Can economic growth really solve global ecological problems like climate change?

Economics’ case that growth can solve problems like climate change is based on the ‘Environmental Kuznets Curve’ (EKC) hypothesis (left-hand graph). The story the EKC tells is that economic growth first increases environmental damage, but then reliably reduces it.

Unfortunately, the EKC is just a hypothesis and is increasingly challenged both empirically and conceptually, raising difficult questions that cannot be ignored.

Empirically, the evidence from hundreds of studies into the EKC is very mixed. Sometimes the curve bends down, sometimes it doesn’t.

Conceptually, the EKC denies the irreversible thresholds and ‘tipping points’ that scientists increasingly point out are the key features of climate change and other global ecological challenges. If tipping points exist, the EKC may bend backwards – a thought that seems not to have occurred to economists, betraying the sort of thinking that economics has been.

For much more on this, see the presentation on economic growth and the EKC:

“Can Growth Really Solve Climate Change? Or What if the Environmental Kuznets Curve Can Bend Backwards?”