Economists & Energy Experts Question Value of Growth In Light of Environmental Impacts

A May 24, 2015, Bay Journal article (published in the June 2015 edition of the Bay Journal) summarized a discussion on how growth affects a region’s economy when environmental impacts are considered.  The discussion was part of the Journal’s Growth and the Chesapeake conference held earlier this year.  In the article, ecological economists challenge the longstanding assertion that growth is always good and necessary:

The economic downturn since the crash of 2008 isn’t a blip that will soon turn up, said Richard Heinberg, energy expert and author of “The End of Growth: Why We Won’t Be Able to Resume Business as Usual.”

Two of the biggest reasons, he said: fossil fuels, principally oil — and consumer debt.

With oil, which has driven economic growth like nothing else, we’ve picked the low-hanging fruit, exploited the cheap and easy sources. With new technologies, we can squeeze plenty more out of shale, tar sands and ultradeep wells in remote oceans; but too expensively to fuel growth as usual. And alternatives like solar, wind, conservation and ethanol can’t repeat oil’s past energy and economic windfall.

The other fuel for economic expansion has been the radical increase of personal debt, to where consumer spending supports 70 percent of the U.S. economy. And that, too, appears to have reached its limits in 2008. Only government debt is still growing.

Panelists also posited that while growth does bring economic benefits, it generally benefits certain stakeholders and ends up being subsidized by taxpayers:

Growth does have economic benefits, but to the influential and politically connected few rather than the many, said planning expert Eben Fodor. He has studied the links between high population growth communities and the average citizen’s prosperity across the nation.

He has found population growth, per se, does little to reduce poverty and unemployment, and that its costs — up to $95,000 borne by taxpayers for providing services to each new single-family home — contribute to reduced per capita income in high-growth regions. …

“Growth simply is not creating prosperity; it is heavily subsidized by taxpayers,” Fodor concluded.

Presenters argued that slowing growth does not have to come with negative economic consequences, such as when Calvert County downzoned its agricultural areas:

In the [Chesapeake] Bay watershed, there are beginnings of the shift already. Planner Greg Bowen showed how his county, Calvert, MD, dramatically reduced growth through two downzonings. “Economic disaster didn’t happen…land values and security from development for farmers are higher than surrounding counties that didn’t downzone,” he said.

Among the more radical proposals of the discussion was the creation of a total maximum daily load (TMDL) for growth:

Maryland maintains an alternative to traditional measures of state economic progress. Unlike official measures, the Genuine Progress Index includes environmental and social costs of growth. It is just a start, but is beginning to show the flaws in “grow or die,” economist Elliott Campbell said.

Campbell suggested adding a “growth TMDL” to the Total Maximum Daily Loads that the EPA sets for conventional pollutants to the Bay. “It would measure the load of energy use, population growth…water use,” he said.

 

 

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