This week, German discounter Penny runs an interesting campaign: the company sells nine selected products at a price that reflects their real costs of production – including any environmental damage caused by the production process. The campaign is supported by the University of Technology Nuremberg (Chair of Environmental Economics), which has previously calculated “true” prices and now wants to monitor consumer reaction as part of this campaign. It surely comes as no surprise that animal products showed a price increase of up to 94%, while the prices for plant-based products were up a meager 5%.
I really welcomed this campaign as it once again reflected a matter truly dear to my heart: the need for a more responsible use of our resources. It gives me hope to witness different activities (both in the economy and at home) aimed at reducing consumption, a more responsible consumption or promoting a circular economy.
Patagonia has long since been well known for promoting sustainability. The company uses organic cotton or recycled materials to manufacture its products. Patagonia had already made its voice heard in 2011, on Black Friday, by placing an ad in the New York Times that stated: “Don't buy this jacket.” In a recent article in German daily Handelsblatt dated July 22, 2023, Nina Hajikhanian, newly appointed general manager for Europe, announced the company’s plans to increase repairs fourfold within the next five years and to create the necessary service infrastructure for this. At the same time, Patagonia is a very successful company financially speaking. Its annual sales are estimated at US$1.5 billion, its net profit at US$100 million.
Another example of circular economy implemented in practice is HPE. The company, which previously was part of Hewlett Packard until 2015, has not manufactured any new IT products since 2011 and instead has been specializing in recycling and refurbishing. At its Erskine site in Scotland, the company has refurbished more than eight million IT devices over the past three years. Most of the equipment refurbished by HPE (mainly notebooks and servers that people no longer want to or can use) comes from expired lease agreements. Such IT equipment has a high potential to be reused.
I keep asking myself how these single – albeit positive – examples might help improve the world and how we all deal with the Earth's scarce and vulnerable resources. Well, I believe these examples can be seen as a stimulus that we can and should pick up, but such stimulus alone is not enough. From my point of view, what we need is a renewal and transformation of the approach how policymakers, civil society, and the corporate sector interact. It is the somewhat cumbersome term of “post-growth economy,” also referred to as the “degrowth” movement, that I have come across in this context.
After a bit of Research, I found out that it is above all Niko Paech, economist and professor at the University of Siegen, who coined the term “post-growth economy” in the German-speaking world. He is described as a vigorous critic of the growth narrative. Post-growth economy, in Paech’s words, goes a long way indeed. But what he does not reject in any way is innovation and technical progress. He also says this quite clearly in the current Cicero Podcast titled “Ecology cannot be negotiated” published in late June. In this podcast, Stefan Kooths (growth advocate) and Niko Paech (degrowth advocate) essentially discuss the following two big questions:
- Are we, as an economy, still able to promote innovation and technological progress if we no longer follow an express goal of economic growth measured on the basis of the gross domestic product?
- Are we able to maintain an Earth worth living in if we continue to rely on economic growth (even if we call it “green” growth) and repair the resulting damage through technological progress?
Just listen for yourself, it's an argumentatively interesting exchange between two very different positions.
Well, here’s hoping that flat or even negative growth, measured purely in terms of gross domestic product, does not necessarily preclude innovation and technical progress. If my hope turned out to become a reality, then we (politicians, associations, institutions, entrepreneurs, and private individuals) would be able discuss matters without fear of loss and jointly look for new forms of living together.
From my point of view, some of the ideas stipulated as part of the concept of the post-growth economy are quite positive and not that far away from what many people would be able to imagine.
- Take into account hidden environmental costs in pricing or reflect them through adjusted taxation (see current Penny campaign, or the debate over fair jet fuel taxation for the airline industry).
- Support local businesses through incentives (e.g. support agricultural businesses with direct distribution channels, or introduce higher taxes on transport routes).
- Strengthen circular economy: enable longer product lifetimes, repairs, recycling, refurbishing (see Patagonia or HPE).
- Increase community use (car sharing, etc.).
- Grow your own food to supplement your personal food consumption (instead of turning your homes into rock gardens).
- Expand the concept of growth, for example, to include aspects such as social justice, community, leisure time, self-efficacy, healthy air, clean and sufficient drinking water, etc.
Many changes have already been made towards decarbonization. Companies promote the introduction of framework conditions and laws to reduce CO2 emissions or are even preparing the necessary technology. The civil society in Germany and other rich developed economies does not seem to have reached the point on a broad scale where they are able to rethink for themselves their striving for more prosperity, or the preservation of it.
On today's Earth Overshoot Day, the question comes up for me: Should perceived prosperity depend exclusively on whether we can immediately fulfil every new burgeoning consumer desire? Where do you stand on this? How do you interpret prosperity for yourself personally?
This text first appeared in my newsletter 'Innovation on Wednesday'. It is published every other Wednesday. For subscription click here