Equity, Diversity and Inclusion

How climate change makes the case against perpetual economic growth

Conventional models of economic growth rarely consider the value of nature other than how much it is worth.

Conventional models of economic growth rarely consider the value of nature other than how much it is worth. Image: Unsplash/Aarón Blanco Tejedor

Laura El-Katiri
Visiting Fellow, European Council for Foreign Relations (ECFR)
Our Impact
What's the World Economic Forum doing to accelerate action on Equity, Diversity and Inclusion?
A hand holding a looking glass by a lake
Crowdsource Innovation
Get involved with our crowdsourced digital platform to deliver impact at scale
Stay up to date:

Fairer Economies

Listen to the article

  • The 2023 United Nations Climate Change Conference (COP28) will will showcase the dilemma of trying to reconcile climate action with economic growth.
  • Perpetual reliance on economic growth as a standard measure for progress prevents us making meaningful changes to our developmental models.
  • Climate change is a clear case for alternative economic models that don't focus on unsustainable resource extraction and a race for who owns most.

As planning gets underway in the United Arab Emirates for the 2023 United Nations Climate Change Conference (COP28), its organizers emphasize how the annual climate change event will need to be “pro-climate and pro-growth."

The idea that climate action can, or should, be both is a popular one, alongside the seemingly now universal idea that modern-day socio-economic progress rests on perpetual economic growth. However, these notions should not remain unchallenged.

Have you read?

Conventional wisdom

We see the worldview for increasing economic growth reflected in debates around the world’s growing population, which perpetuates the idea that more is always better because our economies and welfare fundamentally rest on it. Our economic structures seemingly require more, not fewer young people, unemployment is prevalent across world economies, and 8 billion people already consume much more than our planet can sustainably provide. Meanwhile, observers discuss what India's rising population means for our global economy, as they do for China’s declining numbers giving the former the top spot hosting the world’s largest population.

Nationality and population size still matter a lot to our thinking, because more people require more resources, and thus consume more, something that is seen as intrinsically positive in our standard economic models. The United Nations has embraced this perspective, including viewing economic growth as a fundamental pillar of its Sustainable Development Goals (SDG) framework under SDG8. The International Monetary Fund’s most important message in any of its reports has become whether or not the world, a country’s economy or a sector is on an upward line of growth.

Climate change offers the ultimate reason to question conventional wisdom, showing us with increasing clarity that planetary resources that make our economic aspirations possible are not infinite. There’s no growth on a dead planet.

However, nature rarely factors in economics unless it can be assessed in numbers – value to be made or lost. In this respect, a forest is most likely valued in terms of how much its timber is worth rather than non-monetary attributes it can provide – i.e. as a source of life, nutrition and shelter. Recalling an anecdote shared on social media, someone once said that if trees provided wifi access rather than oxygen, people might value forests more. The inconvenient truth is that this way of commodifying the natural world is how our conventional economic systems looks at nature’s wealth.

Time for change

No wonder climate action is a classic case of what economists call “market failure” – when producers and consumers will never achieve an efficient outcome alone. That is because markets, and with them, conventional economic development models do not consider all costs or benefits climate action will bring this and future generations.

In cooperative game theory – the mathematical study of models of conflict and cooperation between groups – climate action would also present a typical case of failure. While everyone would be better off if they cooperated for change, as our economies don’t value nature and our climate, there are inherent information and power asymmetries across our economic systems. Incentives to allow the burden for action to fall on others are high; therefore, climate action and environmental protection stay far below our goals. As American economist Herman E. Daly once said, we are treating the Earth as if she was a business in liquidation and there is something fundamentally wrong with that.

If our economic model of growth-based development fails to consider nature at the expense of the human race, then why are we wedded to it? The answer is that it is difficult to change a system so engrained in Western economic thinking, which economists, governments and financial institutions have spent decades building, placing our common good on a business case. And meaningful change also means more than acknowledgements, pledges and inconsequential assertions of “green” leadership.

Concepts, such as the Doughnut Economy by Kate Raworth, already reflect the idea that we need an alternative economic model, as do others, including the Dasgupta Review on Biodiversity in 2021 and even as far back as 1987 with the United Nation’s Brundtland Report.


Re-evaluating economic growth models

When COP28 stakeholders say we must balance climate action with sustainable economic and social development, they may earn plaudits. Ultimately, however, they fail to address the fundamental and underlying problem of such an approach: climate action is a precondition for sustainable economic and social development, not a developmental outcome to be tempered with, reduced in ambition, greenwashed and diluted with carbon offsets.

And here is where international climate action can actually do very much. To address the overconsumption of Earth’s finite resources, we need to move beyond treating her as a resource to be exploited, with those extracting the most or fastest, reaping the greatest reward in wealth accumulation and social and economic development. A major question for the next climate change conference will thus be whether the international community – through its weight in global climate negotiations – will continue to commodify the natural world through solutions that perpetuate our exploitive relationship with the planet.

We talk about a “just” transition with inclusion at the heart of greening efforts but the green transition will never be just if the richest can protect their enormous wealth while those most vulnerable are not heard, including Indigenous people who should be at the heart of international climate negotiations. Meanwhile, climate finance cannot simply become a way to increase debt in developing countries, to be paid back through increased extraction and natural resource use, while wealthier countries and businesses offset their way out of climate change. So here’s where some emerging models that focus on de-growth could bring real value.

Climate change has made it clear that we need to change how we think about the Earth and consider her a source of life, not a resource. That’s why we must reconsider the idea of perpetual economic growth. Instead, we need to think about how we, our economic systems and societies can learn to do more with less.

Don't miss any update on this topic

Create a free account and access your personalized content collection with our latest publications and analyses.

Sign up for free

License and Republishing

World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

The views expressed in this article are those of the author alone and not the World Economic Forum.

World Economic Forum logo
Global Agenda

The Agenda Weekly

A weekly update of the most important issues driving the global agenda

Subscribe today

You can unsubscribe at any time using the link in our emails. For more details, review our privacy policy.


HKEX CEO abolishes all-male boards to promote gender diversity

Rebecca Geldard

June 27, 2024

About Us



Partners & Members

  • Sign in
  • Join Us

Language Editions

Privacy Policy & Terms of Service

© 2024 World Economic Forum