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Limits of Growth- revisited with thirty years of Reality

“There are no such things as limits to growth, because there are no limits to the human capacity for intelligence, imagination, and wonder.”
- U.S. President Ronald Reagan

In 1972, Club of Rome produced a famous report “The Limits to Growth”.

It presented some challenging scenarios for global sustainability, based on a system dynamics computer model to simulate the interactions of five global economic subsystems, namely: population, food production, industrial production, pollution, and consumption of non-renewable natural resources.

In the 1980s and 1990s, the study was attacked, demonized, and ridiculed in all possible ways. With the apparent end of the oil crisis, in the late 1980s, the ensuing general wave of optimism consigned the Limits study to the dustbin of "wrong" scientific ideas.

It gave three scenarios, namely,
(a) standard run – the business as usual growth that simply ignores the negative effects on the five variables,

(b) comprehensive technology – response by world systems in terms new and low-waste technology evenly penetrating into the whole world and

(c) steady state – response by world systems in terms of new economic price-mechanisms that takes into account the environmental costs and thereby limits the growth rate within an equilibrium.

Common experience shows that world is moving along scenario (a) that is standard run.

A new study from the CSIRO examines the then ground-breaking modelling used for the book, which forecasts a global ecological and economic collapse coming up in the middle of the 21st Century, and finds the forecasts to be on-track.

The analysis shows that 30 years of historical data compares favorably with key features of a business-as-usual scenario called the “standard run” scenario, which results in collapse of the global system midway through the 21st Century.

A Comparison of the Limits to Growth with Thirty Years of Reality"- Graham Turner

Recently, New Scientist magazine ran an article marking forty years since the publication of The Limits to Growth. The piece both echoes and cites earlier positive re-appraisals of Limits to Growth by Graham Turner.

In 2011 Ugo Bardi analyzed the ‘The Limits to Growth’, its methods and historical reception and concluded that The warnings that we received in 1972 … are becoming increasingly more worrisome as reality seems to be following closely the curves that the … scenario had generated.

Australia

It's assumed that Australia is a vast, empty continent with huge unclaimed resources for a big population, and that there are no limits. However, we have the highest rate of mammal extinctions in the modern world, since European settlement.

The loss of endemic species is indicative of the destruction of ecosystems and land clearing/degradation.

Australia has only a small amount of arable land, and thin "green" strips on the East and West coasts. The rest is semi-arid desert. We are a small nation in a big landscape, and our population is being driven far too high. Nothing can be achieved by having 50 million in preference to 23 million. On the contrary, it will compromise our long-term survival and sustainability into the future of resource declines.

Our levels of production and consumption are far too high. We can only achieve them because we few in rich countries are grabbing most of the resources produced and therefore depriving most of the world's people of a fair share, and because we are depleting stocks faster than they can regenerate.

Turner compared real-world data from 1970 to 2000 with the business-as-usual scenario. He found the predictions nearly matched the facts. There is a very clear warning bell being rung here, he says. We are not on a sustainable trajectory.

John Stuart Mill economist, philosophiser

More than 150 years ago John Stuart Mill wrote that in advanced capitalist countries it is necessary to establish, what he called, a stationary state of the economy in order to limit unnecessary growth.

He said that this is to prevent excessive urbanization and overcrowding, to stop the environment being damaged, and to avoid material prosperity being overvalued. No one listened to him or heeded his warnings. We could have saved ourselves and the Planet so much grief.

With 43,560 square feet per acre, by the year 2970 there will be only one square foot of land per person.  Everywhere.  On the entire planet. Endless growth in human population is impossible.  It is also a dangerous, stupid, and irresponsible concept.  Nothing in nature supports the mythical idea that healthy things always multiply and grow. In fact, in the natural order of Nature, it’s quite the opposite. There is nothing in Nature to support a precedent for endless, perpetual, growth.

Stagnating economies

The United States, Europe, and Japan, remain caught in a condition of slow growth, high unemployment, and financial instability, with new economic tremors appearing all the time and the effects spreading globally. The continuing stability of China is now also in question.

Christine Lagarde, managing director of the IMF, gave a speech in Washington in September 2011 in which she stated that the world economy has entered a dangerous new phase of the crisis…. Overall, global growth is continuing, but slowing down, taking the form of an anemic and bumpy recovery.

Somehow, we have come to think the whole purpose of the economy is to grow, yet growth is not a goal or purpose. The pursuit of endless growth is suicidal.
David Suzuki

Herman Daly, one of the founders of the field of ecological economics and a leading critic of neoclassical growth theory, defines a steady state economy as:
An economy with constant stocks of people and artifacts, maintained at some desired, sufficient levels by low rates of maintenance ‘throughput’, that is, by the lowest feasible flows of matter and energy from the first stage of production to the last stage of consumption.

Daly, Herman. 1991. Steady-State Economics, 2nd edition. Island Press, Washington, DC. p.17.

The chancellor of the exchequer George Osborne recently warned UK that a further
£10 billion needs to be shaved from the amount paid out in welfare benefits. Greece is predicting its economy will shrink for a sixth consecutive year. French business confidence fell last month, suggesting Europe’s second-largest economy shrank in the third quarter for the first time in more than two years, the Bank of France said. The Czech and Hungarian economies will keep shrinking in 2013 as the euro region, which buys most of their exports, sinks deeper into a recession, Capital Economics Ltd. said.

“Limits to Growth” addressed an important question: Is the world in overshoot and if yes, will the landing be soft or will it be hard?

Global GDP will grow, but much slower than generally expected because of slow productivity growth in mature economies, and lack of take-off in the 186 poorer countries.

Global GDP will peak after 2052, and investment share of the GDP will grow as society is gradually forced to handle issues of depletion, pollution, biodiversity decline, climate change and inequity, slowing growth in consumption growth will slow, with  fall in disposable income in some places.

Australia's trade deficit has blown out to more than $2 billion. July's deficit has almost trebled from the original $556 million result to $1.53 billion, while June's deficit has been revised down again to nearly $800 million as iron ore and coal prices plummeted. We can't tandem our economic growth with China as their growth can't be sustained.

Climate change and scarcity

The polar icecaps are one of the vital regulators of global climate. If the ice disappears, the absorption of far more solar radiation accelerates ocean warming, with increasing risk of large-scale release of carbon dioxide and methane from melting permafrost. This in turn may initiate irreversible runaway warming.
Energy, food and water security are also poised on a knife-edge in both the developed and developing worlds. Many privately agree that climate change needs far more urgent action that we are seeing, but few are prepared to speak out for fear of derailing “business-as-usual”. This is a fundamental failure of governance – they have a responsibility to objectively assess the critical risks to which their companies are exposed, and take action to ensure these risks are adequately managed.

Climate Change – Emergency Leadership Needed Now

To suggest moving away for economic growth is considered blasphemy in the “church” that worships the “god” of eternal growth – the deity of Cornucopia!
Urban planning should be about preparedness for a time of scarcity, of managing limited resources and securing food, water and land revitalizing, with replanting and repairing of damaged ecosystems.

Richard Heinberg Post Carbon Institute

Unfortunately the idea that growth has limits is still a minority view. When Resources Minister Martin Ferguson told ABC that “the resources boom is over,” he was uttering an unwelcome truth. Unless the nation changes course, Australia is set to suffer the fate of all resource “boom towns.”

Here’s the situation in schematic. As economies in America and Europe stagnate due to high oil prices and too much debt, China’s exports to those countries dry up. Which means China needs less iron ore and coal from Australia.

Richard Heinberg post growth economy

We lost 40 years that could have been used to prepare for what we are seeing happening today in the world's economy but, perhaps, it is not too late to do something to reduce the impact of the crisis.

The end of growth need not be the end for humanity, according to Richard Heinberg. There will be life after GDP growth, and if we adapt wisely it doesn’t imply misery. Indeed, if we focus on improving quality of life and protecting the environment rather than aiming to increase quantity of consumption, we could all be happier even as our economy downsizes to fit nature’s limits. But a gentle landing is unlikely absent intelligent policy and hard work. (something not coming from our present growth-obsessed Western governments).

Sir Isacc Newton

Sir Isaac Newton, Britain's greatest scientist, analyzed the Bible, which he believed contained God's secret laws of the universe. He concluded that the end of the world will happen on or after the year 2060. He believed the Apocalypse would come in 2060 – exactly 1,260 years after the foundation of the Holy Roman Empire, according to a recently published letter. But he confidently stated in the letter that the Bible proved the world would end in 2060, adding: It may end later, but I see no reason for its ending sooner.

Senator Bob Carr

There has got to be a better way than simply parroting 'we need a population of 50 million'. We must consider the degradation of the Australian land and the limitation of our water supplies – I refer to the Murray-Darling. The example of Adelaide, it's isolation, should drive home the point that we have not got a population-carrying capacity like that of the North American continent. We are more like North Africa: a narrow, fertile coastal strip and an arid or semi-arid -inland. Any idea of 50 million for Australia means a complete urbanisation of the east coast, because a grand ramping-up of the population would not result in an increase in the population of inland centres.
Citification or urbanisation of the east coast is not an attractive prospect. ...The Australian public does not want it.
Speech to the Australian Industry Group National Forum, 6 March 2000
(Bob Carr: Reflection of a Public Man – Thoughtlines).

It seems we have to disastrously hit the brick wall of limits to growth before they realise the impossibility of endless growth. Economic growth is not in our interests if consumption, extinctions, destruction and pollution all add to climate change and planetary depletions, making lives for the Earth's inhabitants worse through hunger and poverty – or even worse!

Take Action:

Sustainable Population Australia is conducting a PETITION to be presented to the House of Representatives. The goal is to collect one hundred thousand signatures of people who agree with the need for parliament to take action on population.

The CASSE (Centre for the Advancement of a Steady State Economy) position sets the record straight on the conflict between economic growth and environmental protection. Climate change, biodiversity loss, and pollution are just three powerful examples. The CASSE position calls for a desirable solution – a steady state economy with stabilized population and consumption – beginning in the wealthiest nations and not with extremist tactics. Join the likes of E. O. Wilson, Jane Goodall, and David Suzuki; fill in the information below to sign the position and support a healthy, sustainable economy.

CASSE PETITION

Comments

Although our well being, and very survival depends on us coming to grips with the end of growth, most people cannot conceive of our "civilisation"going in a different direction to that they have known all their lives. It is understandable that they will find new concepts untrustworthy since they are outside their experience. It is hard for people to imagine the future as being very different from the past especially if it is suggested that that future will be more difficult and that this is what their grandchildren will inherit from them.

Queensland's unemployment rate has jumped to its highest level in nearly nine years but the state government denies it's because of its public service job-slashing program. Australia’s unemployment rate rose to 5.4 per cent in September with more people looking for work as softness in the national economy began flowing through to the jobs market.

According to the data, the unemployment rate in the nation's most populous state of New South Wales rose from 4.9 per cent to 5.2 per cent.

Unemployment Rates by State and Territory, August 2012 (%)
Labour Force Region Unemployment Rate
Australian Capital Territory 3.6
Western Australia 3.9
Northern Territory 4.2
New South Wales 4.8
Victoria 5.6
South Australia 5.7
Queensland 5.9
Tasmania 6.8

The "real" rate is likely to be higher, considering under-employment and those who haven't registered for benefits. Economist Ben Jarman said the data showed all types of workers were giving up the hunt.

‘‘Ultimately this is an unsustainable way of keeping the unemployment rate low," he said. ‘‘You either have to get the participation rate back, or there is less income circulating around the economy."

Read more: http://www.canberratimes.com.au/business/the-economy/jobless-rate-falls-as-job-seekers-give-up-20120906-25fwm.html#ixzz28xGiaqoZ

All the rates confirm that Australia's economy is stagnating, along with that of Europe. Continually adding more people doesn't assure economic growth.

Since World War II, our economic system has relied on perpetual growth, that is, our capacity to produce more and more goods and services. Its success depends on an ever-growing population that consumes increasing amounts of
energy and resources.
It’s common sense that perpetual growth in a finite world is impossible.
I’ve benefited from growth more than most, but even so, this doesn’t make
me believe that it can go on forever.
I can see that as we approach the limits of growth, social and environmental problems will increase.
Yet many economists constantly tell us that we have only two choices –growth or recession. Surely there must be an alternative?
I personally believe it’s possible to run our economic system without constant growth in the use of resources and energy. It’s a case of getting smarter, not bigger. We need a plan to develop a viable system based on improving quality of life by growth in efficiencies, satisfaction and happiness, rather than population and consumption.
Some Aussie-owned corporations have become part of the problem, rather than presenting a forum for solutions. Most have a “grow profit at all costs” agenda that prevents their boards from communicating that our economic system can’t grow forever. When was the last time you heard a Chief Executive encouraging our political leaders to develop a sustainable economic plan, one that doesn’t rely on an increasing use of resources and energy?
Without such planning, the problems for typical Aussies could become even worse, as big business desperately claws for every last bit of profit.
I believe our economy is moving into a phase that I call, “extreme capitalism”. The only way big business can grow profits is by taking over competitors or ruthlessly beating down a supplier’s prices, either sacking workers to reduce costs or shifting operations overseas for cheaper labour. In fact, it’s already
happening.
Surely this is not the Australia we want, especially when, with proper leadership and planning, we can move to a stabilised system in which wealth is more equitably shared.
Sooner or later we will need to find an alternative to constant growth.

Extract from Dick Smith magazine: "Aussie Grown Foods and other interesting ideas".