The idea of Growth

Anupam Saraph, PhDFuture Designer and Professor of Systems and Decision Sciences

Dedicated to Nicholas Goergescu Roegen, Malcolm Slesser and all those anonymous humans striving to improve the pulse of the world

The growth game

• Every jump is a unit of revenue

• Every time I say start, you will jump till I say stop

• Every time I say stop, note the units you got since the last start; calculate the growth rate in your revenues

The growth game

• Why did you peak off?

• Why did your growth rate go to zero or even negative?

The growth game

• Innovate to continue growth

• When you are ready we will try your new growth strategy

The growth game

• What was the maximum achievable growth in both scenarios?

• What was the global growth in both scenarios?

revenuerevenue target

desired growth rate

resources(+) (-)

carrying capacity

Overshoot and Collapse

Revenue

Growth with doubled resources

Slower growth rates

The Resource Consumption Scenario

Some resources like water are becoming fast inaccessible and inadequate.

Some resources like oil have gone past their peak production. There is an energy shortfall of 17 - 20 TW. Building 1 1000 MW nuclear plant/day for 50 years would give

10 TW, Wind offers 2-4 TW , Solar offers 20, Biomass has 7-10 theoretical maximum.

In 2002, the Food and Agriculture Organization of the UN estimated that 75 percent of the world’s oceanic fisheries were fished at or beyond capacity. The North Atlantic cod fishery, fished sustainably for hundreds of years, has collapsed, and the species may have been pushed to biological extinction.

Growth is an increase in some quantity over time. Growth is not Development. Development is to become

more mature, elaborate. Growth by itself does not sustain that which grows, in fact

it can destroy it. Growth is by itself neither good nor bad. It depends on

what is growing and when. Nothing grows forever. Not all growth is economic. Uncontrolled growth uneconomic; it is often called cancer. The dynamics of uncontrolled growth eventually results in

an overshoot and then a collapse.

Growth

When the costs of growth exceed the benefits of growth, growth is uneconomic.

Uneconomic growthDepletes a resource that is more expensive than the revenue earned or that generates more harm than the revenue earned.Erodes the carrying capacity. Can continue by parasitic resource use.

Uneconomic growth

The Pollution Scenario

Some pollutants like carbon di-oxide have not be reduced by technology, political or market solutions over the last 20 years.

Sea level has risen 10–20 cm since 1900. Most non-polar glaciers are retreating, and the extent and thickness of Arctic sea ice is decreasing in summer.

The first global assessment of soil loss, based on studies of hundreds of experts, found that 38 percent, or nearly 1.4 billion acres, of currently used agricultural land has been degraded.

CO2 Concentration

To overshoot means to go too far, to grow so large so quickly that limits are exceeded. When an overshoot occurs, it induces stresses that begin to slow and stop growth.

The cause for overshoot and collapse are always the sameFirst, there is growth, acceleration, rapid change. Second, the growth drives a depletion of some resource required for the growth or an increase in some resource that harms the growth.Third this dynamics causes a contraction, deceleration or decay resulting in a collapse.

Overshoot and collapse

We Live in an Growth Era

Source: Alan Atkisson and Junko Edahiro, Life Beyond Growth, ISIS Academy 2012

“The closed economy of the future might similarly be called the 'spaceman' economy, in which the earth has become a single spaceship, without unlimited reservoirs of anything, either for extraction or for pollution, and in which, therefore, man must find his place in a cyclical ecological system” - Kenneth Boulding

1879: Henry George, Progress and Poverty1965, Adlai Stevenson in the UN1966, Barbara Ward, Spaceship Earth1966, Kenneth Boulding, The Economics of the Coming Spaceship Earth 1968, Buckminister Fuller, Operating Manual for Spaceship Earth 1971, U. Thant in the UN

Spaceship Earth

In a closed system •Resources and the carrying capacity are finite. •Perpetual growth is impossible. •Uneconomic growth is inevitable. •Unless regulated an overshoot and collapse is the likely scenario.

Growth on Spaceship Earth

Nicholas Georgescu RoegenWas a mathematician and economist.

He was possibly the first to point out that growth cannot violate the laws of thermodynamics.

All growth requires energy.

Malcolm Slesser

Was a professor, energy analyst and energy economist.

He highlighted that the rate of growth of the global economy was about 2% per anum and has historically never exceeded that. He developed tools to compute the dynamics of growth of national economies and to explore ways to increase their carrying capacity.

The maximum rate of growth of the economy cannot exceed the rate at which energy is pumped into the economy.

Donella Meadowswas a systems analyst and adjunct professor of Environmental Studies at Dartmouth College. She was the lead author bringing the insight of limits to growth from the study for the Club of Rome to the world.

Dennis Meadowshas served on the faculties and directed research centers at MIT, Dartmouth College, and the University of New Hampshire. He is President of the Laboratory for Interactive Learning. Has revisited the study in 1992 and 2002 to confirm the findings documented in the 1972 book on limits to growth.

Jay ForresterProfessor Emeritus at MIT, led the team of researchers who developed the World model for the Club of Rome to explore the dynamics of growth in a finite world.

Technology cannot yield perpetual growth

Energy expansion has been no more than 2% per anum. World GDP has also matched the energy growth. Technology requires energy. Rapid replacement of existing

capital with alternate energy or energy efficient capital drives limited energy away from other requirements of the economy, limiting the rate at which this is practicable.

GDP Growth rates of various countries reflect their ability to control resources (through wars, ownership or trade) and (failure to) offset the impact of pollution.

Fifty-four nations experienced declines in per capita GDP for more than a decade during the period 1990–2001.

Energy production refers to forms of primary energy--petroleum (crude oil, natural gas liquids, and oil from nonconventional sources), natural gas, solid fuels (coal, lignite, and other derived fuels),and combustible renewables and waste--and primary electricity, all converted into oil equivalents.International Energy Agency (IEA Statistics © OECD/IEA, http://www.iea.org/stats/index.asp).

Energy production (kt of oil equivalent)

GDP at purchaser's prices is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the products. It is calculated without making deductions for depreciation of fabricated assets or for depletion and degradation of natural resources. Data are in constant 2000 U.S. dollars. Dollar figures for GDP are converted from domestic currencies using 2000 official exchange rates. For a few countries where the official exchange rate does not reflect the rate effectively applied to actual foreign exchange transactions, an alternative conversion factor is used.World Bank national accounts data, and OECD National Accounts data files.

GDP (constant 2000 US$)

GDP Growth 2000-2010

Annual percentage growth rate of GDP at market prices based on constant local currency. Aggregates are based on constant 2000 U.S. dollars. GDP is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the products. It is calculated without making deductions for depreciation of fabricated assets or for depletion and degradation of natural resources.World Bank national accounts data, and OECD National Accounts data files.

Energy use, (kt of oil equivalent)Energy use refers to use of primary energy before transformation to other end-use fuels, which is equal to indigenous production plus imports and stock changes, minus exports and fuel supplied to ships and aircraft engaged in international transport.

Energy imports, net (% of energy use)Net energy imports are estimated as energy use less production, both measured in oil equivalents. A negative value indicates that the country is a net exporter. Energy use refers to use of primary energy before transformation to other end-use fuels, which is equal to indigenous production plus imports and stock changes, minus exports and fuels supplied to ships and aircraft engaged in international transport.

Politics and Markets do not create perpetual growth

Failure to build informational, social, and institutional mechanisms to keep in check the positive feedback loops that cause exponential population.

Mounting debt and paper “wealth” drive politics and markets. The richest one- fifth of the world’s population has 85 percent

of the global GNP. In 1998 more than 45 percent of the globe’s people had to live on incomes averaging $2 a day or less. And the gap between rich and poor is widening.

Deterioration in renewable resources - surface and ground water, forests, fisheries, agricultural land.

Rising levels of pollution. Growing demands for capital, resources, and labor by military

and industry to secure, process, and defend resources. Investment in human resources (education, shelter, health care)

postponed in order to provide immediate consumption and security demands.

Rising debt; eroding goals for health and environment. Growing instability in natural ecosystems. Growing gap between rich and poor - between the powerful and

the weak. Meadows, et. al. pp 176-177.

Some Indicators of Overshoot

Human beings and the natural world are on a collision course.

Human activities inflict harsh and often irreversible damage on the environment and on critical resources. If not checked, many of our current practices put at serious risk the future that we wish for human society and the plant and animal kingdoms, and may so alter the living world that it will be unable to sustain life in the manner that we know.

Fundamental changes are urgent if we are to avoid the collision our present course will bring about.

World Scientists’ Warning to Humanity signed by more than 1,600 scientists, including 102 Nobel laureates, from 70 countries, 1992

Some Indicators of Overshoot

The idea of growth

Growth in a closed system is not perpetual Technology, markets or politics cannot create perpetual

growth Growth has overshot the carrying capacity when it becomes

uneconomic Growth as an end is the pursuit of a purposeless society