Sustainability transition and economic growth enigma: Money or energy?

• Published in: Environmental innovation and societal transitions 2013-12, Vol.9, p.8-12
• Main Authors: Ayres, Robert U., Campbell, Colin J., Casten, Thomas R., Horne, Paul J., Kümmel, Reiner, Laitner, John A., Schulte, Uwe G., van den Bergh, Jeroen C.J.M., von Weiszäcker, Ernst U.
• Format: Article
• Language: English
• Subjects: Climate change; Economic growth; Energy; Inequality; Resource productivity
• ISSN: 2210-4224; 2210-4232
• DOI: 10.1016/j.eist.2013.09.002

•The global financial system is unstable.•Economic growth depends on cheap energy.•Climate change is driven by waste energy.•The challenge is to decarbonize at a profit. The complex relationship between economic growth, job creation, peak oil and climate change is discussed. This starts from seven facts and leads to five propositions to deal with the consequences of these facts. The overall message is that global economic policy should be redirected, that we need a better understanding of the reasons for the current economic malaise, that “peak oil” remains a concern (despite shale “fracking”), and that climate change is a relevant economic issue demanding a serious response. There is probably only one strategy that has a chance of reversing the present “death spiral” of the global economy and simultaneously reducing the risk of catastrophic climate change. That path requires major investments in energy efficiency and renewable energy technologies in the near and medium term. The investments must be attractive to long-run (20–30 year) investors (pension funds, insurance companies) and probably take the form of securitized, resource-based bonds.