Economic Growth at the crossroads?

[DBT]

Posting this thread to see what the range of views are on the subject of economic growth.

Given that we live in a finite space with finite resources, arable land, potable water, irrigation, etc, the question is: have we exceeded the carrying capacity of our environment, and if so, is it time to phase out economic growth and develop a steady state economy?

Keeping in mind that a steady state economy does not necessarily entail an absence of scientific discovery, development(better ways of doing things) and social progress.

 

[bilby]

Posting this thread to see what the range of views are on the subject of economic growth.

Given that we live in a finite space with finite resources, arable land, potable water, irrigation, etc, the question is: have we exceeded the carrying capacity of our environment, and if so, is it time to phase out economic growth and develop a steady state economy?

Keeping in mind that a steady state economy does not necessarily entail an absence of scientific discovery, development(better ways of doing things) and social progress.

Resource demand is more a function of population growth than of economic growth.

Population growth will end in the next few decades; at that point, growth in demand for most basic resources (food, farmland, pasture, domestic dwellings, etc.) will also plateau. Growth in demand for energy and more technological and lifestyle resources will probably continue for some time after that; growth in demand for non-resource using stuff like software, services such as banking and trading, warehousing, retailing etc. may well continue indefinitely - and will have little impact on carrying capacity.

I would guess that the only major resource constraint we are currently approaching is the ability of the environment to act as a carbon dioxide sink - If other resources were close to running out, then I would expect to see more symptoms of that - such as large and sustained commodity price increases.

The carbon dioxide issue is not difficult from a technical perspective; we just need to move to non-coal (and to a lesser extent non-oil and non-gas) energy sources. Now that China and the U.S. seem to be getting their shit together politically, only the likes of Tony Abbott, and the big coal and oil companies stand in the way of fixing this thing.

The absolute rate of growth will likely slow as population growth tails off; but the per-capita Gross Planetary Product can theoretically grow indefinitely, without hitting any hard physical limits - economic growth is about value; and value isn't necessarily related to physical resources at all.

 

[dystopian]

Population growth will end in the next few decades;

Only looking at individual western countries. New findings show that the global population will *not* stabilize before 2100 as had previously been believed.

 

[bilby]

Population growth will end in the next few decades;

Only looking at individual western countries. New findings show that the global population will *not* stabilize before 2100 as had previously been believed.

I have yet to see a reliable study to that effect, although I have seen that claim made in the popular press. Do you have a link to any of these recent studies?

 

[dystopian]

http://www.sciencemag.org/content/346/6206/234.abstract

 

[bilby]

http://www.sciencemag.org/content/346/6206/234.abstract

Thanks.

I can't get through the paywall, so it is hard for me to say how reliable their methodology was. Still, a population of around 10 billion doesn't seem to me to be unsustainable, and the population growth this century will be dramatically lower than last century whichever studies you believe.

Africa is the problem - and the problem in Africa is religion. A lot hinges on how long the proxy war between Christianity and Islam in Africa takes, and who wins. If the battle is protracted, or worse, one of the combatants prevails, things will take a while to get better.

But if the two or three billion Indians and Chinese go looking for cheap labour, then educating Africans may arm the populace with the tools they need to chuck out both sets of nutters.

Educated people - in particular, educated women - have small families.

 

[DBT]

Posting this thread to see what the range of views are on the subject of economic growth.

Given that we live in a finite space with finite resources, arable land, potable water, irrigation, etc, the question is: have we exceeded the carrying capacity of our environment, and if so, is it time to phase out economic growth and develop a steady state economy?

Keeping in mind that a steady state economy does not necessarily entail an absence of scientific discovery, development(better ways of doing things) and social progress.

Resource demand is more a function of population growth than of economic growth.

It is, but economic growth within a stable population places a demand on natural resources, and therefore environment, because the materials that are required to service any increase (growth) in sales of goods and services ultimately come from the environment.

Economic growth being achieved either through stimulating demand, or a growing population. The former being limited by a saturated market and consequently, a stall in economic growth.

Population growth will end in the next few decades; at that point, growth in demand for most basic resources (food, farmland, pasture, domestic dwellings, etc.) will also plateau.

That is the prediction. But I wonder if the Guru's of economic growth are going to be satisfied with an economy in equilibrium. Somehow, given rhetoric of our politicians, I doubt it.

Nor are official population projections necessary certain.
''Population projections most often use a pattern of demographic change called the demographic transition. This model is based on the way in which high birth and death rates changed over the centuries in Europe, declining to the low birth and death rates of today. Thus, projections assume that the European experience will be replicated in developing countries. These projections take for granted three key things about fertility in developing countries. First, that it will continue to decline where it has begun to decline, and will begin to decline where it has not. Second, that the decline will be smooth and uninterrupted. And, finally, that it will decline to two children or less per woman.''

''But we must face facts. The assumption that all developing countries will see their birth rates decline to the low levels now prevalent in Europe is very far from certain. We can also expect the large majority of population growth to be in countries and areas with the highest poverty and lowest levels of education. Today, the challenge to improve living conditions is often not being met, even as the numbers in need continue to grow.''

The absolute rate of growth will likely slow as population growth tails off; but the per-capita Gross Planetary Product can theoretically grow indefinitely, without hitting any hard physical limits - economic growth is about value; and value isn't necessarily related to physical resources at all.

Economic growth entails manufacturing and selling of goods, cars, houses, iPods, etc, all composed of materials that come (timber) or mined (metals, hydrocarbons, etc) from our environment. If the manufacture and sale of goods stabilizes, economic growth suffers. If consumers are not buying because they have what they need (the market is saturated), the economy most probably go into recession.

 

[bilby]

Resource demand is more a function of population growth than of economic growth.

It is, but economic growth within a stable population places a demand on natural resources, and therefore environment, because the materials that are required to service any increase (growth) in sales of goods and services ultimately come from the environment.

Economic growth being achieved either through stimulating demand, or a growing population. The former being limited by a saturated market and consequently, a stall in economic growth.

Population growth will end in the next few decades; at that point, growth in demand for most basic resources (food, farmland, pasture, domestic dwellings, etc.) will also plateau.

That is the prediction. But I wonder if the Guru's of economic growth are going to be satisfied with an economy in equilibrium. Somehow, given rhetoric of our politicians, I doubt it.

Nor are official population projections necessary certain.
''Population projections most often use a pattern of demographic change called the demographic transition. This model is based on the way in which high birth and death rates changed over the centuries in Europe, declining to the low birth and death rates of today. Thus, projections assume that the European experience will be replicated in developing countries. These projections take for granted three key things about fertility in developing countries. First, that it will continue to decline where it has begun to decline, and will begin to decline where it has not. Second, that the decline will be smooth and uninterrupted. And, finally, that it will decline to two children or less per woman.''

''But we must face facts. The assumption that all developing countries will see their birth rates decline to the low levels now prevalent in Europe is very far from certain. We can also expect the large majority of population growth to be in countries and areas with the highest poverty and lowest levels of education. Today, the challenge to improve living conditions is often not being met, even as the numbers in need continue to grow.''

The absolute rate of growth will likely slow as population growth tails off; but the per-capita Gross Planetary Product can theoretically grow indefinitely, without hitting any hard physical limits - economic growth is about value; and value isn't necessarily related to physical resources at all.

Economic growth entails manufacturing and selling of goods, cars, houses, iPods, etc, all composed of materials that come (timber) or mined (metals, hydrocarbons, etc) from our environment. If the manufacture and sale of goods stabilizes, economic growth suffers. If consumers are not buying because they have what they need (the market is saturated), the economy most probably go into recession.

Not all value adding uses resources; and not one of the materials used to make stuff is lost forever - except for a tiny number of interplanetary probes, and any Helium that is vented into the atmosphere.

As the old Greenpeace slogan says "Don't throw anything away - there is no 'away'". They of course are trying to advise against pollution; but it cuts both ways - if you use all the iron ore, then there will still be plenty of iron to be found in scrapyards. As long as the energy is available to recycle, we won't run out of anything that isn't lost to space.

 

[dx713]

Posting this thread to see what the range of views are on the subject of economic growth.

Given that we live in a finite space with finite resources, arable land, potable water, irrigation, etc, the question is: have we exceeded the carrying capacity of our environment, and if so, is it time to phase out economic growth and develop a steady state economy?

Keeping in mind that a steady state economy does not necessarily entail an absence of scientific discovery, development(better ways of doing things) and social progress.

Resource demand is more a function of population growth than of economic growth.

Population growth will end in the next few decades; at that point, growth in demand for most basic resources (food, farmland, pasture, domestic dwellings, etc.) will also plateau. Growth in demand for energy and more technological and lifestyle resources will probably continue for some time after that; growth in demand for non-resource using stuff like software, services such as banking and trading, warehousing, retailing etc. may well continue indefinitely - and will have little impact on carrying capacity.

I would guess that the only major resource constraint we are currently approaching is the ability of the environment to act as a carbon dioxide sink - If other resources were close to running out, then I would expect to see more symptoms of that - such as large and sustained commodity price increases.

The carbon dioxide issue is not difficult from a technical perspective; we just need to move to non-coal (and to a lesser extent non-oil and non-gas) energy sources. Now that China and the U.S. seem to be getting their shit together politically, only the likes of Tony Abbott, and the big coal and oil companies stand in the way of fixing this thing.

The absolute rate of growth will likely slow as population growth tails off; but the per-capita Gross Planetary Product can theoretically grow indefinitely, without hitting any hard physical limits - economic growth is about value; and value isn't necessarily related to physical resources at all.

Agreed with that.
We've got to stop chasing growth with a traditionnal model based on industrial growth, for two reasons:
1. Ecological (I don't think I have to expand on this one)
2. Geo-political - third world countries, that were where the demand for this kind of growth could be found, are now building their own industries, so it will become increasingly difficult for our western countries to find demand to fuel industrial growth.

Now, of course, it doesn't mean services (including intellectual services like sofware development or management) can't grow.
But we need to get past the idea of traditional industry-led growth.

 

[arkirk]

I don't and won't ever advocate an end to the growth of our technology and our knowledge. These things are not dependent on an ever greater consumption of natural resources. It is a matter of us figuring out how to curb our growthof consumption of natural resources without limiting our ability to improve our living conditions and our understanding of our environment. The growth which most of the governments of the world appear to be seeking is growth that usually demands ever increasing consumption. If it has this quality to it, then it must stop. So far we have been a great tragedy of errors on the planet. Despite our declining resources, we still indulge in the most wasteful forms of development, war, class struggles, and religious intolerance....to the exclusion of cooperation. National and business leaders world wide act like solipsistic narcissistic brats. Show me anyone with any humility at all in a position of leadership, and I will point to that leader and call that leadership progressive and a sign of hope.

 

[barbos]

Posting this thread to see what the range of views are on the subject of economic growth.

Given that we live in a finite space with finite resources, arable land, potable water, irrigation, etc, the question is: have we exceeded the carrying capacity of our environment, and if so, is it time to phase out economic growth and develop a steady state economy?

Keeping in mind that a steady state economy does not necessarily entail an absence of scientific discovery, development(better ways of doing things) and social progress.

Resource demand is more a function of population growth than of economic growth.

Population growth will end in the next few decades; at that point, growth in demand for most basic resources (food, farmland, pasture, domestic dwellings, etc.) will also plateau. Growth in demand for energy and more technological and lifestyle resources will probably continue for some time after that; growth in demand for non-resource using stuff like software, services such as banking and trading, warehousing, retailing etc. may well continue indefinitely - and will have little impact on carrying capacity.

I would guess that the only major resource constraint we are currently approaching is the ability of the environment to act as a carbon dioxide sink - If other resources were close to running out, then I would expect to see more symptoms of that - such as large and sustained commodity price increases.

The carbon dioxide issue is not difficult from a technical perspective; we just need to move to non-coal (and to a lesser extent non-oil and non-gas) energy sources. Now that China and the U.S. seem to be getting their shit together politically, only the likes of Tony Abbott, and the big coal and oil companies stand in the way of fixing this thing.

The absolute rate of growth will likely slow as population growth tails off; but the per-capita Gross Planetary Product can theoretically grow indefinitely, without hitting any hard physical limits - economic growth is about value; and value isn't necessarily related to physical resources at all.

Agreed. Although I am a bit less optimistic.

 

[DBT]

It is, but economic growth within a stable population places a demand on natural resources, and therefore environment, because the materials that are required to service any increase (growth) in sales of goods and services ultimately come from the environment.

Economic growth being achieved either through stimulating demand, or a growing population. The former being limited by a saturated market and consequently, a stall in economic growth.

Population growth will end in the next few decades; at that point, growth in demand for most basic resources (food, farmland, pasture, domestic dwellings, etc.) will also plateau.

That is the prediction. But I wonder if the Guru's of economic growth are going to be satisfied with an economy in equilibrium. Somehow, given rhetoric of our politicians, I doubt it.

Nor are official population projections necessary certain.
''Population projections most often use a pattern of demographic change called the demographic transition. This model is based on the way in which high birth and death rates changed over the centuries in Europe, declining to the low birth and death rates of today. Thus, projections assume that the European experience will be replicated in developing countries. These projections take for granted three key things about fertility in developing countries. First, that it will continue to decline where it has begun to decline, and will begin to decline where it has not. Second, that the decline will be smooth and uninterrupted. And, finally, that it will decline to two children or less per woman.''

''But we must face facts. The assumption that all developing countries will see their birth rates decline to the low levels now prevalent in Europe is very far from certain. We can also expect the large majority of population growth to be in countries and areas with the highest poverty and lowest levels of education. Today, the challenge to improve living conditions is often not being met, even as the numbers in need continue to grow.''

The absolute rate of growth will likely slow as population growth tails off; but the per-capita Gross Planetary Product can theoretically grow indefinitely, without hitting any hard physical limits - economic growth is about value; and value isn't necessarily related to physical resources at all.

Economic growth entails manufacturing and selling of goods, cars, houses, iPods, etc, all composed of materials that come (timber) or mined (metals, hydrocarbons, etc) from our environment. If the manufacture and sale of goods stabilizes, economic growth suffers. If consumers are not buying because they have what they need (the market is saturated), the economy most probably go into recession.

Not all value adding uses resources; and not one of the materials used to make stuff is lost forever - except for a tiny number of interplanetary probes, and any Helium that is vented into the atmosphere.

Waste is a huge problem. Landfills that resemble hills being a feature of every city. Islands of discarded plastic floating in our oceans. Once fossils fuels are burnt, they are converted to gas which disperses into the atmosphere, becoming unusable, entropy, etc.

If the reports that we are using up non renewable resources at a rate of 1.5 planets* are correct, we are liquidating our principle source of wealth at an unsustainable rate right now.

*''According to the recent WWF Living Planet Report, the rate of resources we consume globally in one year requires 1.5 years time for the Earth to regenerate the renewable resources used, and absorb the CO2 waste produced.''

Nor am I convinced of the idea that we can grow our economy without increasing resource use, or population. I have not seen a good detailed explanation of how that is supposed to work. How far does value adding take us? What does it achieve in terms of goods and services?

As I mentioned earlier, growth is achieved either by stimulating demand (which increases resource use) or increasing population (which increases resource use), or as we have now, both through demand and population growth.

Stimulating demand only goes so far before the market is saturated and economic growth flattens out. The classical economists recognized the essential role of increasing population in order to sustain economic growth. And of course, that also entails an increase in resource usage.

 

[DBT]

Voters, where are you?

No need to argue or even comment, just vote!

It's free, and at least for me, it's interesting to see how the percentages stack up.

 

[Clivedurdle]

We need to urgently move to post fossil fuels. A huge proportion of "growth" has been due to running down capital stocks of many things, especially burning carbon based resources.

We need to re-envisage how we live.

We actually do not need to work and therefore all work should be enjoyable and for the commonwealth.

We will be spending a lot of time being artists, repairing, experimenting, playing, learning.

This will lead to very different economic statistics - the way we measure things now actually makes things worse.

The vast majority of us will live in cities but many will be quite wealthy farmers.

 

[Clivedurdle]

Just got a fascinating book about how to reinvent America!

The United States has evolved into a nation of twenty densely populated megaregions. Yet despite the environmental advantages of urban density, urban sprawl and reliance on the private car still set the pattern for most new development. Cars guzzle not only gas but also space, as massive acreage is dedicated to roadways and parking. Even more pressing, the replication of this pattern throughout the fast-developing world makes it doubtful that we will achieve the reductions in carbon emissions needed to avoid climate catastrophe. In Rail and the City, architect Roxanne Warren makes the case for compact urban development that is supported by rail transit.

Calling the automobile a relic of the twentieth century, Warren envisions a release from the tyrannies of traffic congestion, petroleum dependence, and an oppressively paved environment. Technical features of rail are key to its high capacities, safety at high speeds, and compactness—uniquely qualifying it to serve as ideal infrastructure within and between cities. Ultimately, mobility could be achieved through extensive networks of public transit, particularly rail, supplemented by buses, cycling, walking, car-sharing, and small, flexible vehicles. High-speed rail, fed by local transit, could eliminate the need for petroleum-intensive plane trips of less than 500 miles.

Warren considers issues of access to transit, citing examples from Europe, Japan, and North America, and pedestrian- and transit-oriented urban design. Rail transit, she argues, is the essential infrastructure for a fluidly functioning urban society.

http://mitpress.mit.edu/books/rail-and-city

 

[NobleSavage]

For several years I read everything at http://theoildrum.com/ with an open mind. The site now is just an archive. The specific theme was "peak oil" and the general theme was "peak economic growth". I came to the conclusion that the were mostly full of shit.

 

[DBT]

For several years I read everything at http://theoildrum.com/ with an open mind. The site now is just an archive. The specific theme was "peak oil" and the general theme was "peak economic growth". I came to the conclusion that the were mostly full of shit.

Given a finite supply of Crude, 'peak oil' must arrive at some time. The only question is, when? Given a finite Planet, arable land, fresh water, etc, 'peak economic growth' must happen at some time. The only question is, when?

 

[funinspace]

Voters, where are you?

No need to argue or even comment, just vote!

It's free, and at least for me, it's interesting to see how the percentages stack up.

I didn’t really like any of the options, as I find it a complicated issue. Speaking in terms of just economic growth, I suspect the train can still move forward. However, that isn’t the whole picture IMPOV. I don’t expect catastrophe (such as Soylent Green or whatever) in the near future either. Yet, I think we do have some very serious issues. The world’s remaining fairly normal functioning natural habitats are under more and more pressure. I figure that much of the ocean fish many still eat today will be depleted such that only people with serious money will be able to afford it. When I was growing up, very middle middle class, I loved to have fresh shrimp (not the tiny ones) and scallops on our annual vacation to coastal California. Now it seems more of a luxury, even though I’m better off than my parents were. I suspect that the fracking boom will be short lived, and eventually there will be renewed pressure on oil prices, as supplies begin to no longer keep up with demand. Whether this is in 5 or 10 years, I have no idea. The weakened US and EU economies since 2008, have also taken much pressure off the world energy demand equation. The slowing population growth will help stabilize some issues. However, there are more than a few areas where water demand is going to stress regional politics much more, from the Nile river basin, Mesopotamia, and others. The third world will be the hardest hit if oil prices eventually get up to something like $150 a barrel.

 

[NobleSavage]

For several years I read everything at http://theoildrum.com/ with an open mind. The site now is just an archive. The specific theme was "peak oil" and the general theme was "peak economic growth". I came to the conclusion that the were mostly full of shit.

Given a finite supply of Crude, 'peak oil' must arrive at some time. The only question is, when? Given a finite Planet, arable land, fresh water, etc, 'peak economic growth' must happen at some time. The only question is, when?

That was my argument. I brought it over here and several people tore it up. I've tried to find the threads, but I'm not having any luck with the search. Peak oil, yes, unless an alternative replaces oil. Granted, the amount of energy in a gallon of gasoline is gonna be damn hard to match, but it need not be a perfect replacement, it only needs to cost less for most tasks. We can always make synthetic oil -- yes, it's super expensive.

Most of the problems seem to boil down to energy. You can desalinate water, recycle, and pull gold from the ocean with enough energy. Energy use can't grow exponentially or we will use more energy than the sun in 200 years. However, there is no reason you can't have economic growth with less energy and a stable population. The argument soon turns into "what is economic growth?" and "what constitutes an increased standard of living?".

There do seem to be hard limits as long as we are confined to earth such as potassium being necessary for all life, but potassium can be recycled from urine and economic growth does not require more life.

Can we go over a cliff? Yes. Will we? I don't know. I figure the market will solve the problem (gasp!), before politicians. Example, roof top solar is going to beat the cost of coal in all 50 states in a few years. The best thing the politicians can do is make sure the fossil fuel industry doesn't distort the market.

 

[DBT]

Given a finite supply of Crude, 'peak oil' must arrive at some time. The only question is, when? Given a finite Planet, arable land, fresh water, etc, 'peak economic growth' must happen at some time. The only question is, when?

That was my argument. I brought it over here and several people tore it up.

I've tried to find the threads, but I'm not having any luck with the search. Peak oil, yes, unless an alternative replaces oil. Granted, the amount of energy in a gallon of gasoline is gonna be damn hard to match, but it need not be a perfect replacement, it only needs to cost less for most tasks. We can always make synthetic oil -- yes, it's super expensive.

I don't know how they could have torn it up. It can't be torn up. It's just a matter of basic physics, logic and mathematical relationships. Finite non renewable resources cannot last forever. Some may argue that science shall come to the rescue with alternatives but that still doesn't address the problem of carrying capacity of ecosystems, which of course place a limit upon growth.

Can we go over a cliff? Yes. Will we? I don't know. I figure the market will solve the problem (gasp!), before politicians. Example, roof top solar is going to beat the cost of coal in all 50 states in a few years. The best thing the politicians can do is make sure the fossil fuel industry doesn't distort the market.

I don't think that we must necessarily crash, but I don't think that our major problems are being adequately addressed. Politicians tend to look only as far as the next election. The Market is concerned with turning a profit in any way it can.

Except for the work of dedicated ecologists, politically, our ecosystems are not given much more than lip service.