better. That’s the most important but often missed aspect of the wellbeing economy – its promise to be better than the current system.

Let’s say we could replace the dying bee colonies with robot pollinators, why choose that, if we can also advance regenerative agriculture which doesn’t cause insecticide? Why dedicate our innovative powers to tree-planting drones when we can instead redesign our economy to protect existing forests?

Photo by Jan Huber on Unsplash

That’s the other half of the answer to the question of how probable this economic system is: it’s promise. The current system treats us as selfish, never-satisfied consumers. It’s hard to maintain a sense of community and purpose in that environment– or a sense of self-worth and belonging. In a world where you can never have enough, you feel like you never are enough. How different would our experience be in a system that we feel connected to an carried by. As part of this wildly complex web of life of which we are eternal students, not to learn how to control it, but how best to serve nature.

Not just survive, but thrive

See, social science show clearly that not only are we capable of caring for life, we derive a sense of meaning from it. In fact, we can’t really be happy unless those around us thrive too. This economic transformation wouldn’t be a capitulation to grim necessity; we’d want to do it even if we were not facing ecosystem breakdown. We’d have less stuff, but we’d have more of what we need: connection. A wellbeing economy fits much better who we want to be, and the world we long to live in.

So, we started with these global problems, and found that changing our economic system is imperative, but also feasible. And doesn’t require sacrifice, but simply a letting go of what’s no longer serving us, to find belonging in a postgrowth world of embraced interdependence. If that sounds spiritual; that’s what a wellbeing economy delivers: physical sufficiency, social abundance, and spiritual wealth. Including the peace of mind that this prosperity can last.

Thank you.

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