1. Degrowth and capacity to measure sustainable development

Clark and Harley's review on sustainability science identifies measuring well-being as one of the ways to expand the capacity to measure sustainable development. We argue that degrowth can contribute here by historicizing and unpacking the taken for granted relationship between sustainable development and well-being. The critiques of development that arose in the latter part of the 20th century served as the foundation for the concept of degrowth. In other words, degrowth emerged as a response to the strong association between the notion of sustainable development and economic growth. The Brundtland report (1987) advocated for ‘a new era of economic growth – growth that is forceful and at the time socially and environmentally sustainable’ (p. 7). It further emphasized the need for revitalizing global economic growth to prevent economic, social, and environmental crises, asserting that ‘more rapid economic growth in both industrial and developing countries’ was crucial (ibid., p. 72). Similarly, SDGs also engage with economic growth. For instance, SDG 8 aims to promote sustained, inclusive, sustainable economic growth, full and productive employment and decent work for all. Its first target aims to sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7% gross domestic product (GDP) growth per annum in the least developed countries. In the SDG framework, this growth strategy is made sustainable by a single target (SDG 8.4): ‘endeavor to decouple economic growth from environmental degradation’.

Much has been learned on the relation between GDP and environmental pressures since the emergence of the empirical literature on decoupling in the 1990s (for reviews, see, Haberl et al., Reference Haberl, ., Wiedenhofer, Virag, Kalt, Plank, Brockway, Fishman, Hauskost, Krausmann, Leon-Gruchalski, Mayer, Pichler, Schaffartzik, Sousa, Streeck and Creutzig2020; Hickel and Kallis, Reference Hickel and Kallis2020; Parrique, Reference Parrique2019; Vadén et al., Reference Vadén, Lähde, Majava, Järvensivu, Toivanen, Hakala and Eronen2020). The mitigation report of the IPCC AR6 provides one of the most recent syntheses of this body of research. In the report, decoupling is described as ‘insufficient’ (Hubacek et al., Reference Hubacek, Chen, Feng, Wiedmann and Shan2021), ‘not sufficient’ (IPCC AR6 WGIII, Ch. 2, p. 39), with rates that ‘fall a long way short’ (Le Quéré et al., Reference Le Quéré, Korsbakken, Wilson, Tosun, Andrew, Andres, Candell, Jordan, Peters and van Vuuren2019), which makes green growth a ‘misleading’ (Ward et al., Reference Ward, Sutton, Werner, Costanza, Mohr and Simmons2016), ‘misguided’ (Hickel & Kallis, Reference Hickel and Kallis2020) strategy which ‘rests partly on faith’ (Vadén et al., Reference Vadén, Lähde, Majava, Järvensivu, Toivanen, Hakala and Eronen2020).

To make economic growth truly sustainable, we would need to (1) absolutely decouple production and consumption (relative decoupling is not enough) (2) from all environmental pressures (not only carbon) (3) wherever these happen (taking into account imported impacts) (4) at a pace that is sufficiently fast to avoid ecological collapse, taking into account science-based targets (Anderson et al., Reference Anderson, Broderick and Stoddard2020) in line with equity (Robiou du Pont et al., Reference Robiou du Pont, Louise Jeffery, Gütschow, Rogelj, Christoff and Meinshausen2017) (5) by keeping that decoupling over time (as to avoid recoupling). Such narratives of green growth have never been achieved and there is yet no convincing evidence showing that it could.

This is perhaps the most important contribution the degrowth literature had toward debates around sustainable development and its assumptions on well-being: the pursuit of economic growth in advanced capitalist countries are not compatible with the respect of global planetary boundaries. The need to produce and consume less is a consequence of the failure to decouple GDP from environmental pressures. If a specific country is overshooting its fair share of planetary boundaries, and if economic activities are still unavoidably correlated with ecological footprints, then sustainability necessarily requires a reduction of production and consumption. Although elements of social justice, well-being, and democracy are still actively debated among a variety of perspective, the need for a reduction of production and consumption for a social and ecological well-being has been stable since the emergence of the term in 2002 (for a history, see, Parrique, Reference Parrique2019).

2. Degrowth and capacity to promote equity

For a just and equitable transition toward sustainability, it is vital to challenge and transform the unequal power dynamics which have persisted along capitalist, geo-political, colonial, gendered, and racialized lines (Dengler et al., Reference Dengler, Lang, Seebacher, Barlow, Regen, Cadiou, Chertkovskaya, Hollweg, Plank, Schulken and Wolf2022). For several decades, scholars who work on inequality have challenged the growth model for its belief that steady levels of increasing GDP would tackle inequality through the ‘trickle-down of wealth’ from the richest to the poorest (cf. Breman, Reference Breman1996). Instead, one of the consequences has been an ongoing cycle of highly unsustainable extraction of natural resources and labor to maintain the growth paradigm (Chertkovskaya & Paulsson, Reference Chertkovskaya and Paulsson2021). Exploitative logics of extraction and persistent inequality have been key components in the development of the Global North (cf. Amin, Reference Amin1976; Grosfoguel, Reference Grosfoguel2000; Mies, Reference Mies2007). With widespread outsourcing of industrial production in the 1980s, the Global North largely relies on cheap labor from the Global South (cf. Dengler & Seebacher, Reference Dengler and Seebacher2019; Mies, Reference Mies2007; Prentice and De Neve, Reference Prentice and De Neve2017). For example, Hickel et al. (Reference Hickel, Dorninger, Wieland and Swandi2022a, p. 10) calculate that ‘the drain amounted to $10.8 trillion in 2015, and $242 trillion over the period from 1990 to 2015…’ from the Global South to the North.

Colonial histories not only frame the contemporary relations of production and extraction, but the impact of climate change is also asymmetrical. High-income countries, such as Europe and the USA, are responsible for consistently overshooting several planetary boundaries (Fanning et al., Reference Fanning, O'Neill, Hickel and Roux2022; Hickel et al., Reference Hickel, O'Neill, Fanning and Zoomkawala2022b). However, the middle- and low-income countries of the Global South are more vulnerable to numerous effects of climate change (Chen et al., Reference Chen, Noble, Hellmann, Coffee, Murillo and Chawla2015). Thus, universalized strategies of green growth continue within the legacy of neo-colonial means of prescriptive economic planning. Within degrowth scholarship, there is a recognition that these colonial modes of unequal exchange need to be addressed. However, it is important to critically explore what this implies. For example, a common argument proposed is that the Global North needs to ‘degrow’ to enable the Global South to ‘grow’ to gain higher standards of living (D'Alisa et al., Reference D'Alisa, Demaria and Kallis2015). Although these suggestions are well-intended and it is crucial to address discussions on redistribution and reparations, it is also pertinent to examine how degrowth in the Global North economies would inadvertently impact the Global South, especially when the global value and supply chains are complexly entangled (Matković, Reference Matković2018). Yet, a degrowth lens becomes valuable to explore the multi-dimensionality of sustainable transitions, since it puts socio-economic and ecological justice at the core of the discussions of sustainability, instead of focusing on ‘greening’ growth or the markets. Degrowth offers alternatives on how to radically reduce inequality (e.g. wealth and income caps). Proponents have adopted the notion of ‘eco-social’ policies to reduce structures of inequality simultaneously with respecting planetary limits. To integrate both overarching goals, the literature (see Koch, Reference Koch2022a, for an overview) suggests orienting public policies toward the upper (or planetary) and lower (or sufficiency) boundaries of the ‘safe and just operating space’ as defined by Rockström et al. (Reference Rockström, Steffen, Noone, Persson, Chapin, Lambin, Lenton, Scheffer, Folke, Schellnhuber, Nykvist, de Wit, Hughes, van der Leeuw, Rodhe, Sörlin, Snyder, Costanza, Svedin and Foley2009) and Raworth (Reference Raworth2017). In relation to meeting basic needs or the ‘social floor’ of this space, proponents argue for the introduction of a universal and unconditional basic income, the expansion/introduction of universal basic services (UBSs), a voucher system, or a combination of the three (Bohnenberger, Reference Bohnenberger2023). Concerning the upper boundary of the safe and just operating space, degrowthers build on relevant philosophical approaches that defend ‘limitarianism’ in an ecologically constrained world (Robeyns, Reference Robeyns2019). More concrete economic proposals suggest the (re-)introduction of wealth taxation and/or the definition of maximum incomes as some quantitative proportion from minimum incomes (Buch-Hansen & Koch, Reference Buch-Hansen and Koch2019; François et al., Reference François, Mertens de Wilmars and Maréchal2023; Pizzigatti, Reference Pizzigatti2018).

Degrowth scholarship has also engaged with feminist theories on care and social reproduction to examine the gendering of labor within growth-driven economies under capitalism (Barlow et al., Reference Barlow, Regen, Cadiou, Chertkovskaya, Hollweg, Plank, Schulken and Wolf2022; Chertkovskaya et al., Reference Chertkovskaya, Paulsson and Barca2019; D'Alisa et al., Reference D'Alisa, Demaria and Kallis2015). Feminist conceptualizations of social reproduction offer analytical possibilities to acknowledge various scales of care – from everyday domestic work which is vital to maintain life – to structures of care provision through public welfare (Bhattacharya, Reference Bhattacharya2017; Dengler et al., Reference Dengler, Lang, Seebacher, Barlow, Regen, Cadiou, Chertkovskaya, Hollweg, Plank, Schulken and Wolf2022; Koch & Buch-Hansen, Reference Koch and Buch-Hansen2020). There is, however, a further need to examine the intersections of gendered and racialized organization of the labor market. For example, in the current economic paradigm, the commodification of care work has resulted in the segregation, gendering, and racializing of the labor force (Fraser, Reference Fraser2013; Melamed, Reference Melamed2015; Mies, Reference Mies2007; Parreñas, Reference Parreñas2015). The transformation of industrial production is inevitable due to climate change, and care work is unlikely to decline and may even increase, as we observed during COVID-19. Thus, any vision of integrating the ecological and social aspects of an economy needs to reassess how paid and unpaid care work can be reorganized and how structures of care provision can be built for equitable forms of sustainability (Gomez-Baggethun, Reference Gomez-Baggethun2022). By locating ecological and equitable provisions of care at the center of sustainable transition, degrowth scholarship offers a valuable space to critically engage with discussions on care to create more dignified spaces of work and life-making possibilities (Chertkovskaya & Paulsson, Reference Chertkovskaya and Paulsson2021).

3. Degrowth and capacity to promote transformations and governance

Much research on sustainability calls for a large-scale transformation to overcome path dependence. Indeed, the ability to destabilize existing regimes and overcome incumbency is a fundamental component of the capacity for transformation (Clark & Harley, Reference Clark and Harley2020). This should thus be at the cutting edge of transformation research for sustainability. But the research on the governance of sustainability and the financing of transitions, tend to merely describe the difficulties with transformation and put a disproportionate large focus on the costs of a transition. Our argument, however, is that degrowth can offer a way out of path dependency and allow transformational change. It is therefore crucial to explore how governance and welfare financing may be decoupled from economic growth.

The degrowth literature has begun to address horizontal and vertical governance issues and specifically the role of the state (D'Alisa & Kallis, Reference D'Alisa and Kallis2020; Koch Reference Koch2020, Reference Koch2022b). Although the modern state, including the welfare state, has co-evolved with the provision of economic growth, the emerging consensus is that it can nevertheless play an important role within degrowth transformations. In contrast to ecological modernization and ‘environmental state’ approaches (e.g. Meadowcroft in Gough et al., Reference Gough, Meadowcroft, Dryzek, Gerhards, Lengfeld, Markandya and Ortiz2008) that all aim to gradually optimize ecological performances within wider ‘green growth’ strategies, degrowth notions of the state presuppose a break with what Hausknost (Reference Hausknost2020) calls the ‘glass ceiling’ of transformations, namely the policy priority of economic growth. If the growth provision were replaced by a sustainability provision, governments could build governance networks at various scales (European, national, local) and with various private, semi-private, and non-profit actors to ensure the respect of ecological limits in production and consumption patterns (Khan et al., Reference Khan, Emilsson, Fritz, Koch, Hildingsson and Johansson2023). In such multi-level and multi-scalar frameworks, higher level frameworks will be required to set ecological and social targets and to facilitate the sharing (re-)distribution of resources to reduce regional and social inequalities. Such redistribution mechanisms will be necessary at the global level, not least considering the enormous amount of climate debt owed by the Global North to the South (Hickel, Reference Hickel2021).

In existing welfare states economic growth is one of the necessary conditions for the maintenance of high employment levels and thus the government's fiscal base. Lower levels of growth threaten to undermine this base precisely when the welfare state's social functions to counteract economic downturns that may accompany social and ecological transformations are required the most (Bailey, Reference Bailey2015). To achieve ecological sustainability without undermining critical amounts of well-being it is necessary to make welfare systems independent of economic growth (Corlet Walker et al., Reference Corlet Walker, Druckman and Jackson2021; Hirvilammi et al., Reference Hirvilammi, Häikiö, Johansson, Koch and Perkiö2023; Koch, Reference Koch2022a). This relates to both the supply and demand aspects of welfare provision (Büchs, Reference Büchs2021). Reconsidering the supply aspects of welfare requires the transfer of funding sources to those that are less affected by economic fluctuations, such as taxes on property, land, wealth, and inheritance or necessitate the imposition of taxes on consumption practices with high-carbon emissions. Degrowth scholars have also suggested the introduction of caps on wealth and income (Buch-Hansen & Koch, Reference Buch-Hansen and Koch2019).

The demand for welfare could be reduced in an alternative political-economy context that would feature a more even distribution of work, resources and opportunities, greater economic security and improved community and family capacity for social support, care, and social participation (Chertkovskaya et al., Reference Chertkovskaya, Paulsson and Barca2019). Büchs (Reference Büchs2021) adds to this that a corresponding health policy could help prevent disease and maximize everyone's chances to lead healthy and fulfilled lives instead of generating productivity and profits for the health care sector. In general, any shift toward a post-growth economy would need to be accompanied by ‘decommodified’ social policies (Dukelow & Murphy, Reference Dukelow and Murphy2022) that contribute toward a reconfiguration of existing links between work, cash, and services including new kinds of ‘sustainable welfare benefits’ such as universal basic income, UBSs, vouchers, and/or participation income (Bohnenberger, Reference Bohnenberger2020; Coote & Percy, Reference Coote and Percy2020; McGann & Murphy, Reference McGann and Murphy2023).

Another aspect that degrowth can offer concrete insights into debates on transformations and governance is in the context of financing of public services without economic growth. Since degrowth entails both a slow-down in production and consumption, this can impact taxes and subsequently any government's capacity to implement needed reforms. Government revenue in most cases is derived from two primary streams: tax on income and tax on consumption. If fewer people work, there is less taxable income. If consumption slows-down, tax revenue does too. So, what would happen to these two revenue streams if society embarked on a degrowth trajectory? Well, if the total number of hours worked is lowered, for example through a work-time reduction reform, as has been proposed (e.g. Kallis, Reference Kallis2013), the tax base will decrease accordingly. However, should salaries be kept at the same levels as before the work-time reduction reform, this would imply a substantial salary-increase in real terms. Additionally, if the unemployed or the involuntary part-time workers are allowed to share the existing jobs, for example through a substantive job-sharing program, as has been proposed in degrowth scholarship (Alcott, Reference Alcott2013; Scarrow, Reference Scarrow2018), then the total number of hours worked may very well increase. This would most likely lead to a growing tax base, although it depends on the number of unemployed, the share of involuntary part-time workers, and their levels of income.

Moving over to consumption, VAT and sales tax will probably decrease if consumption slows down. For example, widespread voluntary simplicity (Alexander, Reference Alexander2011) and re-use of products, combined with reforms to prevent planned obsolescence (see, e.g., Fitzpatrick et al., Reference Fitzpatrick, Parrique and Cosme2022), the removal of advertising from public spaces (Lloveras et al., Reference Lloveras, Marshall, Vandeventer and Pansera2022) and the introduction of a maximum income cap (Buch-Hansen & Koch, Reference Buch-Hansen and Koch2019), would most likely slow-down consumption and thus also reduce government revenue. Shifting the tax base from consumption to wealth will most likely then be necessary. A billionaire tax has been proposed both by wealthy people themselves (Neate, Reference Neate2022) and by parties in many countries (Whitehouse, 2022). Scaling up inheritance tax could be another reform to cover the loss in revenue coming from a slow-down of consumption. Besides simply making up for the loss of revenue, taxing the wealthiest could also imply the greatest impact in terms of reducing environmental harm. After all, it is the wealthiest households that emit the largest share of carbon dioxide emission (Chancel, Reference Chancel2022).

How would government spending change under a degrowth trajectory? People will still need help and care. People should also continue to benefit from guaranteed pensions. Consequently, health care funding and pension savings are essential. Yet, there are likely other care-related expenses that would be affected. For example, many of the so-called welfare diseases, which are generally linked to affluence, would probably diminish over time. This includes, for example, heart disease, stroke, Alzheimer's, diabetes, kidney diseases, and breast cancer. The list could be much longer. But the main point is clear: rather than being associated with costly reforms and a lowering of the tax base, degrowth itself could mitigate some of the escalating costs found in the core areas of today's health care systems (Borowy & Aillon, Reference Borowy and Aillon2017). Arguably, degrowth would be self-financed over a longer period of time, around 10–20 years, as it would be built on a combination of reduced spending and increased revenue. Indeed, by shifting costs around and shifting the tax base, if only temporarily, revenues and expenses would be matched over time. Although we here only have sketched how the financing of public services without economic growth could be approached, more studies are needed to explore the fiscal details around tax reforms in full, and how such shifts in revenues and spendings could balance out.