Let me make this clear: GDP is not an accurate measure of prosperity. Nor is it an adequate measure of wealth. As Robert U. Ayres argues in “The Economic Growth Engine”, it is a measure of economic activity. It only accounts for capital that is generated as a result of the depletion of “natural capital” (i.e the environment). It does not account for societal wellbeing; nor does it account for the losses of wealth (i.e pollution) resulting from the depletion of “natural capital” resulting from economic activity.
So with all of these limitations, why on earth are policymakers, politicians, and economists still using it as a metric for social and economic progress?
Not accounting for the costs of pollution is a choice, but the fact is that these costs remain present. The reason why we don’t see the costs of economic growth is because economists dismiss them as “externalities”. This is how the current Labour Government can justify that a “win-win for economic growth and natural recovery,” (DEFRA: Environmental Improvement Plan, 2025) can happen, even though growing the economy is inherently coupled to the depletion of the natural environment. You don’t get an economic product from nothing, you have to get the resources from somewhere, and that only comes from either the extraction from the natural environment or from solar energy.
Aside from the essential renewable energy transition which can use solar energy to fuel the pursuit of economic growth, there will always exist economic needs and thus industries that require the extraction of natural resources. The EV transition is an example of this, with electric batteries requiring the extraction of critical Earth minerals. The increasing demand for EVs due to the green transition will inevitably lead to greater depletion of the natural environment.
It can be correctly argued that a move to a circular economy will reduce the pressure for industry to extract resources from the natural environment. The circular economy is a vital component of an environmentally just world: by extending the life-cycle of products we can massively reduce the environmental impact of the economy. However, even if as Ayres argues that 100% recycling is theoretically possible in a closed system, it is not a practical aim.
As an item is recycled, the useful energy we can extract from it degrades over time. The more times we recycle a product, the more energy we have to put in to extract the useful energy out of it. We would have to put increasingly larger amounts of energy into a product to recycle it, and this aim is not realistic.
How many solar panels, wind farms, dams would we need to build to obtain this energy to recycle these products repeatedly, on top of the increasing electricity demand that we require for the green transition? Imagine the extent to which we would have to deplete the natural environment to extract the necessary raw materials required to build that.







