You are BANG on but the solution to this problem needs to be extremely carefully considered.
For one, keeping the economy going and growing is actually our only chance to tackle climate change and fossil fuel egress.
The reason the western nations have been able to reduce their per-capita consumption is because of accumulated wealth during their booms (and colonialism) that they were then able to spend on efficient infrastructure, whether nuclear, solar or wind. China is smart and collectivist enough to achieve the same, but the rest of the world isn't yet.
There have been incredible advancements in efficiencies and costs of things like solar, making it cheaper, but to truly migrate the world still requires massive expenditures and investments into energy grid upgrades, electric vehicle charging infrastructure, etc.
All of this requires wealth, which requires a growing economy, which requires optimism. Because the economy is only as positive as the optimism of the populace.
Optimism isn't rational. There has never been a time in Human history (maybe for less than a decade in the 90s between the fall of the cold war and 9/11, as long as you weren't in the balkans) when the logical decision would've been to be optimistic about the future. Yet people did anyway out of necessity/obligation to their children, out of religion, out of greed, out of empathy. Whatever is the reason it is required.
And this is what I see lacking today - especially with Gen Z, who's education we (well - their Gen X parents, but in the society) fucked up by telling them the truth.
We told them the world is going to hell, that anything good they had is based on generations of blood and exploitation, the world is unfair and is full of rich people getting richer, and nepotism.
And, I actually believe everything in that sentence is true! But it's irrelevant. Because it's no foundation for actually DOING something about the problem. Instead it's an exercise to disengage, to decide not to participate in society, to sink deeper into online social spaces that this generation was raised on by being exposed to screens & social media too early. So what do they get attracted to instead? Red pill, manosphere, 4chan, and eventually Trump.
Because here come people with solutions - there IS a problem, but it's not your fault - it's THEIR fault (women, immigrants, foreigners).
How can you not be attracted to it?
The left has no alternative answer for this. They/we/me want a better world, but we focus on equalization of justice - to bring up the disadvantaged to the level of the dominant class - but no plan for what to do next. If western prosperity was borne out of exploitation, you can't simply raise the formerly-exploited to the high water mark, and expect to be able to continue growing it at the same pace. (That's before even getting into ongoing exploitation that funds the entire western world by taking advantage of the 3rd world)
And yet, you also can't sink into apathy. You need awareness of the realities of the situation, but you need to empower people that they can make a change...that they can participate. And that they can overcome.
Some of this requires self-delusion, but ultimately it needs inspiration. Of which the left is extraordinarily low on right now.