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3. PRESEN­TATIONS

Four presenters provided both a theoretical and evidence-based introduction to the theme: 
  • Daniel Montalvo, Head of Sustainable Resource Use and Industry, European Environment Agency, gave the keynote speech Decoupling, where are we and where should we go?
  • Bjørn Bauer, CEO at Norion Consult, summarised key findings presented in the report Is economic growth compatible with a Sustainable Nordic Future?
  • Mikael Malmaeus, Environmental Intelligence, IVL Swedish Environmental Research Institute, introduced The concept and the content of economic growth in the 21st century.
  • Outi Haanperä, Project Director, Nature and the Economy, SITRA, focused on Growth positive zero-emissions pathways to 2050
The presentations were followed by a panel discussion with the four speakers, with questions from both the onsite and online audiences. Bjørn Bauer moderated the conference.

3.1 Keynote by Daniel Montalvo, EEA

The presentation gave an overview of current efforts and whether these are sufficiently addressing the existential crises we face. In the last 200 years, humans have induced exponential change to a wide range of social and economic parameters, including world population, water use and real GDP. These trends are coupled with many parameters of the functioning earth systems that have experienced correlated exponential change, including atmospheric carbon dioxide concentrations, ocean acidification and terrestrial biosphere degradation. We are currently mainly in control of major geochemical cycles such as the carbon or nitrogen cycle. Our societal and economic patterns are strongly coupled to our earth systems, and it is this correlation we strive to decouple.
According to IPCC and other international institutions, our response and efforts to tackle the existential crises of nature and climate change are insufficient to abate the crises we face. To tackle these crises sufficiently, we need more considerable transformative changes. The connections between the environment and the health of citizens are another issue that has not received much attention but is emerging, according to OMS. We are already seeing irreversible changes and approaching tipping points beyond which the correlation between our societal behaviour and the functioning of the earth's systems is no longer within our control. There is a clear relation between how we process and turn resources into products and services in our economy - and climate change and nature loss. We must be aware of trade-offs and interconnections when we address the crisis.
There is no quick fix for sustainability transitions. We need to reconfigure our energy, food, mobility, and industrial systems and find more robust ways to provide the services that we need in our society. The conversation about relative and absolute decoupling provides some nuance to this discussion.
The below sections briefly discuss developments and the current situation in Europe within key policy areas relevant to the conference topic.

Climate Change

The EU have strong climate policies that have made a significant impact, but the progress varies across the different sectors of the economy; for instance, we have begun transforming our energy supply systems, but progress in the agricultural sector has long stagnated. We need to scale up and speed up with a factor of 3 if we are to reach the target for 2050, and for this to happen, we need a paradigm shift. In addition to emission reductions, it is necessary to sequester more carbon, so-called negative emissions – with, for example, industrial carbon capture (expensive and not yet at a sufficient scale) or biological carbon sequestration (requiring a changed relationship with the agricultural system and with our forestry sector.

Materials

Some progress and relative decoupling have been achieved, but waste and resource use is still correlated with economic growth. The European green deal has facilitated improved policies for the circular economy, but the systemic challenge of production and consumption systems remains. No substantial reduction has been achieved, and several planetary boundaries have already been breached when considering Europe’s fair share.
Looking at the current circular material use rate, which is the share of recycled materials over the total supply of materials to the economy, the trend is relatively flat and not living up to the 2030 aspiration.
Establishing a circular economy is not on track, so how do we progress towards a resilient and climate-neutral economy where resource use is low, recirculation of materials is high, and the material cycle is clean?
    • Consolidating a more binding and target-oriented policy – beyond waste.
    • Promoting high-quality recycling, fostering EU resource independence.
    • Leveraging the concept of sufficiency.
    • Leading globally and with our trading partners.
    • Transforming domestic industrial production so it promotes & delivers safe and sustainable design products.
    • Continue establishing value-chain-specific strategies.
    • Doing more to get the economics right, e.g., increasing market competitiveness for secondary raw materials.

    Pollution

    The EU has a zero-pollution ambition plan, and addressing pollution is crucial to maintain and to restore landscape health. However, it has been challenging to discuss pollution reduction in recent years because there has been a prevailing narrative that European pollution has largely been solved mainly due to technological progress. But numerous pollutants still need to be handled, such as PFAS and others, that we either didn’t know about before or have not addressed sufficiently yet. 
    Decoupling has been achieved for several pollutants, and it is central to acknowledge that incremental thinking, regulation, and technological approaches can deliver a lot. One success story is that SO2, NOx, and PM emissions from combustion plants have been absolutely decoupled, and there is solid evidence that incremental policy interventions mainly drove this development.
    The zero-pollution action plan has several targets focusing on health outcomes, biodiversity-related degradation due to pollution, and production and consumption system aspects. Currently, four of them are on track. For the rest, we are currently not or only partly on track, so our current policy mechanisms for this need to be changed.

    Key Takeaways

    Furthermore, our society is continuously shocked by phenomena that have long-ranging consequences due to the complexity and interconnection, e.g., COVID-19 or the war in Ukraine. There is a general conception that doing something new is challenging. However, one can argue that the difficult part is to phase out because phaseouts will cause sector disruptions and conflicts. It is crucial that disruptions are managed sufficiently to ensure a just transition. Furthermore, there is a need to convince society to change paradigms and shift revenue streams. The critical question, based on all that we know, is economic growth compatible with a sustainable future.
    VUCA World
    Volatility
    Uncertainty
    Complexity
    Ambiguity

    3.2 Presentation by Bjørn Bauer, CEO of NORION Consult

    Bjørn Bauer presented the key findings from the report ‘Is economic growth compatible with a sustainable Nordic future?’ that formed the actual foundation of the conference. The core of the study was a systematic and in-depth literature review on the evidence and arguments for the historical decoupling of environmental impacts/resource use from economic growth and the potential for decoupling in the future, with a Nordic focus. 48 papers, reports and books presenting pro-growth, de-growth and agnostic viewpoints were assessed against an analytical framework. The report sheds light on two critical questions: ‘Is decoupling feasible, or is it a convenient pipedream?’; and ‘Can decoupling be rapid enough to prevent overshoot of planetary boundaries?’ Key concepts introduced in the report and essential for understanding the discussions on decoupling can be found in the box below.

    Key Concepts


    Absolut or Relative Decoupling: Decoupling in the context of environmental economics is the antithesis of what is often considered the norm for an economy under development; economic growth leads to, or is caused by, an increase in the throughput of materials and energy through the economy, which itself leads to increases in environmental pressures. Decoupling can be relative or absolute. Under relative decoupling environmental pressures continue to grow but at a slower rate than economic growth. Under absolute decoupling, environmental pressures reduce despite economic growth.
    Territorial-based or footprint-based perspective: The scope is highly relevant when investigating decoupling. Decoupling analysis often takes either a territorial-based perspective (where trends in direct emissions/pressures within national boundaries are compared to trends in national GDP) or a footprint-based perspective (where trends in global pressures caused along the value chains of all consumed products and services are compared to trends in national consumption expenditure).
    Planetary boundaries: The planetary boundaries framework defines a safe operating space for humanity that respects ecological and geophysical systems. The framework comprises nine planetary boundaries within which society can safely develop and thrive. Seven boundaries are already assessed to be crossed, and other planetary boundaries are at high risk of being crossed soon. A safe operating space may often be defined in terms of the remaining budget of resource use or emissions that there is space for without overstretching the boundary. It is common to discuss the fair share of this budget as the remaining budget per global citizen, although there are varying views on this issue (Stockholm Resilience Center 2022).
    Rebound effects: The rebound effect describes cases where efficiency improvements increase consumption that partially or wholly offsets the expected energy/resource use reductions. Considerable evidence for the rebound effect was found in the literature, placing a question mark against the potential of technological improvements to deliver absolute decoupling. Despite these findings, rebound effects are seldom considered in energy efficiency policy.
    Three types of rebound effects have been identified:
    1. Direct rebound effects: When the lowered price due to an increase in resource efficiency results in more consumption of the same resource.
    2. Indirect rebound effects: When the lowered price due to an increase in resource efficiency results in more consumption of other types of goods.
    3. Structural rebound effects: When the lowered price due to an increase in resource efficiency results in a higher and different consumption pattern on the macro level.

    Historical evidence of decoupling to date

    The literature review identified many cases of relative decoupling but only a few examples of absolute decoupling. When absolute decoupling has been achieved, it has mainly been territorial-based GHG emissions and not footprint-based GHG emissions. Still, Denmark, Estonia, and Germany achieved absolute decoupling of footprint-based GHGs between 1993 and 2010. Sweden managed to decouple footprint-based GHG emissions absolutely, most air pollutants, water use and land use from 2008-2014. There is little evidence of absolute decoupling of material resource use in any country. These distinctions between different types of decoupling are essential when discussing the feasibility of decoupling.

    Looking Ahead 

    To respect planetary boundaries, citizens in developed countries must reduce their material resource use. The environmental impact per capita in the EU is too high by a factor of 8 for particulate matter and climate and a factor of 60 for land use. There is a broad recognition in the literature that green technologies, improved resource efficiency and the circular economy are essential to decouple pressures from economic growth. One of the biggest challenges is to decouple material use, and a circular economy holds enormous potential to achieve decoupling by looping resource use and avoiding further extraction. However, if the circular economy is to deliver, focusing more on product lifetimes, reuse, repair, and refurbishment is necessary instead of recycling.
    Many argue that green technology, resource efficiency, and circular economy are not sufficient to achieve absolute decoupling but only relative decoupling; we also need lifestyle changes. Governments generally prefer means such as technology and efficiency to achieve pressure reduction. They are cautious of anything limiting economic growth due to the societal disruptions it will likely cause. Still, the highest observed yearly increase in carbon productivity lies under 3%, and we need 90% by 2050. Some theorists argue that GDP is so strongly linked to material resource use that any reductions in material resource use necessarily will lead to GDP reductions. Many of the cited authors in the literature study argue that we need new or additional measures of wealth. Since standing alone, GDP is not a sufficient measure of wealth, human health, and life satisfaction have stalled as economic output has grown. Numerous alternatives to GDP have been proposed and used, but there is no consensus on which shall supplement or replace GDP. But can we manage without economic growth, and what is the alternative? Do we want de-growth? 

    Key Takeaways

    • Evidence of absolute decoupling has been limited, especially for material resource use.
    • Absolute decoupling requires global cooperation and strong policies; we cannot rely on technology.
    • The circular economy is an essential means to achieve decoupling. Still, it cannot stand alone, and there is a need to shift focus away from recycling and focus more on the inner circles of circularity by encouraging long product lifetimes, reuse repair and refurbishment.
    • We need a lifestyle change which requires behavioural change. For this to happen, strong supportive policy frameworks are needed.
    • We must focus on goods and services with the most significant global pressures.
      • Currently, we see a high material resource demand for buildings and infrastructure.
    • Absolute decoupling can only be achieved if we address rebound effects.
      • Rebound effects critically undermine efficiency improvements.

    3.3 Presentation by Mikael Malmaeus, IVL Swedish Environmental Institute

    The presentation gave a brief overview of how the term ‘growth’ is used in the public debate in Sweden and what arguments are used in discussions on whether growth is desirable. The presentation was based on the study report ‘Tillväxten inför verkligheten’ (growth before reality). The study reviewed over 200 news articles and documents and investigated how we use the growth term and what type of growth we mean. This was partly an attempt to clarify why, even though many of us see an apparent conflict between growth and environmental sustainability, many people still argue that we need to pursue economic growth.

    The current state of green growth

    Furthermore, looking onward, many strategies for reaching our goal depend on carbon capture and storage technologies. These technologies yet have to be done at a grand scale. We don’t know how efficiently it will work or if it is feasible at the necessary scale. Furthermore, decreasing emissions largely depend on electrification, which is currently expensive due to the energy crisis. Green growth does not seem compatible with sustainability, so why is the dominant narrative that we can reach the global climate targets with green growth, and why do so many argue for green growth? How we define and use the term growth can partly explain this. The study ‘Tillväxten inför verkligheten’ investigated what kind of growth people mean when using the term growth, which is not always the same, and in many cases, people do not specify what type of growth they mean when they say growth.
    Illustrative example: GDP growth is primarily about quantity, not quality.
    20 years ago, if you bought a mobile phone e.g. a Nokia, the price would have been around 500 € when adjusting for inflation, today the price for a smartphone will approximately be the same. This means that the smart phone does not add further to GDP growth, even though the smartphone is of better quality. Today most people own a phone some own several and this adds to the GDP. Growth is not primarily about quality but quantity.
    When people use the term growth, they typically mean one of these three types of growth:
    1. The standard definition is that economic growth means increased GDP over time.
    2. Development and progress in more general terms.
    3. Partial growth, i.e., increased turnover or production within a firm, sector, municipality, region, or the like.

    In many of the articles and documents that talked about growth in a climate or environmental context, a definition for growth was not given. The study found that many who argue that we need growth do not define what type of growth they mean. Most often, when people talked about growth, the kind of growth they had in mind was GDP growth, but not always. An interesting example concerns Swedish legislation. Only in two out of 19 cases was the type of growth explained.

    Arguments for and against Growth

    The different arguments concerning growth in an environmental and climate context can essentially be summed up in the following ten arguments, 8 of them consider growth to be a prerequisite for sustainability, and the last two do not:
    1. Without growth, we cannot afford the climate transition.
    2. Without growth, no new technology to solve environmental problems.
    3. We can get more from less.
    4. Growth can be combined with sustainability.
    5. Sweden should increase growth to export sustainability.
    6. Sustainability triggers growth.
    7. In rich nations, growth is primarily about more services.
    8. Nations with no growth have a bad environmental performance.
    9. Growth should not be prioritised before the environment.
    10. Obvious relation between growth and environmental impact.
       
    Several of these arguments can, of course, be challenged and discussed. For instance, growth in rich nations is mainly due to services. It is true that people increasingly tend to work with services, but it has little impact on our consumption and production since we rely more on imports and have streamlined the production processes. Or does it make sense that we need growth to achieve a sustainable transition, even though the growth paradigm is one of the critical causes of the crisis? Several of these arguments might also be theoretically correct but far from the actual situation. For instance, we have no evidence of decoupling happening at a sufficient scale for growth to be sustainable. It is also true that it is possible to do more with less. However, we currently see that we do more with more; GDP grows, but so does material resource use.

    What is next?

    What is the colour of growth currently, and will green growth be sufficient? The crises we face are so substantial that we need a paradigm shift. We do not need incremental change but a new system for doing things.
    We must consider and explore other ways of organising our society and economy. One suggestion could be a caring economy, where we still work, but rather than produce goods, we produce services such as health care and education.
    We, therefore, need new alternative narratives to the green growth paradigm because, so far, the green growth paradigm has not delivered what was promised. In addition, we need to set clear limits for our use of nature instead of hoping that policies will be able to reduce our environmental impacts alone. We, therefore, need to do it the other way around and establish clear limits and then let the economy adapt to these limits. The market economy has before proved to be adjustable.

    3.4 Presentation by Outi Haanperä, Sitra

    Presentation of the study ‘Growth-positive zero-emission pathways to 2050’ The study aim was:
    • Whether net-zero emissions by 2050 is possible? And how?
    • Can we combine stringent climate policies with economic growth towards 2100?

    The methodology used two different complementary models:
    • TIAM-UCL: The bottom-up energy system model provided the exact adjustment of the power generation mix and associated investments to the economic model.
    • GEM-E3: The economic model provided the economic activity, the driver for energy demand and the overall economic pathway.

    The modelling was built on various assumptions (from the IPCC's shared socioeconomic pathways) that will make it easier to reach the Paris Agreement. These assumptions include the following:
    • Global cooperation, rapid technology development, strong environmental policy, low population growth, declining inequality, dietary shifts, and forest protection.
     
    If these assumptions are absent, reaching the target will be even more difficult or impossible. These assumptions also served as the foundation for the new scenarios presented in the project. One can always consider whether these assumptions are realistic. There are examples of, for instance, global cooperation, most recently, the adoption of the Global Biodiversity Framework at COP15.

    What will it take to reach the 1.5 degrees target?

    The study found that reaching the 1.5 °C target by 2100 is possible while maintaining an average annual growth rate of 1.7%. However, it will require unprecedented action by all countries and strong public policies to support it. Global emissions need to peak around 2020 and then very rapidly decrease afterwards. Key actions necessary to reach the target in the central scenario are carbon capture and storage technologies (CCSs) and negative emission technologies (NETs), fast coal reduction, and wide-scale electrification.
    In the central scenario, global temperatures will peak around 1.88 °C and then decline and reach the 1.5 °C target by 2100. Numerous uncertainties are associated with the central scenario, including whether CCSs and NETs will become sufficiently available and cheap. Another uncertainty is whether the global temperature will decrease as expected. The scenario also depends on a rapid phase-out of coal, which we are not currently seeing. Some countries and industries are even switching back to coal due to the war in Ukraine. Lastly, it is crucial to decarbonise the electricity system by switching to renewable energy sources such as Solar PV and onshore- and offshore wind since the need for electrical generation will be seven times higher in 2100 compared to 2010. Clean electricity will be needed for transportation, heating of buildings and industry.
    In the central scenario, the size of the world economy will be 4.5 times bigger at the end of the century. At the same time, the primary energy demand does not increase that much due to the expected energy efficiency of new technology, e.g., due to electrification. The average annual growth rate will decrease but still be positive at an average annual growth rate of 1.7%. The growth can be divided into technical progress, population, and investment. The role of population growth will decline over time, and then growth will primarily be driven by technological progress and investments. According to the study, the impact of decarbonisation on economic growth will only be negative if decarbonisation increases the price of energy or decrease the rate of technological progress. There are no reasons to think that since clean energies have become the cheapest type of energy and clean technologies are proliferating, and progress innovations are being made for batteries, hydrogen etc.
    Several sensitivity scenarios were also conducted as part of the study. The sensitivity scenarios investigated what will happen if the coal phase-out does not happen rapidly enough or if carbon capture and storage technologies (CCSs) and negative emission technologies (NETs) are unavailable and therefore do not deliver the necessary offset emissions.
    Reaching the 1.5 °C target with a slower coal phase-out is still possible, keeping roughly the same peak temperature and a final 1.5 °C temperature increase by 2100. However, it is only possible by making significantly greater use of CCSs and NETs. Without CCS and NET in any scenario, reaching the 1.5 °C target is impossible despite a rapid coal phase-out.  

    Key Takeaways

    From the study:
    1. Strict climate targets can be achieved while the global economy grows.
    2. The 1.5-degree target requires unprecedented action from all countries.
    3. Technology leap: Countries need to invest heavily in carbon sequestration to have a better chance of reaching the 1.5-degree target this century. Coal must be phased out rapidly. Similarly, heating, transport and industry must switch to clean electricity as much as possible.

    Important to consider what was not part of the study:
    1. Wider environmental issues (e.g., land use for bioenergy)
    2. Circular economy and other new business models were not considered.
    3. Decoupling of other environmental issues from GDP
    4. Economic costs from increasing temperatures and other climate damages

    Nature’s carrying capacity is eroding:
    • The climate and nature crises cannot be solved separately; a holistic approach is necessary.
    • The key drivers of the nature crisis: changes in land use and sea use, climate change, pollution, direct exploitation of natural resources, and invasive alien species.
    • Without nature, there is no economy.
    Another key takeaway from this study is that any arguments for delaying decarbonisation for the sake of the economy do not have a sound foundation. We should put all our actions into figuring out how to decarbonise our society and economy. Even though this study shows it is possible, it is important to consider all the assumptions it is based on and that multiple factors have been exempt from this study. Other studies that analyse different factors, such as other environmental issues or circular economy models, are needed. Furthermore, we still ought to consider the concept of sufficiency and sufficient consumption rates.
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