The Mirage of Green Growth: Why Sustainability and Economic Expansion Still Collide

By Yuto Hayashi Aug. 13, 2025

Governments and corporations alike have rallied around a comforting slogan: green growth. It promises a world where the economy can expand endlessly while emissions decline, where prosperity and preservation coexist without tradeoffs. Yet beneath the rhetoric lies an arithmetic contradiction—growth, by its very nature, consumes.

The International Energy Agency (IEA, 2024) reports that despite record renewable energy investment exceeding US$1.7 trillion, global CO₂ emissions hit an all-time high of 37.4 billion tons. In other words, the planet is burning faster—just more cleanly. The dream of infinite green growth is not sustainability; it is wishful accounting.

The Promise That Sold the Century

Green growth was born from political necessity. During the 2008 financial crisis, governments sought a narrative that could reconcile ecological urgency with economic optimism. The result was the “decoupling hypothesis”—the idea that GDP could rise while environmental impact fell.

At first, the data seemed promising. Between 1990 and 2019, OECD economies grew their GDPs by 60 percent while cutting territorial emissions by 20 percent. Yet the illusion fades when consumption-based emissions are included: much of the reduction came not from cleaner production, but from outsourcing pollution to the developing world.

The Global Carbon Project (2023) found that when imported goods are counted, the same OECD nations increased their total carbon footprint by 12 percent. The West didn’t decouple—it displaced.

The Rebound Effect: Efficiency as Illusion

Technological efficiency is often celebrated as the hero of sustainability: better engines, smarter grids, cheaper solar panels. But efficiency gains rarely translate into absolute reductions—they just make consumption more affordable.

This is known as the rebound effect. When LED lighting cut electricity use per lumen by 85 percent, global light consumption increased by 120 percent within a decade (World Bank Energy Outlook, 2024). When electric vehicles became cheaper to operate, average driving distance per capita rose. Efficiency, far from reducing energy use, often accelerates it.

Green growth thus feeds on its own success. Every technological leap expands the frontier of consumption.

Renewable Energy’s Material Footprint

The shift to renewables is vital—but not immaterial. Each wind turbine, solar array, and battery requires metals, minerals, and land. The International Renewable Energy Agency (IRENA, 2024) estimates that achieving net-zero by 2050 will require sixfold increases in lithium, cobalt, and rare earth mining.

Mining is neither green nor growth-neutral. The World Bank predicts that meeting this demand will add 2.5 billion tons of CO₂-equivalent emissions over the next 30 years—just from mineral extraction. Meanwhile, renewable infrastructure still relies on fossil-based inputs: cement, steel, plastics, and global logistics chains that remain carbon-intensive.

The transition, in other words, is not decoupled—it is front-loaded with debt to the planet.

The Political Economy of Greenwashing

Why does the myth persist? Because it is profitable. Green growth allows policymakers to promise transformation without sacrifice and corporations to rebrand without reform.

ESG funds—environmental, social, and governance investments—grew to US$41 trillion in assets in 2024 (Bloomberg Sustainable Finance Review, 2024). Yet an internal audit by the EU Commission on Financial Integrity found that 53 percent of these funds failed to meet even minimal sustainability standards. “Net-zero” pledges often rely on carbon offsets that plant trees in one hemisphere while emissions rise in another.

Green capitalism has mastered the art of ecological storytelling: sustainability not as limitation, but as marketing.

The Developing World’s Dilemma

The hypocrisy cuts deepest in the Global South. Western nations, having industrialized through centuries of carbon intensity, now urge restraint from those still climbing the ladder.

The African Development Bank (2024) estimates that transitioning Africa’s infrastructure to low-carbon alternatives would require US$2.3 trillion by 2050—nearly the entire GDP of the continent. Meanwhile, only 12 percent of climate finance commitments from OECD countries have been delivered in full.

The message is clear: decarbonization is expected, but development must wait. The world’s poorest are asked to go green without first being allowed to grow.

The Decoupling Mirage

The central flaw in green growth is its reliance on relative decoupling—reducing emissions per unit of GDP—while ignoring absolute limits. Global GDP must grow around 2.8 percent annually to maintain employment and fiscal stability (IMF World Outlook, 2024). To achieve net-zero by 2050, emissions must fall by roughly 7.6 percent per year.

These two equations are not compatible. The more the economy expands, the harder the emissions curve steepens. Unless the relationship between energy and output fundamentally breaks—a technological miracle with no precedent—the math of perpetual growth cannot coexist with planetary boundaries.

Beyond Growth: Toward Sufficiency

The emerging alternative is post-growth economics. Rather than chasing infinite expansion, it prioritizes sufficiency—meeting human needs within ecological limits. Models from the European Post-Growth Observatory (2024) suggest that reducing material throughput in high-income nations by 40 percent could still maintain quality of life through redistribution, circular design, and shorter work weeks.

Bhutan measures progress through Gross National Happiness; New Zealand’s Wellbeing Budget integrates environmental health with fiscal policy. These are not utopias—they are prototypes for a civilization mature enough to stop mistaking motion for progress.

Growth has been humanity’s greatest story. But stories end.

Conclusion: Prosperity Without Expansion

The age of easy optimism is over. Green growth promised that we could fix the future without changing the present—that we could innovate our way out of arithmetic. But the data is unforgiving: the planet’s biophysical limits are real, and they do not negotiate.

True sustainability will not come from cleaner consumption, but from less of it. It will demand an economy built on durability, equity, and restraint—not acceleration. The question is no longer how to grow greener, but whether we can thrive without growing at all.

Because on a finite planet, even green growth is still growth.

Works Cited

“World Energy Outlook 2024.” International Energy Agency (IEA), 2024, www.iea.org.

 “Territorial vs. Consumption Emissions Analysis.” Global Carbon Project, 2023, www.globalcarbonproject.org.

 “Energy Efficiency and Rebound Effects Report 2024.” World Bank, 2024, www.worldbank.org.

 “Renewable Transition Material Requirements.” International Renewable Energy Agency (IRENA), 2024, www.irena.org.

 “Sustainable Finance Review 2024.” Bloomberg Intelligence, 2024, www.bloomberg.com.

 “Financial Integrity Audit of ESG Funds.” European Commission, 2024, www.ec.europa.eu.

 “Climate Finance and Development Report.” African Development Bank (AfDB), 2024, www.afdb.org.

 “World Economic Outlook 2024.” International Monetary Fund (IMF), 2024, www.imf.org.

 “Post-Growth Transition Analysis.” European Post-Growth Observatory, 2024, www.postgrowth.eu.

 “National Wellbeing Budget Summary.” New Zealand Treasury, 2024, www.treasury.govt.nz.