Prosperity without growth? The transition to a sustainable economy

Growth has delivered its benefits, at best, unequally. A fifth of the world’s population earns just 2% of global income. Inequality is higher in the OECD nations than it was 20 years ago. And while the rich got richer, middle-class incomes in Western countries were stagnant in real terms long before the recession. Far from raising the living standard for those who most needed it, growth let much of the world’s population down. Wealth trickled up to the lucky few.

Fairness (or the lack of it) is just one of several reasons to question the conventional formula for achieving prosperity. As the economy expands, so do

the resource implications associated with it. These impacts are already unsustainable. In the last quarter of a century the global economy has doubled, while an estimated 60% of the world’s ecosystems have been degraded. Global carbon emissions have risen by 40% since 1990 (the Kyoto Protocol ‘base year’).

Significant scarcity in key resources – such as oil – may be less than a decade away. A world in which things simply go on as usual is already inconceivable. But what about a world in which nine billion people all aspire to the level of affluence achieved in the OECD nations? Such an economy would need to be 15 times the size of this one by 2050 and 40 times bigger by the end of the century. What does such an economy look like?

What does it run on? Does it really offer a credible vision for a shared and lasting prosperity?

These are some of the questions that prompted this report. They belong in a long tradition of serious reflection on the nature of progress. But they also

reflect real and immediate concerns. Climate change, fuel security, collapsing biodiversity and global inequality have moved inexorably to the forefront of the international policy agenda over the last decade. These are issues that can no longer be relegated to the next generation or the next electoral cycle. They demand attention now.

Accordingly, this report sets out a critical examination of the relationship between prosperity and growth. It acknowledges at the outset that poorer nations stand in urgent need of economic development. But it also questions whether ever-rising incomes for the already-rich are an appropriate goal for policy in a world constrained by ecological limits.

Its aim is not just to analyse the dynamics of an emerging ecological crisis that is likely to dwarf the existing economic crisis. But also to put forward

coherent policy proposals (Box 1) that will facilitate the transition to a sustainable economy.

In short, this report challenges the assumption of continued economic expansion in rich countries and asks: is it possible to achieve prosperity without growth?