Growth for Good: Reshaping Capitalism to Save Humanity From Climate Catastrophe

Terzi thoughtfully engages with the “degrowth movement,” whose followers argue that societies must transition away from economic growth in order to avoid climate catastrophe and address other ills of the market system, notably pervasive and growing inequality. Although he acknowledges the urgent need to attend to climate change and income inequality, he makes the case that only the resources made available by an expanding market economy will suffice to address these problems. Containing climate change requires extensive investments on multiple fronts. But rather than being viewed as a cost to be borne, the needed projects should be seen as strategic investments with the capacity to boost growth in both the short and the long run. Firms and governments should move in this direction sooner rather than later (if only they can figure out how to work together), because the returns on green investments will be greatest for the first movers in developing and producing new clean technologies. Unavoidably, the turn away from fossil fuels will leave behind carbon-intensive sectors and their workers, amplifying concerns about inequality and creating resistance to the green transition. Governments will have to address simultaneously the two challenges of greening the economy and curbing excessive inequality for either to be successfully met.