1. Introduction
Economic growth, the expansion of output over time, has long been regarded as a central aim of economic policy and a key condition for achieving social progress. It provides the material foundation for rising incomes, an increasing standard of living, and public investment. Accordingly, most theories of distributive justice, from utilitarianism to Rawlsian liberalism, have developed under the implicit assumption of continued economic expansion. Yet, in the face of intensifying environmental crises—climate change, biodiversity loss, and resource depletion—this assumption becomes untenable. Mounting scientific evidence suggests that a continuation of aggregate growth, especially in high-income countries, is incompatible with ecological sustainability. Against this backdrop, scholars and activists have begun to explore the normative and institutional contours of a post-growth or even degrowth economy.
This paper contributes to this literature by exploring how distributive justice must be reimagined when the promise of growth can no longer anchor our moral economy. So far, the degrowth literature has not sufficiently engaged in systematic discussions of distributive justice (Parrique, Reference Parrique2019, p. 259). We submit that this is a grave omission. If growth is no longer available as a means to reconcile equity and efficiency, distributive conflicts will likely intensify. In such a scenario, the legitimacy of distributional arrangements will depend more directly on the justice of initial allocations, rather than on compensatory gains through future growth. As a consequence, distributive justice will assume greater practical significance. It is arguably the foundational requirement of any transformation toward zero (or even negative) growth. Therefore, we ask: What principles of distributive justice are required under zero economic growth?Footnote 1
In developing our answer, we draw on two widely discussed approaches. First, the “doughnut economics” framework usefully captures the double imperative of sustainability (Raworth, Reference Raworth2018): to ensure that no one falls below a minimum level of well-being (the social floor), while collectively staying within the planet’s safe operating space (the environmental ceiling). Exceeding this ceiling today, however, means violating the social floor tomorrow—for future generations. This intertemporal and biophysical tension calls for a theory of justice that is not merely compatible with sustainability, but grounded in it. Second, we draw on the central intuition behind John Rawls’ difference principle (Rawls, Reference Rawls1971): inequalities in the distribution of income and wealth must be to the benefit of the least advantaged. Rather than engaging in an exegetical reading of Rawls, we investigate how the difference principle must be reinterpreted if the material basis for redistribution can no longer be assumed to expand.
In discussing abstract principles of distributive justice, we deliberately set aside the “system question,” whether a sustainable economy must necessarily transcend capitalism, as many degrowth advocates believe. Our aim is first to establish principles of distributive justice that must hold in any economy constrained by biophysical limits. Only in a second step, when deriving policies and institutional arrangements consistent with these principles, may the system question resurface (or it may turn out that the principles are consistent with various economic systems, be they capitalist or non-capitalist). In other words, in contrast to some degrowth proponents, our approach prioritizes the normative foundations of distribution and allows the institutional form of a sustainable economy to emerge as an implication of implementing these principles, rather than as a prior assumption.
The paper is structured as follows: Section 2 clarifies the conceptual terrain. We begin with a biophysical account of sustainability and outline the material thresholds, such as emission caps and resource regeneration rates, that a sustainable economy must respect. Reviewing the empirical literature, we argue that both extensive and intensive (i.e., “green”) growth models fail to meet the biophysical requirements of sustainability, particularly in high-income countries. This motivates our assumption that distributive justice must be theorized under conditions of zero growth. In Section 3, we develop normative principles by asking: What does distributive justice require when the economic “pie” can no longer grow? We first argue that sufficientarianism, the normative theory on which most degrowth theorists rely, is an incomplete theory of justice and thus ill-equipped to guide the transformation toward a sustainable zero-growth future. In our own approach, we distinguish two key dimensions of distribution: (1) the distribution of economic outputs, especially income, and (2) the distribution of rights to use ecological resources, especially emissions. Section 3.a reinterprets the Rawlsian difference principle for a zero-growth context and develops a justice-based argument for limiting income inequality. Section 3.b extends this logic to ecological resources, focusing on the problem of just emission allocation. Section 4 draws out some policy implications of these principles. While the existing degrowth literature contains a wide array of proposals, our approach reverses the usual order of reasoning: instead of deriving principles from a preferred policy package or institutional vision, we develop principles first and then ask what policies and economic arrangements would be consistent with them.
2. Sustainability Thresholds and the Moral Imperative of Zero Economic Growth
What does sustainability imply for distributive justice? In this section, we argue that the biophysical requirements for sustainability are fundamentally incompatible with ongoing economic growth, whether in its classical (extensive) or its decoupled (intensive) form. From this follows a moral imperative of zero growth as the starting point for theorizing justice. The aim is not to rehearse the full literature on ecological economics but to establish the basic parameters within which distributive principles must operate if they are to remain coherent under conditions of planetary finitude.
We first need to clarify the concept of sustainability. In a biophysical sense, sustainability refers to the capacity of the earth’s natural systems to maintain their functional integrity over time while supporting human life and flourishing (Meadows et al., Reference Meadows, Randers and Meadows2004; World Commission on Environment and Development [WCED], 1987). This implies respecting critical thresholds or planetary boundaries beyond which ecological systems risk irreversible degradation (Rockström et al., Reference Rockström, Steffen, Noone, Åsa Persson, Lambin, Lenton, Scheffer, Folke, Schellnhuber, Nykvist, de Wit, Hughes, van der Leeuw, Rodhe, Sörlin, Snyder, Costanza, Svedin, Falkenmark, Karlberg, Corell, Fabry, Hansen, Walker, Liverman, Richardson, Crutzen and Foley2009). At a minimum, the following requirements must be met: Renewable resources (e.g., forests, freshwater, fisheries) must be used at or below their natural regeneration rates; non-renewable resources (e.g., fossil fuels, critical minerals) must be used in ways that allow substitution with renewable inputs or high rates of recycling; pollutant emissions (e.g., CO₂, nitrogen, plastic waste) must remain within the absorptive and assimilative capacities of ecosystems; ecosystem integrity and biodiversity must be preserved to maintain the resilience and adaptive capacity of natural systems, and energy use must shift toward renewable sources with low entropy and minimal ecological disruption. According to the latest evidence, humanity has moved out of the safe operating space for the majority of these requirements (Richardson et al., Reference Richardson, Steffen, Lucht, Bendtsen, Cornell, Donges, Drüke, Fetzer, Bala, von Bloh, Feulner, Fiedler, Gerten, Gleeson, Hofmann, Huiskamp, Kummu, Mohan, Nogués-Bravo, Petri, Porkka, Rahmstorf, Schaphoff, Thonicke, Tobian, Virkki, Wang-Erlandsson, Weber and Rockström2023).
Taken together, these requirements imply a material throughput ceiling—a limit to the amount of energy and material that human economies can sustainably extract, process, consume, and emit. Crucially, this ceiling is not merely a technological constraint but a hard ecological boundary that defines the outer perimeter of sustainable economic activity.
Where does this leave us with respect to the question of growth? Can economies grow, that is, increase their output of goods and services over time, as conventionally measured by GDP, without breaching the biophysical constraints of sustainability?
Since the Industrial Revolution economic growth has been driven by an increase in material and energy throughput. This extensive growth implies more production, more consumption, and more extraction of natural resources, more carbon emissions and generation of waste. This growth model is incompatible with the biophysical constraints outlined above (Wiedmann et al., Reference Wiedmann, Schandl, Lenzen, Moran, Suh, West and Kanemoto2015).
In response to this, some economists and policymakers have proposed a model of intensive or green growth, wherein GDP can rise while environmental impacts fall—a process known as absolute decoupling. The idea is that innovation, efficiency improvements, and a shift to low-carbon technologies can maintain economic growth without breaching ecological limits.
However, this proposition has come under sustained empirical and theoretical critique. As Hickel and Kallis argue, while some countries have achieved relative decoupling, that is, emissions growing more slowly than GDP, there is no empirical evidence of sustained absolute decoupling at the global level, let alone at the scale and speed required to meet the 1.5 °C climate target of the Paris agreement (Hickel & Kallis, Reference Hickel and Kallis2020).Footnote 2 However, absolute decoupling is needed to meet the biophysical requirements of sustainability.
While high-income countries appear to reduce their domestic environmental impact, much of this is due to offshoring production and importing goods with embedded emissions. When assessed on a consumption-based accounting basis, most advanced economies continue to increase their ecological footprint even as their territorial emissions plateau (Parrique et al., Reference Parrique, Barth, Briens, Kerschner, Kraus-Polk, Kuokkanen and Spangenberg2019). Furthermore, rebound effects, whereby efficiency gains are offset by increased consumption, tend to erode environmental gains over time (Alcott, Reference Alcott2005). Even in scenarios where decoupling might be partially achieved, it does not extend to all ecological domains: biodiversity loss, soil degradation, nitrogen loading, and resource depletion all continue unabated in most high-income economies (Haberl et al., Reference Haberl, Wiedenhofer, Virág, Kalt, Plank, Brockway and Creutzig2020). In short, GDP remains structurally tied to material throughput via complex supply chains and consumption patterns.Footnote 3
Finally, even if absolute decoupling were theoretically possible, it raises profound normative questions: Should the global South be asked to rely on a yet unproven model of “green growth,” while the global North maintains its disproportionate share of resource use? In this sense, the moral burden of proof lies with the proponents of green growth, and the evidence to date does not support their case.
If neither extensive nor intensive growth is compatible with biophysical sustainability, it follows that the commitment to continued economic growth is ethically indefensible—at least for those societies already operating beyond safe ecological limits. Instead, the principle of zero growth emerges as a normative imperative, not merely an economic or environmental option.
This does not imply economic stagnation or social regression. As many authors writing under the rubric of degrowth have emphasized, it opens up opportunities toward the qualitative improvement of human well-being within biophysical boundaries (Hickel, Reference Hickel2020). A zero-growth economy would aim to decrease material throughput, reduce inequality, and ensure a just provisioning of needs through sufficiency rather than accumulation (Schmelzer et al., Reference Schmelzer, Vetter and Vansintjan2022). While there is no scarcity of general discussion about degrowth, whether its realization implies overcoming capitalism or not (Hickel, Reference Hickel2020), and also a number of more or less detailed policy proposals for such a degrowth economy (Fitzpatrick et al., Reference Fitzpatrick, Parrique and Cosme2022), what is lacking so far is a systematic discussion of principles of distributive justice in a zero growth world. We propose to approach the discussion the other way round: We develop principles of justice first to provide a firm grounding to then inform questions of economic systems, structures, and policies that may contribute to their realization.
From a justice perspective, a zero-growth economy demands a fundamental shift in our distributive principles. If aggregate growth can no longer be relied upon to improve well-being, distribution assumes greater significance and a new focal point. Justice is no longer a question of how to divide the fruits of growth, but how to equitably allocate resources and rights under the biophysical constraints of sustainability.
In sum, sustainability entails an end to economic growth as a structural goal. Sustainability is not a marginal constraint on justice but a constitutive condition for any plausible theory of justice in the Anthropocene. The next step, then, is to develop distributive principles that are normatively sound, ecologically grounded, and institutionally applicable under conditions of zero growth.
3. Principles of Justice under Zero Growth
Contributors to the zero-growth literature are likely to object to our assertion that they have little to say on distributive justice.Footnote 4 After all, the image of doughnut economics naturally lends itself to the interpretation that what justice requires is ensuring that each individual has enough income or welfare.Footnote 5 Indeed, several advocates of zero growth explicitly (Parrique, Reference Parrique2019, pp. 259–264) or implicitly (e.g. Hickel, Reference Hickel2019; Schmelzer et al., Reference Schmelzer, Vetter and Vansintjan2022) endorse such a sufficientarian approach to distributive justice. If an economy can respect environmental constraints while also fulfilling the social constraint of providing enough income to everyone, then it will fall in the sustainable zone between the two rings of the doughnut economy.
Critics have argued that, despite its intuitive appeal, sufficientarianism is incomplete. Specifically, Casal (Reference Casal2007, pp. 299–300) has suggested that “what makes a view sufficientarian is not simply the great importance it attaches to eliminating deprivation but the lack of importance it attaches to certain additional distributive requirements.” Some sufficientarians have responded to this criticism by pointing out that the most plausible version of their theory is one that attributes priority to ensuring that everyone meet the threshold of sufficiency, while accepting additional principles of justice once the threshold has been met. Footnote 6 Under current conditions, where the sufficiency threshold is obviously not met in many places, this seems to vindicate both sufficientarianism and the advocates of degrowth who adopt it. Our discussion in this paper is orthogonal to this debate.
However, we see a second reason to consider sufficientarianism incomplete and, importantly, one that changes what follows from the theory below the threshold of sufficiency. Sufficientarianism relies on a notion of justice limited to what individuals receive in the zero-growth economy, while neglecting how this interacts with what they contribute to the production of economic output. Most contemporary theories of justice recognize the importance of the latter.Footnote 7 What if, for example, for the same amount of natural resource inputs and emissions generated, all individuals can receive more income with an unequal income distribution than with an equal one? What if, in other words, incentivizing some to contribute more will make everyone better off? This is the intuition animating Rawls’ (1971) difference principle: A certain amount of inequality can generate efficiency gains that will make everyone better off. We will discuss the precise mechanism(s) that generate these efficiency gains in the next section.
For now, the important point is to note that it would constitute a serious omission from the perspective of justice to leave these efficiency gains on the table, perhaps especially so in a zero-growth economy. Yet, this is precisely what advocates of sufficientarianism and, mutatis mutandis, degrowth theorists tend to do. We should add immediately that this is not a necessary but a contingent feature of these positions.Footnote 8 They focus on ensuring that everyone has “enough” but neglect how the distribution of contributions and incentives affects overall output—even under zero growth. Without addressing contribution, motivation, and efficiency, sufficientarianism provides too thin a foundation for distributive justice in a sustainable economy. Our approach, therefore, goes beyond sufficiency and incorporates efficiency-related considerations, as captured in a reinterpreted difference principle.
A key reason why much of the degrowth literature does not explicitly address the question of contribution to output is its frequent assumption of altruistic or solidaristic motivations. While this assumption is often not made explicitly, most degrowth visions rest on the idea of transformed social norms and cooperative behavior, often associated with post-capitalist narratives. Within this perspective, questions of contribution and incentive structures do not arise, or are assumed away, because individuals act in ways that support beneficial collective outcomes regardless of material rewards.
We deliberately avoid starting from such an extreme assumption about motivation. Our approach rests on the following two considerations: First, we believe that individual motivation can lie anywhere along a spectrum: from (1) radically self-interested behavior, to which Williamson (Reference Williamson1985, p. 47) referred as “self-interest with guile” and which includes a willingness to behave opportunistically and harm other actors if it is to one’s own benefit; via (2) the standard rationality assumption of neoclassical economics, in which actors merely pursue their own interest and are neutral toward other actors’ payoffs (e.g. Mas-Colell et al., Reference Mas-Colell, Whinston and Green1995, pp. 7–9; Samuelson, Reference Samuelson1947, p. 90); to (3) solidaristic or altruistic orientations, where doing good for others increases one’s own utility (cf. Fehr & Schmidt, Reference Fehr and Schmidt1999, p. 818; cf. Becker, Reference Becker1974, p. 1064). For the purpose of developing general distributive principles, we adopt the intermediate assumption of standard rationality. This is done to ensure that the distributive principles we propose remain robust even in societies where solidaristic norms cannot be presupposed. Given that assumptions about the motivational outlook of individuals are key to interpreting the difference principle, it is worth pointing out that this represents a departure from Rawls’ position in this regard. Whereas Rawls and the standard rationality both take individuals to be “disinterested” in the sense of unaffected by the payoffs of others, Rawls in addition assumes that individuals are motivated by a sense of justice. Our argument does not depend on the latter assumption.
Second, we are convinced that, ultimately, which motivation is most prevalent depends on social norms and institutional context. Institutions, social norms, and motivations co-evolve (e.g. Polanyi, Reference Polanyi1944, p. 46). If the distributive principles we defend were to be implemented—limiting inequality, ensuring fair access to ecological resources, and creating transparent and equitable incentive structures—this could itself foster a shift in social norms. Over time, such institutional arrangements will encourage more solidaristic or altruistic behavior, even among actors initially motivated primarily by self-interest. In other words, our baseline assumption of self-interested actors is conservative: it ensures that our principles are workable without presupposing a normative transformation, while leaving open (and welcoming) the possibility that their implementation will gradually reshape motivations in ways envisioned by many degrowth proponents.
Before we move on, a number of clarifications of our use of Rawls are in order. First, we assume that both the principle of equal liberty and of fair equality of opportunity (Rawls, Reference Rawls1971) are satisfied.Footnote 9 We focus our argument on the normative implications of Rawls’ difference principle in the context of a zero-growth economy. Second, for simplicity, we assume a closed economy, just as Rawls does, and take the population level as given.Footnote 10
Third, and most importantly, the question arises of what the relevant distribuenda are. We submit that a discussion of distributive justice under ecological constraints needs to consider (at least) two dimensions—the distribution of economic outputs and the distribution of the rights to use natural resources or emissions. The discussion on the just distribution of economic outputs is of course well-established. What is a just distribution of income and wealth? We turn to income distribution in Section 3.a but bracket the issue of wealth distribution, in part because more has already been said on this issue in a context of zero growth.Footnote 11
Given the binding constraints on ecological inputs, the focus on outputs needs to be complemented with principles for the just distribution of natural resources. What distribution of individual rights to the use of natural resources and emissions is compatible with the biophysical requirements of sustainability? For reasons of space and simplicity, we restrict ourselves to the discussion of carbon emissions and the problem of global warming (Section 3.b). This is certainly not the only issue relevant for a discussion of justice under ecological constraints. We leave discussion of the distribution of the right to use other natural resources or the protection of biodiversity to future work.Footnote 12
3.a. Principles of just income distribution under zero growth
The literature contains a wealth of proposals for the just distribution of social advantage (e.g. Dworkin, Reference Dworkin1981; Nozick, Reference Nozick1974; Rawls, Reference Rawls1971; Robeyns, Reference Robeyns2023; Sen, Reference Sen1992). We believe that an intuition central to one of these accounts, namely, the thought animating Rawls’ difference principle that the incomes at the top of the income scale should stand in some kind of relation to those at the lower end, is an intuition that society will want to hold on to through the transition to a zero-growth economy. At first sight, this might seem surprising, because in Rawls’ writings the relationship between the difference principle and zero growth remains underdeveloped.
Granted, Rawls himself explicitly entertains the possibility of zero growth in passages such as the following: “A further feature of the difference principle is that it does not require continual economic growth over generations to maximize upward indefinitely the expectations of the least advantaged (assessed in terms of income and wealth). That would not be a reasonable conception of justice. We should not rule out Mill’s idea of a society in a just stationary state where (real) capital accumulation may cease” (Rawls, Reference Rawls2001, pp. 63–64). While this passage makes it clear that Rawls does not want to rule out a zero-growth scenario, he does not dwell on the details of such a scenario nor does he ask what implications it would have for distributive justice, in particular, for the distribution of income.
When analyzing what exactly these implications are, some might consider the difference principle a non-starter for a zero-growth economy. If a zero-growth economy implied that the context of justice “was zero-sum, that is, if the issue boiled down to dividing an existing cake, then […] any existing inequality between the more fortunate and the less fortunate would necessarily be unjust, according to the difference principle” (Van Parijs Reference Van Parijs and Freeman2002, p. 203).Footnote 13 Yet, importantly, zero-growth does not entail a zero-sum game. In fact, this is so precisely because of the efficiency gains informing the difference principle. Even in an economy that is zero-growth in the sense that it uses a fixed level of natural resources inputs, some inequalities in income can generate higher incomes for everyone compared to an equal income distribution.
It is now time to investigate in more detail how these efficiency gains ariseFootnote 14 so that we will subsequently be able to determine what level of income inequalities, if any, the difference principle licenses under zero growth. As Rawls himself emphasizes, there are two different ways or channels through which income inequalities make the economy more efficient. “I assume that [economic inequalities] are necessary, or highly advantageous, for various reasons: they are required to maintain and to run social arrangements, or to serve as incentives; or perhaps they are a way to put resources in the hands of those who can make the best social use of them, and so on” (Rawls, Reference Rawls and Freeman1999 [1975], p. 257; our emphasis).
The first, incentive-based rationale underpins the standard interpretation of the difference principle. Recall that its explicit purpose is to mitigate the arbitrariness of the distribution of natural endowments (Rawls, Reference Rawls1971, chapter 12). Since the talented do not deserve their talents, they should only be allowed to benefit from them by way of an income premium to the extent that these inequalities also better the position of the least advantaged. The difference principle sanctions income inequalities as incentives for the talented to make economic contributions that benefit all members of society. A rising tide lifts all boats as it were. The efficiency gains here stem from the motivational impact inequalities have. Incidentally, note that this logic extends to situations involving individuals with equal talents. Incentives can motivate some to perform socially beneficial tasks that others have the requisite talent to fulfil, but do not want to do.Footnote 15
In his seminal critique of the difference principle thus understood, GA Cohen (Reference Cohen2008) has argued that Rawls’ approach fails because it relies on a bargaining conception of distributive justice. The high-income earners holding out for an income premium to make their productive contribution amounts to a form of blackmail. While any income premium they can obtain in this fashion might be expedient to pay for society given the lack of alternatives to motivate the talented to contribute, Cohen leaves no doubt that income inequalities of this type are unjust.
Let us add two observations in this context. First, the Rawls-Cohen exchange exposes a dilemma for the sufficientarian position discussed earlier. Either the sufficientarian does indeed grant everyone the same, “sufficient” income, in which case they will forfeit the efficiency gains offered by the difference principle; or they need to make unrealistic assumptions about human motivation that will induce the talented to make their valuable contribution without receiving any income premium. Both options are unattractive, which reinforces the need to look beyond sufficientarianism. Our second observation points out that both Rawls and Cohen might be overestimating the role that innate talents play in explaining differences in productivity between individuals. To the extent that gains in productivity are due to the social division of labor between different jobs and roles in the economy rather than to exogenous individual talent, the gap between justice and expedience might be smaller than Cohen fears (Dietsch, Reference Dietsch2023). After all, if productivity gains arise endogenously rather than from exogenous talent, this diminishes the justification for talented individuals to demand a premium in the first place.
We now turn to the second rationale of the difference principle indicated in the above quote from Rawls. When Rawls states that inequalities “are a way to put resources in the hands of those who can make the best social use of them,” he is referring to the allocative efficiency of markets and the signaling function that income inequalities fulfil in this context. Van Parijs describes income inequalities thus understood as “enabling devices” (Van Parijs Reference Van Parijs and Freeman2002, p. 204). They enable societies to obtain cooperative benefits they would not be able to access otherwise.
What exactly is the connection between the justification of economic markets on the one hand and the normative evaluation of income inequalities on the other? The relationship between the two is an instrumental one. Some level of inequalities is required, so the argument goes, to make markets work effectively and to secure the benefits they can provide for society. The idea at the heart of this rationale of the difference principle is that we need some inequalities not to motivate some select few to make economic contributions but to ensure that competition for positions of responsibility and for resources result in a more efficient working of the economy. The efficiency gains in this case stem from the information value of inequalities as part of the price mechanism.Footnote 16
In sum, the difference principle rests on a double foundation that appeals to motivational efficiency on the one hand and to allocative efficiency on the other. In practice, there is likely more overlap between these two rationales than our analysis here suggests. Rejecting one element of this double foundation would not be sufficient for undermining the force of the principle. Now that we have rehearsed the contours of the difference principle, what are its implications in a zero-growth economy?
Absent from Rawls’ cursory remarks on zero growth is a serious consideration of the environmental constraint. This constraint, we shall now argue, plausibly entails that the income inequalities sanctioned by the difference principle will be limited. To see why this is so, let us start with a simplified numerical example, comparing different possible distributions of income.Footnote 17
Even though, as mentioned earlier, Rawls was careful not to reject a zero-growth economy, generally speaking he formulated his theory of justice in a “extractivist spirit.” What do we mean by this? Rawls’s remarks both in the context of the difference principle and in the context of his just savings principle (cf. Rawls, Reference Rawls2001, pp. 158–162), which applies the logic of the difference principle to an intergenerational context, neglect the social and environmental cost of extensive economic growth. Consider the following statement: “A feature of the difference principle is that it does not require continual economic growth over generations to maximize upward indefinitely the expectations of the least advantaged measured in terms of income and wealth” (ibid., 159; our italics). While growth is not required, the statement implicitly assumes that growth, if submitted to the just constraints of the difference principle, positively correlates with the expectations of the least advantaged. In other words, Rawls implicitly assumes that if society grows, this will lead to more social primary goods to be distributed. His writing is not alive to the insight, highlighted in Section 2 of this paper that, given planetary limits, extensive economic growth will in fact result in fewer social primary goods for the least advantaged including, but not limited to, income and wealth.
Table 1 illustrates the trap that an extractivist framing of the difference principle falls into. It leads one to assume that extensive growth will lead us to Scenario 3 (short-term), while overlooking the fact that this trajectory will eventually, due to catastrophic natural degradation, result in Scenario 3 (long-term).Footnote 18 You might interject, rightly, that our remarks do not uncover a flaw in the logic of the difference principle itself but merely require adjusting its interpretation under environmental constraints. In one sense, we agree. The difference principle, in light of the negative externalities of continued extraction for everyone, including the least advantaged, calls for a constraint on this extraction. It reaffirms zero extractive growth as a moral requirement, because this extractive growth would not only breach environmental boundaries in the short term (cf. Section 2) but would also violate the social constraint—not worsening the position of the least advantaged—in the long term.
Growth scenarios
Table 1. Long description
The table is structured under the main heading The extractivist frontier. It is divided into two primary categories: Zero growth (output generated by a constant or declining bundle of resources and generating a constant or declining amount of emissions) and Extensive growth (growth in resource extraction and emission generation).
Under Zero growth, there are two columns:
* Scenario 1: High-income earners at 5, Low-income earners at 5.
* Scenario 2: High-income earners at 7, Low-income earners at 6.
Under Extensive growth, there are two columns:
* Scenario 3 (short-term): High-income earners at 10, Low-income earners at 7.
* Scenario 3 (long-term): High-income earners at 6, Low-income earners at 3.
However, we will now suggest that adjusting our interpretation of the difference principle along these lines has more significant implications than one might suspect at first sight. Pace Rawls, the difference principle calls for a limit to the income inequality warranted under zero growth.Footnote 19 Consider the two rationales of the difference principle in turn.
First, an income premium as an incentive for the talented to deploy their skills: There is a trade-off here between two considerations. On the one hand, as a society we do indeed have an interest in motivating them to contribute, because this is part of what makes Scenario 2 accessible; on the other hand, given that we are now working with a limited amount of resources, there will also be costs associated with granting the talented a larger share of the pie. As emphasized earlier, we are not in a zero-sum context. Yet, compared to an extractivist scenario without environmental constraints, the point where additional incentives to the talented stop benefiting everyone else will be reached much sooner.Footnote 20 Furthermore, notice that one type of incentives is ruled out altogether under zero growth, namely, the incentives to extract a growing amount of resources.
Second, income inequalities as part of the price mechanism to direct resources, including labor, to its most productive use: The key question here is how large income inequalities need to be in order to play this role effectively. On this point, we agree with John Maynard Keynes: “There are valuable human activities which require the motive of money-making […] But it is not necessary for the stimulation of these activities […] that the game should be played for such high stakes as at present. Much lower stakes will serve the purpose equally well, as soon as the players are accustomed to them” (Keynes, Reference Keynes1953, p. 374).Footnote 21 Once again, it is plausible to think that a limited level of income inequality is called for by the difference principle.
The attentive reader will raise the following objection to our argument. One of the starting points of the paper states that the goal of decoupling emissions from growth or, in other words, the prospect of intensive growth has to this day proven elusive. By appealing to the logic of the difference principle, that is, the idea that some income inequality can make higher incomes for everyone accessible, are we not contradicting our earlier assumption? In other words, do the efficiency gains offered by the difference principle represent evidence of a kind of decoupling?
This point is well taken and invites an important clarification and refinement of our position. Consider three comparisons, one static, the other two dynamic. The first, static comparison, depicted in the two columns on the left side of Table 1, shows that for any given resource input, some inequality yields efficiency gains through the two mechanisms we have discussed—incentives and allocative efficiency. Here is one counterfactual to illustrate this point. Take today’s economy and hold fixed its resource input. Now pay everyone the same income instead of the (arguably excessive) income differentials we actually observe. If the logic of the difference principle holds, then output in this counterfactual strictly egalitarian society will be smaller.Footnote 22 The second, dynamic comparison depicted on the right side of Table 1 looks at economy A at time 1 with resource use and emissions (RU&E) 1 and compares it to economy A’ at time 2 with RU&E 2, where RU&E 2 > RU&E 1. RU&E2 is ruled out by the environmental imperative. It is correct, and this leads us to the third, also dynamic, comparison, that this leaves open the possibility of an economy with a fixed resource and emission level refining its use of these resources over time and experiencing growth as a result. Compare economy B at time 1 with incentive level and social division of labor (IL&SDL) 1 with economy B′ at time 2 with IL&SDL 2.Footnote 23 To illustrate what is at stake here, imagine a clean fusion technology becomes available and allows us to produce the same or even more goods and services without transgressing the extractivist frontier. If economy B′ is bigger than economy B, this will be a case of intensive growth.
Our take on intensive growth of the latter kind is the following. Intensive growth is real, but slow. While the static comparison 1 shows that the cumulative effects of intensive growth over time are significant, it would be naïve to put too much hope in significant intensive growth in the short term. This, we believe, is what explains and renders compatible the force of the difference principle analyzed in this article with the observation cited at the outset (Hickel & Kallis, Reference Hickel and Kallis2020) that decoupling of the scale required today to maintain current growth rates is not forthcoming. Another way to make this point is by adding an asterisk to the “zero growth” on the left-hand side of Table 1. Zero growth in terms of resource use does allow for the possibility of intensive growth, but such growth is negligible compared with the kind of extensive growth that we can no longer afford.
In sum, these considerations yield a conclusion that represents a significant departure from Rawls’ own interpretation of the difference principle. Despite his gestures toward the possibility of zero growth, his analysis was formulated in an extractivist spirit of an extensively or intensively growing economy. In that context, the difference principle imposes no limit on the magnitude of income inequalities. By contrast, we hope to have shown that a zero-growth economy, while allowing for some level of income inequality, plausibly calls for a firm limit on this inequality. For the purposes of this paper, we will refrain from taking a position on the level of income inequality at which this limit should be imposed. In fact, we believe that determining this level will need to be done at least in part by trial and error. That said, the last section of the paper will provide more detail on the kinds of instruments that might be employed to implement a policy of limited income inequality.
Even at the level of principle, it is worth adding an observation on the political feasibility of a cap on income inequality. At least with respect to labor income, both Britain and the United States have experimented with levels of progressive taxation that in effect amount to such a limit. The highest tax bracket on incomes and estates was taxed at 98% in Britain in the 1940s as well as for the latter part of the 1970s (Piketty, Reference Piketty2014, p. 507), and “over the period 1932–1980, nearly half a century, the top federal income tax rate in the United States averaged 81 percent.” (ibid.) If it was possible then, there is no reason why it should not be feasible again. Incidentally, Piketty argues that it was only the dismantling of these progressive tax rates started by the Reagan and Thatcher governments in 1980 that led to explosion of executive salaries (ibid., 508–512).
3.b. Principles of just emission allocation under zero growth
For any given growth rate—positive, zero, or negative—there is the question of who has the right to contribute to the emissions associated with that growth rate. Just as in the case of income in the previous section, when the overall level of emissions is capped in a zero-growth economy in order to avoid runaway global warming and harms to members of future generations, this issue becomes more acute.
To situate our contribution in the fast-expanding literature on just emissions, consider the following stylized history of this literature.Footnote 24 Early contributions appealed to a variety of arguments to defend the idea that individuals should have equal emission rights, where the level of the rights would be informed by the overall carbon budget compatible with keeping global warming to a tolerable level (e.g., Gosseries, Reference Gosseries2005; Jamieson, Reference Jamieson, Gardiner, Caney, Jamieson and Shue2010; Vanderheiden, Reference Vanderheiden2008).
Among the objections raised against this view, several scholars pointed out that it is misleading to think about the just distribution of emission rights because they are not what ultimately matters from the perspective of justice (e.g., Caney, Reference Caney2012; Hayward, Reference Hayward2007). What matters is individuals’ standard of living and the goods required to promote this standard of living independently of one’s conception of the good life. However, you can have a good standard of living without emitting much, provided you have access to clean energy. Thus, so the argument runs, emissions are peripheral from the perspective of justice.
Notice that this normative idea aligns perfectly, and can be used to justify, the dominant practical approach to emission reduction. Carbon pricing, in the form of either a carbon tax or in the form of a cap-and-trade-scheme, is widely regarded as the most effective way to reduce emissions (e.g., Baranzini et al., Reference Baranzini, van den Bergh, Carattini, Howarth, Padilla and Roca2017). Putting a price on carbon will reduce emissions where it is most effective to do so, but as such carbon pricing is not sensitive to who will end up reducing their emissions in the process, which explains why the conventional wisdom today sees no problem with tradeable emission permits. Ensuring that no one falls under a certain threshold in terms of standard of living can be achieved, for instance, by combining carbon taxes with rebates for low-income individuals (e.g. Mintz-Woo, Reference Mintz-Woo2023).
In sum, the conventional wisdom both in the normative literature on emission rights and in the policy literature on carbon pricing is focused on two elements: overall emission reduction while ensuring a minimum individual standard of living.
We believe that this approach suffers from an important shortcoming whose importance becomes accentuated in a zero-growth economy. To see this shortcoming, consider the key insight from the literature on socioenvironmental inequality (e.g. Chancel, Reference Chancel2020). Emissions correlate with wealth. The 10% highest individual emitters are responsible for somewhere between 50% (Chancel & Piketty, Reference Chancel and Piketty2015) and two thirds (Schöngart et al., Reference Schöngart, Nicholls, Hoffmann, Pelz and Schleussner2025) of individual emissions.
Does this matter from the perspective of justice and, if so, how? When the focus lies on overall emission reduction and on a minimum standard of living, the fact that a minority of individuals are responsible for the lion share of emissions seems not particularly problematic from the perspective of justice. However, when considering our starting point here, namely, the question of who has the right to engage in the limited emissions of the remaining carbon budget in a zero-growth economy, this changes things in two ways.
First, rather than perceiving emissions as something that is contingently conducive to certain goods—activities that promote individual well-being—emissions should arguably be considered as a bad. As everyone in the literature accepts, they represent a bad because they harm the members of future (and present) generations.
Second, individuals who are responsible for bringing about this bad have a moral obligation to reduce it. Consider the following analogy with the phenomenon of absolute poverty. Those with a larger ability to pay arguably have a stronger moral obligation to contribute to alleviating absolute poverty (e.g. Singer, Reference Singer1972). Notice that this obligation holds even on the unrealistic assumption that the wealthy have acquired their riches under just institutions and thus have a legitimate entitlement to it. Now consider emissions. Plausibly, those with a larger ability to reduce their emissions, because they emit more to begin with, have a stronger moral obligation to do so and, incidentally, one that they should not be allowed to buy themselves out of. Once again, this obligation holds even on the unrealistic assumption that the wealth of the high individual emitters was acquired under just institutions and that they thus have a legitimate entitlement to it and use it in carbon-intensive ways. If we relax this assumption, the obligation of high-emitting individuals will become even stronger (cf. Dietsch, Reference Dietsch2024).
When emissions are viewed as a “bad” rather than as a “means to a good,” the distribution of the right to emit does become a question of justice in its own right, especially under the biophysical constraints that today’s economies are subject to. What represents a just distribution of this right? We distinguish three different contexts here.
First, the right to emit that individuals have in their role as consumers. We do not see any plausible argument for why any consumers should have a right to emit more than others, even if one assumes that they are legitimately wealthier. As consumers, we all have an equal moral obligation to reduce emissions and contain global warming. Today’s dominant normative and practical approach with its focus on overall emissions and carbon pricing misses this important point, thus making it both ineffective and unjust.
It is ineffective because the demand of the rich polluters responsible for the lion share of emissions is relatively price insensitive. Thus, when faced with a flat-rate carbon tax, the actual reduction in carbon-intensive behavior by the rich will be minimal—they will just pay the tax. It is unjust because the idea that the rich are able to pay for their “emission sins” whereas the less well-to-do bear the burden of adjustment in terms of actually changing their consumption behavior appears problematic.Footnote 25 It will be even more troublesome if the underlying wealth inequality against the background of which this happens is itself questionable from the perspective of justice. These considerations illustrate once again how taking seriously socioenvironmental inequality has implications for how we approach distributive justice in emission rights.
Second, things are more complicated when looking at individuals in their professional roles. Here, just as in the case of the income distribution, the logic of the difference principle might justify an unequal distribution of emission rights. In order to attain the most efficient organization of the economy, it might be necessary to let some individuals produce more emissions in exercising their jobs than others. To illustrate, suppose that for company X to run efficiently, the CEO needs to engage in more (carbon-intensive) air travel than the average employee.
Whether or not this is in fact the case is ultimately an empirical question. Plausibly, in the age of videoconferencing, the case for the CEO having to travel more has become weaker. We do not take a stance here on the underlying facts, but merely make the conditional argument that if the efficient running of the economy requires some asymmetry in emissions between certain professional roles, then a justification for this asymmetry can be provided based on the difference principle.Footnote 26 Implementing such asymmetric emission rights in practice would have to include safeguards against abuse of the system.Footnote 27
Third, what obligations do individuals have to limit their emissions as potential parents? Given that for most people the decision to have children is likely to be the most consequential in terms of emissions over their lifetime, some have defended one-child policies (e.g. Conly, Reference Conly2016). Since we have argued that emissions constitute a bad, it seems incumbent upon us to somehow hold individuals responsible for the emissions generated by their children.Footnote 28 However, we shy away from this step for two reasons. First, while it is true that the decision to have children or not lies with parents, the emission intensity of the consumption choices of the children in question is up to them. Therefore, responsibility for these emissions also lies with the children. Second, we have doubts about the effectiveness of a one-child policy as a means to lower emissions. As pointed out earlier, wealth strongly correlates with emissions. Therefore, a single child of rich parents is likely to emit more than two or three children born into a poorer family combined. In light of these facts, while our arguments in this paper commit us to forceful measures on other issues, adopting a strongly paternalist policy when it comes to population control strikes us as a step too far.
4. What Policies to Implement These Principles?
If absolute limits both on income inequalities and on individual emissions are what justice requires in a zero-growth economy, this raises the question of what policies could be used to effectively implement these principles in practice. We believe that the answer to this question is underdetermined, that is, different policies and policy mixes might be available to do this job. However, the fact that the principles we have defended in previous sections in some respects represent a significant departure from the normative outlook that is dominant today suggests that innovation in terms of policies will be required in a zero-growth economy, too.
Our objective in this section is to briefly discuss two policies—one for income and another for emission rights—that seem particularly promising candidates to effectively promote the principles above. The first is the idea of a maximum wage ratio, the second that of individual carbon budgets. This section will not provide a comprehensive evaluation of either but emphasize the continuity between the level of principle and policy.
4.a. A maximum wage ratio
Rather than attempting to identify a limit on income inequality in absolute terms, which would require regular adjustments for inflation and thus open the door to watering down, a limit defined in relative terms looks more promising. A maximum income ratio (e.g. Pizzigati, Reference Pizzigati2018) represents one way to do this. The central idea is to establish a link between the highest and the lowest income.
A maximum income ratio is in perfect sync with the interpretation of the difference principle defended in Section 3.a. It is designed to allow some inequality, namely, enough to promote an efficient allocation of resources in society, but not so much that the share of the privileged negatively affects the share of low-income individuals, which would make it socially unsustainable.
The Swiss population voted on a maximum income ratio in 2013. The idea of limiting the wage gap between the CEO and regular workers within corporations to a multiplier of 12 was rejected in a two-thirds to one-third vote.Footnote 29 From the perspective of justice, a maximum income ratio would ideally apply at the level of society rather than within corporations only, but the latter would represent a step in the right direction.
Someone might object to such a proposal that, despite our declarations to the contrary, a maximum income ratio is likely to undermine allocative efficiency because it interferes with the “free” operation of markets and thus with the proper functioning of the price mechanism.
Two points in response. First, there is no such thing as a “free” market. All markets are embedded in, and presuppose, a set of legal and institutional rules about property, contracts, labor regulation, and so on. Second, from this perspective, a maximum wage ratio merely represents a different set of “rules of the game” that market participants need to respect. Again, we agree with Keynes (Reference Keynes1953, p. 374) on this point (see above on p. 10). No doubt, some players will not get accustomed to these rules and thus reduce their labor supply. However, recall from Section 3.a that while this might trouble one in the context of the extractivist spirit of a growing economy, in an economy that accepts today’s environmental constraints to espouse zero growth, this would tend to be welcome news.
4.b. Individual carbon budgets
If justice requires limited and equal individual emission rights for consumers, rather than merely a cap on collective emissions that is then implemented through some form of carbon pricing, the obvious policy implication is to use a mix of regulation and prohibitive carbon pricing to make individuals respect their individual carbon budget.
For example, luxury carbon-intensive activities such as operating private jets, yachts, or luxury cars should simply be banned. For other activities such as commercial air travel, construction, heating and cooling homes, etc., a mix between regulation and a progressive carbon tax (Chancel & Piketty, Reference Chancel and Piketty2015; Dietsch, Reference Dietsch2024) represents a plausible policy approach.Footnote 30 Incidentally, this kind of policy mix, by powering aggregate demand, would also help with achieving the goal of zero growth.
One question and challenge that arises here concerns a precondition of implementing individual carbon budgets, namely, the feasibility of measuring individual emissions. While fine-grained measures of all carbon-intensive consumption by individuals does indeed seem utopian—think, for instance, of individual meat consumption—good proxies do exist for the two main categories of carbon-intensive consumption: transport and housing. Information on private ownership of aircraft, boats, and vehicles, on passenger information for commercial flights, on the footprint and energy efficiency of houses, on how we heat and cool our homes—all this information is already available today. Given today’s information technologies, compiling this information to produce viable estimates of individual annual emissions is feasible (Dietsch, Reference Dietsch2024).
5. Conclusion
This paper has set out a framework for distributive justice suited to an economy operating within binding biophysical limits. Recognizing that most existing theories of justice take sustained economic growth for granted, we have examined how their core commitments can be reformulated for a context of zero, or even negative, growth. Our strategy has been to articulate principles that are normatively robust and, in the first instance, independent of any particular economic system or institutional arrangement.
We have defended two complementary principles. Concerning the just distribution of income we put forward a modified version of the difference principle, arguing that the context of a zero growth economy calls for a cap on income inequalities. The rationale for this cap is grounded in the fact that the efficiency gains of a zero growth economy are limited compared to those of an extractivist economy of the kind that Rawls’s analysis focused on. This entails that the benefits of paying some individuals an income premium will be limited, too.
With respect to the just distribution of ecological resources, we argue that the use of scarce environmental resources, such as carbon budgets, must remain within scientifically defined boundaries, and that the allowable use should be allocated among individuals in an equitable manner, for example, on an equal per capita basis. Deviations from strict equality may be permissible for individuals in their professional roles in line with the difference principle. Together, these principles connect distributive justice on both the input and the output side of the economy, integrating ecological sustainability into the heart of the distributive framework.
In this paper, we have intentionally proceeded in a two-step manner: first articulating principles of distributive justice under conditions of biophysical constraint and only then turning to policy implications. Yet, the analysis inevitably reopens the “system question.” If justice under zero growth requires both strict ecological ceilings and limits on income inequality, it is not obvious that these requirements are fully compatible with the structural dynamics of contemporary capitalism. The accumulation imperative, reinforced by competition and interest-bearing capital, creates endogenous pressures toward expansion. A regime committed to permanent zero growth would, therefore, face significant tensions within a system whose stability has historically relied on growth.
Here, it is instructive to recall Rawls’s own institutional reflections. While “justice as fairness” is often read as compatible with welfare-state capitalism, Rawls explicitly rejected this interpretation. He argues that welfare-state capitalism fails to secure the fair value of political liberties and fair equality of opportunity, since it tolerates persistent concentrations of wealth and productive assets. Instead, Rawls expresses a preference for either a property-owning democracy or a form of liberal (market) socialism, both of which aim to disperse ownership of productive capital and prevent the domination of economic life by a small class (Rawls, Reference Rawls2001, pp. 135–140). In this respect, Rawls’ thinking already contains resources for thinking beyond standard capitalist institutional forms.
Whether the principles developed here ultimately require a transition toward a post-capitalist order—and if so, which variant—remains an open question. Determining the institutional configuration best suited to realizing limited inequality and equitable ecological allocation is a task for further work. What can be said, however, is that movement in this direction does not necessarily involve an abrupt or wholesale restructuring of the economic system. Gradual reforms that reshape incentive structures, ownership patterns, and ecological constraints may cumulatively alter the systemic logic itself. The policies discussed in this paper, a maximum wage ratio and individual carbon budgets, would represent concrete steps toward institutional arrangements more compatible with justice under conditions of planetary limits, regardless of whether they are ultimately embedded in a reformed capitalism or a post-capitalist alternative.
Acknowledgments
Previous versions of this paper were presented at a workshop on climate change hosted by the Canadian Journal of Philosophy, the Montreal Social Justice Theory Workshop, the PPE Europe Annual Conference, the MANCEPT workshops, the Politics of Limits Conference at the University of Duisburg Essen, the Annual Conference of the Political Economy Section of the German Association of Political Science (DVPW) and both the Philosophie Kolloquium of Stefan Gosepath and the IPE Werkstatt at Freie Universität Berlin (all in 2025) at the philosophy colloquium at the University of British Columbia and a lecture series on socio-ecological transformation at Freie Universität in 2026. We thank the participants at all these events for their helpful feedback. Special thanks go to Lisa Herzog, Louis-Philippe Hodgson, Matthias Kranke, Philipp Lepenies, Colin Macleod, Christoph Sorg, and Rafael Ziegler for their written comments. Thank you also to Gabriel Manriquez Urra for his research assistance.
Peter Dietsch is a professor in the Philosophy Department at the University of Victoria. He works on issues at the intersection of economic inequality, climate change, and finance. Dietsch is the author of Catching Capital—The Ethics of Tax Competition (Oxford University Press, 2015), co-author of Do Central Banks Serve the People? (Polity Press, 2018), co-editor of Global Tax Governance—What is Wrong with It and How to Fix It (ECPR Press, 2016), and author of numerous journal articles.
Thomas Rixen is Professor of International and Comparative Political Economy at the Otto Suhr Institute of Political Science, Freie Universität Berlin. His research interests and teaching are in (de-)globalization, institutionalist theory, and economic policies, in particular taxation and financial regulation. He is currently developing a research agenda in the political economy of post-growth. He is author of the monograph The Political Economy of International Tax Governance (2008) and co-editor (with Peter Dietsch) of Global Tax Governance. What’s wrong with it and how to fix it (ECPR Press, 2016) and Historical Institutionalism and International Relations. Explaining Institutional Development in World Politics (Oxford University Press, 2016—with Lora Viola and Michael Zürn). He has, amongst others, published in European Journal of International Relations, FinanzArchiv, Journal of Common Market Studies, Regulation & Governance, Journal of Theoretical Politics, Journal of Political Philosophy, and Review of International Political Economy.
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