The trouble with growth: Make Change Happen podcast episode 4

Article, 11 March 2020

The concept of economic growth has dominated political and policy thinking for 50 years. But increasingly, that hold is being questioned, as the urgent need to cut emissions, protect nature and create a more socially just world becomes ever clearer. In this episode, IIED director Andrew Norton asks: what is the trouble with growth, and how can we fix it?

IIED’s ‘Make Change Happen’ podcast provides an opportunity to hear our researchers discuss key global development challenges and explain how they are working to support positive change.

The fourth episode explores the possibilities of economic growth from a sustainable development perspective. Led by director Andrew Norton, the discussion features Essam Yassin Mohammed, IIED’s head of blue economy; Clare Shakya, director of our Climate Change research group; and Paul Steele, IIED's chief economist.  

Growing pains

Growth is usually measured by gross domestic product (GDP). While this can indicate the health of other factors – such as jobs, livelihoods and even poverty reduction – it paints a limited picture. 

GDP does not capture inequality, despite the effect this has on wellbeing. It excludes the environment and the care economy – meaning a huge amount of work done by women literally doesn’t count. 

GDP also largely overlooks greenhouse gas emissions, failing to count the cost to vulnerable countries. In fact, damaging climate shocks can even count as ‘positive’ when we focus on GDP, as destruction prompts recovery spending.

The ‘more is better’ mindset can also contribute to declining mental health and social alienation. When local and national government doesn’t recognise the limits of designing policy around growth, damaging aspects become embedded. 

And growth-driven polices don’t always work. China’s manufacturing focus and reliance on coal keeps growth high, but air pollution is killing 4,000 people a day. Export-driven policies have proven bad for the climate and bad for basic human welfare.

But there are alternatives. Natural capital accounting (NCA) places a monetary value on the goods and services provided by nature – for example wetland ecosystems – and so allows these to be measured as part of a national economy. 

NCA takes on the question of 'what' we value as well as 'how'.

Growth reimagined

Many of the least developed countries desperately need growth. It can be a good thing if designed to benefit the poorest people and be climate resilient. More is better if it means more quality health services, more education, more access to nutrition, and so on. The question is around the trajectory lower income nations take as they grow.

Developing countries have a relatively clean slate in comparison to the big polluters: not yet locked into the type of sprawling cities or vehicle-based transport that makes it so hard for the richest countries to change. But we have no model for development pathway that is entirely low carbon and climate resilient. 

Huge public investment is needed to support developing countries to grow in progressive ways; wealthier nations must more readily share technologies that can support developing countries to achieve progressive growth. 

Without such support, asking policy communities in poor nations to relinquish growth ambitions can be read as a tactic to preserve the unfair global status quo.

Wealthy nations could also seek to grow differently. While the call to lower global greenhouse gas emissions by 7.6% suggests an inevitable reduction in economic activity, wealthier countries could mitigate this by shifting from production reliant on fossil fuels to renewables, energy efficiency, clean cars and so on.

Where do we go from here?

It seems citizens are beginning to look past growth, or at least question its value. Calls to act on the climate crisis are also inherently calls for economic reorganisation. Every economy will shrink if we don’t change course, so this could be a chance to restructure the economy in ways that benefit far more people. 

The podcast closes with three thoughts for where growth should go from here: 

  • Look to NCA: the environment and greenhouse gas emissions should be included in the way we measure goods and services. A number of initiatives are already under way, including relevant policy work in Uganda
  • Seize opportunities: all countries are now developing countries; no one has a blueprint for a low-carbon future. This creates an opportunity for the poorest nations to shape the way we do things in future, and
  • Take wellbeing seriously: with a broader understanding of how people really feel about their lives, and how that is reflected in the economy, things could improve.

How to listen and subscribe

The ‘Make Change Happen’ podcast will provide informal insights into IIED’s work to create positive change and make the complex issues we face more accessible to wider audiences. The title refers to IIED’s 2019-2024 strategy, which sets out how IIED plans to respond to the critical challenges of our time.

You can subscribe to the podcast on your favourite podcast app as follows:

The podcast is also available on IIED's YouTube channel.

You can follow the panellists on Twitter: @andynortondev, @clareshakya and @EYMohammed. Follow the podcast on @IIED_Voices for all the latest updates.

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