The Folly of Growth

The Folly of Growth

OK, not fiction again, but surely relevant to anyone interesting in reading or writing near-future SF. This concerns the 18th October issue of New Scientist magazine, which has several linked articles under the general heading "The Folly of Growth". These explore the contention that the world's economic system, based on endless growth, is fundamentally unsustainable. Authors of the articles include a Professor of Sustainable Development, the founder of the David Suzuki Foundation which investigates how society can live in balance with the natural world, a former senior economist at the World Bank (now a Professor of Ecological Economics), the Policy Director of the New Economics Foundation, the author of 'The Bridge at the End of the World: Capitalism, the Environment, and Crossing from Crisis to Sustainability', and the chair of the board of the Transnational Institute which addresses global problems.

Collectively, these make the point that our economic system needs constant growth to be successful, but there are finite limits on fertile agricultural land, cheap fresh water and other natural resources. With the world's population constantly growing, and everyone trying to improve their standard of living, this can't go on forever (or even for much longer). Let's look at the problems in more detail.

Underlying everything is the continuing increase in the world's population. Yes, I know that this is likely to level off and may even begin to decline when (if?) the poorer countries become richer. But by the time that happens, it will be a lot higher than it is now, and it is already far too high to enable everyone to enjoy a comfortable standard of living. One of the authors points out that if everyone on the planet enjoyed the same level of per-capita resource use as the EU, the resources of five Earths would be needed to supply that. If the global resource use were raised to the level of US citizens, fifteen Earths would be needed.

This links to the second problem, which is the entirely legitimate aspiration of the poorer parts of the world to achieve the same standard of living as the richer part. As they work towards achieving that, there will inevitably be a massive impact on resource demands.

The third problem, also linked to the others, is that increasing industrialisation is having a significant impact on our atmosphere, which is in turn beginning to affect our climate. No-one knows what this will lead to and where it will end, but given that our current pattern of agriculture, settlement and infrastructure is based on existing patterns of climate and sea levels, any change from these will be likely to cause serious problems.

Coincidentally, many related points were made in the recent "Living Planet Report" by the WWF, the Zoological Society of London and the Global Footprint Network, which argues that the planet is headed for an ecological "credit crunch", with our current demands on natural resources overreaching what the Earth can sustain by almost a third.

Economists may argue that there is no necessary link between growth and resource use, and point to the experience of Western European countries to prove this. But the use of resources in these countries has been kept down by exporting much of the production of consumer goods to cheap-labour economies elsewhere in the world, so those resources are still being used up somewhere to satisfy western demands.

Also, the EU situation of a relatively static use of resources does not apply in those less-developed countries which are now aiming for a dramatic improvement in their standard of living. This means motorbikes instead of bicycles, cars instead of motorbikes, flying off on foreign holidays, eating a lot more meat, buying lots of fridges, freezers, washing machines, TVs, DVDs and other nice-to-haves, plus the associated huge increase in the demand for power. The classic case is China (with a population three times that of the EU 15) whose use of all kinds of resources has been accelerating rapidly; partly, of course, to satisfy western demand for consumer goods.

The ultimate consequences of current economic trends will be ever-increasing prices for natural resources (and everything using them) as a result of the combination of growing demand and increasing scarcity. We see this in miniature with the rise in the price of oil over the past few years. This has recently dipped due to nervousness over the international recession, but no-one can reasonably doubt that this is anything other than a short-term respite. The underlying trend is for a continuing increase in demand, but the quantity of oil in the ground is finite and it becomes ever more expensive to extract.

The articles suggest ways in which we can ameliorate the problems and achieve long-term sustainability, but they involve major changes to our current economic system. Of course, no politician wants to hear that, because we (the short-sighted public) don't want any restrictions on our ability to burn up resources as we please, and politicians only look as far ahead as the next election. Business doesn't want to know either, as it would hit their profits. So in dealing with the present economic crisis, we charge on towards the iceberg while arguing about rearranging the deckchairs.

The New Scientist articles make the point that some growth is still sustainable, as long as it is based on genuine improvements in the efficiency with which resources are used. Advanced technologies can help here, but they are most likely to be used in the richer countries which can afford them. What should we be doing? Trying to convert to a steady-state economy, basically by using two measures: a cap-and-trade system under which companies can buy and sell emissions permits, and a change in the basis of taxation, to tax heavily resources at the point at which they are removed from the biosphere: for example oil as it is pumped from the ground, or fish as they are removed from the sea. This will stimulate the development of renewable energy sources and the search for sustainable alternatives to current practices. The tax effect will be regressive (hitting poorer people the hardest) so some of the income will need to be used to fund benefits programmes for them: the rest could be used to cut direct taxation. Other economic measures will aim to reduce interest rates to a very low level and force banks to keep large reserves, limiting their scope for risky lending.

Like it or not, we will eventually be forced to do things in a different way, and that will mean a significant reduction in the use of resources by the wealthy countries. Our choice is between gradually altering our economic system to introduce these changes in a planned way, or to do our very best to ignore the issue for as long as possible. No prizes for guessing which is more likely.

Nothing could better illustrate the schizophrenic attitude of our politicians than the coincidence in mid-October this year of the UK's Secretary of State for Energy and Climate Change committing the country to meet much tougher CO2 reduction targets (an 80% cut by 2050), on the same day that the Prime Minister was putting pressure on oil companies to reduce the price of fuel so we can all afford to burn more of the stuff. It reminds me of the old prayer of the sinner, which went something like: "Lord, let me be virtuous – but not yet!"

(This entry is cross-posted from my science-fiction & fantasy blog.)