4. PANEL DISCUSSION

• The challenge is enormous, and it gets much more complex when considering the entire ecological crisis instead of just a part of it, e.g., emissions. It is difficult to imagine this is possible without implementing ambitious and strict policies such as putting a cap on resource use and seeing how the economy reacts. Without these types of robust policies, it is improbable that it will be possible.
• The climate problem is a scale problem, and we need to minimise our emissions. When you look at it within the boundaries of the energy system, the different dimensions are quite limited. It gets much more complex if you start talking about trade-offs and consequences in other systems.
• Earlier, we discussed potential models for degrowth, but degrowth alone will be too one-sided a vision; the different issues or challenges we face will behave differently. If you look at climate from an energy provision perspective, it is mainly about technology and investments and changing how we do it, and this is relatively easy. But for the food system, the challenge might be different. Earlier, we talked about dietary shifts as a measure. It is not always a matter of reducing the size, e.g., emission reductions, and sometimes the approach needs to be different.
• Another aspect that needs to be considered is critical raw materials. Massive investments in wind power require a lot of critical raw materials and finite resources. There is also a time perspective. Opening and making a new mine operational takes time, making it difficult to scale up the extraction of critical raw materials at the necessary speed needed to ensure the large amounts of renewable energy the transition require.
• We have previously seen rapid actions from a political site to address societal challenges, e.g., during the covid pandemic, where politicians rapidly took decisions that harmed the economy but benefitted citizens. One can hope that the same precautions and willingness to act can also be true in other areas.

• We should acknowledge that many policymakers at an EU level understand and recognise the sense of urgency. Perhaps we should arm ourselves with some patience and wait to see how newly implemented measures affect the economy and how the solutions are deployed. One can always discuss if current actions are enough, but progress is being made. When we discuss the current crises, we should always try to address the problems and provide solutions to ensure fruitful discussions.
• To facilitate progress, it is crucial to create holistic narratives with social dimensions showing where we are going as a society. We do not have a clear vision of a good life within the planetary boundaries or what the economy will look like. Another aspect we can debate is how we measure it and what we measure.

• The doughnut economy is a good example, entailing all the essential dimensions where the different parameters can be measured.

• Policymakers should not define solutions to the last detail. We don’t want a planned economy where everything gets decided centrally. We need to tap into the creativity of society.
• Policymakers need to create an environment that lays out the direction for our society—for instance, removing harmful subsidies or protecting new ideas that support the objectives we want to achieve. Defining how a t-shirt should be made down to the last detail is neither feasible nor effective. Instead of providing engineering solutions, policymakers should set the direction.
• It is not only growth and prosperity that generate innovation. A crisis often triggers innovation. There will still be profits in a steady state economy. A steady state economy means that the whole economy is not growing, parts of the economy will be growing, but damaging elements will experience degrowth. We should not be afraid of low growth; growth is unimportant. The problem is not that we are not producing enough but that the distribution is unequal.
• It is essential to shift revenue streams and dematerialise services. But there will still be trade, and there will still be a generation of wealth.
• We have a lot of information and tools on how to improve agriculture and forestry without negatively impacting biodiversity or having a positive impact. These approaches need to be scaled up while unhelpful or harmful practices need to be phased out, and that is the tricky part.

• In principle, it is very good and holds promises. We should set resource use limits and let the economy adapt within these limits.
• Any tax on materials will, at least to some extent, reduce consumption. Taxing materials is one way to approach it; another is to figure out the fair share of materials and then cap them and see how the economy will react—any measure, whether cap or tax, could reduce our materials.
• This concept has been around for several decades. The EEA has investigated how we can rethink the tax system and shift from the current model to a model that is nudging towards more sustainable patterns and trying to understand why it has not happened before. The carbon adjustment mechanism recognises the capacity of a project like the European Union to be assertive towards other partners, to ask for more and to limit what is placed on the market when it is not produced here. So that we don’t undermine ourselves with a very stringent environmental policy without asking the same for other parts of the world, we can be naïve and achieve decoupling within our sovereignty by outsourcing the production elsewhere, where it will be less resource or climate efficient. We currently see that material footprints are recoupled to GDP because production is moved to other parts of the world where the efficiency is much lower. So, we basically bring in this inefficiency through trade. The carbon border adjustment mechanism is a significant breakthrough, but we still must see what it delivers.

• Then the difficulty will be methodological; how do we link the science to put numbers into that specific fee? However, the fact that the carbon border adjustment mechanism is happening will lead to further development, and the potential is enormous.

• First, it is important to acknowledge that this is a sensitive topic, and when the population grows, it impacts our resource use. But our increasing living standards and how we are consuming have a much more significant effect than population growth.
• Historically there have been several disastrous attempts to limit population growth. Any attempts to impact population growth need to take a human rights-based approach; for instance, giving women access to education and health services. It is about improving the conditions, not reducing the population.

• The evidence on this is still emerging.
• Some advocate for urbanisation from an environment and climate perspective because you can achieve efficiency gains such as for energy supplies. Other argues against urbanisation in this context since the urban population, on average, is wealthier than the rural population. If living standards increase, then material consumption often increases, an example of rebound effects.

• The economy is not growing because we measure GDP; it grows because of dynamics in our way of producing and consuming. Measuring something else will not immediately change those dynamics. By measuring something else, those dynamics will not necessarily change. But we, of course, need to lower the pressure on the planet, and that means de-growing our material production in some way. And it is essential that we are outspoken about how we do it and that it is the only fair solution for the planet. The role of other well-being or welfare measures is to show that we still can build good societies, but we need to focus on other things than GDP growth, and these measures should play a small role as indicators, but we should not rely on them.
• It might be helpful to provide tools that allow individuals to imagine what kind of life they want to lead, what makes them happy, and, in terms of sufficiency, what is enough.
• This is where it gets complicated because a consumption level in Denmark would not deliver the same level of happiness if you had the same consumption level in the U.S. due to cultural differences in expectations, education, etc. GDP is good in that it delivers comparable numbers, the methodology can be challenged, but it is well-established. What we are discussing now is, to a large extent, unknown territory that could deliver different results in different contexts, and it is too one-sided to consider de-growth as the only solution. Any solution needs to be multifaceted.
• In the circular economy, everyone uses the circular material use rate parameter. It is the circular economy's GDP, and it is shaping the conversation. Circular economy policies are not only about recycling by looping the material resources but so much more. It is also about time, the time that materials are part of the anthropogenic stock, and the longer the time materials stay in the stock, the lower the embedded impacts. However, because we use the circular material use rate, we tend to revolve around the circularity of the loop. So, changing what we measure can shift the conversation and impact our direction.

• Sometimes rebound effects are described as something that happens by accident. We did something good, and then, whoops, we see rebound effects. But if you look at efficiency, efficiency is a major growth trigger. When you make something more efficient, it brings growth, so you should not be surprised. It is not an accident; it is the purpose of efficiency. We must address this if we want efficiency to bring something other than more consumption. You can endorse efficiency for many reasons but not for environmental reasons.
• What you can do to address rebound effects is to put a cap on resource use and emissions.
• Rebound effects would be less critical in a world where all the products would be taxed based on environmental impacts.
• If we understand the system and how it behaves, we will acknowledge that rebound effects are a part of that system. We must consider how to counter phenomena that we think should be minimised. Using the forces of the market has been a tool for policy in other contexts like the emission trading scheme. We need to investigate the toolbox and see how to counter the phenomena we are currently not addressing.  

• SITRA has published a study on environmental tax reform that received much positive attention and broad support from the whole political spectrum in Finland, and it was implemented into the government program. There was a specific clause on environmental tax reform, but implementation has been relatively slow. On paper, it is excellent, but it isn't easy to implement at a greater scale.
• It is also important to acknowledge the forces of the political debate and the boundaries of the European Union project, even if social science and economists conclude this is the right direction. Taxation is a politically sensitive area, and at an EU scale, it requires unanimity; it needs to become mainstream at a national level before it becomes a European policy.
• However, other hard and ambitious directives are being adopted in the EU, such as the Eco design directive.
• Many governments in the EU are facing a situation where their population are getting older. They need to raise new revenue streams for care, and one of the most significant potentials for new taxes, according to the SITRA study, is some carbon-based consumption tax on all products.

• Sufficiency is a relatively new concept, at least in the political debate. There are no current policies that address this. It is picking up as a conversation in political conversations, for instance, in France. So far, there are no specific policy decisions on this, but it is good that this narrative is being built since it helps address complex issues in a less emotional way.
• SITRA has created a lifestyle test where you can insert information about your lifestyle, such as diet and mode of transportation. Then it calculates your carbon footprint and provides you with some solutions on how you can reduce your carbon footprint. It has been very popular; people have shared their good experiences of living within the 1.5-degree target. The European Commission has requested that it be scaled up to a European level.
• The current energy crisis and resulting advice to cut energy consumption is a type of sufficiency discussion, and sufficiency by consuming less can solve the problem of an energy shortage. Still, sufficiency should be discussed more.

• We will see change by using both old and new concept need. We will also see technological breakthroughs, efficiency gains, and a shift in the products we put on the market and how we relate to those products. During this discussion, we have not talked much about shifting from products to services, but we might see such a societal development. We may begin to relate to providers in different ways.
• Mikael Malmaeus has done a study on beyond GDP growth - where they made with four widely different scenarios. We still do not know what it will look like, we can still make choices that impact what it will look like within the limits, and we need to discuss it. It is not up to the experts to decide this; it is up to everyone to create this future.