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Growth for good – a discussion
- 25 July 2022
- Event report
- gsclibrary
On 30 June, the Council Library hosted the launch of the book Growth for good: reshaping capitalism to save humanity from climate catastrophe in the presence of the author, Alessio Terzi, and ECOFIN Director-General Thomas Westphal.
Economic growth is considered by many to be the engine driving climate change, pollution, and the shrinking of natural spaces. To save the environment, will we have to shrink the economy? Might this even lead to a better society, especially in rich nations, helping break free from a pointless obsession with material wealth that only benefits the few?
In Growth for good, which came out in May 2022, Commission economist Alessio Terzi takes a multidisciplinary approach to the concept of economic growth and its relation to climate change.
In the more theoretical Part I of his book, Terzi explains why in his view, halting growth, or tearing down our current economic system, are bad ideas, which will not help to fight climate change nor to reduce inequality. Instead, we need to develop and adopt green innovations, based on a credible decarbonisation strategy. Terzi considers innovation and economic growth as mutually reinforcing concepts. He comes to the conclusion that economic growth is an imperative, which we should employ in the fight against climate change.
In Part II of the book, Terzi starts building up to his master plan for the fight against climate change. He explains why humanity should not be expected to embrace a ‘less is more’-lifestyle, and goes on to explore how innovation works. Terzi also dedicates a chapter to the global dimension of climate change and the resulting need for a ‘polycentric approach’.
In the final chapter of Growth for good, Terzi lays out a blueprint for green capitalism: a climate agenda that is compatible with capitalism, democracy, and national sovereignty. All along the way, social cohesion should be ensured and, in particular, ‘places that don’t matter’ should be taken care of. For each policy, distributional effects should be carefully analysed: which groups in society reap the gains or bear the costs?
What would such a green strategy mean for economic growth? A Green Deal package in its full size and shape, according to Terzi, will change the structure of the economy and entails a technological and industrial revolution. Importantly, Terzi notes that a green agenda is not really a choice – because the alternative is not a business-as-usual scenario, but one in which we increasingly suffer the effects of climate change.
A key condition for its success, however, is the reduction of inequality. Anyone needing some positivism about the future challenges our world is facing will benefit from reading Terzi’s book, which takes a long-term positive but realistic view.
On 30 June, Terzi presented his book in the Council Library to an audience of colleagues from the GSC and from the permanent representations to the EU. After giving an overview of the theoretical foundations of the book, he described how capitalism could become an ally in avoiding a climate disaster and making the green transition successful.
A lively discussion followed, moderated by the Director-General for Economic and Financial Affairs Thomas Westphal, which touched on a wide range of issues: from the need to measure wellbeing beyond GDP to the impact (and responsibility!) of individual citizens, and from carbon capture and storage to the likelihood of innovative breakthroughs solving our problems. Those present valued the opportunity to step away from their day-to-day business for a moment and exchange views on a timely and complex topic.
Alessio Terzi is an Economist at the European Commission’s Directorate-General for Economic and Financial Affairs. Prior to this, he was an Affiliate Fellow at the think tank Bruegel and a Fulbright Scholar at the Harvard Kennedy School. His research and commentaries have appeared in leading media outlets including BBC World News, Financial Times, and the Wall Street Journal.
Thomas Westphal was appointed as Director-General for Economic and Financial Affairs (ECOFIN) in January 2022. He is an economist with a long career in Germany’s public administration in the fields of finance, economics and EU policies, most recently as Director-General for European Policy at the German Federal Ministry of Finance and before that as Director at the European Investment Bank.
Council Library users can access the e-book of Growth for Good via the online catalogue Eureka.
This post does not necessarily represent the positions, policies, or opinions of the Council of the European Union or the European Council.
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