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Our Insights 11 Aug 2011

Top Tips for Decoupling Economic Growth from Environmental Impacts

By Ramon Arratia

In the first in a series of blogs on economic growth, Kyra Choucroun set out the problems of an economy predicated on infinite economic growth. Here, guest author Ramon Arratia, Sustainability Director at InterfaceFLOR, sets out his vision for how we can begin to challenge established assumptions by decoupling economic growth from environmental impact. (Note: A version of this piece first appeared on InterfaceFLOR’s Cut the Fluff blog in June 2011.)

Recently I participated in a very interesting Guardian Sustainable Business debate on decoupling economic growth from environmental impact.

Clearly, we cannot continue to exploit the planet’s resources unsustainably in order to strengthen the global economy and live more prosperous (unequal) lives. But I don’t believe we need to stop economic growth to be sustainable. There is no real reason why the two should be incompatible. Granted, the trend over the last 30 years is not encouraging, but I believe it is possible to decouple one from the other – we just haven’t really tried yet! Think of how the price of carbon – have our governments really tried?

To achieve this on a global scale we have to challenge established assumptions and here are my Top 10 tips for doing that:

1. Separate wider economic growth (in terms of GDP) from the growth of individual businesses. One is macro-level and other is micro-level.

2. Forget the triple bottom line. There is only one bottom line and it’s financial. But we need to set a realistic price for carbon (and other impacts) that will make sustainability an economic necessity.

3. Acknowledge that some sectors will actually need to shrink to enable the wider economy to grow sustainably. Do we really need more oil, steel, wood, travel and meat? Transformative sustainability will come from new actors disrupting traditional industries to meet people’s needs better and with less resources. Why? Because they have nothing to lose.

4. Encourage growth in low-impact services – this can be almost unlimited because services have significantly lower environmental impacts per unit of GDP generated than physical products.

5. Stop thinking corporate sustainability and start thinking product sustainability. What’s the point of car manufacturers reducing the carbon footprint of their operations when their biggest impact comes from tailpipe emissions when the car is in use? The key is looking at the impacts across the whole lifecycle and tackling the biggest impacts – even if this is more challenging. The biggest impact of many physical products, for example, is from the raw materials they are made with not the manufacturing process.

6. Mandate disclosure of lifecycle impacts for full product transparency – give people the information they need to choose the products with the least environmental impact.

7. Replace high-impact products with low-impact services that do the same job. But don’t expect manufacturers to drive the move to services that will replace their products – the push to disrupt the market needs to come from the outside. It wasn’t car manufacturers that came up with the idea of a car sharing scheme…

8. Harness the power of creativity to make products more sustainable. Not all physical products can be replaced with services. We will always need food, clothing and a roof over our heads. Innovation is the key to make these products use fewer resources and create less waste. But not all smart people on the planet work for you. Open innovation and crowd-sourcing will be key in unlocking creativity.

9. Use what we already have. Mine the treasures that are hidden away in landfills, drawers, sheds and garages instead of extracting virgin raw materials from the Earth. Recycling will make more and more economic – not just sustainability – sense as both natural resources are depleted further and anti-waste regulations progress.

10. Focus on local services, not local products. Locally sourced products and produce are not always lower impact. In fact, it can be much more efficient to produce food and products through economies of scale, using fewer resources. The local economy should not be about consuming local products, but using local services – going to local hairdressers, spinning classes, theatre and restaurants, not growing vegetables in your garden.



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