A Growth Paradox

A little line in Irwin Stelzer's piece:

Only a growing, affluent society can afford to invest in the technology necessary to reduce the effect of economic activity on the environment without placing an intolerable burden on taxpayers.

It is possible to go further than this actually: and indeed, the SRES, the economic models which the IPCC and our whole global warming thing rest upon do so.

In certain circumstances, the faster the economic growth the faster pollution (and or emissions, to taste) will fall. The assumption is that there is indeed some new(ish perhaps) technology which is more efficient.  That we get what we want from it with fewer emissions, just as an example. Clean coal perhaps, cost effective solar PV, whatever.

OK, great, so now we want to try and roll this out over the economy: the odd thing is that the faster the economy is growing, the faster said technology will get rolled out.

There's two parts to this, the first simply being that a fast growing economy has more new technology in it: if the economy is 8% larger than it was a year ago then clearly, 8% of the economoy must be driven by equipment and technology installed in the last year.

But there's another side to it to. High growth rates increase corporate profits and corporate investment as well (the two are linked but not necessarily the same). Thus we see, in a fast growing economy, faster technological turnover, the faster scrapping of old plant and their replacement by new.

Which leads us to this slightly counter-intuitive point: once (I'm convinced we will get there, so if isn't right here) we've got a low carbon generation technology that is cost competititve with fossil, then it's actually in the environmental interest for the economy to be growing quickly, rather than slowly.