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April 20, 2011

Nature and the bottom line

The folly of endless economic growth on a finite planet

Charles Darwin was a consummate scientist, meticulous and rigorous. He spent nearly 20 years sifting his research, honing his analysis and polishing his prose before publishing his groundbreaking work, “On the Origin of Species,” in November 1859.

Darwin’s slim volume was what we would call a “game-changer”; a revolutionary work that fundamentally altered the way human beings see themselves and the natural world. Today most of us are familiar with his theory of natural selection, the foundation of modern evolutionary biology. But 150 years ago, Darwin was sailing into choppy waters; his thesis challenged the orthodox view that humans were a separate, unique part of God’s creation and that all life was divinely concocted and unchangeable.

The establishment mocked him. There was intense public debate. But Darwin was unflinching. Today his core idea that all animals and plants evolve and adapt through natural selection is the bedrock of modern life sciences. He opened the door to a new world — a door which religious fundamentalists and “intelligent design” proponents are still trying to close.

Darwin’s long battle has disturbing echoes today. We, too, are trapped in the same sort of false illusion that stymied critical thought before his radical breakthrough. Except the myth that envelops us is more dangerous and even more deeply rooted.

Our great sustaining myth is economic growth: faith that the economy can grow forever, that there are no limits to the wealth we can create from the natural resources of the Earth. Growth, measured by an increasing gross domestic product (GDP), is what drives government policy worldwide. The equation has been drummed into us for so long that it’s received wisdom. Growth equals prosperity and jobs. Growth equals progress.

Yet this is a fairly recent turn of events. Using GDP as a tool to measure growth has only been around since the late 1940s when the United Nations System of National Accounts was developed. For most of human history economic growth was a mere blip. Only the last eight generations of humans have experienced consistent growth (out of an estimated 125,000 generations in total). As the father of green economics, Herman Daly writes: “Historically, steady state is the normal condition; growth is an aberration.” By “steady state” Daly means an economy with a constant population and “the lowest feasible flows of matter and energy from the first stage of production to the last stage of consumption.”

The latest global economic slump underlines our reliance on growth. What happens when the economy stumbles? Financial markets crash, property values plummet, bankruptcies pile up, unemployment soars and social pathologies multiply. Prime the pump with billions in government funds. Pray that tax breaks and fiscal stimulus boost investment, production and jobs.

Yet the world already produces way too much stuff, a lot of it unnecessary and much of it useless. We go on churning out mountains of consumer goods because it’s good for growth. As long as the economy keeps growing, things will be OK. Growth keeps people employed, investment profitable and the endless cycle of production and consumption spinning. Increases in productivity and the restless search for profits drive the process. Endless accumulation and expansion is the core of capitalism.

Consider this: The world economy grew more than seven-fold from 1950 to 2000. It’s projected to do the same again by 2050. At current rates of growth (before the recent global meltdown) the economy was doubling every 15 years, a breathtaking number when you consider it took all of human history to hit the $6 trillion world economy of 1950.

As the U.S. writers Fred Magdoff and John Bellamy Foster note: “No-growth capitalism is an oxymoron: When growth ceases, the system is in a state of crisis.” The upshot is that the natural environment, on which human life and the human economy depend, is sidelined “not as a place with inherent boundaries within which human beings must live together with Earth’s other species, but as a realm to be exploited in a process of growing economic expansion.”

The uncomfortable truth is that the physical resources of the biosphere are finite. We’re not approaching the ecological limits to growth; we’re well past them. And in the process, we’re fouling the globe with our wastes and threatening the natural systems on which humanity and all other species depend. The statistics of ecological decline could fill a library. We’re chewing through massive quantities of renewable and nonrenewable resources at a breakneck speed.

In 2005, the U.N. Millennium Ecosystem Assessment, a collaborative work of more than 10,000 scientists, found 60 percent of “ecosystem services” — things like climate regulation, the water cycle, pollination, global fisheries, natural waste treatment — were being degraded or used unsustainably. “Human activity is putting such a heavy strain on the natural functions of the Earth,” the report warned, “that the ability of the planet’s ecosystems to sustain human endeavor can no longer be taken for granted.”

The now familiar “ecological footprint” model supports this conclusion. It’s a way of asking how much we’re extracting from the planet to live the way we do. Conventional economics tends to see the environment as a subset of the economy. The footprint approach does the reverse, comparing humanity’s ecological impact, resources consumed and waste produced with the amount of productive land and water available to supply key ecosystem services. It deals in averages, so the rich/poor divide is blurred. But the message is clear: It takes about 4.5 acres to sustain the average person on Earth. Those of us in the rich world are way above the average: Canadians use about 20 acres. Americans use nearly 25, more than five times the average. In 1961, human beings used about half the Earth’s biocapacity; by 2006 we were using 44 percent more than what was available. Mathis Wackernagel, one of the founders of the footprint analysis, says we will need the equivalent of two Earths by the late 2030s to keep up with our demands. Ecologists call this phenomenon “overshoot.” It’s a temporary state that becomes more untenable as stocks of renewable and nonrenewable resources are depleted. “Since the 1980s, we’ve been drawing down the biosphere’s principal rather than living off its annual interest,” Wackernagel states. “To support our consumption, we have been liquidating resource stocks and allowing carbon dioxide to accumulate in the atmosphere.”

Oil is the main culprit. The burning of fossil fuels, especially petroleum, powers the global economy. Oil is an extraordinary feat of concentrated energy: Three large teaspoons of crude contain about the same amount of energy as eight hours of human manual labor.

Napoleon said an army marches on its stomach; our modern, globalized economy marches on oil. But the costs now exceed the benefits. Take the climate system, a key “natural service” threatened by human-made greenhouse gas emissions, mostly CO2, the main byproduct from the combustion of fossil fuels. The more oil and coal we burn, the more CO2 is pumped into the atmosphere and the more we tip the balance.

Leading climate scientists say a target of 350 parts per million (ppm) of CO2 may avoid dangerous climate cahange. We’re currently at 390 ppm and projected to hit 650 ppm by the end of this century. This translates into an increase in global temperature that could result in large parts of Africa, China, India and Latin America becoming deserts or near-deserts. Heard the term “environmental refugees”? Keep it in mind, because you’re going to be hearing it a lot more.

Even on its own terms, growth isn’t working. We avoid talking about the skewed distribution of the planet’s wealth and income, dreaming instead that we can grow our way out of the problem. So the richest 20 percent of the world’s population consumes the lion’s share of resources, while the poorest 80 percent get by on the crumbs. And the ratios are getting worse. Growth is an excuse for continued inequality. But more importantly, countless studies show that beyond a certain point, higher levels of material consumption don’t lead to increased wellbeing. Per capita GDP has tripled in the United States since 1950, but the percentage of people who say they are happy has declined since the 1970s.

Free market cheerleaders believe technology and human ingenuity will solve the problem — that the economy can be “de-coupled” from material inputs, and that improved technology will allow us to produce more wealth with less energy, materials and waste. This is whistling in the dark. Between 1970 and 2000, rich countries saw impressive gains in energy efficiency of up to 40 percent. But average improvements of 2 percent a year were eclipsed by growth rates of 3 percent or more. Increased technical efficiency is swamped by increased consumption. A recent report by the New Economics Foundation found that to stabilize carbon emissions at 350 ppm by 2050, the carbon intensity (CO2 per unit of production) of the global economy would need to fall by 95 percent. Ramping up GDP without improving technological efficiency leads to more environmental damage. Yet improving efficiency triggers more growth, which leads to the same result.

We’ve been captured by a myth far more alluring than the one that Charles Darwin confronted 150 years ago: the dream of perpetual economic growth. We have been living beyond our ecological means for decades, consuming too much and producing more waste than the environment can absorb, while inequality grows.

The global population is expected to jump by 3 billion in the next 40 years — more than the entire population in 1950. Most of that increase will be in the places where poverty is entrenched and living standards desperate.

The economy is a human construct: We made it. We can change it.