Growth and sustainability
and accountability were also implemented to move the economy in a greener direction. Under the Biden administration, the US pushed through the Inflation Reduction Act, which increased environmental subsidies for green industries, incentivized investment into green technology and infrastructure, promoting economic growth in sustainable sectors. Importantly, the goal was still to foster economic growth, but in a more virtuous and environmentally conscious way. Only a higher prioritization of environmental sustainability can bring about the scale of change required. Inherent flaws in current measures of economic growth, e.g. GPD growth, overlook the full environment and human cost of growth. For instance, most global economic growth is built on accessing fossil fuels, but this fails to reflect their adverse human and environmental costs in official metrics, despite general awareness of the harm caused. Existing mechanisms to mitigate their impact, such as carbon pricing, have so far fallen short of the scale required for systemic change. A demanding and clear framework based on science and a clear and ambitious political agenda could cut through current green-washing practices and help companies to adapt their business models in favour of less damaging practices. The green transition is not a silver bullet, as we can see in its flagship product, electric vehicles (EVs). EVs provide a more environmentally friendly way to travel compared with existing transportation methods. They are nonetheless reliant on non-renewable energy grids and require precious metals such as cobalt that are unsustainable to extract, as the clearing of forested and rainforest land for mining is typically required. But, while EVs still represent significant progress, more can be done. However, the requirement for growth in industry is inevitably limits environmental sustainability, as it creates an increasing demand for ever shrinking natural resources. Technological solutions to mitigate the environmental impact of a growing economy are not perfect. The rebound effect tells us that energy efficiency increases overall consumption, thus offsetting the benefits expected. Despite the increasing share of renewables in the energy mix worldwide, the total absolute consumption of coal reached all-time highs of 8.8 billion tonnes in 2024 and is set to increase further in 2025 (International Energy Agency) . Tech solutions often require more and more energy as they are deployed to produce economic growth. Despite the rebound effect, this approach has underpinned significant progress in energy efficiency. However, it also carries risks. The disastrous flood in Dubai in 2024, for instance, may have been caused by cloud seeding (BBC News). Technology is not a silver bullet and should go hand in hand with reducing the use of natural resources. Should the government then completely disregard economic growth? Is it incompatible in the long- term with environmental sustainability ideals? Under the social contract, the government has a duty to provide safety and wellbeing to its citizens. Very often, this can look like prioritizing economic growth. Growth should increase company profits, which in turn allows companies to expand and invest, increasing jobs. Pay increases allow consumers to have more disposable income, and to spend more and create growth in a virtuous circle. At the same time, the government benefits from increased tax income and can re-use the money as government investment in the form of infrastructure, healthcare and education spending. These raises living standards while helping lift people out of poverty by strengthening of social safety sets and education system.
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