There is one issue that has been tormenting my mind for quite some time, namely the following contradiction. On one hand, planet Earth offers finite resources and has a limited carrying capacity for all its inhabitants, i.e. a limited regeneration ability for resources extracted by those inhabitants. On the other hand, our current global civilisation is based to a growth paradigm, in its mindset and most importantly, in its economic thinking. Hence the question: given a finite planet, can this civilisation ever become sustainable? This story ponders over the possibility of an economic state where our civilisation is in equilibrium with planet Earth.
Population, Affluence & Technology
Any human activity on this planet has an impact on the environment; a common way to express and quantify this impact is the so-called I-PAT model: the impact I is a product of the three factors population (P), affluence (A) and technology (T). I would like to extend this approach to express and quantify the usage of a given resource such as energy, copper, iron, fresh water or any other commodity underpinning our civilisation. Similarly to the impact, a given resource R can then be thought of as the product of three factors: population, affluence expressed in monetary unit/capita and technology expressed in resource unit per monetary unit, or
Resource = Population x Affluence x Technology
Any resource usage in this R-PAT model, however, is far away from being at a level at or below the carrying capacity. As the world economy has been growing over the past centuries, every resource usage (and its impact as it happens) has been growing, too. For instance, energy consumption — which can be used as a proxy for other resources — has been growing at an exponential rate of 2.3% per annum according to Tom Murphy’s Exponential Energy Extrapolation or Annual change in primary energy consumption on Our World in Data.
Combining the concept of R-PAT with an exponential growth model, each factor (population, affluence, technology) can be each expressed as a product of a respective constant at an arbitrary moment (P₀, A₀, T₀) and a respective exponential term with a exponential growth rate (aₚ, aₐ, aₜ) yielding the overall resource usage R as:
which can be re-arranged as:
The resource R is hence the product of the contributing constants R₀ = P₀ x A₀ x T₀ times the exponential function with the sum of all growth factors in the exponent as the overall resource growth factor aᵣ = aₚ+ aₐ + aₜ.
Possible Stationary System
In an equilibrium on earth, the impact of all resources ought to remain within sustainable limits and the planet’s regeneration capacity. This means that in the worst (or best) case the resource extraction is allowed to grow only up to a ceiling value of Rₓ for any given resource with the sum of all growth factors being zero, i.e. aᵣ = aₚ+ aₐ + aₜ = 0. Such a stationary material state would be characterised by:
- the sustainable amount of Rₓ for all consumable resources available to our civilisation has been reached, i.e. resource extraction = resource regeneration = Rₓ, e.g. fresh water extracted from aquifers for irrigation used in agriculture and similar resources.
- certain kinds of resources can be accumulated after extraction but with a certain decay during usage such as timber taken from managed forests for metals which are mined¹. There would be a total amount of recirculating resource Rᵣ available to our civilisation; at loss rate r, any reuse and recycling losses Rᵣ x r would have to be equal to the regeneration capacity Rₓ. The amount of recirculating mass would then be Rᵣ = Rₓ / r. The smaller the losses, the larger the recirculating amount will be. In other words, the more resources are reused & recycled at low loss, the more is available per person, i.e. more affluence.
- our civilisation uses in essence natural resources and transforms them into something useful using energy; the only independent source of that energy is the sun; consequently, this stationary state can only be powered by solar energy, directly (PV, CSP) or indirectly (wind & hydro). Note that recycling as mentioned before demands energy, too. To a certain extent, the recirculating mass is also limited by the amount of energy available to recycle & refine, e.g. metals like steel.
Such a civilisation is shown in the diagram above. John Stuart Mill reflected already in 1848 on the “stationary state of population and capital”, and later, Herman Daly, made a case for a “steady state economy” by stating:
… if we are to remain within ecological scale, there must be a constant stock of capital assets, capable of being maintained by a rate of material throughput that always lies within the regenerative capacities of the ecosystem.
If the total material resource growth rate has to be zero, this means that the sum of contributing growth rates aₚ + aₐ + aₜ, has to be zero, too. The crux is: how can we accommodate human ambition and the innate desire for creativity (perhaps as a compensation for mortality), and by extension, economic growth² with constant resource use on a finite planet?
First, the equation on resource usage already contains the model for economic output E in some currency unit as a function of time, using population P and affluence A expressed in currency unit/capita:
or rearranged again as:
As long as the sum of aₚ + aₐ is positive, the economic output E will grow, too. Using this approach, the problem of economic growth in a planetary equilibrium can be put as two conditions than need to hold:
aₚ + aₐ > 0 & aₚ + aₐ + aₜ <= 0
It can be amusing to play with the numbers and find combinations that would satisfy both equations, e.g. assuming a declining population. One attempt to find solution to this conundrum is called Economic decoupling which comes in two flavours:
- relative decoupling: resource usage (or intensity) grows at a lower rate than the economic growth but still continues to grow; a decrease in relative terms. This is self-evident looking at the growth factors. If aₚ + aₐ is positive, then aₜ has to be negative, i.e. a decline in material intensity through efficiency improvements.
- absolute decoupling: resource usage declines in absolute terms, i.e. aₚ + aₐ + aₜ < 0. If economic growth is expected to remain positive (aₚ + aₐ > 0), then aₚ + aₐ has to be more than compensated by the decrease in resource intensity, i.e. aₜ < -(aₚ + aₐ). This means significant efficiency gains are needed to compensate population and affluence growth.
The snag with decoupling is that efficiency gains are unfortunately limited. For example, over the past few decades huge strides were made in the efficiency of lighting in the transition from incandescent to LED lights. However, LEDs are close to the theoretical limits. Since this limitation holds true for all resources, a resource is often substituted by another one. The new resource will suffer the same problem in due course as substitution moves the goal post and buys some time. The issues with decoupling & substitution has been described in various places, such as in “The Myth of Decoupling” in Tim Jackson’s Prosperity Without Growth.
Bottom line: if our civilisation had to live within planetary boundaries, in an equilibrium between resource use and regeneration capability of the planet, economic growth will have to converge to zero at some point in the future, even with decoupling and substitution. Perhaps then, given enough time, a suitable economic system would have evolved, too.
Prosperity within Material Boundaries
What could we learn from the design of a spaceship about the conditions that allow prosperity within planetary…
- Even though minerals and metals may be regenerated by planet Earth in time scales of millions of years, the mining business at our time scales is still extractive and not regenerative. Mining takes energy and other resources, too, and all low hanging fruit has already ben harvested, i.e. high grade ores are known and exploited. More are being found, but usually at lower grades. More energy will be needed to refine these ores into metals; to make matters worse, energy being a resource, too, more energy is needed to produce even more energy due to a diminishing ERoEI. Hence, in the long run, our civilisation would have to make do with what has already been refined and invest more energy to keep it that way (second law of thermodynamics).
- Our entire economic system is based on growth, usually measured in GDP, which is related to the concepts of return-on-investment and interest rates for debt-based financing. This growth paradigm is baked into our banking and monetary systems, and as a consequence into our provision for retirement and pension payment s based on pension funds and government bonds; they constitute the contract with future generations and the need, even the underlying expectation for an increased economic output in the future.
- Population is an important factor. 3.5% population growth means doubling in 20 years. 3.5% population shrinking results in half the population in 20 years. Or 1% contractions means half the population by the end of the century (~70 years). But that is a different story as then the economic output decreases proportionally which does not work well with the established economic growth paradigm.