Source
doi:10.1111/jiec.13450 — original publication (opens in a new tab; the file is not redistributed)
Summary
Forum article from Journal of Industrial Ecology by Schultz and Pies (Martin-Luther-University Halle-Wittenberg, Germany). Uses the philosophical “practical syllogism” (normative premise + positive premise → normative conclusion) to analyse the post-growth vs. pro-growth circular economy debate. Both positions are shown to rest on a shared error: assuming production functions are static. The paper proposes governance innovation — redesigning institutional incentive structures — as the superior path to circular economy transition at both macro and micro levels. Entirely theoretical; no empirical data. Useful thesis background for the CE/degrowth framing debate and for the argument that governance structure (not behaviour) is the key leverage point for sustainability transitions.
Key thesis insights
- CE is only 8.6% circular globally as of 2022 (Circularity Gap Report, 2022) — the striking baseline that makes the post-growth vs. pro-growth debate urgent.
- Post-growth critique: Degrowth moves along a production function (less production → fewer emissions) but can never reach net-negative CO₂ emissions, which are required for the 1.5°C Paris target. It can only slow the approach to the emissions ceiling, not break through it.
- Pro-growth “balancing” critique: Asking firms to sacrifice profit for environmental/social goals is structurally unsustainable in competitive markets; managers who do so endanger their firm’s existence.
- The resolution — governance innovation: Rather than moving along existing incentive curves, redesign the institutional framework so that sustainable behaviour becomes profit-compatible. This shifts the production/profit function northwestward — enabling both economic growth and net-negative emissions simultaneously. The key mechanism is making the profit motive “into service” for environmental and social desiderata.
- Macro insight: Intensive growth (more from less, via innovation) is superior to degrowth for climate because technology-driven efficiency shifts can achieve net-negative CO₂; degrowth cannot.
- Micro insight: Governance innovation (inter-industrial sustainability commitments, strategic alliances) is superior to firm-level balancing because it changes the incentive structure for the whole market rather than asking individual firms to absorb losses.
- Two governance competencies required: (1) argumentative clarification — disclosing common interests in value networks; (2) institutional reconfiguration — building cross-sector commitments that could not previously be realised due to mutual exploitation fears (Williamson 1983 credible commitments).
- Theoretical link to community governance: The governance innovation concept parallels the community trust structure finding in Jones (2011) — communities that redesign their internal incentive/ownership structures can make sustainable behaviour intrinsically rewarding without requiring individual sacrifice. lit_015_jones-2011-nz-intentional-communities
Connections
Links to
Sources (1): LIT_015
Referenced by
Sources (1): LIT_027