Degrowth vs Green Growth: Why Climate Policy Is Abandoning Economic Contraction

A growing number of economists and policymakers are moving away from degrowth as the primary climate strategy. The argument that advanced economies must shrink to cut emissions is losing ground to a more pragmatic view: the global energy transition requires trillions in investment, and a shrinking tax base cannot fund it. Data from the IMF and LSE now shows that several countries have grown GDP while reducing territorial emissions, weakening the core degrowth thesis. For Africa, the shift is especially significant. Kenya already generates over 90 percent of its electricity from renewables while pursuing strong GDP growth. The continent needs sustained expansion to build infrastructure and lift millions out of poverty. The retreat of degrowth validates the view that the solution is not to stop building, but to build differently using zero-carbon technology and critical minerals. Capital markets are following suit. Institutional investors are pouring money into green equities and clean energy infrastructure. The narrative has moved from risk mitigation to commercial opportunity. The practical takeaway: climate action and economic growth are not opposed when the right policies and technologies are in place.