Why “Growth” Makes Fools of Us all

It never ceases to amaze me just how quickly people tend to reject a blatantly obvious observation such as the hopeless naivety that spawns from growth economics. One would assume that it should be a no-brainer to say that growing resource demand from a limited resource pool will ultimately lead to a collapse of that resource and if the resource is vital, so to the population.

Yet, surprisingly, people scoff such conclusions away as the result of some lunatic dooms-day theorist.

So here I will present a basic version of the problem to illustrate it as basically as one can.

Let’s say you start with a population value “ɲ” (here, 10 people) and starting quote of a resource “ß” (here, 1000000 units) with each unit supporting 1 person for one year. Effectively, that is a huge number of a resource. Using the numbers pre-selected, at the very least, such a resource should last the population for 100,000 years (if non-renewable).

We often hear of a favoured growth of 2% per year, so we will add a population growth of 2% per year.

If the resource is non-renewable, now it runs collapses in 0.004% of the time, when the population has increased 2000 fold (fig. 1). For example, if our consumption for fossil fuels, for example, had remained stable, rather than driven purely by growth, it would have lasted us many centuries longer, place providing environments that extra time to absorb these emissions, saving us all this trouble.

Figure 1. Population growth impact on non-renewable resources

Of course, some vital resources also grow with time. If we start with the same initial conditions and this time match the 2% growth for resources as well, we find that they continue to grow regardless of population and only collapse if the growth rate is dropped to 1.7%. Collapse with this reduced growth rate occurs in about 0.019% of the time of the original conditions (ie. stable population with ß units of non-renewable resource, fig. 2).

Figure 2. Population growth (2%) and renewable resource growth (1.7%) without restrictions

However, even this scenario is not very realistic. Resources and population are spatially limited to suitable areas for life on the globe. Therefore, we can assume the original value of ß for resources is the natural limit of the resource as it is likely to reached equilibrium prior to the coming of the population.

This time, we can match growth rates for population and resource renewal of 2%, with the upper limit of resource amount being ß. This time, the resource remains stable at ß until population increases by 2000 fold (again!) and then it rapidly collapses (fig. 3).

Figure 3. Population growth (2%) and renewable resource (2%) with starting amount as upper limit

It seems no matter how you shift the values, collapse is inevitable. In fact, noting the 2000 fold value, we only reach an ongoing access to such a renewable resource if ɲ is kept beneath this magnitude, in other words, growth in resource extraction has an upper limit or, a stable economic model.

I admit, I have grossly simplified the situation. However the basic principles stand regardless of how much one desires to add complexity. This is why I continually stress the virtue of efficiency. We must acknowledge that there is a maximum limit to how much of a renewable resource that we can exploit indefinitely and also that growth dramatically reduces the time in which a non-renewable can serve a role, however such points have no say in how well we use the resource!

The difference between when we reach peak coal or gas and how much of it changes the chemistry of the atmosphere depends on how much energy we can extract per unit (recognising too that population size must also be limited). It is nothing but account keeping and growth puts us more in debt.

Another point worth raising is yet another one of my favourite points that goes alongside efficiency – it is investment. How much we change the atmosphere or how many units of fresh water we have access to depends upon how much we shore up natural processes that provide the ecological and geological functions for these processes. Spending money on biodiversity and biophilic design to human landscapes is an investment that is highly profitable (in a real world sense) without the same volatility of our markets.

In short, our favoured approach is a bad bet. The bookies are making a stack of cash by convincing us to bet on that dead horse – growth markets. Overlooking the simple story is making fools of us all.

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