The economic theory of qualitative green growth

Advanced economies are increasingly forced to act in order to mitigate climate changes and to reduce the impact of human activity on the environment. The key strategy promoted by the OECD and other international organizations is green growth. The key tenet of green growth is the ability of science and technology to let economies grow without damaging the environment. Banning unpredictable technology advances, empirical data cast doubts about the practical possibility of implementing green growth. This paper claims that we need to change the concept of growth, accepting qualitative growth as true growth. At the same time we need to change economic theory because mainstream economics recognizes only quantitative growth and would conclude that a healthy economy that grows qualitatively is in recession. We claim that economic theory is an abstract theory that can only model monetary variables plus abstract variables that represent the real economy. These variables are not descriptive but are only mathematical tools to connect monetary variables. (c) 2022 Elsevier B.V. All rights reserved.