Economic growth in harmony with quality of life and a better environment - the canton of Zurich shows how it's done

Economic growth in the canton of Zurich – increasing prosperity and quality of life while reducing environmental pollution. This is the conclusion of the latest economic monitoring by the Office of Economic Affairs. Economic growth in the canton of Zurich in recent years has not only increased disposable income, but also enabled a better quality of life, such as leisure, education and health. In addition, environmental pollution has decreased in many areas. A thought experiment also shows that zero growth would lead to many problems.

The economic development of the Canton of Zurich is remarkable: the gross domestic product (GDP) has more than doubled in the last 40 years after adjusting for inflation. - from CHF 74 billion to CHF 159 billion. On a per capita basis, economic output rose from CHF 65,000 to CHF 101,000 - and the majority of this increase in value added was paid out to the people of Zurich in the form of higher wages. However, they not only achieved higher incomes, but also more free time: the number of hours worked per capita has fallen by almost half an afternoon per week since 1991. As a result, the prosperity of the people of Zurich has steadily increased. The driving force behind this development was and is technological progress and innovation.

Rising quality of life - but not everywhere

However, economic growth entails more than just rising monetary income and more leisure time. Tax revenues have also risen in the canton of Zurich - as has the quality of life in many areas. The factors that influence the quality of life can be perceived very differently from person to person. With the "Regional Well-Being Indicators" and the "Better Life Index", the OECD has established a system for measuring quality of life. Various indicators are shown on the basis of eleven categories, providing a comprehensive picture of quality of life and its components.

Improvements in the canton of Zurich can be seen in particular in the areas of education (increase in the level of education and the rate of further education), employment (fall in unemployment and increase in the employment rate), work-life balance (increase in the part-time rate and reduction in hours worked per capita), health (increase in life expectancy and expansion of healthcare) and technology (internet access). The results are mixed in the area of safety (decrease in the number of violent crimes per capita, but slight increase in traffic accidents per capita) and in the area of housing (decrease in the average housing cost burden, but stagnating satisfaction with the housing situation). Finally, the subjective life satisfaction of the people of Zurich has remained largely the same but at a very high level.

Environmental pollution decreasing

It is undisputed that economic growth in the past was often associated with an increasing demand for resources and that a high level of prosperity in almost all countries goes hand in hand with a significantly larger ecological footprint. However, this is not a law of nature, as a look at the statistics shows: Over the last thirty years, economic growth, resource consumption and environmental pollution have been decoupled, especially in richer countries. This also applies to the canton of Zurich: while real GDP has risen by 69% since 1990, the quality of the environment has improved in most cases. This applies, for example, to material consumption, the recycling rate, air and water quality and the overall environmental footprint. No absolute, but at least a relative decoupling has so far been observed in the quantities of waste, soil sealing and certain biodiversity indicators.

The decoupling is also clearly visible in the currently most important indicator, greenhouse gas emissions. While the economic growth achieved on Zurich soil has risen steadily, the GHG emissions generated here have fallen by around 17% since 1990. However, this consideration only includes the so-called "white" emissions - i.e. those that are emitted in the country itself. If emissions caused by the production and transportation of goods imported from abroad are also included, greenhouse gas emissions have fallen less sharply over the last 30 years, but they have also decreased. Either way, achieving the Paris climate target remains a major challenge despite decoupling.

The canton of Zurich with zero growth?

But what would be the impact on prosperity, society and the environment if the Zurich economy were to stop growing? To this end, the INFRAS research office has modeled a thought experiment in economic monitoring up to the year 2050 - not in the sense of a forecast, but as an illustrative scenario. This shows that zero growth would lead to significantly lower incomes and an increased risk of poverty. At the same time, the financial challenges would become greater: there would be much less tax revenue and money available for social security than in a growing economy, which would lead to distribution conflicts. Environmental quality would improve in some areas, but at a high price. In addition, fewer financial resources would be available for environmental protection.

View full article