The world’s unspoken final goal of generalizing the material welfare currently enjoyed in the most developed countries is a utopian extravaganza. An unbridgeable gulf of natural capital shortage separates collective myth from earthbound reality. But who should tell the billions on the outside to remain there forever; to watch with noses pressed against the window pane as a minority inside satisfies its appetites, has all the amenities of modern life, and squabbles over what seems to be a raft of unadulterated trivia?
While the thought that our civilization is engaged in a dangerous overreach remains in the twilight zone of understanding, choices made between economic ambitions and natural resource concerns — occurring almost on a daily basis at practically every level of community organization, from local governance to international polity — show a strong bias in favor of the first at the expense of the second.
The depletion of nonrenewable ecological assets is approaching the planet’s carrying capacity at an accelerating pace. Many disagree, believing that “just in time” deceleration is in the cards. Although no clear victory can be declared in this debate for decades to come, it is in the common interest that it should broaden and intensify.
Scientific demonstrations concerning global warming and the emergence of physical resource scarcity — most immediately the consequences of bumping off easily accessible oil wealth — are so many X-ray pictures of the world that show distinguishable contours of potential damage, if not a broken interior. They have been clipped on the light board for a long time. Pretending that they are not there is no longer excusable.
Those who resist participating in the “growth versus limits” discourse — which may, without exaggeration, be called the problematic of the century — because it is outside their comfort zone or because it appears to be an academically unadaptive career strategy and those who claim that the possibility of economic growth is unbounded should pay particular attention.
We plunge toward the limits.
Demographic transition now underway should stabilize world population later in this century. But the momentum (the increase in absolute size despite declining marginal contributions to the total) is still forceful. Given that the planet’s inhabitants are projected to multiply from the present 6.8 billion to 9-10 billion by mid- to late 21st century, the human biomass can still be characterized as growing exponentially.
Disregarding periodic slowdowns, the growth of global output is also exponential. It has been increasing at a fast clip since World War II and is projected to continue to do so in the foreseeable future.
Thus, both world population and the sum of human-crafted material objects are expected to remain in a mode of acceleration.
Predictions of a smooth (e.g., “logarithmic-curve like”) approach to the limit through deceleration cite transition to lower birth rates, converging eventually toward replacement level fertility, and the closely-related effects of rising per capita incomes.
Affluence should cause a shift from industry to services; toward a less material-resource-demanding, less polluting, human-capital intensive “knowledge economy;” facilitating the transfer of increasingly significant amounts of resources to the environmental sector.
These convictions bear the stamp of ruling unecological economic doctrines and are based on the limited experience of the most developed, “rich” countries — the “North.” The so-called “Environmental Kuznets Curve (EKC)” is the symbolic flagship of this worldview. The hump-shaped “EKC curve” shows environmental damage first rising and then declining toward zero as per capita income (output) increases. With prosperity comes heightened concern about the environment and greater ability to protect it.
Adherents of the theory suggest that the deceleration needs to be demographic only to avoid fatal run-ins with the planet’s ecological constraints. Acceleration in economic output can continue indefinitely and will solve environmental problems.
Originally, the Kuznets curve, named after the 1971 Nobel laureate Simon Kuznets, was applied to income inequality. It purported that as an economy develops, income tends to polarize only to a certain point, after which its distribution becomes increasingly equitable. If the venerable professor, who passed away in 1985, were alive today, he would certainly revise his theory. The massive economic growth that occurred since the 1970s had been accompanied by more and not less income inequality.
The latter-day application of this hopeful hypothesis to the environment is voluntaristic wishfulness. Proofs of its validity have been restricted to particulates of limited significance and only for selected countries (or regions within). When all pollutants (especially carbon dioxide) are considered at the world scale, EKC’s theoretical hump turns into a monotonously upward-sloping curve.
As the world economy grows so do insertions of increasing volumes of polluting substances into the environment. And unlike a rich country that can fork over the nasty stuff to some devastated, struggling pariah nation for eternal safekeeping, the world as a whole cannot ship its detritus abroad. It must live with it.
That an accelerating economy will solve global environmental problems brought about by acceleration is a fruitless thought experiment that suffers from the fallacy of non-composition. It counts on technical progress not yet at hand and forgets about the lack of effective mechanisms for the international enforcement of mandated environmental measures.
Or has the critical threshold already been crossed?
Many analysts argue that even the current level of global population and economy is beyond the planet’s biophysical-social carrying capacity. Consequently, they consider the proposition that ten billion people should have the same level of material welfare as now enjoyed by Switzerland, for example, an unequivocal death sentence for the Earth’s habitability and a sure way to trigger dreaded Malthusian “positive checks” (death from wars, famine, and disease).
Indeed, the estimated $70 trillion world GDP (2008, PPP basis) would need to increase nearly six-fold to about $410 trillion — a Pollyannic daydream. How could an economy of that size be sustained in terms of exhaustible energy sources, metals and minerals, tropical forests, biodiversity, global warming? And major dependence on the Earth’s net primary productivity (i.e., “going totally green”) seems unfeasible even at the current level of activities.
Acrimonious exchanges between sounders of alarm and their disparagers continue.
Backlash against assertions that we are already beyond the limit (and are now just waiting for the “data”) sees them as the struggle of modern-day Cassandra to get a hearing about the world’s suicidal folly.
“Prognosticators of impending doom” are accused of cashing in on the gullibility of an impressionable public. Mayan prophecy, Nostradamus, or a football-field-sized cosmic rock whirling this way from outer space can frighten people as long as the wailing strings in the background are sufficiently unnerving. The trick is to associate warnings about environmental degradation and “peak oil” with the same category of impending bad news, as if all such thoughts emanated from a single “disaster lobby.”
The trick does not work as well as it used to.
Economic evidence that the chaotic plateau of “peak oil” has been reached is accumulating. Moreover, efforts to discredit the “apocalypse business” have become associated with the same ideological persuasion that gave rise to the heady years of unbounded huckstering in the paper economy; tall talk about the “incredible efficiency of innovative financial engineering” that created “a vast array of complex hybrid financial products, which allow risks to be isolated,” that is, until the day markets began to crumble in 2007. (The nauseating words in quotes were those of a once-fabled central banker who discovered never-ending prosperity through unlimited monetary expansion and a laissez passer regulatory stance.)
The unmaskers of “doomsday mongering” find themselves increasingly in opposition to institutions that are part of the very same establishment they want to defend.
Unfailingly staid and reassuring until recently, the U.N. Environmental Programme, the OECD-established International Energy Agency (IEA), major universities, and top-notch scholarly organizations are now amplifying the alarm. The American Natural History Museum’s exhibit “Climate Change: The Threat to Life and A New Energy Future” is an important indication that society-wide ecological consciousness is on the ascent.
Despite its diminished predominance, self-sustaining, perpetual growth remains the leitmotif of economics and public policy. It is etched into our thinking as if it were the system’s natural equilibrium behavior to which it keeps reverting. The most eloquent manifestation of this state of affairs is the absence of energy, raw materials, and the environment in debates over the current worldwide economic setback.
We hear about the real estate and stock market bubbles, global savings glut, the history of business cycles going back all the way to the 19th century; the Great Depression, the inadequacies of Fed and financial oversight, deregulation of banking and the securities markets; Obama and Bush; Keynes and Friedman; stagflation of the 70s, the savings and loan crisis of the 80s and 90s, Japan’s lost decade, the dotcom debacle, emerging markets, the threat of protectionism; greed and irresponsibility, etc. — but these issues are never put in the framework of “growth versus limits,” not even when opinion makers of the highest prestige are squeezed for their views about the long run.
Preoccupation with growth has led to a super-illumination of factors affecting its continuation, keeping ecological boundaries from being seen: Second-order empiricism blocks first-order rationality.
In the actual debate about the future of growth, three broad lines of reasoning are used to dismiss the proposition that an exponential physicochemical depletion of the Earth’s ability to perform work is occurring or that this process endangers the life and prosperity of future generations: economic efficiency, technology, and the coming deceleration. In due time, all three will be seen as mere sophistry.
Economic efficiency arguments range from the naïve to the ridiculous.
Showing that world output per some specific material resource (such as oil or copper) is increasing, or that its reciprocal, the cost of the resource as a percentage of output moves in the opposite direction, and then trumpeting Urbi et Orbi that this demonstrates the growing independence of the human economy from natural constraints is blissfully innocent.
Given the finiteness of nonrenewable resources, such “productivity growth” is obviously a transient phenomenon. The more the economy becomes dependent on waning resources — a process that tends to escalate rather than moderate as production becomes increasingly roundabout and lines of commerce multiply — the more voluminous the bubble; the higher the house of cards.
Reports about formidable breakthroughs in economic efficiency turn farcical when top office holders (trained in economics) in the most developed democracies underscore the diminished roles energy and raw materials play in their respective countries’ GDPs. They forget that the bulk of those great resource savings comes from a shift in the international division of labor. Developed economies have enlarged their service sectors while they have become increasingly dependent on the developing world’s manufactured products. The “post-industrial” country consumes the exhaustible resources it believes to have saved when it imports resource-intensive goods from somewhere else.
The buildup of industry in the “South” has made (and continues to make) possible the buildup of the service sector in the “North.” Of course, hair salons for dolls in New York and Paris use less energy and a smaller bundle of material resources than doll manufacturing plants in China. If you compare the hourly dollar wage of an American or French doll hairdresser with that of a worker in the outskirts of Shanghai, you will see why the service sector has twice the weight of industry in world statistics. (According to U.S. Government data, global output is 64 percent services, 32 percent industry, and 4 percent agriculture.)
Assuming that economic development in the South will further increase the portion of services in global output is the wrong way to assess potential demand for resources. The number of hours the “South” would have to spend in industry to live at “Nordic” levels would be a much better starting point. Four-fifths of the world population living in the “South” cannot simply catapult over metallurgy, chemical industry, and manufacturing into a post-industrial service economy, which itself is dependent for its existence and expansion on physical capital. The pressure on material and energy inputs is growing, not declining. We are pouring oil on the fire, not water.
Technology is more endogenous than modern growth theory postulates.
The subject of growth is so central to the science of economics that generally-held convictions about it may be called upon to characterize socioeconomic evolution in broad brush endeavors of macrohistoric periodization. As one might expect, such “signs of the times” doctrines are Oedipal in nature. Each must kill its progenitor before it can mount the throne and fulfill its destiny.
Since the 1980s, the so-called endogenous growth theory (EGT) has held sway. It is distinguished from its predecessors by “endogenizing” variables formerly considered to be exogenous. Through their simultaneous interactions, all the variables are solved within a mathematical formulation of long-run economic expansion, typically captured by growth in productivity (output per capita). Particularly noteworthy is the “endogenization” of technological progress and demographic expansion.
Concerning technology, EGT symbolically eliminated its exogenous forerunner by permanently associating it with the derisive sound bite — “manna from heaven;” that is, for considering technological progress an unfailingly delivered gift (as if from a deus ex machina) rather than the result of a complex interplay among all demographic and economic variables. Ironically, EGT also has a quasi-religious belief in inevitable progress.
As much as it gropes to incorporate ecological considerations, the reigning growth theory is impervious — sometimes overtly hostile — to recognizing the entropy law’s importance in the economic process. It essentially denies that humans cannot create something out of nothing. It embraces creatio ex nihilo in a universe where creatio ex materia is the fundamental law.
By focusing on an enlarged concept of capital (called “generalized capital”), which includes knowledge and monetary gains from research and development, EGT heroically bans diminishing returns, i.e., the gradual disappearance of economic growth opportunities. The adherents (most of whom had topped off their wisdom tanks at unregenerate neoclassical filling stations) believe that, as long as human ingenuity prevails, the flow of new ideas into the global network of ever more efficient industrial assets — coupled with an insatiable entrepreneurial spirit — will ensure permanent growth.
In light of the second law of thermodynamics, EGT’s technical progress is also exogenous because it treats ideas about products and techniques of production as if they were independent from the terrestrial sphere’s overall physical condition. EGT redefined “manna from heaven” but remained dependent on it, abetting the insane theology whereby “growth forever” is possible in a thermodynamically closed system. In short, EGT misses and obfuscates the most essential.
The accumulation of entropy (unidirectional and irreversible), owing to the depletion of free energy contained in matter implies that the errant focus of scientific interest (always finding free energy for a purpose) is on its way to be statistically defeated. Matter may have an infinite number of qualities, but its growing dispersion decreases the probability that any particular set of qualities can be used without increased amounts of energy and matter. Importantly, the potentially unlimited energy pent up in matter cannot pick up the tab alone. More energy means increased use of matter, increasing the share of bound energy in our ecological niche.
Believing in the independence of technical innovativeness is the same as considering information a free variable that can undo entropic accumulation. The approach inadvertently equates entropy with ignorance and, hence, unconsciously assumes a loophole in the second law, the existence of perpetual motion machines.
The phsyico-chemical drain imposed on terrestrial matter will tend to frustrate particular solutions to the opportunistic acquisition of free energy from the global environment. Eternal substitution of one material for another is a sheer thermodynamic impossibility. But when and how will this already accessible rational insight begin to shape thinking and behavior and become the primal empirical paradigm of global self-organization is an indecipherable mystery.
Indefinite sustainability is a myth founded on blind spots.
Isn’t it possible, after all, that the current vampire-like hunger for low entropy (relatively easy-to-access free energy) can be assuaged before the world takes a great leap backwards both in terms of population and economic activity? It is possible; it cannot be excluded on theoretical grounds. But even this would not get us off the entropic hook.
World mass (defined as the ensemble of atoms in the human biomass, man-made objects, and living matter in human service) is not a static quantity. It is a throughput, a flow. New individuals appear as old ones melt into the landscape and deteriorated material objects must be replaced. Therefore, not even the maintenance of a large world mass is conceivable without drawing down exhaustible natural resources.
The only way sustainability could be maintained into the distant future is that demand for nonrenewables is reduced in tandem with the diminution of their supply. But such smooth, asymptotic convergence toward a fully green economy without declining populations and affluence overstretches credulity.
The best the world can hope for is to harvest the planet’s low entropy material endowment at an irreducible constant rate. This means the subtraction of the same number from a fixed sum; i.e., deceleration in value or accelerated write-down.
The recognition of this fix may become the ultimate spur for developing a new perspective on the human journey.
Georgescu-Roegen: Right diagnosis, wrong RX
The eminent scholar Georgescu-Roegen made a mistake by allowing his signal contribution to economic theory to be linked with a defeatist vision of “entropy.” Those who want to ban the second law of thermodynamics from economics through rhetoric strategy (in addition to jiggling some of the most vacuous, codified signifiers by which true believers recognize one another) do not have to do much more than to quote:
“If we understand well the problem, the best use of our iron resources is to produce plows or harrows as they are needed, not Rolls Royces, not even agricultural tractors . . . The realization of these truths will not make man willing to become less impatient and less prone to hollow wants.”
Such tragic romanticism, with a depressing call for self-denial, made “entropy” an offensive concept. The average psyche finds the hubristic vein of ever-upbeat unlimited growth advocacy more appealing than donning a hair shirt as punishment for enjoying the blessings of consumer capitalism.
Georgescu-Roegen should have emphasized the possibility of eliminating the terrestrial sphere’s (economically interpreted) material isolation as a feasible, future-oriented finality. Co-opting the moon as a standing reserve and terraforming Mars have become long-term orientation points in the space programs of leading nations. These are clear signs that humanity is drawn by space and is pointing toward it. The low level actuality in realizing these intentions ought not to diminish their significance.
By not recognizing all this, one of the founding figures of ecological economic thought injected controversy and vulnerability into the only correct way to analyze the world’s evolutionary potential.
But back to the immediate future!
It may be that the population/economy dualism, in particular, and any fragmented approach, in general, effectively renders the acceleration/declaration debate undecidable. To get out from this dead end, a fresh, physically-based methodology is proposed by examining the behavior of the world mass.
Integral approach to global limit issues
As a single object, world mass requires force to move both “forward,” meaning toward the planet’s carrying capacity and, simultaneously, “within;” i.e., performing its myriad interactions.
The larger the mass (the more it weighs) the more work it performs, the more energy it demands to expand and preserve itself. Solar radiation and energy contained in terrestrial matter (much of which is the legacy of solar radiation from the Earth’s geological past) provides the fuel.
It bears emphatic repetition that the terrestrial sphere is a thermodynamically closed system and that closeness combines the opposite features of openness and isolation. We import and export huge quantities of direct solar energy daily but are isolated as far as economically significant matter is concerned. And the partial openness cannot compensate for the consequences of partial isolation. Capturing solar energy requires physical substances and, despite the theoretical equivalence of energy and matter, the practical nexus is strictly one-way: Matter is used to generate energy but energy cannot be used to produce matter beyond the confines of a nuclear lab.
Free energy is being irreversibly transformed into bound energy, labeled inaccessible because the cost of accessing it (in joules) exceeds the gains (in joules). This means an irreversible accumulation of thermodynamic loss (entropy).
The world mass’ present and projected behavior implies an exponential amortization of the lump sum of free-energy contained in matter because both the mass and the amount of “push and pull” within it (the deployment of kinetic energy from somatic and extrasomatic sources combined) are monotonously increasing. A more detailed analysis that relates elementary physical variables — e.g., force, power, momentum, impulse — to the secular worldwide increase in productivity and the movement of people and goods makes this conclusion robust.
