"The climate is changing much faster than the international efforts to address it and the political rhetoric does not match the scale and the seriousness of the problem."
Many economists and policy makers, also many from the environmental movement advocate a fundamental shift towards “green growth” based on enhanced material/resource/energy efficiency, changes towards a service-dominated economy and a switch in the energy mix favouring renewable forms of energy. Market mechanisms are mostly the main vehicle to reach there, even if government interventions are part of the proposal - after all there was never and nowhere a "free market".
According to the report "Can Green Growth Really Work?" from the Heinrich-Böll-Stiftung, "green growth" may work well in creating growth with reduced environmental load per GDP unit. But the paper, by Ulrich Hoffmann, argues that growth, technological, population-expansion and governance constraints cast a very long shadow on the “green growth” hopes.
Hoffmann cuations that we should not deceive ourselves into believing that such an approach will be sufficient to cope with the complexities of climate change. It may rather give much false hope and excuses to do nothing really fundamental that should bring about a U-turn of global GHG emissions. The proponents of a resource efficiency revolution, re-structuring of economies and a drastic change in the energy mix need to scrutinize the historical evidence, in particular the arithmetic of economic and population growth.
For example, energy-related carbon emissions increased much stronger in the first decade of this century than in the 1980s and 1990s, mostly caused by higher carbon intensity of energy generation (notably related to the renaissance of coal in the fuel mix) and strong GDP per-capita growth. In Europe, savings through more fuel efficient cars were outweighed by the strong increase in the car population and the total mileage traveled. New innovations, such as ICT or renewable energy often don't replace older technologies, but are added to the existing technosphere meaning that there potential resource saving is not materialized. Hoffmann also refers to the many aspects of rebound and how efficiency gains may not lead to the savings one expect (see also my blog post Jevons paradox - why efficiency is a liar word).
He points to the inherent growth mania of capitalism and that is is needed to keep the wheels spinning and people content and concludes that the required transformation goes far beyond innovation and structural changes including better distribution of income and wealth, as well as limitation of market power. Climate change calls into question the global equality of opportunity for prosperity (i.e. ecological justice and development space) and is thus a huge developmental challenge for all countries, but particularly for the global South and a question of life and death for some developing countries.
Ulrich Hoffmann was until the end of 2014 the Senior Trade Policy Advisor to the Director of the International Trade Division of the United Nations Conference on Trade and Development (UNCTAD).