“Energy efficiency: the win-win solution to climate change?”

Advocates of green capitalism often believe that energy efficiency will be the answer (or at least one of the main answers) to solving climate change. As energy consumption is one of the main causes of greenhouse gas emissions, it is indeed paramount to decrease global energy use. Energy efficiency represents a perfect solution for many because it would preserve social and economic development of countries (growth-based development) while reducing greenhouse gas emissions. “Energy efficiency” seems to be the buzzword for corporations, nations and global organisations that want to fix climate change. For instance, the United Nations Economic Commission for Europe (UNECE) actively promotes energy efficiency investments for climate change mitigation and sustainable development and describes energy efficiency as “one of the priority fields in the energy economic and climate change policies of many countries globally” (1). Techno-optimists affirm that technological innovation alone can solve a large part of environmental problems (2). Thus, we could achieve material abundance globally through economic growth and solve environmental issues at the same time thanks to technological advancement.

Even though such an idea seems seductive, it seems illusory to me to believe that energy efficiency without sufficiency can represent a credible promise to solve climate change.

One main issue with energy sufficiency seems to be the effect of “rebound consumption”: when increased consumption cancels out energy savings because increase in efficiency can make demand goes up because of price reduction (3). This “rebound effect” was first introduced by William Stanley Jevons as the Jevons Paradox in 1865, in application to the coal sector. Jevons maintained that technological efficiency gains in the use of coal in engines (economical use of coal) increased the overall coal consumption instead of saving it (4). This phenomenon observed with coal works with other resources, even energy. Many countries have seen their energy consumption and carbon output increase despite huge investments in energy efficiency aiming to reduce greenhouse emissions (3). The United States, for instance, has doubled its energy efficiency since 1975 but has seen its energy consumption rise greatly (2). “Rebound effect” happens in capitalist societies because savings in energy are used to stimulate increase in goods and new capital formation, thus demanding greater resources and increasing ecological destruction (2). Dr Samuel Alexander, from the Melbourne Sustainable Society Institute, argues that rebound effects and the inherent structure of growth economics make absolute decoupling (a decline in the global ecological impact of total economic output) through efficiency gains highly unlikely to occur (5).

If it is unlikely for energy efficiency to enable the promised win-win situation (of continued growth-based development and reduction of greenhouse gases emissions), perhaps we should start thinking of coupling efficiency with material sufficiency and going towards a 'post-growth’ economy.

Can capitalism ever be "green"?

The concept of Capitalocene is useful when one need to think about potential answers to the current environmental crisis. By pointing out the responsibility of capitalism in the global environmental changes, it tells us something more: capitalism dynamics destroy the environment therefore answers to environmental destruction should not be looked for within capitalism. But what about green capitalism some might wonder? It has long been believed (and still broadly is) that “green” or “sustainable capitalism” is the way to go to fix the climate and other environmental issues.

However, green capitalism sounds more like an oxymoron and it has not produce results so far. The centrality of the issue is that even a greener version of capitalism remains based on profit-maximisation, endless growth and consumerism, dynamics that destroy the environment.

Richard Smith, author of ‘Green capitalism, the god that failed us’, argues that maximizing profit and saving the planet are inherently in conflict. Under capitalism, CEOs and corporations are not responsible to society but to private shareholders and the aim is to increase profit. In order for capitalism to be truly green, the pursuit of profit should be systematically subordinated to ecological concerns. Even if at times, maximising profit and saving the planet might coincide, the two cannot always be aligned and profit is not likely to be sacrificed for environmental concerns (1).

Another issue with green capitalism is that it does not question the belief of endless growth in a finite planet. Proponents of green capitalism believe that green growth can become sustainable through innovation and technological progress to achieve eco-efficiency. They assume that a decoupling of global environmental pressure and growth is possible, enabling growth to be ever increasing without impacting the environment anymore. However, despite relative decoupling (decline in the ecological impact per unit of ecological output) observed in some countries, permanent absolute decoupling (decline in overall ecological impact of total economic output) that would guarantee the sustainability of growth remains elusive and might turn out to be impossible (2). The UK Sustainable Development Commission, a senior government advisory body, has reported that developed countries should cease growth because “there is, as yet, no credible, socially just, ecologically sustainable scenario of continually growing incomes for a world of nine billion people”. It argues that economic growth cannot be separated from over-exploitation of natural resources and environmental degradation (3). Despite technological development in the last decades, environmental impacts (carbon emissions, extraction of renewable and non-renewable resources etc) are still increasing. In a growth-orientated economy, efficiency gains tend to be negated by further growth. Indeed, efficiency gains are almost always reinvested not into reducing production and consumption but into increasing them. As a result, efficiency gains achieved through technological progress or innovation leads to an overall increase, or at least no reduction, of resource and energy consumption (4).

In addition, green capitalism does not question our high consumption lifestyle but just aims to replace goods and services by “green” products and services. Green or not, manufacturing requires use of energy and our global consumer culture is unsustainable, especially in the context of increasing population rates. Consumerism is part of the environmental issue and the idea of buying stuff to express one’s identity or to increase happiness should be challenged. Critics of green consumerism argue that in order to reduce carbon footprint, there is the need to significantly reduce one’s consumption of goods and services (5).

The answer to global environmental changes should not be limited to the ‘greening’ of capitalism, without questioning the dynamics of endless growth, consumerism and profit-maximisation. It seems more relevant to go beyond the growth model and to open up broader political and social debates in order to find real alternatives (6). But as Fredric Jameson states it, “it is easier to imagine the end of the world than the end of capitalism”.

Growthocene

In my previous article, I wrote about the dynamics of capitalism that lead to environmental destruction. I want to stress that it does not mean that capitalism is the only economic system that harms the environment. I use the notion of Capitalocene because capitalism is our current global economical system and it structures the world we live in. For these reasons, I believe it is still useful to talk about Capitalocene and the dynamics of capitalism because suggesting that it is capitalism and not all of humanity that is responsible for the current ecological and social crisis can help us find more appropriate and pertinent solutions.

However, it actually seems more accurate to talk about Growthocene because it broadens the notion of Capitalocene: Growthocene states that what needs to be challenged and criticised is the growth of biophysical throughput, continuous capital accumulation and productivism as well as the perpetual aim for quantitative expansion of economies (measured in GDP) (1). Such a concept enables us to take into account the environmental destruction made by non-capitalist systems and to understand that productivism (the growth of production) is not sustainable in a finite planet, whatever forms it takes. 

A striking example is the one of the former Soviet Union and the Eastern bloc. Even though they were communist and not capitalist systems, they still damaged the environment because industrial production (productivism) was key to their economies. For instance, the Soviet Union is responsible for the drying up of the Aral Sea, that U.N Secretary-General Ban Ki-moon described in 2010 as “one of the planet’s worst environmental disasters” (2) . 

The size of the Aral Sea has been shrinking since the 1960s (by 2007, it had shrunk to 10% of its original size) as a result of an economic plan by the Soviet Union to divert the rivers feeding the Aral Sea in order to irrigate the desert in Uzbekistan. The aim of that plan was to develop cotton production to boost economic growth. In addition, the Soviet Union also contaminated the region by using it for industrial projects, pesticides and fertilisers dumping as well as biological weapons testing. The Soviet Union that started in the 1920s led to massive environmental destruction because its aim was industrialization at all costs to compete with the western capitalist block. Many of the former Soviet countries have excessive pollution levels (air pollution, earth and groundwater contamination) due to former industrialisation (including chemical-weapons production), mining, petroleum production and radioactive activities. (3)

Thus, it is the notion of productivism and strive to growth in their broad sense, not only limited to the context of capitalism, that have to be challenged when thinking about environmental damages.