Breakthrough: Productivity (read: Growth) is the Answer to Our Woes

by Adam Solomon Zemel, Breakthrough Generation Fellow
-------

The McKinsey Global Institute's Climate Challenge Initiative released a report last week entitled "The Carbon Productivity Challenge." It is a prime example of how to analyze climate change--not solely or even primarily an ecological crisis, but also a social, economic and developmental problem. The conclusions they draw are astounding, and inspiring. In my opinion, the relevancy and appeal of their analysis relies on a fundamental assumption: "Any successful program of action on climate change must support two objectives--stabilizing atmospheric greenhouse gases (GHGs) and maintaining economic growth."

Economic growth means the continued forward trajectory of the developing world--there is no denying that, considering that "China" has become a sort of code word or short term for "rapid, expansive growth." And any attempt to tackle climate change needs to recognize and foster this growth in places like China, India and Brazil for two reasons:

It is right. I know that this is a value judgment, but if we care about equality of opportunity, and democracy, and as many people as possible living a life of security, well-being and self-discovery, I think it's safe to say that this growth is good, and it would be wrong to limit it.
It is practical. India has unequivocally stated that it will not limit its growth by capping its fossil fuel use if this means using less energy. If we want global emissions reduction, we need to provide a viable option for the developing world.

So, with all this in mind, McKinsey claimed that our carbon productivity must increase tenfold by 2050 to maintain economic growth while scaling back emissions--essentially, we need to create 7,300 dollars of GDP per ton of carbon in 2050, while we are only creating 740 dollars now. They equated this increase in carbon productivity to the increase in labor productivity of the industrial revolution--but, considering the fact the time we have to cut our emissions before we irreversibly change the earth, this productivity needs to happen in a third of the time. Yes, that's right; we need more prosperity and more growth in order to tackle climate change, not less.

In fact:

"If we do not increase our carbon productivity, the consequences will be stark, the report suggests. Meeting commonly discussed abatement target would require a per-person carbon budget of 6 kilograms of CO₂e per day. If one had to live on such a carbon budget with today's low levels of carbon productivity, one would be forced to choose between a 40 kilometer car ride, a day of air conditioning, buying two new T-shirts (without driving to the shop), or eating two meals. So without a major boost in carbon productivity, stabilizing greenhouse-gas emissions would require a major drop in lifestyle for developed countries and would hinder economic development in low income countries."

Hm..unless we all want to be scheduling our weeks with Tuesday and Thursday being clothing days, Monday and Wednesday being eating days, Friday being a traveling day, and holding our breath in dark silence over the weekend, I'd say we should all heed the McKinsey report--you don't want to see me without a shirt.

*Side note: You all should really check out this McKinsey Global Initiative's Energy Markets page. Just reading the titles--"The case for investing in energy productivity", "Wasted energy: How the U.S. can reach its energy productivity potential", "Leapfrogging to higher energy productivity in China" give me goosebumps and make my spine tingle.

Adam, it seems to me like you might be confusing the end with the means here. You quote McKinsey: "our carbon productivity must increase tenfold by 2050 to maintain economic growth while scaling back emissions--essentially, we need to create 7,300 dollars of GDP per ton of carbon in 2050, while we are only creating 740 dollars now." And then you conclude: "Yes, that's right; we need more prosperity and more growth in order to tackle climate change, not less." Productivity is basically just a fraction; it has a numerator and a denominator. Carbon Productivity (or intensity) is GDP/CO2. Since McKinsey notes that we have a goal in terms of limiting emissions, you can consider the denominator fixed. So McKinsey's point, as I see it anyway, is applying the simple property of fractions to emissions and GDP-- If we want to achieve our social goal of high growth (raise the numerator), while reducing emissions a certain amount (lowering the denominator), then inherently we have to raise productivity (you can't raise a numerator and lower a denominator without increasing the value of the fraction). So the emphasis on productivity is a means of achieving growth without bringing climate disaster, not an argument for "more growth." It's also not an argument for "more growth" because "growth" as commonly used means not productivity (the fraction), but economic output (or GDP, just the numerator). So "more productivity" does not mean "more growth." Also note that just framing the issue in terms of productivity obscures the fact that if we achieve the desired level of productivity, but then growth exceeds expectations, we would still end up with too much CO2 emitted (and so disaster, if you believe in tipping points). So productivity is not the goal, its just something we need to recognize we need to improve greatly to achieve the true goal- emissions reductions- while preserving the opportunity for growth. Posted by: Max Epstein at July 6, 2008 6:43 PM

Post a comment