Climate change has revived debates around the concept of limits to growth, 45 years after it was first proposed. Many citizens, scientists and politicians fear that stringent climate policy will harm economic growth. Some are anti-growth, whereas others believe green growth is compatible with a transition to a low-carbon economy. As the window to curb warming at 2 °C closes, this debate will intensify. This Review critically reflects on both positions, providing an overview of existing literature on the growth versus climate debate. Both positions are argued here to jeopardize environmental or social goals. A third position, labelled an 'agrowth' strategy, is proposed to depolarize the debate and reduce resistance to climate policies.
Subscribe to Journal
Get full journal access for 1 year
only $8.25 per issue
All prices are NET prices.
VAT will be added later in the checkout.
Tax calculation will be finalised during checkout.
Rent or Buy article
Get time limited or full article access on ReadCube.
All prices are NET prices.
Meadows, D. H., Meadows, D. L., Randers, J. & Behrens, W. W. The Limits to Growth (Universe Books, 1972).
Turner, G. M. A comparison of The Limits to Growth with thirty years of reality. Glob. Environ. Change 18, 397–411 (2008).
Turner, G. M. Is Global Collapse Imminent? An Updated Comparison of The Limits to Growth with Historical Data Research Paper 4 (Melbourne Sustainable Society Institute, 2014).
Anderson, K. Duality in climate science. Nat. Geosci. 8, 898–900 (2015).
Jackson, T. Prosperity Without Growth—Economics for a Finite Planet (Earthscan, 2009).
Fankhauser, S. & Tol, R. S. J. On climate change and economic growth. Resour. Energy Econ. 27, 1–17 (2005).
Klein, N. This Changes Everything: Capitalism versus the Climate (Penguin Books, 2014).
Wolf, M. Living with limits: growth, resources, and climate change. Clim. Policy 12, 772–783 (2012).
Victor, P. Ecological economics and economic growth. Ann. New York Acad. Sci. 1185, 237–245 (2010).
Sterner, T. & Damon, M. Green growth in the post-Copenhagen climate. Energy Policy 39, 7165–7173 (2011).
Better Growth, Better Climate (The New Climate Economy, 2014).
Mendelsohn, R. Climate Change and Economic Growth (World Bank, 2009).
Bowen, A., Cochrane, S. & Fankhauser, S. Climate change, adaptation and economic growth. Climatic Change 113, 95–106 (2012).
Millner, A. & Dietz, S. Adaptation to climate change and economic growth in developing countries. Environ. Dev. Econ. 20, 380–406 (2015).
Stern, N. The economics of climate change (Richard T. Ely Lecture). Amer. Econ. Rev. 98, 1–37 (2008); http://go.nature.com/2hvwnEe
Hepburn, C. & Bowen A. in Handbook on Energy and Climate Change (ed. Fouquet, R.) Ch. 29, 617–638 (Edward Elgar, 2013).
van den Bergh, J. C. J. M. Rebound policy in the Paris Agreement: instrument comparison and climate-club revenue offsets. Clim. Policy http://doi.org/bwfv (2016).
van den Bergh, J. C. J. M. Environmental and climate innovation: limitations, policies and prices. Technol. Forecast. Soc. Change 80, 11–23 (2013).
Smulders, S., Toman, M. & Withagen, C. Growth theory and 'green growth'. Oxf. Rev. Econ. Policy 30, 423–446 (2014).
Acemoglu, D., Aghion, P., Bursztyn, L. & Hemous, D. The environment and directed technical change. Amer. Econ. Rev. 102, 131–166 (2012). Presents a general model clarifying conditions under which green growth is possible or impossible.
Popp, D. Innovation in climate policy models: implementing lessons from the economics of R&D. Energy Policy 28, 596–609 (2006).
The Double Dividend and Environmental Tax Reforms in Europe EC-IILS Joint Discussion Paper Series No. 13 (International Labour Organization, 2011).
Antal, M. & van den Bergh J. C. J. M. Macroeconomics, financial crisis and the environment: strategies for a sustainability transition. Environ. Innov. Soc. Transitions 6, 47–66 (2013). Proposes a broad set of macroeconomic strategies, combining orthodox and heterodox views, to address the challenge of a sustainability transition.
Jackson, T. & Victor, P. Productivity and work in the 'green economy': some theoretical reflections and empirical tests. Environ. Innov. Soc. Transitions 1, 101–108 (2011). Draws attention to the 'productivity trap': potential unemployment due to labour productivity increases being compensated through higher incomes and associated demand. This maintains the high cost of labour, which stimulates further innovations to increase labour productivity.
Antal, M. Green goals and full employment: Are they compatible? Ecol. Econ. 107, 276–286 (2014).
Towards Green Growth (OECD, 2011).
Inclusive Green Growth: The Pathway to Sustainable Development (World Bank, 2012).
Toman, M. A., Pezzey, J. & Krautkraemer, J. in Handbook of Environmental Economics (ed. Bromley, D.) 139–165 (Blackwell, 1995).
de Mooij, R. A., & van den Bergh J. C. J. M. Growth and the environment in Europe: a guide to the debate. Empirica 29, 79–91 (2002). Identifies and explains five positions in the longstanding debate on economic growth versus the environment.
Gordon, R. J. The Rise and Fall of American Growth: The U.S. Standard of Living since the Civil War. (Princeton Univ. Press, 2016). Provides a set of empirically founded arguments suggesting that high economic growth in industrialized countries may have come to an end.
Rogoff, K. Rethinking the growth imperative. Project Syndicate (2 January 2012).
Ostry, J. D., Loungani, P. & Furceri, D. Neoliberalism: oversold? Finance and Development (June 2016).
Rockström J. et al. A safe operating space for humanity. Nature 461, 472–475 (2009).
Costanza, R. et al. The UN Sustainable Development Goals and the dynamics of well-being. Solutions 7, 20–22 (2016).
van den Bergh, J., Folke, C., Polasky, S., Scheffer, M. & Steffen, W. What if solar energy becomes really cheap? A thought experiment on environmental problem shifting. Curr. Opin. Environ. Sustain. 14, 170–179 (2015).
van den Bergh, J. C. J. M. & Rietveld, P. Reconsidering the limits to world population: meta-analysis and meta-prediction. BioScience 54, 195–204 (2004).
Schneider, F., Kallis, G. & Martinez-Alier, J. Crisis or opportunity? Economic degrowth for social equity and ecological sustainability. J. Cleaner Prod. 18, 511–518 (2012).
Friedlingstein, P et al. Persistent growth of CO2 emissions and implications for reaching climate targets. Nat. Geosci. 7, 709–715 (2014).
Victor, P. A. Growth, degrowth and climate change: a scenario analysis. Ecol. Econ. 84, 206–212 (2012).
van den Bergh, J. C. J. M. Environment versus growth—a criticism of “degrowth” and a plea for “a-growth”. Ecol. Econ. 70, 881–890 (2011). Presents a critical analysis of the notion of degrowth, based on identifying five different interpretations of it.
Nordhaus, W. D. & Boyer, J. Warming the World: Economic Models of Global Warming (MIT Press, 2000).
Hope, C. The marginal impact of CO2 from PAGE2002: An integrated assessment model incorporating the IPCC's five reasons for concern. Integr. Assessment 6, 19–56 (2006).
Anthoff, D. & Tol, R. S. J. The impact of climate change on the balanced growth equivalent: An application of FUND. Environ. Resour. Econ. 43, 351–367 (2009).
Tol, R. S. J. The economic effects of climate change. J. Econ. Perspect. 23, 29–51 (2009).
Ackerman, F., DeCanio. S. J., Howarth, R. B. & Sheeran, K. Limitations of integrated assessment models of climate change. Climatic Change 95, 297–315 (2009).
Botzen, W. J. W. & van den Bergh, J. C. J. M. How sensitive is Nordhaus to Weitzman? Climate policy in DICE with an alternative damage function. Econ. Lett. 117, 372–374 (2012).
Stern, N. Economics: current climate models are grossly misleading. Nature 530, 407–409 (2016).
Weitzman, M. L. On modeling and interpreting the economics of catastrophic climate change. Rev. Econ. Stat. 91, Vol. XCI (2009).
Dietz, S. High impact, low probability? An empirical analysis of risk in the economics of climate change. Climatic Change 108, 519–541 (2011).
Pindyck, R. S. Climate change policy: what do the models tell us? J. Econ. Lit. 51, 860–872 (2013).
Dietz, S. & Stern, N. Endogenous growth, convexity of damages and climate risk: how Nordhaus' framework supports deep cuts in carbon emissions. Econ. J. 125, 574–602 (2015).
Dell, M., Jones B. F. & Olken B. A. Climate change and economic growth: evidence from the last half century. Amer. Econ. J. Macroecon. 4, 66–95 (2012).
Lemoine, D. & Kapnick, S. A top-down approach to projecting market impacts of climate change. Nat. Clim. Change 6, 51–55 (2016).
Burke, M., Hsiang, S. M. & Miguel, E. Global non-linear effect of temperature on economic production. Nature 527, 235–239 (2015).
Ozturk, I. A literature survey on energy-growth nexus. Energy Policy 38, 340–349 (2010).
Ayres, R. U., van den Bergh, J. C. J. M., Lindenberger, D. & Warr, B. The underestimated contribution of energy to economic growth. Struct. Change Econ. Dyn. 27, 79–88 (2013). Provides several arguments for why the relevance of energy for economic growth is played down in many theoretical and empirical studies.
Stern, D. I. The role of energy in economic growth. Ann. New York Acad. Sci. 1219, 6–51 (2011). Provides an overview of both orthodox and heterodox studies of the importance of energy quantity and quality for economic growth.
Bassetti, T., Benos, N., & Karagiannis, S. CO2 emissions and income dynamics: what does the global evidence tell us? Environ. Res. Econ. 54, 101–125 (2013).
Wagner, M. The carbon Kuznets curve: a cloudy picture emitted by bad econometrics. Res. Energy Econ. 30, 388–408 (2008).
Stern, D. I. Between estimates of the emissions-income elasticity. Ecol. Econ. 69, 2173–2182 (2010).
Peters, G. P., Marland, G., Le Quéré, C., Boden, T., Canadell, J. G. & Raupach M. R. Rapid growth in CO2 emissions after the 2008–2009 global financial crisis. Nat. Clim. Change 2, 2–4 (2012).
York, R. Asymmetric effects of economic growth and decline on CO2 emissions. Nat. Clim. Change 2, 762–764 (2012).
Jaunky, V. C. The CO2 emissions-income nexus: Evidence from rich countries. Energy Policy 39, 1228–1240 (2011).
Liao, H. & Cao H.-S. How does carbon dioxide emission change with the economic development? Statistical experiences from 132 countries. Glob. Environ. Change 23, 1073–1082 (2013).
Narayan. P. K. & Narayan, S. Carbon dioxide emissions and economic growth: panel data evidence from developing countries. Energy Policy 38, 661–666 (2010).
Peters, G. P., Minx, J. C., Weber, C. L. & Edenhofer, O. Growth in emission transfers via international trade from 1990 to 2008. Proc. Natl Acad. Sci. USA 108, 8903–8908 (2011).
Burke, P. J., Shahiduzzaman, M. & Stern, D. I. Carbon dioxide emissions in the short run: the rate and sources of economic growth matter. Glob. Environ. Change 33, 109–121 (2015).
Aden, N. The Roads to Decoupling: 21 Countries Are Reducing Carbon Emissions While Growing GDP (World Resources Institute, 2016); http://go.nature.com/2j3Qqhi
Gazheli, A. et al. How realistic is green growth? Sectoral-level carbon intensity versus productivity. J. Cleaner Prod. 129, 449–467 (2016).
Mir, G. & Storm, S. Carbon Emissions and Economic Growth: Production-based Versus Consumption-based Evidence on Decoupling Working Paper 41 (Institute for New Economic Thinking, 2016).
Zhu, B., Wang, K., Chevallier, J., Wang, P. & Wei, Y.-M. Can China achieve its carbon intensity target by 2020 while sustaining economic growth? Ecol. Econ. 119, 209–216 (2015).
Lin, B. & Li, J. The rebound effect for heavy industry: empirical evidence from China. Energy Policy 74, 589–599 (2014).
Wang, H., Zhou, P. & Zhou, D. Q. An empirical study of direct rebound effect for passenger transport in urban China. Energy Econ. 34, 452–460 (2012).
Antal, M. & van den Bergh, J. C. J. M. Green growth and climate change: conceptual and empirical considerations. Clim. Policy 16, 165–177 (2016).
Rogelj, J. et al. Differences between carbon budget estimates unravelled. Nat. Clim. Change 6, 245–252 (2016).
Varian, H. Intermediate Microeconomics 8th edn, Ch. 32 (W. W. Norton, 2010).
Jakob, M. & Edenhofer, O. Green growth, degrowth, and the commons. Oxf. Rev. Econ. Policy 30, 447–468 (2014). Argues that both green growth and degrowth constitute inadequate foundations for public policy as they fail to appropriately conceptualize social welfare.
van den Bergh, J. C. J. M. The GDP Paradox. J. Econ. Psychol. 30, 117–135 (2009).
Nuzzo, R. How scientists fool themselves—and how they can stop. Nature 526, 182–185 (2015).
Victor, P. Questioning economic growth. Nature 468, 370–371 (2010).
Costanza, R. et al. Time to leave GDP behind. Nature 505, 283–285 (2014). Provides a brief, accessible overview of aggregate welfare metrics that can serve as an alternative to, and thus dethrone, GDP.
I am indebted to very many colleagues, especially K. Aiginger, W. Botzen, S. Drews, E. Galbraith and P. Victor, for useful comments.
The author declares no competing financial interests.
About this article
Cite this article
van den Bergh, J. A third option for climate policy within potential limits to growth. Nature Clim Change 7, 107–112 (2017). https://doi.org/10.1038/nclimate3113
Environmental Science and Pollution Research (2021)
Nature Communications (2020)
The Trade-off Between Poverty Reduction and Carbon Emissions, and the Role of Economic Growth and Inequality: An Empirical Cross-Country Analysis Using a Novel Indicator
Social Indicators Research (2020)
Regionalization and parameterization of a hydrologic model significantly affect the cascade of uncertainty in climate-impact projections
Climate Dynamics (2019)
The Energy Pillars of Society: Perverse Interactions of Human Resource Use, the Economy, and Environmental Degradation
BioPhysical Economics and Resource Quality (2018)