Monday, November 10, 2008

Limits to growth ???

Just thought I should post this reply I made to a mate about 'limits to growth' and technology. I might come back to it and rework it up a bit as it is a bit rought at the minute.

Hi Mate,

Thanks for that video link:

Very interesting, although perhaps a bit simplistic, it did get me thinking.

However, it was mainly the comments made under the video that I want to discuss.

The comments made under the video by the blogger are in italics below for you (my comments then follow, beginning the bolded section).

First, perpetual growth in a finite world is possible.

The factor Grignon doesn't account for is technology. The function of technology is to allow us to be more efficient with our given resources, to get more out of what we have. We are riding the dart that continuously slows its speed by half so as to never touch the wall.

Yes, population is increasing at an exponential growth rate. But so is technology. It is this very technology which has allowed our ever-increasing world population growth to occur. And it is exactly what will allow it to continue, provided that technological innovation is not impeded by man (read: governments).

His error is understandable, as this fallacy is common to all overpopulation scenarios since Thomas Malthus first published "An Essay on the Principle of Population" in 1798. But Grignon's conclusion, that the populace must be coerced into a reduction in the birth rate, is not. It is fascism masquerading as environmentalism.

I think:

Perpetual growth in a finite world is NOT possible because of the ecological limits of the Earth (i.e. greenhouse gas production is causing problems already, loss of habitat and extinction of species due to many human causes, pollution of air water and soil, etc, etc).

The blogger is right that technology plays a role; but he fails to understand how technology affects our impact on the Earth. Technology does play an important role in economic growth but it also play a big part when you consider the environmental impacts that human societies cause.

At the University of New South Wales (Institute of Environmental Studies), they taught us a formula that was proposed (during the 1970's) to explain the impact of human society of the Earth.

I = P A T

I = impact
A= affluence (consumption)
T= technology i.e. how resource intensive the production of affluence is; how much environmental impact is involved in creating, transporting and disposing of the goods and services used.

(Improvements in efficiency can reduce resource intensiveness, reducing the T multiplier).

So impact equals population x affluence x technology.

The blogger makes two mistakes:

1. Assumes that technology is growing at the same rate as population growth.

However it isn’t - data from the UN World Bank has shown it hasn't been keeping up and is falling further behind.

2. More importantly, the blogger ignores the influence of affluence (A) on the impact on the environment.

Affluence has been growing greatly in the west since the industrial revolution. However, now China and India are rapidly developing (growing affluent) and many other countries are trying to follow our increasingly heavier footsteps (consumer lifestyles).

These two factors means there is an ever increasing (negative) impact on the Earth.

Although we have had massive technology growth (more efficient production), not only is it not enough to keep up with population growth, but the technology is not evenly spread. There are big debates over how to spread the current technology to developing nations where much of the population growth is occurring at present.

Also, not everyone can afford a new hybrid car, for example, or have the most up-to-date energy efficient appliances or homes. There is always a time-lag between the development of a new technology and its uptake by large parts of society. Although getting shorter for many products (e.g. think of household appliances that are now designed to last only 4 years), for many products there is still a long time between updates (e.g. an old energy inefficient house may only be rebuilt after 70 years and may not take up other currently available options such as solar heating, insulation, double glazing, etc, due to cost or perhaps the person is renting and won’t receive the long-term benefits).

Another good example of the problem is that modern car motors are more efficient, BUT there are way more cars on the road (and many cars are caught in traffic and crawl along with single occupants - which is not very efficient at all). Building more roads also makes more traffic, so traffic jams just tend to grow (increasing inefficiency of the system). Bikes are one solution to help reduce the greenhouse problem, but there are many barriers to people getting on a bike – the point is technology doesn't always get taken up or used efficiently).

Note: I= PAT was only a simplistic starting point (the theory has been further developed and is still being refined and reworked) but the main point agreed upon is that unlimited growth can be very BAD.

Growth and development are possible but need to be within the limits of sustainable development. Thankfully, this is now the development model of the United Nations and its many member countries, because unsustainable growth is NOT sustainable.

To say that suggesting slowing the population growth rate is a fascist idea ignores the fact that population growth plays a big part in the overall impact of humanity on the Earth. (I could talk more on this point too but I won't today - lol).

Many economists (and businesses) are now starting to use triple bottom line reporting to try and include the environmental cost of growth on the Earth (e.g. measuring carbon dioxide and other greenhouse gases).

Many free-market economists who believe that government intervention makes the economy less efficient also often believe that governments impede technological development when they try and pick technology 'winners'. They prefer that the market decides. This may be true when they protect technology 'losers' (such as inefficient car makers). However, sustainable solutions often need a lot of help to get to market and many 'dirty' industries have been given large amounts of money already and continue to receive them. Just think of the huge investment in 'clean coal' made by many governments.

Governments and science are not seperate, today many have strong links with universities and research institutions and play a critical role as both facilitator and actor (e.g. CSIRO) within technological development. Governments indeed have a vital role to play in encouraging technological development that helps us move towards a sustainable society. Environmental regulations are needed and designed to protect the environment when the free market fails to do so e.g. fines for polluting are designed to try and discourage firms/individuals from doing the wrong thing.

Still governments can also impede technological progress. Just think about the huge subsidies given to nuclear and oil producers rather than renewable energies such as solar, wind or geothermal. Or look at the controversy over car efficiency standards in the US. Legal battles are being fought between Federal law makers who want less stringent standards and Californian legislators (go Arnie !!) who want tighter controls. All the while, both Ford and General Motors are about to go under because they built mainly HUGE cars with terrible fuel efficiency.

Policies that restrict the free-market are designed to protect the system so that it can become sustainable. Yes, policies can be bad and do a lot of harm to industry and people - but good policy should try and walk the fine line between the different stakeholders while protecting the environment.

Also, increasingly banks in Australia (and elsewhere) are starting to insist that projects ‘looking for finance’ take steps to lower the impact on the environment. The banks don't want to 'look bad' and lose their valuable reputation by being connected to 'dirty' projects such as the Tasmanian pulp mill (e.g. ANZ were or maybe still are thinking of pulling their promise of funds for the pulp mill project to go ahead).

Bit simplistic video, as the government does have the ability to TAX and SPEND, so there is another big player in the market that can control where money goes other than the banks.

Also people pay interest because of the opportunity cost (having $100 now is worth paying $110 later for) because you don't have to wait to save it up! Also in say 6 months time, $100 won't buy $100 worth of stuff because of inflation - so the lender wants to ensure that they are not losing on the deal over time. Of course interest charged above this opportunity cost is a different thing altogether. Still, banks are there for shareholders profit (and shareholders want profit) . . . so yeah, that is the system we have and I agree it may need some radical changes. The recent wall street problems have lead to a change in the way banks operate (more regulation and tighter credit controls), but are only really tinkering - many governments are lowering interest rates to encourage borrowing to those that are already drowning in too much debt or worried about losing their jobs and not spending.

Wow, really did get my thinking . . . I will put this on my blog.


My friend's reply:

Yeah, I found it a bit simplistic, too, but I would talk about other philosophical implications (like the fact that it's not just the bank that creates the money; the borrower is just as much a party to it by promising to pay back money he doesn't have. Banks are just institutions that do what we want them to do: give us money now for the promise of our future hard work). I agree that it's unsustainable and that technology is chancy ground to build castles on. I'm hoping our generation will be lucky and get to sleep in peace before the shit hits the fan. If technology pulls an ace out of the hat, so much the better, otherwise it could get a bit grim.
A comparison of The Limits to Growth with 30 years of reality (a new paper by Graham Turner, from the CSIRO)

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