This might look like very bad news, that economic growth has pretty much come to an end as an important phenomenon. On the other hand we could regard it as pretty good news as well: for it means that we no longer have to worry about climate change.
The argument that economics growth, or at least the 2-3% per annum sort of growth that has characterised the last couple of centuries, is over is explored here at FT Alphaville. I’ll admit that I don’t find it all that convincing but that;’s another matter. It strikes me as being much too full of the usual, well, yes, that’s how it all worked in the past but from now on it’s going to be entirely different.
It questions the assumption, nearly universal since Solow’s seminal contributions of the 1950s, that economic growth is a continuous process that will persist forever. There was virtually no growth before 1750, and thus there is no guarantee that growth will continue indefinitely. Rather, the paper suggests that the rapid progress made over the past 250 years could well turn out to be a unique episode in human history.
Before getting all provocative:
A provocative “exercise in subtraction” suggests that future growth in consumption per capita for the bottom 99 percent of the income distribution could fall below 0.5 percent per year for an extended period of decades.
I leave it entirely to you as to whether you are convinced by the thesis.
The point that interests me though is what influence this has on the debate about climate change. For if there’s not going to be much economic growth in the future then we don’t really have to worry all that much about the climate. You see, the IPCC’s warnings about what is going to happen, you know, the stuff about the oceans boiling, small countries sinking under those hot waves and spontaneous immolation of humans exposed to the noonday Sun, all of these are based on continual economic growth.