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What the controversial 1972 ‘Limits to Growth’ report got right: Our choices today shape future conditions for life on Earth

Provost Professor of Economics and Spatial Sciences, USC Dornsife College of Letters, Arts and Sciences

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Matthew E. Kahn does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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The 1970s launched an environmental reckoning across the U.S. Spurred by rising public concern, corporations and national leaders pledged to protect resources, and created new laws and agencies to lead that effort.

Amid these discussions, a group of researchers at MIT tackled a far-reaching question: How long can humanity keep growing and consuming at its current rate?

Using computer modeling, they came up with an ominous answer :

“If the present growth trends in world population, industrialization, pollution, food production, and resource depletion continue unchanged, the limits to growth on this planet will be reached sometime within the next one hundred years. The most probable result will be a rather sudden and uncontrollable decline in both population and industrial capacity.”

Their report, “ The Limits to Growth ,” generated widespread controversy when it was published in 1972. It was an intellectual extension of biologist Paul Ehrlich’s thesis in his 1968 bestseller “ The Population Bomb ,” which predicted that aggregate world demand for resources, driven by population growth, would lead to future starvation. Some predictions in “The Limits to Growth” were impressively accurate, while others proved to be way off.

As an environmental economist , I tend to be skeptical that any one model can explain how the global economy operates at a single point in time, let alone predict global conditions in 2100.

Nonetheless, I believe “The Limits to Growth” got a larger point right: Humans must limit and soon reduce their aggregate production of greenhouse gas emissions. The authors anticipated the potential for the world’s economy to shift to cleaner sources of energy, noting that “If man’s energy needs are someday supplied by nuclear power instead of fossil fuels, this increase in atmospheric carbon dioxide will eventually cease, one hopes before it has had any measurable ecological or climatological effect.”

Graph showing world growth declining radically

Extrapolating resource use

The MIT research team that produced “The Limits to Growth” focused on five basic factors that they claimed determined, and therefore ultimately limited, growth on Earth: population, agricultural production, natural resources, industrial production and pollution.

They hypothesized that a growing economy eventually devours its finite supplies of natural resources. If aggregate demand for resources such as wood, oil, rubber, copper and zinc increases as the world’s population grows and per capita income rises, they forecast that the world will eventually run out of these precious resources.

At its heart, this is an extrapolation exercise. If developing nations such as India catch up by the year 2035 to the U.S level of average income in the year 2000, the argument goes, then the average person in India in 2035 will consume the same quantity of natural resources as the average American did in 2000. This approach assumes that we can foresee a developing nation’s future consumption patterns by looking at consumption patterns in a rich country today.

World map showing nations' GDP per capita in 2020

Economists respond

Economists have tended to be more optimistic that ongoing economic growth can slow population growth, accelerate technological progress and bring about new goods that offer consumers the services they desire without the negative environmental consequences associated with past consumption.

The Limits to Growth mindset implicitly assumes that our menu of consumption choices does not really change over time. Consider the vehicle market: In the year 2000, one could not buy a Tesla or Chevy Volt to get around without consuming fossil fuel.

A typical economist would argue that Elon Musk invested in Tesla because he anticipated rising demand for high-quality electric vehicles. In this sense, the belief that we could run out of oil helps us to adapt to expected scarcity by accelerating innovation.

Why? If the Limits to Growth hypothesis is correct, then future gas prices will soar as aggregate demand devours our finite supply of resources. And as gas prices rise, so will future demand for electric vehicles.

This point applies to more than cars. In a 1992 reassessment of “The Limits to Growth,” Nobel laureate William Nordhaus argued that rising aggregate demand for natural resources traded in markets, such as oil, wood and copper, will lead to rising prices. This scarcity signal will encourage buyers to substitute other products for increasingly expensive resources.

Economists tend to be optimistic that we can always find substitutes for resources that are becoming increasingly scarce. “The Limits to Growth” implicitly assumed that such possibilities were limited.

For-profit firms constantly design new products to attract consumers. Some goods, such as smartphones, may deplete natural resources . But others have smaller environmental footprints than the products they replace, and those eco-benefits can help attract customers .

For example, affluent people today are choosing to eat less red meat to improve their health . Innovative firms are designing “ fake meat ” to cater to those consumers. If more consumers substitute fake meat for meat, then the perverse environmental impacts of global caloric intake decline.

“The Limits to Growth” emphasized population and income growth as key determinants of resource collapse. But worldwide, as people move to cities and their earnings rise, they tend to marry later and have fewer children . Nobel laureate Gary Becker argues that choosing to have fewer children represents prioritizing quality over quantity of children. Such household choices help to reduce aggregate population growth and defuse the “population bomb.”

The limits that matter today

Today, scientists and policymakers widely agree that climate change is an overriding challenge worldwide. But the risk isn’t running out of resources. Rather, it is warming Earth drastically enough to produce heat waves, wildfires, floods and other impacts on catastrophic scales.

The standard economic policy prescription for cutting greenhouse gas emissions that drive climate change is adopting a carbon tax . This gives consumers an incentive to use less fossil fuel and businesses an incentive to produce better low-carbon technologies, such as electric vehicles and green power.

If every nation enacted a carbon tax that rises over time, then economists would be confident that we could avoid the most severe negative effects of global economic growth. Why? A great race would unfold, with carbon emissions per dollar of global gross domestic product declining faster than economic growth would rise and global emissions declining.

The vast majority of economists believe that economic growth is essential for improving the lives of billions in the developing world. As people invest in their education and urbanize, economic logic predicts that population growth will slow. And energy efficiency will increase if energy prices are rising over time, due to induced innovation .

Children stand in line in a slum, carrying large plastic jugs.

Climate scientists are analyzing how much nations must reduce their aggregate emissions to avoid climate change on a catastrophic scale. Ideally, climate mitigation policies can be fine-tuned to balance ongoing global per capita income growth while staying within the aggregate emissions constraints prescribed by climate science research.

Since the full costs of runaway climate change aren’t known, many economists have embraced the idea of reducing carbon emissions as insurance against extreme climate risks . Call it a “limit to carbon growth.” Ongoing efforts to invest in climate change adaptation, and nascent efforts to explore the potential of geoengineering , provide humanity with additional strategies for coping with the consequences of our past carbon growth.

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Amid these discussions, a group of researchers at MIT tackled a far-reaching question: How long can humanity keep growing and consuming at its current rate?

Using computer modeling, they came up with an ominous answer :

“If the present growth trends in world population, industrialization, pollution, food production, and resource depletion continue unchanged, the limits to growth on this planet will be reached sometime within the next one hundred years. The most probable result will be a rather sudden and uncontrollable decline in both population and industrial capacity.”

As an environmental economist , I tend to be skeptical that any one model can explain how the global economy operates at a single point in time, let alone predict global conditions in 2100.

A figure from ‘The Limits to Growth,’ with consumption continuing at the 1970 rate. Depletion of nonrenewable resources leads to a collapse of industrial production, with growth stopping before 2100. (Image srouce: YaguraStation/Wikipedia , CC BY-SA .)

Extrapolating resource use

Wealth per capita varies widely around the world. Richer nations have much higher per capita resource consumption. (Image source: Our World in Data , CC BY-ND .)

Economists respond

London researchers are developing a new kind of fuel by converting household waste into a low-carbon bio-substitute. See more in this week’s tech playlist https://t.co/Cxodk6tp1b via @ReutersTV pic.twitter.com/jYt0AGUOgq — Reuters (@Reuters) July 7, 2019

Copenhagen offers a model for sustainable urban development, with a goal of carbon neutrality by 2025.

The limits that matter today

Matthew E. Kahn , Provost Professor of Economics and Spatial Sciences, USC Dornsife College of Letters, Arts and Sciences

This article is republished from The Conversation under a Creative Commons license. Read the original article .

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The Limits to Growth

Published 1972 – The message of this book still holds today: The earth’s interlocking resources – the global system of nature in which we all live – probably cannot support present rates of economic and population growth much beyond the year 2100, if that long, even with advanced technology. In the summer of 1970, an international team of researchers at the Massachusetts Institute of Technology began a study of the implications of continued worldwide growth. They examined the five basic factors that determine and, in their interactions, ultimately limit growth on this planet-population increase, agricultural production, nonrenewable resource depletion, industrial output, and pollution generation. The MIT team fed data on these five factors into a global computer model and then tested the behavior of the model under several sets of assumptions to determine alternative patterns for mankind’s future. The Limits to Growth is the nontechnical report of their findings. The book contains a message of hope, as well: Man can create a society in which he can live indefinitely on earth if he imposes limits on himself and his production of material goods to achieve a state of global equilibrium with population and production in carefully selected balance.

Authors: Donella H. Meadows, Dennis L. Meadows, Jørgen Randers, William Behrens III

Download the book in pdf here.

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Intereconomics / Volumes / 2022 / Number 3 / The Limits to Growth – 50 Years Ago and Today

Volume 57, 2022 · Number 3 · JEL: F63, F64, N10

The Limits to Growth – 50 Years Ago and Today

By Thomas Döring , Birgit Aigner-Walder

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Thomas Döring , Darmstadt University of Applied Sciences, Germany.

Birgit Aigner-Walder , Carinthia University of Applied Sciences, Austria.

The Limits to Growth was published 50 years ago. Ordered by the Club of Rome, the study was a milestone in the analysis of the economic, demographic, technical and ecological effects of the existing economic system. In industrialised Western countries in particular, the critical examination of the development model of continuous economic growth led to a broad discussion about the far-reaching implications of a global economy focusing on growth, on a planet with finite natural resources.

Criticism of the growth paradigm, dominant in both market-based and planned economic systems, has existed (almost) as long as economic growth itself. For example, Thomas Malthus (1798) reflected on the natural boundaries of economic and population growth very early on (Hussen, 2018). However, Meadows et al. (1972) carried out a notably broad system analysis. On the one hand, they examined existing ecological as well as socio-economic development trends and their global effects in detail. Secondly, the use of computer models to simulate different development scenarios of the world economy, based on the availability of data, was a methodological novelty at the time.

The study of 1972, as well as its later updates, paved the way for growth-critical contributions of the recent past. Existing approaches that dominate current discussions, such as “post-growth”, “de-growth”, or “green growth”, do not merely reproduce the critique of growth, but rather expand it to include additional perspectives on global consequences, such as climate change, species extinction, social inequality or unemployment (see e.g. van den Bergh and Kallies, 2021; Jackson, 2017). Moreover, from today’s perspective, the limits to growth are no longer seen primarily in terms of depleting raw materials, but rather as planetary boundaries, with the ecological functioning of the planet being endangered (see Rockström et al., 2009; Foley et al., 2010; Persson et al., 2022 for more details). Due to the intensity of human intervention in nature, researchers believe that the limits of biodiversity, the nitrogen and phophate cycle, chemical pollution and climate change have already been exceeded, creating a threat to the natural basis of life for future generations. The German Federal Environmental Agency (2021) estimates that the cost of the global consequences of climate change and the loss of biological diversity alone will be around 25% of global GDP by 2050.

The Limits to Growth report

Based on a computer-simulated world model, the report analysed five basic development trends with global consequences: population growth, industrialisation, malnutrition, exploitation of raw materials and destruction of the living environment. The scenarios analysed differed in their assumptions in supply of raw materials, efficiency in agricultural production, as well as the level of birth control and environmental protection. Most of the simulations found an initially ordinary population and economic growth until the year 2050. After that, there was a tipping point that marked a sharp and unstoppable reduction in population and industrial capacity, combined with environmental destruction and widely depleted raw materials. The source of this collapse of the world economy in the various scenarios was, above all, the dynamics of growth that tended to be unproblematic initially but had increasingly negative environmental aspects as time progressed.

Nevertheless, it was also possible to calculate scenarios characterised by a long-term sustainable ecological as well as economic equilibrium with a constant population and prosperity level. However, the prerequisite for this was fundamental changes in the preconditions for growth, such as instant and drastic measures for environmental protection, birth control, a reduction of economic growth as well as various technological measures such as an increase in the recycling rate, an extended use of investment and other capital goods and an increase in agricultural productivity.

In order to address the problem of partly unavailable data, the calculations assume a much higher stock of raw materials than known in 1972. Additionally, different assumptions concerning the economic growth rate were applied. However, despite these modifications, the stock of raw materials still ran short before 2100 in the majority of simulated scenarios. Moreover, according to the forecasts, a possible state of equilibrium could only be achieved under a rapid implementation of massive countermeasures.

Reactions and updates

In light of the oil crisis in 1973, The Limits to Growth has led to a recognisable rethinking in industrialised countries in the course of a more qualitative-oriented growth. This rethinking was reflected in technological innovations aimed at a better energy efficiency as well as an improved decoupling of economic growth and use of resources.

However, the results of the study were controversial from the beginning. Points of criticism were: underestimated possibilities in solving growth-related environmental problems due to a pure extrapolation of technological progress; a lack of traceability based on an inconsistent use of growth functions for the future development of the world population, industrial capital, environmental pollution and technologies for a more efficient use of resources; and the opinion that predictions about the potential end of raw material sources were unfounded (for more details, see Wallich, 1972; Simon, 1981; Bardi, 2011).

Against this criticism, the Meadows et al. (1972) study deals with the question of technological progress in particular and in detail, with the result that, at least within the model framework, technological solutions alone, however far-reaching they may be, cannot prevent a collapse of the system. Moreover, empirical investigations concerning the projected developments with data from 1970 to 2000, later also with data beyond, reached the conclusion that the real development so far is more or less identical with the development forecasts of the basic scenario, which projects a collapse of the world economic system by the middle of the 21st century (Turner, 2008; Turner, 2014). Additionally, updates of the original study with latest data and findings on developments that occurred in the meantime (such as the effects of greenhouse gases on climate) came to similar results. Simulations based on these updates also led to an excess of growth limits and a subsequent system overshoot and collapse within the calculated standard model (Meadows et al., 1992; Meadows et al., 2004).

Accordingly, another report to the Club of Rome (Randers, 2012), forecasted growing influences on climate and nature by economic activity up to 2052. Moreover, a rising consumption of energy was expected, despite an increasingly efficient use of energy. Due to growing environmental damage and gradually scarce natural resources, it was anticipated that productivity and subsequently global economic output would grow much slower, i.e. it was expected that increasing environmental damage would limit economic growth.

World without growth: De-growth

In the recent past, new approaches to dealing with growth have been developed, such as de-growth, green growth, or post-growth. All of these concepts are in line with the explanations made so far, as all concepts follow the idea of a realised balanced development, as formulated within the study The Limits to Growth and its updates. However, the stipulated assumptions and consequent recommendations for action differ in many aspects diametrically from each other. Moreover, there is no self-contained theory behind the mentioned approaches; they can rather be seen as a pool for various contributions and political initiatives following a common main idea.

For example, the considerations on a decline of growth (de-growth) are manifold, varying roughly by contributions focusing on social reforms, capital criticism or resource orientation (Schmelzer, 2017). Although their emphasis differs, they all fundamentally question the possibility of decoupling economic growth and resource consumption. They rather assume that under a continuation of the traditional paradigm of growth and its linked increase in consumption and production, the global energy and resource consumption could not be reduced to a level needed for sustainable development – even if existing potentials for efficiency increases are completely exploited (see exemplarily Martinez-Alier et al., 2010; or Demaria et al., 2013). One explanation is that it would not only require a surplus of technical efficiency but also fundamental changes in consumer behaviour. However, as experience – especially within a growth economy – shows, progress made in reductions of material or energy are often cancelled by an increase in demand, so-called rebound effects. Such rebound effects can be explained by lower costs in the purchase or use of goods and services due to efficiency improvements, consequently leading to a higher demand and thus fully or partly cancelling the savings potential of efficiency improvements (e.g. higher demand for larger vehicles due to more energy-saving car engines). Moreover, we see a permanent increase in energy demand due to an increase in world population associated with a rise in purchasing power of the global middle class.

Consequently, to get rid of the existing forces of growth, a radical change would be needed. There are different scenarios for such a change, e.g. an increased handling of economic activities outside of established markets or in fundamentally differently designed markets; a reform of the existing monetary and interest system; a reduction of the global division of work and its connected principle of external supply; a reallocation of time between paid work and leisure, as well as differently designed social relationships and gender roles. Even if such actions lead to a reduction of economic performance (measured in GDP per capita), this should not be the case for social welfare. Rather, economic growth is seen as the source for manifold undesirable social developments, such as tendencies of social acceleration, the increase of disaffected work or the decline of meaningful activities, which could be avoided by an abandonment of growth.

Green growth and post-growth

The need for a fundamental transformation of the economic system is also shared by various contributions considering the approach of green growth. However, the content and direction of this transformation process is a different one, as the dominating idea suggests that ecologically sound growth is very much possible if economic development is embedded in an ecological orientation (see e.g. Jacobs, 2013; Jacobs and Edelhofer, 2014). For this, the promotion of ecological innovation is seen as central. It is based on the concept that technical innovations in favour of greater efficiency in the use of raw materials and energy as well as an increase in existing recycling rates could decouple the tradeoff between economic growth and resource consumption. If these innovations are realised and adapted to worldwide markets, it would generate economic growth at the same time. This is of particular relevance since it is assumed that without an increase in GDP per capita, the needed investments for an ecological transformation could not be financed and the existing level of social well-being could not be sustained (German Federal Advisory Council on Global Change, 2011).

Simulations based on the concept of green growth show the possibility of a relative decoupling of economic growth and environmental consumption with a lower increase in ecological damage than economic performance. Moreover, alternatively modelled scenarios lead to an absolute decoupling, i.e. constant or even decreasing negative environmental impacts with a simultaneous increase of economic output (Giljum et al., 2008; Meyer et al., 2012). However, the results of such simulations strongly depend on the upcoming legislation framework of governments and corresponding market incentives. Measures in favour of green growth include financial incentives for ecological innovations as well as a reduction of legal barriers that prevent green innovations and business models. This approach of green growth differs from the de-growth approach, especially concerning the strong focus on technological progress as a driving force for sustainable economic growth. However, the latest research insights regarding the empirical evidence on decoupling of GDP also show that existing economic systems are still far away from green growth in terms of sufficient reductions of resource use or emissions (see Haberl et al., 2020; Hickel and Kallis, 2020; Parrique et al., 2019).

In order to be able to analyse how realistic the assumptions and statements of both approaches are, knowledge about the relationship between resource consumption, ecological burdens and economic development is needed. However, reliable models are not yet available (Petschow et al., 2018). Another recent position has been formulated under the paradigm of a precautionary post-growth strategy, which sees the dependency of relevant societal areas and institutions on growth as a central obstacle for political measures adressing a sufficient reduction of ecological burdens, in particular in industrial countries (Seidl and Zahrnt, 2012). This position is also known as “a growth” or “new economics of prosperity” (see e.g. van den Bergh, 2011). The question of whether in the future, for the compliance of the planetary boundaries, growth must either be compelled or restricted to environmentally compatible innovations is not central anymore. It is yet uncertain which of these two developmental paths is ecologically sound, as the current state of knowledge does not allow a clear theoretical or empirical statement on this. The main challenge, especially in the case of declining economic output, is to keep central social institutions such as social security systems as resilient as possible, so that their ability to function no longer depends on constant economic growth. To do this, for example, it is recommendable to increase the statutory pension age, implement a supplementary funded provision or switch to a public guaranteed standard pension in order to decrease the dependency of old-age security systems on growth. To forward with another proposal, it is advisable to establish a citizen insurance and abolish the existing income thresholds in order to address health insurance.

Generally, it has been noted within the previous explained growth concepts that GDP per capita is not a comprehensive or reliable indicator considering the relationship between economic growth and social well-being. Accordingly, this indicator should not have a central role in the legitimation of political measures concerning the design of sustainability policies, or should always be considered in the context of other well-being indicators (Petschow et al., 2020).

Economic growth and measuring well-being

From an economic point of view, GDP only measures a part of societal well-being, as welfare is not only determined by material well-being but also by the social situation as well as an intact environment. In operationalising the latter two components, there are different possibilities. Hence, it is not surprising that there are currently a large number of measurement methods for prosperity, which differ greatly considering their definition (see for an overview German Federal Parliament, 2013). For some approaches, only material well-being is measured, for others non-material aspects such as the existing level of knowledge or education, aspects of health, social relationships, environmental quality or political participation are taken into account. The basis for this is not only objective but also subjective assessments and surveys, investigating e.g. individual life satisfaction or perceived economic insecurity.

Welfare can be expressed in monetary terms (e.g. expenditures on private consumption, education, health or environmental protection) or non-monetary terms (e.g. infant mortality or unemployment). Depending on the method, the result is depicted as a singular number or a series of collocated numbers. In the first case, aggregated welfare indices are used, which has the advantage of reducing the complexity of the different facets of welfare. Accordingly, the results are not only simple and comprehensible, but allow for interpretations about whether the overall welfare of a country has risen or fallen. One disadvantage of this approach is its more or less arbitrary weighting of individual welfare components. Moreover, problems in interpreting the results may arise, if singular components within the overall index develop in the opposite direction, not being reflected in the aggregated result.

Well-known examples are the National Welfare Index, which includes, contrary to GDP, data on private consumption, income distribution, ecological damage and public debt; the Human Development Index, which contains, in addition to GDP per capita, life expectancy at birth and school attendance (but no ecological data); the Weighted Index of Social Progress, which comprises economic, ecological and demographic indicators as well as measures on the status of women, the extent of “social chaos” and cultural diversity. Other, newer well-being indicators also consider environmental quality by including variables such as healthy life expectancy (Bloom et al., 2019).

The counterpart to these aggregated welfare indices are clusters of economic, social and ecological indicators. The individual indicators stand on an equal footing for different sub-aspects of wealth, their results not being offset against each other. Such indicator sets have the advantage of being useable for specific political decisions due to their attention to detail. A disadvantage is that they often do not allow for a definite statement if the well-being of a country has generally risen or fallen. Moreover, they can be confusing and lead to problems of understanding. In order to avoid this, it is common to define specific sets of indicators. An example is the indicator set developed by the German Council of Economic Experts and the French Conseil d’Analyse Économique, which – based on the recommendations of the Stiglitz-Sen-Fitoussi Commission (Stiglitz et al., 2010) – includes different measures on economic performance and environmental and fiscal sustainability, as well as objective data on quality of life and subjective assessments of well-being. Comparable is the Better Life Index of the OECD, which is complimented by green growth indicators, if the progress in ecological sustainable growth is in focus.

Finally, when considering The Limits to Growth , the calculation of specific sustainability indices should also be mentioned, which differ from the approaches presented so far, as they measure primarily stock variables (such as capital or natural assets) and their change over time in relation to investments and natural regeneration. The question in focus is, whether a society is depleting its economic, social and/or natural resources and endangers its future level of well-being. The best-known example might be the Ecological Footprint, calculated annually by the Global Footprint Network. One result of its calculation is the Earth Overshoot Day, which was reached in 2021 on the 29 July, much earlier than when it was calculated for the first time 40 years ago – it then fell on the 19 December.

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Seidl, I. and A. Zahrnt (2012), Postwachstumsgesellschaft , metropolis.

Simon, J. L. (1981), The Ultimate Resource , Princeton University Press.

Stiglitz, J., A. Sen and J. P. Fitoussi (2010), Mismeasuring Our Lives , New Press.

Turner, G. (2008), A Comparison of The Limits to Growth with Thirty Years of Reality, Global Environmental Change , 18(3), 397-411.

Turner, G. (2014), Is Global Collapse Imminent?, Melbourne Sustainable Society Institute, MSSI Research Paper , 4/2014.

Van den Bergh, J. C. J. M. (2011), Environment versus Growth – A Criticism of “Degrowth” and a Plea for “A-Growth”, Ecological Economics , 70(5), 881-890.

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Open Access: This article is distributed under the terms of the Creative Commons Attribution 4.0 International License ( https://creativecommons.org/ licenses/ by/4.0/ ).

Open Access funding provided by ZBW – Leibniz Information Centre for Economics.

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Publication of The Limits to Growth

The Limits to Growth captured the world’s attention with its thesis that unchanged population growth and resource consumption would dramatically worsen the conditions for humanity within forty to fifty years. The computer-modeled study was published in 1972 by Donella Meadows, Dennis Meadows, Jørgen Randers, and William Behrens. It was commissioned by the Club of Rome, a private think tank founded in 1968 focusing on future global scenarios and aiming to stir public debate and influence policy makers. The report marked the beginning of the scientific discussion around “sustainable development.” In 1992 and 2004 some of the original authors have issued reports about the “new limits to growth” based on contemporary data.

The Limits to Growth (Digital Scan)
The Limits to Growth: The 30-Year Update (Digital Scan)
Meadows, Donella, Jorgen Randers, and Dennis Meadows. Limits to Growth: The 30-Year Update. White River Junction, VT: Chelsea Green, 2004.
Meadows, Donella, Dennis L. Meadows, and Jorgen Randers. Beyond the Limits: Global Collapse or a Sustainable Future. London: Earthscan, 1992.

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ECONLOG POST

The Limits to Growth?

Vibhu vikramaditya .pp-multiple-authors-boxes-wrapper.box-post-id-69046.pp-multiple-authors-layout-inline.multiple-authors-target-shortcode.box-instance-id-1 .pp-author-boxes-avatar img { width: 80px important; height: 80px important; } .pp-multiple-authors-boxes-wrapper.box-post-id-69046.pp-multiple-authors-layout-inline.multiple-authors-target-shortcode.box-instance-id-1 .pp-author-boxes-avatar img { border-radius: 50% important; } .pp-multiple-authors-boxes-wrapper.box-post-id-69046.pp-multiple-authors-layout-inline.multiple-authors-target-shortcode.box-instance-id-1 .pp-author-boxes-meta a { background-color: #655997 important; } .pp-multiple-authors-boxes-wrapper.box-post-id-69046.pp-multiple-authors-layout-inline.multiple-authors-target-shortcode.box-instance-id-1 .pp-author-boxes-meta a { color: #ffffff important; } .pp-multiple-authors-boxes-wrapper.box-post-id-69046.pp-multiple-authors-layout-inline.multiple-authors-target-shortcode.box-instance-id-1 .pp-author-boxes-meta a:hover { color: #ffffff important; } .pp-multiple-authors-boxes-wrapper.box-post-id-69046.pp-multiple-authors-layout-inline.multiple-authors-target-shortcode.box-instance-id-1 .pp-author-boxes-recent-posts-title { border-bottom-style: dotted important; } .pp-multiple-authors-boxes-wrapper.box-post-id-69046.pp-multiple-authors-layout-inline.multiple-authors-target-shortcode.box-instance-id-1 .pp-author-boxes-recent-posts-item { text-align: left important; } .pp-multiple-authors-boxes-wrapper.box-post-id-69046.pp-multiple-authors-layout-inline.multiple-authors-target-shortcode.box-instance-id-1 .pp-multiple-authors-boxes-li { border-style: none important; } .pp-multiple-authors-boxes-wrapper.box-post-id-69046.pp-multiple-authors-layout-inline.multiple-authors-target-shortcode.box-instance-id-1 .pp-multiple-authors-boxes-li { color: #3c434a important; } .pp-multiple-authors-boxes-wrapper.box-post-id-69046.pp-multiple-authors-layout-inline.multiple-authors-target-shortcode.box-instance-id-1 .pp-multiple-authors-boxes-li { border-radius: px important; } .pp-multiple-authors-layout-inline ul.pp-multiple-authors-boxes-ul { display: flex; } .pp-multiple-authors-layout-inline ul.pp-multiple-authors-boxes-ul li { margin-right: 10px }.pp-multiple-authors-boxes-wrapper.pp-multiple-authors-wrapper.pp-multiple-authors-layout-inline.multiple-authors-target-shortcode.box-post-id-69046.box-instance-id-1.ppma_boxes_69046 ul li > div:nth-child(1) {flex: 1 important;}.

By Vibhu Vikramaditya, Nov 5 2022

In the 50 years since The Limits to Growth was published in 1972, its grim Malthusian message has gripped the social consciousness. Its central thesis was that since the earth’s resources are finite, it would not be able to support the exponential rates of economic and population growth and would collapse before the end of this century. This proclamation has become the fountainhead behind calls for growing centralization and the establishment of limits to curtail the freedom of individual choices.

Global institutions such as the World Health Organization , the World Economic Forum have pointed to air pollution, climate change, overpopulation, and water scarcity as some of the biggest threats to human well-being. The consensus among policy-makers, politicians, and environmentalists seems to be that entrepreneurs and firms good will use the cheapest means of production possible, even as they degrade the environment. Therefore, any reliance on market mechanisms to solve the problem of environmental degradation and to provide sustainability are automatically ruled out.

Similarly, the consensus that consumers are driven by personal desires to overconsumption implies consumer sovereignty must be put on hold in pursuit of a sustainable world in which the needs of today are met without compromising on the needs of future generations.

It follows from such consensus that the solution must be global, as there are potentially massive consequences for failure, and that a centrally planned approach is the only feasible solution. The centralized approach to solving the problem of environmental degradation assumes rational, well-informed people with massive resources will deal with the massive issues of environment conservation in a well-intentioned and efficient manner for the public good.

This approach in practice would mean doing away with civil liberties if they interfere with the plan of environment conservation. But as sovereign individuals who desire a free world and who hold values of liberty and dignity of human beings sacred, we must pause before making such a Faustian bargain. Stop and think carefully about the true nature of environmental degradation, the effects of scarcity on the economy, and how a spontaneously ordered system such as the market might deal with it.

Apart from the intellectual stimulation that history provides, it can also provide us with lessons from past experiences, and we have enough evidence from the experiments of centralized planning to make us intellectually suspicious of it.

Markets Deal with Scarcity.

The economy consists of huge numbers of buyers and sellers who respectively supply and demand vast quantities of goods and services. Therefore, there is an enormous amount of information available to them in a decentralized manner- but this information about demand and supply are important for everyone as it impacts the decisions they make in their day to day lives. This is where monetary valuation comes in. Based on competition between buyers and sellers through a bidding process, prices are formed which convey information about such things.

Prices in the market act as coordinating signals which convey information about important economic data scattered in a decentralized manner. The role of prices in coordinating actions in the market was one of the core arguments advanced by Fredrick Hayek on why centralized planning could never allocate resources as effectively as markets do.

When something is scarce in the market, a large number of its users compete in the market over its possession which leads to the increase in its prices initiated by the seller to economize on its existing stock. The increased price is a signal in the market reflecting its scarcity. If the claims of The Limits to Growth are true, then prices of natural resources which are used heavily in energy consumption should increase.

This increase in the price is necessary to substantiate the claim that this resource scarcity limits to economic growth , as energy consumption is bound to increase with increases in economic activity. If the resource prices today were exponentially higher than they were in the past,

But the reality has been much different. Despite the fall in the purchasing power of the dollar and the cartelization of oil, an item that cost 50 dollars in 1970 would theoretically cost 335.5 US dollars in 2020 (50 x 6.71 = 335.5). But the increase in the rice of oil is quite low relative to the fall in the value of the dollar, which suggests that the real increase in the price of the oil barrel is negligible. Might this convince people to change their minds?

Vibhu Vikramaidtya is a scholar with research interests in capital theory, monetary theory, and business cycles writing about events in the economy from a legal and economic standpoint. His other works can be found at the Austrian Economics Center, the Libertarian Institute, and beinglibetarian.com .

Nov 5 2022 at 7:41pm

What are your thoughts on regulations focused on halting Red Queen’s races?

With respect to market signals, what are your thoughts on monopolization of natural resources or vertical integration vis-a-vis scarcity? A monopolist doesn’t have to price based on scarcity. They can sell it all at a fixed price, and once it’s gone, it’s gone (this is effectively what happened with gold mines when the price of gold was fixed to the currency, wasn’t it?)

Is it appropriate to calculate the cost of oil in terms of barrels, or the cost of oil in terms of fractions of total oil production? After all, I can go to a scrapyard and get a bunch of formerly $2000 items for nothing. High durability commodities (fossil fuels, metals) have to have a different price change effect than low-durability commodities (food, smartphones).

And, of course, every environmentalist’s favorite bugaboo: externalities. Is it plausible to say that the externalities of a barrel of oil today are more so than in the past? And that the socialization of these externalities, if accounted for, would dramatically increase the cost of that barrel of oil? The world has paid a lot for geopolitical stability of oil producing countries, and continues to do so. A ton of quid-pro-quo happens to keep oil market prices from being too chaotic.

Trying to apply market theoreticals to cartels which, at the margin, have *always* been able to charge far more than the cost of production seems inappropriate. And then of course there’s the problem that oil is a theoretically fungible commodity (replaceable, in part, by other hydrocarbon sources, including renewables). To maintain the cartel pricing as best as possible it is required to cap the price. This may an argument in favor of market power. But you can’t overlook that oil is also used geopolitically.

I don’t know that oil is the best commodity to make this point with.

My fundamental critique of your post though is this: “It follows from such consensus that the solution must be global, as there are potentially massive consequences for failure, and that a centrally planned approach is the only feasible solution.”

The one doesn’t not follow from the other. For something like carbon, and other forms of distributing pollution, the limits must be global, but the actual solutions needed to reach those limits can take place in a distributed and competing market. It is the fundamental purpose of free governments to tell people when to stop throwing their fists around because they are coming into proximity to other people’s noses. This is the purpose of regulation. Done right regulations serve both the public welfare and the public freedom.

Another critique: “If the claims of The Limits to Growth are true, then prices of natural resources which are used heavily in energy consumption should increase.”

Does this book claim that prices will rise, and how they will rise, or simply that we’ll run out? If they don’t claim that prices will necessarily rise, or how those prices will rise (e.g. price stays the same until a particular scarcity level is hit, and then it shoots through the roof), then it’s unfair to impute a market-economics claim to the authors as an argument against their thesis.

And my fundamental disagreement with “The Limits of Growth” is on the microlevel: Industries and regions can collapse, creating room for the growth of other industries and regions. No, you can’t increase the average forever, but you can keep changing the measuring stick.

Vibhu Vikramaditya

Nov 6 2022 at 8:55am.

Hey Everett, Thank you for your remarks. Let me start by asserting, My understanding of competition is vastly different from the onse espoused in the perfect competition ideal where price is necessarily equal to its marginal cost of production and hence my understanding of how the market produces efficient outcome is also different from an where production is taking place at the lowest point of the marginal cost and where prices equal such cost. The efficiency which I have in mind is a dynamic one where over time lower cost production structures are discovered and used by entrepreneurs in form of lower prices to win market shares. As long as the barriers to entry are not outlawed by legislature, if a monopoly seller of a good charges a higher price than one which another who can produce the same good at a lower cost, the entrepreneur will use initiate a new set of prices use to earn marker shares and profits. It may often be that the product produced by the new entrepreneur is the same in form or it may be in a newer form. Unfortunately, a passage from this post is missing, where I discussed how old energy forms such as wood are gradually replaced by different energy forms by new entrepreneurs. A cartel or a monopolist can this only raise prices today to their own disadvantage in the future unless there are some real constraints which are physical in nature. This is where my take on the definitive points of the book follows, i.e even if there are real constriants, higher prices would make sure there are no limits to growth, the other thing I wanted to show though that currently there are no such constriants , exemplified by the lower rise in prices relative to higher increases in its use. Regarding your point about externalities, again my conception of externalities is based on either uncharged profit opportunities in terms of positive externalities for firms or unchanged property rights violation costs which the entity producing negative externalities owes to its recipients. Regarding specific forms of CO2 problems, we should let industries develop certain machines which can detect CO2 emissions from particular places and give them a unique label like is done in supply chains, then individuals and other entities who receive such problematic CO2 emissions and charge them in court.

Thomas Lee Hutcheson

Nov 7 2022 at 1:36pm.

The externality is not oil production it is in CO2 emission. The link between the two is quite tenuous.

Nov 5 2022 at 7:44pm

Please check the spam filter.

Fazal Majid

Nov 5 2022 at 10:22pm.

J. K. Rowling has created billions of dollars of value out of thin air, with minimal use of non-renewable resources. The only real limit to growth is the human imagination now that capital is a commodity.

Nov 6 2022 at 6:46am

“policy-makers, politicians, and environmentalists seems to be that entrepreneurs and firms good will use the cheapest means of production possible, even as they degrade the environment. Therefore, any reliance on market mechanisms to solve the problem of environmental degradation and to provide sustainability are automatically ruled out.”

It seems that the exact opposite conclusion holds. Only market solutions — Pigou taxes on negative externalities can solve problems of environmental degradation?

Nov 6 2022 at 6:52am

“air pollution, climate change, overpopulation, and water scarcity as some of the biggest threats to human well-being.”

Biggest? Who knows? Big enough to justify investment in reducing their impact? Yes. But either way it has little relevance to growth.

Nov 6 2022 at 7:01am

After a good start criticizing the silliness of the “running out of resources” idea becasue markets will price scarce resources, the author, unfortunately, fails entirely to actually address the issue of externalities where, so far at least, transaction costs have failed to allow the development of a market in the CO2 concentration of the atmosphere.

Walter Donway

Nov 6 2022 at 9:20am.

Footnote: I made the point in an OLL article a couple weeks ago that Malthus did not predict inevitable doom. He believed that popular education could arm people to deal with the problem of runaway population growth. He was a Church of England cleric and argued that government could not provide such education; he wanted the church to take on universal primary education. The chief positive result he expected: sexual restraint.

The characterization of economics as “the dismal science” may not have referred to Malthus; it was used much later by Thomas Carlyle, who was criticizing John Stuart Mill for advocating emancipation of slaves.

Comments are closed.

Proud Ignorance and the Possibility of a Free Soci...

Pierre lemieux .pp-multiple-authors-boxes-wrapper.box-post-id-69046.pp-multiple-authors-layout-inline.multiple-authors-target-shortcode.box-instance-id-1 .pp-author-boxes-avatar img { width: 80px important; height: 80px important; } .pp-multiple-authors-boxes-wrapper.box-post-id-69046.pp-multiple-authors-layout-inline.multiple-authors-target-shortcode.box-instance-id-1 .pp-author-boxes-avatar img { border-radius: 50% important; } .pp-multiple-authors-boxes-wrapper.box-post-id-69046.pp-multiple-authors-layout-inline.multiple-authors-target-shortcode.box-instance-id-1 .pp-author-boxes-meta a { background-color: #655997 important; } .pp-multiple-authors-boxes-wrapper.box-post-id-69046.pp-multiple-authors-layout-inline.multiple-authors-target-shortcode.box-instance-id-1 .pp-author-boxes-meta a { color: #ffffff important; } .pp-multiple-authors-boxes-wrapper.box-post-id-69046.pp-multiple-authors-layout-inline.multiple-authors-target-shortcode.box-instance-id-1 .pp-author-boxes-meta a:hover { color: #ffffff important; } .pp-multiple-authors-boxes-wrapper.box-post-id-69046.pp-multiple-authors-layout-inline.multiple-authors-target-shortcode.box-instance-id-1 .pp-author-boxes-recent-posts-title { border-bottom-style: dotted important; } .pp-multiple-authors-boxes-wrapper.box-post-id-69046.pp-multiple-authors-layout-inline.multiple-authors-target-shortcode.box-instance-id-1 .pp-author-boxes-recent-posts-item { text-align: left important; } .pp-multiple-authors-boxes-wrapper.box-post-id-69046.pp-multiple-authors-layout-inline.multiple-authors-target-shortcode.box-instance-id-1 .pp-multiple-authors-boxes-li { border-style: none important; } .pp-multiple-authors-boxes-wrapper.box-post-id-69046.pp-multiple-authors-layout-inline.multiple-authors-target-shortcode.box-instance-id-1 .pp-multiple-authors-boxes-li { color: #3c434a important; } .pp-multiple-authors-boxes-wrapper.box-post-id-69046.pp-multiple-authors-layout-inline.multiple-authors-target-shortcode.box-instance-id-1 .pp-multiple-authors-boxes-li { border-radius: px important; } .pp-multiple-authors-layout-inline ul.pp-multiple-authors-boxes-ul { display: flex; } .pp-multiple-authors-layout-inline ul.pp-multiple-authors-boxes-ul li { margin-right: 10px }.pp-multiple-authors-boxes-wrapper.pp-multiple-authors-wrapper.pp-multiple-authors-layout-inline.multiple-authors-target-shortcode.box-post-id-69046.box-instance-id-1.ppma_boxes_69046 ul li > div:nth-child(1) {flex: 1 important;}.

There is, of course, as Elon Musk suggested, some probability that the aggression against Mr. Pelosi covers some yet unknown reality (Kurtis Lee, “Elon Musk, in a Tweet, Shares Link From Site Known to Publish False News,” New York Times, October 30, 2022): In a reply to Mrs. Clinton’s tweet, Mr. Musk wrote, “T...

Limits to Growth—the study sponsored by the Club of Rome and conducted by a team led by Professor Dennis Meadows at the Massachusetts Institute of Technology—was published in March 1972. Its main conclusion—that man is faced by ecological catastrophe unless zero growth rates in population and industrial production are attained by 1975—attracted great attention and controversy. Here a World Hank economist offers his views.1

Mahbub ul Haq

The basic thesis in the Limits is a simple one—and for that very reason it has a powerful appeal. It derives its conviction from the simple notion that infinite growth is impossible on a finite planet. It lends an air of frightening urgency to this notion by contending that the limits to growth are already being reached and that mankind is destined for catastrophe during the next 100 years unless this growth is stopped right away.

The basic thesis of the Limits to Growth model breaks down into the following major themes:

(1) Many critical variables in our global society—particularly population and industrial production—have been growing at a constant percentage rate so that, by now, the absolute increase each year is extremely large. Such increases will become increasingly unmanageable unless deliberate action is taken to prevent such exponential growth.

(2) However, physical resources—particularly cultivable land and nonrenewable minerals—and the earth’s capacity to “absorb” pollution are finite. Sooner or later the exponential growth in population and industrial production will bump into this physical ceiling and, instead of staying at the ceiling, will then plunge downward with a sudden and uncontrollable decline in both population and industrial capacity.

(3) Since technological progress cannot expand all physical resources indefinitely, it would be better to establish conscious limits on our future growth rather than to let nature establish them for us in catastrophic fashion.

The authors concede that more optimistic alternative assumptions can be built into the model but they contend that this merely postpones the problem by a few decades so that it would be better to err on the side of action now rather than later. They are also conscious of some of the problems that zero growth rates may raise for the world. They hint at policies of income redistribution between the rich and the poor nations as well as within these nations; and they plead for a change in the composition of production away from industrial output and toward the social services. Unfortunately, many of the redeeming qualifications that the authors mention are not pursued by them and are generally lost in their anxiety to make their predictions as dramatic as possible.

“the real issue is how to arrest population growth”

THE BASIC ASSUMPTIONS

Any study of the Limits model clearly must start with a critical examination of the assumptions that went into the model of the world economy on which it is based; it is a truism that a model is just as good as the assumptions built into it. Our investigations showed that many assumptions in the model were not scientifically established and that the use of data was often careless and casual. This was particularly true of the assumptions regarding nonrenewable resources and pollution. We also found that, contrary to the protestations of the authors, the model was fairly sensitive to the choice of these assumptions, and that reasonable adjustments in the assumptions regarding population, nonrenewable resources, and pollution could postpone the predicted catastrophe by another 100 to 200 years even if one accepted the general methodology of the model. And in this context an additional 100 years might be as vital as an additional second might be to a car driver in a traffic emergency—it could transform the whole situation.

The Limits model is right in postulating that world population has been growing exponentially in the last century and that, if the present rate of growth continues, today’s population of 3.6 billion will double in the next 35 years. However, while such medium-term assumptions are fairly sound, the model does not do justice to a number of demographic factors that are likely to come into play in the long run, and which may even be significant in the short run.

To begin with, some of the recent demographic trends indicate that fertility has already started to decline in a number of countries. Of the 66 countries for which accurate data are available, as many as 56 show a decline. Most demographers are agreed by now that the 1970s will see the population growth rate reach a plateau so that by 1980 population growth rates will tend to decline, slowly at first and rapidly thereafter.

Furthermore, one of the major features in the population model of the Limits is that fertility and mortality levels are determined largely by economic factors, such as the level of industrial production and the output of services. Population growth in the Limits model can only be reduced by increasing per capita industrial production. This in turn increases the output of services, including education, which both permits the growth of family planning services and creates the climate for their use to be effective. Little attention is given to the possibility—considered realistic by many demographers—that population growth may be checked by family planning even at low levels of income.

No one will deny that continued population growth at the present rate is a serious matter which should engage the urgent attention of humanity. The question is not whether population growth can continue unchecked forever; it simply cannot. The real issue is how to arrest it through deliberate policies of population planning, and through technological breakthroughs in population control methods suitable for use in the poor nations.

We should not, however, play down the population problem as presented in the Limits model. Even if population control efforts are successful, the world will still be left with a substantial population problem in both absolute numbers and scope for future growth. The long time lags involved in demographic change ensure that population growth would continue for several generations after balance had been achieved between mortality and fertility. Any prognostication about the future, therefore, must take into account the inevitability of a world population several times larger than the present 3.6 billion.

Nonrenewable Resources

A number of assumptions have been made about nonrenewable resources which turn out, on close examination, to be characterized by the same rather dramatic gloom with which Limits views population. The figures on reserves of nonrenewable resources generally come from the U.S. Bureau of Mines, but the bureau warns that 80 per cent of their reserve estimates have a confidence level of less than 65 per cent; Limits ignores this important reservation. Moreover, some of the reserve estimates—particularly for the communist countries—are extremely old or incomplete; some estimates for Mainland China, for example, go back to 1913! Again, reserve estimates have been revised frequently over time and are likely to change again in our own lifetime; between 1954 and 1966, the reserve estimates for one of the largest resources, iron ore, rose by about five times. It is estimated by the bureau of Mines that even these reserves can be doubled at a price 30 to 40 per cent higher than the current price. Similarly, the reserve estimates for copper today are 3.5 times their level in 1935 and it is estimated that they could be more than doubled again if the price were three times higher. The Limits authors allow for such contingencies by assuming that reserves could increase by five times over the next 100 years. This assumption has appeared generous to many who have been alarmed by the sweeping prognostications of Limits but it is in fact extremely—and many experts would say almost irrationally—conservative.

It can, of course, be objected that reliance on such illustrations of how the world’s resource base has expanded shows an unjustified and adventuresome confidence in history. However, this can no more be faulted than the use of history in the Limits study which only looks at the story of irrationality, waste, and neglect.

The pessimism of the assumptions on nonrenewable resources becomes even more evident if one considers that the concept of resources itself is a dynamic one: many things become resources over time. The expansion of the last 100 years could not have been sustained without the new resources of petroleum, aluminum, and atomic energy. What are tomorrow’s possibilities?

’Club of Rome’

A loose-knit group of about 75 men from 25 nations, the “club” includes eminent scientists, industrialists, economists, sociologists, and educators. Despite lack of formal budget or organizational structure, it aims to spur action on major world problems through research projects .

As an immediate example, there exists the imminent potential for exploiting resources on the seabed. Reserves of nodular materials—the most promising underwater source of minerals—distributed over the ocean floor are estimated at levels sufficient to sustain a mining rate of 400 million tons a year for virtually an unlimited period of time. If only 100 million tons of nodules are recovered every year—a target which appears to be within reach in the next 10 to 20 years—it would add to the annual production of copper, nickel, manganese, and cobalt to the extent of roughly one fourth, three times, six times, and twelve times, respectively, compared to the current free world production levels. And the present production cost estimates are a fraction of current prices—for copper, 1/13 for nickel, 1/24 cobalt. These estimates—like all such estimates—are very tentative; but there is a good deal of evidence that exploitation of seabed resources is fast becoming a real possibility.

If certain resources are likely to become scarcer—or, to use the jargon of the economists, if supply inelasticities are likely to develop—it is a scientific and intellectual service to humanity to draw attention to those resources and to the time period over which they may vanish, given current usage and the present state of knowledge. Research into these areas is, therefore, both useful and vital. But it is quite another thing to argue that no amount of research, no technological breakthroughs, will extend the lifetime of these resources indefinitely or to pretend that supply inelasticities will afflict all natural resources in the same manner and at the same time in an aggregate model. While identification of specific supply inelasticities in advance of time is a definite service, sweeping generalizations about complete disappearance of all nonrenewable resources at a particular point of time in the future is mere intellectual fantasy.

It should also be remembered that the waste of natural resources is a function of both their seeming abundance and of public attitudes. It is quite possible—and indeed probable—that with either of the above factors changing, resources can be conserved without undue pain. For the major flaw of today’s pattern of consumption is not really that we consume too many final goods and services, but that we use our resource inputs extremely inefficiently. If certain resources become more scarce and their relative price increases, there will be a powerful incentive for their more efficient use—a factor that Limits completely ignores, as it ignores similarly potent positive factors throughout. For instance, energy can be much more economically used. There is scope for smaller cars with weaker engines, public rather than private transport, increasing efficiency in burning fuels and in generating and distributing electricity, and improved design of aircraft engines and bodies.

Looking at the problem, as Limits to Growth has done, in terms of quantifying the life expectancy of resources as presently constituted, we conclude that these are sufficient to last very much longer than stipulated. It is not a question of expecting natural resources to accommodate forever our current patterns of growth, production, and consumption; clearly, they will not. but we are confident that natural resources will last long enough to allow us time to make deliberate adjustments in the way we use them so that resource needs can be met indefinitely. We have seen no convincing evidence to suggest that mankind faces a final curtain about 100 years from now through depletion of nonrenewable resources.

“about 80-90 per cent of present pollution can be removed at relatively low cost”

The assumptions regarding pollution are the weakest part of the model of world economic activity on which Limits is based. In many instances they are not established on any scientific basis. We still know so little about the generation and absorption of pollution, and about the effects of pollution, that definite functions are very hard to establish.

Our examination of the relationships between pollution and economic growth began with a study of the model developed in the book World Dynamics . 2 We did this because the Limits model was not available to us at that time. This indirect examination was justified because the Limits model treats pollution in much the same way that World Dynamics does. The main differences are that Limits allows for a time lag between the generation of pollution and its effects and also for pollution resulting from agricultural development. However, these differences are hardly important for the main argument of the Limits model.

Although little is known about the generation of pollution, it is simply claimed in the World Dynamics model that it rises at the same speed as the growth in capital stock per capita. As natural resources are used, progressively more capital must be applied to extract a given amount of final output—because of the necessity of using increasing amounts of energy in production as resources are either consumed or disposed of. Hence pollution grows to increasingly higher levels. In fact, the prediction of a pollution catastrophe depends on the value of the ratio asumed in the model between the pollution level and capital stock per capita. It appears from our study, however, that if the assumed value could be reduced by ⅝—an adjustment well within the error range of the data—the prediction of catastrophe would be completely erased. Since data on actual relationships between pollution and capital stock are sparse, there is no particular reason to favor one value for the ratio rather than another.

Again, in discussing the earth’s capacity to absorb pollutants, the World Dynamics model assumes, entirely arbitrarily, that the world’s overall capacity to absorb pollution is four times the present annual level and that pollution levels beyond certain limits will start affecting human mortality. While it may be true that accumulating pollution levels may destroy present concepts of living during the next 100 years, there is little evidence that life itself will be destroyed.

Furthermore, the authors do not fully consider that higher levels of industrial development will allow societies to devote additional resources to taking care of the pollution problem without sacrificing continued economic growth. It has been estimated, for example, that the United States could spend $16 billion a year, or about one third the annual increase in its gross national product, and achieve a substantial reduction in pollution over the next six years. Despite this, the United States could still increase its per capita consumption by another $900 over this period. Similarly, it has been calculated that about 80-90 per cent of present pollution can be removed at a relatively low cost: the cost increases would be about 5 per cent for industrial waste; 2 per cent for thermal electricity; and 10 per cent for automobiles.

Despite such objections to the Limits model, it should not be thought that pollution is of little global concern or that it is unrelated to economic growth. It is simply that information of the kind given above—which is extremely pertinent to the Limits projections—illustrates that pollution build-up and world collapse is not necessarily inevitable even with continued economic growth .

In general, however, the assumptions of the model regarding population, depletion of nonrenewable resources, and pollution generation and absorption should not be taken lightly. However, more study and research is needed to establish more reasonable parameters for these three critical variables in a long-term model.

NATURE OF THE MODEL

From an analysis of the basic assumptions of the model, we turned to its essential nature and methodology. Here we found that our analysis was handicapped by the extreme aggregation found in the model. The whole world is treated as one and homogenous even when it is clear that the real world is characterized by vast differences in income and consumption patterns: for instance, the per capita income levels in developed countries are 14 times those in the developing countries; and the style of development, the patterns of growth, and the composition of consumption demand vary widely in different parts of the world.

The highly aggregate nature of the model raises a number of difficulties in analysis. For one thing, it is not clear how seriously one can take averages of various variables which are widely dissimilar. For another, it makes any plausible interpretation of the model very difficult. There is only one aggregate natural resource or one aggregate pollutant, keeping one guessing as to how representative its behavior is of the real world which is marked by much greater diversity, complexity, and substitutability.

More important, it is not possible to get any useful policy guidance from such an aggregate view of the world. The real world is divided politically into a number of nation states and economically into developed and developing countries. They do not all behave similarly nor are they affected in the same manner. Thus, if natural resources are being progressively depleted, this may raise their price and benefit the producing countries which are mostly in the developing world. The transfer of resources from the rich to the poor nations in such a situation may well alter the overall pattern of growth rates. Such natural checks and balances arise in the real world but they are not allowed for in the Limits aggregate world model which moves only in one direction—toward disaster.

Before we can arrive at any useful or relevant conclusion, a minimum condition is to construct at least a “two-world” model, distinguishing between the developed and the developing world. Without a greater degree of disaggregation there is a great danger that the model may become a caricature of the real world rather than a mere abstraction.

The methodology used in the model further helps us along the road to disaster. It does not allow for economic costs and prices nor for conscious choices made by society; there are no real corrective mechanisms—only physical engineering relationships. The world keeps on proceeding in its merry way—frittering away its resources, populating itself endlessly, accumulating pollution—until one fine morning it hits disaster.

Is this a realistic abstraction from the world as we know it? In the real world, there is not one nonrenewable resource but many. They do not suddenly disappear collectively but become more and more scarce individually. As each resource becomes more scarce, price signals flash and alarm bells ring all over the world. This directs technological research into them; possibilities of substitution are explored; conscious choices are made by society to economize on them, to do without them, or to enlarge their exploitation by using marginal reserves or by recycling at a higher price. In other words, corrective mechanisms start working. Similarly, it is hard to believe that a pollution crisis can sneak upon humanity as insidiously as the model implies. Even a modest level of pollution would mean that even though the world average of persistent pollutants were still quite low and not yet obnoxious to human health, some particular localities would be suffering to a point at which corrective action would have to be taken—London, for example, introduced legislation to help purify its air and eliminate the deadly “pea-soup” fogs.

Humanity faces these problems one by one, every year in every era, and keeps making its quiet adjustments. It does not keep accumulating them indefinitely until they make catastrophe inevitable. One does not have to believe in the invisible hand to subscribe to such a view of society. One has merely to believe in human sanity and its instinct for self-preservation. While the model itself contains hardly any mention of conscious corrective mechanisms, in a larger sense its very appearance can be regarded as part of the corrective mechanism which societies devise in response to major problems.

One of the most curious parts of the model is its treatment of the role of technology. In an age of the most dramatic technological progress, the authors contend that there cannot be a continuation of such rapid progress in the future. And this is merely an assumption, not a proven thesis. The model assumes that certain things in this world—population, capital stock, pollution—will grow at exponential rates; but it assumes that certain other things—specifically technology to enlarge the resource base and to fight pollution—will not grow exponentially. Any such model is inherently unstable and we should not be surprised if it leads to disaster.

The authors’ assumptions are, however, scarcely realistic since man so far has continuously proved his ability to extend the physical limits of this planet through constant innovations and technological progress. There is no reason to think that technological innovations in conserving, recycling, and discovering new resources, and in combating pollution will stop simply because by their very nature we cannot predict them in advance.

Policy Implications of the Model

The policy implications which flow from the Limits model are the least stressed and the least developed part of the book. Yet, it is these policy implications that have attracted the greatest attention since the book has appeared. The major policy conclusion from the model is the prescription of a zero growth rate, both in population and in material production. but that prescription is not logically derived from the model. Even if one accepts some of the premises of the authors about certain physical limits to further unchecked growth, it is not clear from their work why the world must immediately move in 1975 to zero growth rates. Since the model is excessively aggregated, the authors are in no position to discuss various alternative choices which are still open to society even if physical limits to growth are conceded.

There is first the choice between development and defense. Presently, about $200 billion is being spent on defense, which is one of the major users of world resources and generators of pollution. If society is really concerned about resource constraints, could it not consciously choose to devote less resources to defense and more to development? Again, there is the choice of patterns of growth. If natural resources become more scarce, could society not decide to have a different pattern of consumption—based on more services and leisure—which is less resource-consuming? Finally, if the rich nations were to stop growing, the growth of the developing world could well proceed without putting major pressures on global physical limits, whatever these may be. These are some of the real choices that humanity faces at present and a good deal of debate is centering on them. but these choices can hardly be considered in the context of the Limits model which is sweeping in its overall policy prescriptions.

Another area of policy concern is world income distribution. If we were to accept, as the authors do, the thesis that the world cannot be “saved” except through zero growth rates, we must also demonstrate that world income redistribution on a massive scale is possible. Otherwise, freezing the present world income distribution would not “save” the world; it would only bring about a confrontation between the haves and the have-nots. The Limits recognizes this but skips the issue rather lightly as if it were a mere irritant. It does not address itself to the basic issue; how is such a redistribution to be brought about in a stagnant world? Through negative growth rates in the developed world and positive growth rates in the developing countries? Through a mass immigration of the populations of the developing countries into the developed world? Through a massive transfer of resources under a world income tax? And what is the realism of all this in a world that is rather reluctant to transfer even 1 per cent of its gross national product in the form of development assistance? While income redistribution is a desirable objective and must be pursued with full vigor, we must recognize that it is going to be even more difficult to achieve—both within and between nations—if there is no prospect of future growth and various groups fight to keep their share in a stagnant world.

The basic weakness of the Limits to Growth thesis is not so much that it is alarmist but that it is complacent. It is alarmist about the physical limits which may in practice be extended by continued technological progress, but complacent about the social and political problems which its own prescriptions would only exacerbate. Yet it is such problems which are probably the most serious obstacles in the way of enjoyment of the earth’s resources by all its population. The industrialized countries may be able to accept a target of zero growth as a disagreeable, yet perhaps morally bracing, regime for their own citizens. For the developing world, however, zero growth offers only a prospect of despair and world income redistribution is merely a wistful dream.

The shock waves generated by the Limits will do good if they start some serious academic work on the long-range issues of global survival. To the extent that they divert effort from the grave but probably soluble problems of our own day to plans for dealing with specters in the future, they can only do harm.

This article is based on a World Bank analysis of The Limits to Growth , undertaken by a team of which the author was chairman. The author is grateful to Messrs. Nicholas Carter, Edward Hawkins, Douglas Keare, bension Varon, Charles Weiss, and Kunniparampil Zachariah for their help.

Jay W. Forrester, World Dynamics , (Cambridge, Massachusetts, U.S.A., 1971), Wright-Allen Press.

Other Publishers

Asian development bank.

Limited Impact of Business Development Programs on Profitability in the Presence of Ambiguity Aversion
Demographic Change, Technological Advances, and Growth: A Cross-Country Analysis
Hydropower Development and Economic Growth in Nepal
2021 Trade Finance Gaps, Growth, and Jobs Survey
Pakistan: Reviving Growth through Competitiveness
2023 Trade Finance Gaps, Growth, and Jobs Survey

Inter-American Development Bank

Taxation and Economic Growth in Latin America

International Labour Organization

Spain: Growth with jobs. Studies on Growth with Equity

Nordic Council of Ministers

Agriculture and the environment in the Nordic countries: Policies for sustainability and green growth
REACH Trigger for Information on Substances of Very High Concern (SVHC): An Assessment of the 0.1% Limit in Articles

The World Bank

Four Critiques of the Redistribution Hypothesis: An Assessment
Do Labor Markets Limit the Inclusiveness of Growth in the Dominican Republic?
Ethnic Partition as a Solution to Ethnic War: An Empirical Critique of the Theoretical Literature
Global Norms: Creation, Diffusion, and Limits.
The limits of stabilization: infrastructure, public deficits, and growth in Latin America
Social Protection in Latin America: Achievements and Limitations
Malaria and Growth
Population Growth and Economic and Social Development: Addresses
Health, Demographic Transition and Economic Growth
Nutrition Policy and Programs in Ghana: The Limitation of a Single Sector Approach.

Front Matter
The Limits to Growth: A Critique
The Gold Markets–1968-72
Technical Cooperation within the Third World
Britain Joins the EEC
The Bank Group Meeting
The Fund Meeting
The Role of Contractual Savings
Japan’s Capital Market: Recent Developments
Recent Activity–International Monetary Fund
Recent Activity–International bank for Reconstruction and Development, International Development Association, and International Finance Corporation
Book Notices
Table of Contents for Volume 9 (1972)

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195.158.225.230

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5 Towards a Contemporary Understanding of The Limits to Growth

Published: May 2014
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Chapter 5 surveys what has changed since The Limits to Growth first appeared, in 1972. The chapter identifies how the concept of ‘overshoot’ advanced by Donella Meadows and associates launched a new era of systemic thinking about human sustainability and highlighted the implications of business as usual. In the subsequent years, free market ideologies have become more widespread, the chapter argues at the expense of an understanding of the public costs of market behaviour. The chapter explores the consequences with reference to oil exploration and the pricing and distribution of water resources. The failures of modern consumption, it argues, could be addressed by a return to a more systemic, holistic paradigm that departs from a too-narrow concept of GDP growth and returns to the moral philosophy about human wealth advanced in early economic history.

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Limits to Growth Resources

A Synopsis: Limits to Growth: The 30-Year Update

By donella meadows, jorgen randers, and dennis meadows.

The following piece is a short synopsis of Limits to Growth: The 30-Year Update. The full length book is available at Chelsea Green’s website .

The signs are everywhere around us:

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.
In 1998 more than 45 percent of the globe’s people had to live on incomes averaging $2 a day or less. Meanwhile, the richest one- fifth of the world’s population has 85 percent of the global GNP. And the gap between rich and poor is widening.
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.
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.
Fifty-four nations experienced declines in per capita GDP for more than a decade during the period 1990–2001.

These are symptoms of a world in overshoot, where we are drawing on the world’s resources faster than they can be restored, and we are releasing wastes and pollutants faster than the Earth can absorb them or render them harmless. They are leading us toward global environ- mental and economic collapse—but there may still be time to address these problems and soften their impact.

We’ve been warned before. More than 30 years ago, a book called The Limits to Growth created an international sensation. Commissioned by the Club of Rome, an international group of businessmen, states- men, and scientists, The Limits to Growth was compiled by a team of experts from the U.S. and several foreign countries. Using system dynamics theory and a computer model called “World3,” the book presented and analyzed 12 scenarios that showed different possible patterns—and environmental outcomes—of world development over two centuries from 1900 to 2100.

The World3 scenarios showed how population growth and natural resource use interacted to impose limits to industrial growth, a novel and even controversial idea at the time. In 1972, however, the world’s population and economy were still comfortably within the planet’s carrying capacity. The team found that there was still room to grow safely while we could examine longer-term options.

In 1992, this was no longer true. On the 20th anniversary of the publication of Limits to Growth , the team updated Limits in a book called Beyond the Limits. Already in the 1990s there was compelling evidence that humanity was moving deeper into unsustainable terri- tory. Beyond the Limits argued that in many areas we had “overshot” our limits, or expanded our demands on the planet’s resources and sinks beyond what could be sustained over time. 1 The main challenge identified in Beyond the Limits was how to move the world back into sustainable territory.

1 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 three causes of overshoot are always the same, at any scale from personal to planetary. First, there is growth, acceleration, rapid change. Second, there is some form of limit or barrier, beyond which the moving system may not safely go. Third, there is a delay or mistake in the perceptions and the responses that try to keep the system within its limits. The delays can arise from inattention, faulty data, a false theory about how the system responds, deliberate efforts to mislead, or from momentum that prevents the system from being stopped quickly.

The 30-Year Update

Now in a new study, Limits to Growth: The 30-Year Update, the authors have produced a comprehensive update to the original Limits , in which they conclude that humanity is dangerously in a state of overshoot.

While the past 30 years has shown some progress, including new technologies, new institutions, and a new awareness of environmental problems, the authors are far more pessimistic than they were in 1972. Humanity has squandered the opportunity to correct our current course over the last 30 years, they conclude, and much must change if the world is to avoid the serious consequences of overshoot in the 21st century.

When The Limits to Growth was first published in 1972, most economists, along with many industrialists, politicians, and Third World advocates raised their voices in outrage at the suggestion that population growth and material consumption need to be reduced by deliberate means. Over the years, Limits was attacked by many who didn’t understand or misrepresented its assertions, dismissing it as Malthusian hyperbole. But nothing that has happened in the last 30 years has invalidated the book’s warnings.

On the contrary, as noted energy economist Matthew Simmons recently wrote, “The most amazing aspect of the book is how accurate many of the basic trend extrapolations … still are some 30 years later.” For example, the gap between rich and poor has only grown wider in the past three decades. Thirty years ago, it seemed unimaginable that humanity could expand its numbers and economy enough to alter the Earth’s natural systems. But experience with the global climate system and the stratospheric ozone layer have proved them wrong.

All the environmental and economic problems discussed in Limits to Growth have been treated at length before. There are hundreds of books on deforestation, global climate change, dwindling oil supplies, and species extinction. Since The Limits to Growth was first published 30 years ago, these problems have been the focus of conferences, scientific research, and media scrutiny.

What makes Limits to Growth: The 30-Year Update unique, however, is that it presents the underlying economic structure that leads to these problems. Moreover, Limits is a valuable reference and compilation of data. The authors include 80 tables and graphs that give a comprehen- sive, coherent view of many problems. The book will undoubtedly be used as a text in many courses at the college level, as its two earlier versions have been.

The World3 computer model is complex, but its basic structure is not difficult to understand. It is based in system dynamic—a method for studying the world that deals with understanding how complex systems change over time. Internal feedback loops within the structure of the system influence the entire system behavior.

World3 keeps track of stocks such as population, industrial capital, persistent pollution, and cultivated land. In the model, those stocks change through flows such as births and deaths; investment and depre- ciation; pollution generation and pollution assimilation; land erosion, land development, and land removed for urban and industrial uses.

The model accounts for positive and negative feedback loops that can radically affect the outcome of various scenarios. It also develops nonlinear relationships. For example, as more land is made arable, what’s left is drier, or steeper, or has thinner soils. The cost of coping with these problems dramatically raises the cost of developing the land—a nonlinear relationship.

Feedback loops and nonlinear relationships make World3 dynami- cally complex, but the model is still a simplification of reality. World3 does not distinguish among different geographic parts of the world, nor does it represent separately the rich and the poor. It keeps track of only two aggregate pollutants, which move through and affect the environment in ways that are typical of the hundreds of pollutants the economy actually emits. It omits the causes and consequences of violence. And there is no military capital or corruption explicitly represented in World3. Incorporating those many distinctions, how- ever, would not necessarily make the model better. And it would make it very much harder to comprehend.

This probably makes World3 highly optimistic. It has no military sector to drain capital and resources from the productive economy. It has no wars to kill people, destroy capital, waste lands, or generate pollution. It has no ethnic strife, no corruption, no floods, earthquakes, nuclear accidents, or AIDS epidemics. The model represents the uppermost possibilities for the “real” world.

Reader s wh o want to reproduce the World 3 scenarios of the book can do so themselves, because the authors have prepared interactive World 3 CDs. To order disks, please see back of title page.

The authors developed World3 to understand the broad sweep of the future—the possible behavior patterns, through which the human economy will interact with the carrying capacity of the planet over the coming century.

World3’s core question is, How may the expanding global popula- tion and materials economy interact with and adapt to the earth’s limited carrying capacity over the coming decade? The model does not make predictions, but rather is a tool to understand the broad sweeps and the behavioral tendencies of the system.

Technology Markets

The most common criticisms of the original World3 model were that it underestimated the power of technology and that it did not represent adequately the adaptive resilience of the free market. Impressive—and even sufficient—technological advance is conceivable, but only as a consequence of determined societal decisions and willingness to follow up such decisions with action and money.

Technological advance and the market are reflected in the model in many ways. The authors assume in World3 that markets function to allocate limited investment capital among competing needs, essentially without delay. Some technical improvements are built into the model, such as birth control, resource substitution, and the green revolution in agriculture. But even with the most effective technologies and the greatest economic resilience that seems possible, if those are the only changes, the model tends to generate scenarios of collapse.

Many drug manufacturers in India pay special attention to environmental friendliness of production, and manufacturers of generic Cialis monitor the quality of tadalafil purification.

One reason technology and markets are unlikely to prevent overshoot and collapse is that technology and markets are merely tools to serve goals of society as a whole. If society’s implicit goals are to exploit nature, enrich the elites, and ignore the long term, then society will develop technologies and markets that destroy the environment, widen the gap between rich and poor, and optimize for short-term gain. In short, society develops technologies and markets that hasten a collapse instead of preventing it.

The second reason for the vulnerability of technology is that adjustment mechanisms have costs. The costs of technology and the market are reckoned in resources, energy, money, labor, and capital.

THE DRIVING FORCE: EXPONENTIAL GROWTH

For more than a century, the world has been experiencing exponential growth in a number of areas, including population and industrial production. Positive feedback loops can reinforce and sustain exponential growth. In 1650, the world’s population had a doubling time of 240 years. By 1900, the doubling time was 100 years. When The Limits to Growth was published in 1972, there were under 4 billion people in the world. Today, there are more than 6 billion, and in 2000 we added the equivalent of nine New York cities.

Another area of exponential growth has been the world economy. From 1930 to 2000, the money value of world industrial output grew by a factor of 14—an average doubling time of 19 years. If population had been constant over that period, the material standard of living would have grown by a factor of 14 as well. Because of population growth, however, the average per capita output increased by only a factor of five.

Moreover, in the current system, economic growth generally occurs in the already rich countries and flows disproportionately to the richest people within those countries. Thus, according to the United Nations Development Program, the 20 percent of the world’s people who lived in the wealthiest nations had 30 times the per capita income of the 20 percent who lived in the poorest nations. By 1995 the average income ratio between the richest and poorest 20 percent had increased from 30:1 to 82:1.

Only eight percent of the world’s people own a car. Hundreds of millions of people live in inadequate houses or have no shelter at all—much less refrigerators or television sets. Social arrangements common in many cultures systematically reward the privileged, and it is easier for rich populations to save, invest, and multiply their capital.

Limits to growth include both the material and energy that are extracted from the Earth, and the capacity of the planet to absorb the pollutants that are generated as those materials and energy are used. Streams of material and energy flow from the planetary sources through the economic system to the planetary sinks where wastes and pollutants end up. There are limits, however, to the rates at which sources can produce these materials and energy without harm to people, the economy, or the earth’s processes of regeneration and regulation.

Resources can be renewable, like agricultural soils, or nonrenew- able, like the world’s oil resources. Both have their limits. The most obvious limit on food production is land. Millions of acres of cultivated land are being degraded by processes such as soil erosion and salinization, while the cultivated area remains roughly constant. Higher yields have compensated somewhat for this loss, but yields cannot be expected to increase indefinitely. Per capita grain production peaked in 1985 and has been trending down slowly ever since. Exponential growth has moved the world from land abundance to land scarcity. Within the last 35 years, the limits, especially of areas with the best soils, have been approached.

Another limit to food production is water. In many countries, both developing and developed, current water use is often not sustain- able. In an increasing number of the world’s watersheds, limits have already been reached. In the U.S. the Midwestern Ogalallah aquifer in Kansas is overdrawn by 12 cubic kilometers each year. Its depletion has so far caused 2.46 million acres of farmland to be taken out of cultivation. In an increasing number of the world’s watersheds, limits have already, indisputably, been exceeded. In some of the poorest and richest economies, per capita water withdrawals are going down because of environmental problems, rising costs, or scarcity.

Another renewable resource is forests, which moderate climate, control floods, and harbor species, from rattan vines to dyes and sources of medicine. But today, only one-fifth of the planet’s original forest cover remains in large tracts of undisturbed natural forests. Although forest cover in temperate areas is stable, tropical forest area is plummeting.

From 1990 to 2000, the FAO reports that more than 370 million acres of forest cover—an area the size of Mexico—was converted to other uses. At the same time that forests decline, demand for forest products is growing. If the loss of 49 million acres per year, typical in the 1990s, continues to increase at 2 percent per year, the unprotected forest will be gone before the end of the century.

Nonrenewable Resources

A prime example of a nonrenewable resource is fossil fuels, whose limits should be obvious, although many people, including distin- guished economists, are in denial over this elementary fact. More than 80 percent of year 2000 commercial energy use comes from non- renewable fossil fuels—oil, natural gas, and coal. The underground stocks of fossil fuels are going continuously and inexorably down. Between 1970 and 2000, even though billions of barrels of oil and trillions of cubic feet of natural gas were burned, the ratio of known reserves to production actually rose, due to the discovery of new reserves and reappraisal of old ones.

Nonetheless the stock of reserves is finite and nonrenewable. Moreover, fossil fuels use is limited by the planet’s capacity to absorb their byproducts after burning, such as the greenhouse gas carbon dioxide. Fossil fuels may be limited by both supply and sinks. Peak gas production will certainly occur in the next 50 years; the peak for oil production will occur much sooner, probably within the next decade. Energy efficiency and renewables offer the best prospect for a sustain- able future.

Materials are another finite resource. If population rises, and if those people are to have housing, health services, education, cars, refrigerators, and televisions, they will need steel, concrete, copper, aluminum, plastic, and many other materials.

But if an eventual nine billion people on earth all consumed materials at the rate of the average American, world steel production would need to rise by a factor of five, copper by a factor of eight, and aluminum by a factor of nine. From source to sink, the processing, fabricating, handling, and use of materials leaves a trail of pollution.

Such materials flows are neither possible nor necessary. Fortunately, growth in materials consumption has slowed, and the prospects for further slowing are good. The possibilities for recycling, greater efficiency, increased product lifetime, and source reduction in the world of materials are exciting. On a global scale, however, they have not yet reduced the vast materials flow through the economy. At best, they have slowed its rate of growth.

Another fundamental limit to growth is sinks—the capacity of the planet to absorb the pollution and waste resulting from human economic activity. The most intractable wastes are nuclear wastes, hazardous wastes (like human synthesized chemicals), and greenhouse gases. They are chemically the hardest to sequester or detoxify, and economically and politically the most difficult to regulate.

Current atmospheric concentrations of carbon dioxide and methane are far higher than they have been in 160,000 years. It may take decades for the consequences of climate change to be revealed in melting ice, rising seas, changing currents, greater storms, shifting rainfall, and migrating insects, birds or mammals. It is also plausible that climate may change rapidly.

THE SCENARIOS

Using the World3 computer model, Limits to Growth: The 30-Year Updat e presents 10 different scenarios for the future, through the year 2100. In each scenario a few numbers are changed to test different estimates of “real world” parameters, or to incorporate optimistic predictions about the development of technology, or to see what happens if the world chooses different policies, ethics, or goals. Most of the scenarios presented in Limits result in overshoot and collapse—through depletion of resources, food shortages, industrial decline, or some combination of these or other factors.

Under the “business as usual scenario,” world society proceeds in a traditional manner without major deviation from the policies pursued during most of the 20th century. In this scenario, society proceeds as long as possible without major policy change. Population rises to more than seven billion by 2030. But a few decades into the 21st century, growth of the economy stops and reverses abruptly.

As natural resources become harder to obtain, capital is diverted to extracting more of them. This leaves less capital for investment in industrial output. The result is industrial decline, which forces declines in the service and agricultural sectors. About the year 2030, population peaks and begins to decrease as the death rate is driven upward by lack of food and health services.

A similar scenario assumes that the world’s endowment of natural resources doubles, and further postulates that advances in resource extraction technologies are capable of postponing the onset of increasing extraction costs. Under this scenario industry can grow 20 years longer. But pollution levels soar, depressing land yields and requiring huge investments in agricultural recovery. The population finally declines because of food shortages and negative health effects from pollution.

Other scenarios address the problems of pollution and food short- ages by assuming more effective pollution control technologies, land enhancement (an increase in the food yield per unit of land), and protections against soil erosion.

Even a scenario with these features however, results in overshoot and collapse. After 2070 the costs of the various technologies, plus the rising costs of obtaining nonrenewable resources from increasingly depleted mines, demand more capital than the economy can provide. The result is rather abrupt decline.

If to this scenario one adds reductions in the amount of nonre- newable resources needed per unit of industrial output (resource efficiency technology), in combination all these features permit a fairly large and prosperous world, until the bliss starts declining in response to the accumulated cost of the technologies.

This technology program comes online too late to avoid a gradual decline in human welfare throughout the century. By the end of the 21st century, a stable population of less than eight billion people is living in a high-tech, low pollution world with a human welfare index roughly equal to that of the world of 2000.

But industrial output begins to decline around 2040 because the rising expense of protecting the population from starvation, pollution, erosion, and resource shortage cuts into the capital available for growth. Ultimately this simulated world fails to sustain its living standards as technology, social services, and new investment simultaneously become too expensive.

TRANSITIONS TO A SUSTAINABLE WORLD

The world can respond in three ways to signals that resource use and pollution emissions have gone beyond their sustainable limits. One way is to disguise, deny, or confuse the signals. Generally this takes the form of efforts to shift costs to those who are far away in space and time. An example would be to buy air conditioners for relief from a warming climate, or to ship toxic wastes for disposal in a distant region.

A second way is to alleviate the pressures from limits by employ- ing technical or economic fixes. For example, reducing the amount of pollution generated per mile of driving or per kilowatt of electricity generated. These approaches, however, will not eliminate the causes of these pressures. The third way is to work on the underlying causes, to recognize that the socioeconomic system has overshot its limits, is headed toward collapse, and therefore seek to change the structure of the system. World3 can be used to test some of the simplest changes that might result from a society that decides to back down from over- shoot and pursue goals more satisfying and sustainable than perpetual material growth.

Scenario 7 supposes that after 2002, all couples decide to limit their family size to two children and have access to effective birth control technologies. Because of age structure momentum, the population continues to grow for another generation. But the slower population growth permits industrial output to rise faster, until it is stopped by rising pollution.

Under this scenario, world population peaks at 7.5 billion in 2040. A globally effective, two children policy introduced in 2002 reduces the peak population less than 10 percent. Because of slower population growth, consumer goods per capita, food per capita, and life expectancy are all higher than in the scenario where the world’s endowment of natural resources was doubled.

But industrial output peaks in 2040 and declines. The larger capi- tal plant emits more pollution, which has negative effects on agricul- tural production. To sustain food production, capital must be diverted to the agricultural sector. Later on, after 2050, pollution levels are sufficiently high to have negative impacts on life expectancies.

But what if the world’s people decide to moderate not only their demand for children, but also their material lifestyles? What if they set a goal for themselves of an adequate but not excessive standard of living?

If the model society both adopts a desired family size of two children and sets a fixed goal for industrial output per capita, it can extend somewhat the “golden age” of fairly high human welfare between 2020 and 2040 in the previous scenario. But pollution increasingly stresses agricultural resources. Per capita food production declines, eventually bringing down life expectancy and population.

These changes cause a considerable rise in consumer goods and services per capita in the first decade after the year 2002. In fact, they rise higher and faster than they did in the previous run, where industrial growth was not curtailed. But this economy is not quite stabilized. It has an ecological footprint above the sustainable level, and it is forced into a long decline after 2040.

The world of Scenario 8 manages to support more than seven billion people at an adequate standard of living for almost 30 years, from 2010 to 2040, but during that time the environment and soils steadily deteriorate. To remain sustainable, the world in this scenario needs to lower its ecological footprint to a level below the carrying capacity of the global environment.

Scenario 9: World Seeks Stable Population and Stable Industrial Output per Person, and Adds Pollution, Resource and Agricultural Technologies from 2002. Moving in this direction, in another scenario the world seeks stable population and stable industrial output per person, and adds pollution, resource and agricultural technologies starting in 2002.

In this scenario, population and industrial output are limited as in the previous run, and in addition technologies are added to abate pollution, conserve resources, increase land yield, and protect agri- cultural land. The resulting society is sustainable: Nearly eight billion people live with high human welfare and a continuously declining ecological footprint.

Under this scenario, the world decides on an average family size of two children and sets modest limits for material production, as in the previous scenario. Further, starting in 2002 it begins to develop, invest in, and employ the technologies that increase the efficiency of resource use, decrease pollution emissions per unit of industrial output, control land erosion, and increase land yields until food per capita reaches its desired level.

The society of this scenario manages to begin reducing its total burden on the environment before the year 2020; from that point the total ecological footprint of humanity is actually declining. The system brings itself down below its limits, avoids an uncontrolled collapse, maintains its standard of living, and holds itself very close to equilibrium.

In a final scenario, the sustainability policies of the previous scenario are introduced 20 years earlier, in 1982. Moving toward sustainability 20 years sooner would have meant a lower final population, less pollution, more nonrenewable resources, and a slightly higher average welfare for all. Under this scenario, population levels off just above six billion instead of eight billion. Pollution peaks at a much lower level and 20 years sooner, and interferes less with agriculture than it did in the previous scenario. Life expectancy surpasses 80 years and remains high. Life expectancy, food per capita, services per capita, and consumer goods per capita all end up at higher levels than they did in the previous scenario.

Two general insights from this effort are valid and relevant. The first insight is the realization that waiting to introduce fundamental change reduces the options for humanity’s long-term future. The second insight is that the model world’s goal for industrial goods per capita, even with all the ameliorative technologies, cannot be sustained for the resulting population of more than seven billion.

The final four scenarios also suggest some general conclusions

A global transition to a sustainable society is probably possible without reductions in either population or industrial output.
A transition to sustainability will require an active decision to reduce the human ecological footprint.
There are many choices that can be made about numbers of peo- ple, living standards, technological investment, and allocations among industrial goods, services, food, and other material needs.
There are many trade-offs between the number of people the earth can sustain and the material level at which each person can be supported.
The longer the world takes to reduce its ecological footprint and move toward sustainability, the lower the population and material standard that will be ultimately supportable.
The higher the targets for population and material standard of living are set, the greater the risk of exceeding and eroding its limits.

THE SUSTAINABLE SOCIETY

In 1987, the World Commission on Environment and Development put the idea of sustainability into these words:

A sustainable society is one that “meets the needs of the present without compromising the ability of future generations to meet their own needs.”

From a systems point of view, a sustainable society is one that has in place informational, social, and institutional mechanisms to keep in check the positive feedback loops that cause exponential population and capital growth. This means that birthrates roughly equal death rates, and investment rates roughly equal depreciation rates, unless or until technical change and social decisions justify a considered, limited change in the levels of population or capital.

Such a society, with a sustainable ecological footprint, would be almost unimaginably different from the one in which most people now live. Before we can elaborate on what sustainability could be, we need to start with what it need not be.

Sustainability does not mean zero growth. Rather, a sustainable society would be interested in qualitative development, not physical expansion. It would use material growth as a considered tool, not a perpetual mandate. Neither for nor against growth, it would begin to discriminate among kinds of growth and purposes for growth. It would ask what the growth is for, and who would benefit, and what it would cost, and how long it would last, and whether the growth could be accommodated by the sources and sinks of the earth.

A sustainable society would also not paralyze into permanence the current inequitable patterns of distribution. For both practical and moral reasons, a sustainable society must provide sufficiency and security for all. A sustainable society would not be a society of despon- dency and stagnation, unemployment and bankruptcy that current systems experience when their growth is interrupted. A deliberate transition of sustainability would take place slowly enough, and with enough forewarning, so that people and businesses could find their places in the new economy.

A sustainable world would also not be a rigid one, with population or production or anything else held pathologically constant. One of the strangest assumptions of present-day mental models is the idea that a world of moderation must be one of strict, centralized government control. A sustainable world would need rules, laws, standards, bound- aries, social agreements and social constraints, of course, but rules for sustainability would be put into place not to destroy freedoms, but to create freedoms or protect them.

Some people think that a sustainable society would have to stop using nonrenewable resources. But that is an over-rigid interpretation of what it means to be sustainable. Certainly a sustainable society would use nonrenewable gifts from the earth’s crust more thoughtfully and efficiently.

Suggested Guidelines

The authors do suggest a few general guidelines for what sustainability would look like, and what steps we should take to get there:

Extend the planning horizon. Base the choice among current options much more on their long-term costs and benefits.
Improve the signals. Learn more about the real welfare of human population and the real impact on the world ecosystem of human activity.
Speed up response time. Look actively for signals that indicate when the environment or society is stressed. Decide in advance what to do if problems appear.
Minimize the use of nonrenewable resources.
Prevent the erosion of renewable resources.
Use all resources with maximum efficiency.
Slow and eventually stop exponential growth of population and physical capital.

The necessity of taking the industrial world to its next stage of evolution is not a disaster—it is an amazing opportunity. How to seize the opportunity, how to bring into being a world that is not only sustainable, functional, and equitable but also deeply desirable is a question of leadership and ethics and vision and courage, properties not of computer models but of the human heart and soul.

Donella Meadows, who died unexpectedly in 2001, was a systems analyst and adjunct professor of Environmental Studies at Dartmouth College. She wrote the nationally syndicated newspaper column “The Global Citizen.”

Jorgen Randers is professor and former President of the Norwegian School of Management. He is also former Deputy Director General of World Wildlife Fund International. He lives in Oslo, Norway.

Dennis Meadows has 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. He lives in Durham, New Hampshire.

“It is time for the world to re-read Limits to Growth. The message of 1972 is far more real and relevant in 2004. We wasted a valuable 30 years by misreading the message of the first book.”

—Matthew R. Simmons, energy analyst and founder, Simmons & Company International, the world’s largest energy investment banking practice

“The authors of this book are the Paul Reveres of our time— sounding the alarm and calling us to action, before it’s just too late. This book is a crucial tool for every citizen and leader who wants to help build a safer, sustainable future.”

—Betsy Taylor, President, Center for a New American Dream

“Thirty years ago, The Limits to Growth was widely but erroneously attacked for prophesying doom, ignoring price, and denying adaptation. Today, its timely update remains an exceptionally valuable tool for creating the kind of future we want.”

—Amory B. Lovins, CEO, Rocky Mountain Institute

“It ’ s time we paid serious attention to the sustainable prescriptions outlined in Limits to Growth: The 30-Year Update.”

—Jim Motavalli, editor, E/The Environment Magazine

“Thirty years has proved this model prophetic; now, in its newest iteration, we get one last challenge.”

—Bill McKibben, author, The End of Nature

“Reading the 30th-year updated reminds me of why the systems approach to thinking about our future is not only valuable, but indispensable.”

—Lester Brown, President, Earth Policy Institute

“Not everything bears repetition, but truth does—especially when both denied by entrenched interests and verified by new information.”

—Herman E. Daly, former senior economist in the Environment Department of the World Bank and Professor, School of Public Affairs, University of Maryland

This entry was posted on Tuesday, June 1st, 2004 at 11:12 am and is filed under . You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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Limits to growth model (assumptions and operation) – explained.

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Introduction:

In 1968, a group of about seventy five persons belonging to different strata of society from around the world founded the Club of Rome. It believed that the possibilities of continuous growth have been exhausted and timely action is essential in order to avert a planetary collapse.

It chose its initial theme “The Predicament of Mankind” in June 1970. It commissioned the research by four MIT scientists led by Donald Meadows which was published by the Club of Rome as The Limits to Growth in 1972. The second report entitled Beyond Limits was published in 1992 which gave fresh evidences as to how mankind has crossed beyond the limits.

It was Jay Forester of MIT who in his book World Dynamics published in 1971 devised a model that investigates the interplay of such highly aggregated variables as world population, industrial world production, food supply, pollution and natural resources still remaining in the world.

Using the “system dynamics” methodology of Forester, the authors of the Limits to Growth constructed an elaborate computer model of the world. They presented a large and new type of model designed to predict the future development of five global inter-related variables: population, food production, industrial production, non-renewable resources and pollution.

The model is based on the thesis that “the continued growth leads to infinite quantities that just do not fit into a finite world.” This basic idea has been elaborated in a highly complicated model which cannot be easily described in equation form. This is because the many relations between the five variables are not rectilinear.

The multipliers in question depend on the level of the variables. Among the various relationships, there are “feedback loops” that register the effects of changes in one variable such as food production on another variable like population growth. For example, population growth is positively related to food production. But food production is negatively related to pollution, and pollution, in turn, is positively related to industrial output. The model also uses past data on such factors as growth rates of population, industrial output and agricultural production, and the estimates of rates of technological progress. These factors would lead to the use of new resources, raise agricultural productivity and control pollution.

Assumptions of the Model:

The assumptions of the model are based on highly non-linear relations:

1. Population increase (the difference between the birth rate and the death rate) is influenced by crowding, food intake, pollution, and the material standard of living. A rise in any of these four factors tends to drive the birth rate downwards. The death rate decreases with increasing food intake and the material standard of living, and increases with increasing pollution and crowding.

2. The material standard of living depends on the level of capital, relative to the size of the population and the productivity of capital.

3. Non-renewable resources are continually used up by the production process. The lower the level of non-renewable resources, the more capital must be allocated to obtaining resources, and thus the productivity of capital for producing finished goods is less.

4. Agricultural production depends on land and on capital investment in agriculture. Land can be developed or eroded, depending on investment decisions. Yield per unit of land can be increased by capital, but with diminishing returns.

5. Pollution is generated by the production process and gradually absorbed into a harmless form by the environment. High accumulations of pollution, lower the absorbing capacity of the environment.

Operation of the Model:

A major purpose in constructing the world model has been to determine which, if any, of these behaviour modes will be most characteristic of the world system as it reaches the limits to growth. The model shows four possible modes that a growing population can exhibit over time.

The mode actually observed in any specific case will depend on the characteristics of the carrying capacity. They are the level of population that could be sustained indefinitely by the prevailing physical and biological systems and on the nature of the growth process itself.

For example, a population growing in a limited environment can approach the ultimate carrying capacity of that environment in several possible ways. It can adjust smoothly to an equilibrium below the environmental limit by means of a gradual decrease in growth rate, as shown in Fig. 20.1 (A) where LC represents the carrying capacity of the world, while the OP curve represents the population growth curve.

The second possibility is that it can overshoot the limit and then lie back either smooth or in an oscillatory way, as shown in Figures 20.1 (B) and (C) respectively.

The last possibility is that it can overshoot the limit and in the process decrease the ultimate carrying capacity by consuming some necessary nonrenewable resources. This is shown in Figure 20.1(D).

The most characteristic of the globe’s population and material outputs under different conditions have been shown in these figures. The purpose of the model is to identify the future policies that may lead to a stable rather than an unstable behaviour mode.

Limits to Exponential Growth:

Food, resources and a healthy environment are necessary but not sufficient conditions for growth. Even when resources are abundant, growth may be stopped by social factors. Of course, the society will not be suddenly surprised by the crisis point at which the area of land needed becomes greater than that available.

Symptoms of the crisis will begin to appear long before the crisis point is reached. Food prices will rise so high that some people will starve. Others will be forced to decrease the effective area of land they use and shift to lower quantity diets and thus caught in the death trap due to malnutrition.

There is a direct trade-off between producing more food and other goods needed by mankind. The demand for these goods is also increasing as population grows and therefore, the trade-off becomes continuously more apparent and more difficult to resolve.

If the first priority is to produce food continued population growth and the law of increasing costs could rapidly drive the system to the point where all available resources were devoted to produce food, leaving no further possibility of expansion. The exponential growth of demand for food supply results directly from the positive feedback loop that is now determining the growth of human population.

Non-renewable Resources:

The resources that permit growth of capital stock tend not to be renewable resources but non-renewable resources. Are there limits to the earth’s supply of these non-renewable resources? Even taking into account such economic factors as increased prices with decreasing availability, it would appear at present that the quantities of platinum, gold, zinc and lead are not sufficient to meet the demands.

Meadows concludes, “At the present rate of expansion….silver, tin and uranium may be in short supply even at higher prices by the turn of the century. By the year 2050, several more minerals may be exhausted if the current rate of consumption continues.”

D. Meadows is of the view that some pollutants are obviously directly related to population growth as in the case of agricultural land which is a nonrenewable resource and its capacity to absorb excessive pollution is limited. While other poullants are more closely related to the growth of industry and advances in technology.

Further, it is not known how much CO 2 or thermal pollution can be released without causing irreversible changes in the earth’s climate. How much radioactivity, lead, mercury or pesticides can be absorbed by plants, fish or human beings before the vital processes are severely interrupted.

Predictions of the Model:

The predictions of the Limits to Growth (LTG) Model are based on its basic thesis that “the continued growth leads to infinite quantities that just do not fit into a finite world.”

This basic thesis can be analysed as under:

(i) The future world population level, food production and industrial production will first grow exponentially, become increasingly unmanageable and then collapse during the 21th century.

(ii) The collapse follows because the world economy will reach its physical limits in terms of non-renewable resources, agricultural land and the earth’s capacity to absorb excessive pollution which are finite.

(iii) Eleven vital minerals such as copper, gold, lead, mercury, natural gas, oil, silver, tin and zinc are being exhausted. If, in addition, industrial production continues to increase, that too will give rise to catastrophic results.

(iv) If the present growth trends in world population, industrialisation, pollution levels, food problem and resource depletion continue unchanged, the limits to growth on this planet will be reached within the next one hundred years. The most probable results will be rather sudden and uncontrollable decline in both population and industrial capacity sometime before the year 2010.

(v) Since technological progress cannot expand physical resources infinitely, it would be wise to put limits on our future growth rather than await the doomsday within the coming 50 or 100 years.

(vi) This catastrophe can be averted by controlling the growth rate of output and population, reducing the pollution levels, and thus achieving a global equilibrium with zero growth.

Thus the Limits to Growth report developed an interactive simulation model that produced a variety of scenarios which were especially useful for defining what was to be prevented. It stressed that pollution, high population growth rate, and shortages of food and resources make the future prospects of the world bleak which will lead to catastrophic results.

Since the resources are finite and are likely to be depleted within 50 or 100 years, people should change their attitude towards the use of resources, their reproduction and pollution levels so as to save the world from collapse.

Graphic Explanation of the Model:

The Limits to Growth Model is explained in Figure 20.2 (A), (В) and (C). Time in years is taken on the horizontal axis beginning from the year 1900 to 2100. In Panel (A), resources are measured along the vertical axis and are represented by the downward sloping R curve. Since such resources as oil, natural gas, copper, lead, etc. are fixed, they are being continuously depleted over time from the year 1900 and beyond 2100.

In Panel (В), the growth of population and food supply are measured on the vertical axis and are represented by the P and F curves respectively. They are shown to increase up to point E at the same rate from 1900 to 2000 year. But beyond the year 2000, the population curve P continues to rise, while the food production curve F rises at a diminishing rate and then starts declining by 2100. In Panel (C), the curve P L shows the pollution level which continues to rise beyond the year 2010 and if not checked in time, will lead to catastrophic results in the world.

It’s Criticisms:

The Limits to Growth was an alarming report predicting the collapse of the world economy in the 21st century. It sold ten million copies in over thirty languages and had considerable impact on economic and political thinking and provided an impetus to anti-growth sentiment. In fact, the world community was divided into two groups: the resource pessimists and the resource optimists.

The former accepted the predictions of the report and the latter criticised them on the following grounds:

(a) Static Reserve Index:

The model has been criticised for assuming that the non-renewable resources are scarce and are likely to be exhausted by the year 2100. This perspective is based on the use of the static reserve index which is the ratio of current reserves to current use or consumption. The current reserves represent known resources that are economically extractable.

The index expresses the number of years until the resources are depleted, given that there will be no additions to the known resources and also the future annual use of the reserves remains at the current level. But the static reserve index is flawed because it neglects technological development in recycling and reuse of resources and the possibility of substituting scarce materials for abundant resources. Further, with the discoveries of new deposits of oil, gas, etc., the size of reserves may increase overtime despite their continuing extraction.

(b) Technological Development:

This model neglects technological developments in resource extraction, use and substitution. In fact, the size of reserves of non-renewable resources has been increasing due to rapid technological development which makes the extraction of sub-economic stocks of resources less expensive.

Moreover, the scarcity of resources has led to technological developments in new resources such as atomic energy, bio-gas, etc. for industrial and human use. According to Giddens, “It is the world of endless charge and endless expansion which the LTG report overlooks.”

The model assumes the availability of limited land and consequent decline in food production. According to H. Kahn, “Whenever certain limits are reached, new technologies are introduced with the passage of time. These technologies effectively either remove the limit or as time passes a subsequent technology can remove the limit.”

Kahn sees production rising with the invention of new technologies as in the case of the Green Revolution in developing countries which has increased food production and solved their food problem.

(d) Population Growth:

The model predicted that the world population growing at an exponential rate would be 7 billion in 2000. If the mortality rate continues to decline without lowering the fertility rate, it will be 14.4 billion in 2030. But the world population has not grown exponentially.

It was 6 billion in 2000, as against 7 billion predicted in the model. Highly populated countries like China and India have slowed down their population growth rate by adopting birth control measures. Moreover, empirical studies have shown that economic growth accompanied by rising incomes lowers the fertility rate.

(e) Pollution:

The model assumes that the level of pollution is increasing exponentially in the world due to growth in agricultural and industrial activities. Consequently, the degradation of environment will adversely affect the quality and existence of human life, and flora and fauna.

No doubt, pollution of the environment is a serious problem, yet both developed and developing countries are trying to bring down pollution levels by using cleaner technologies. So there is no need for pessimism that pollution will bring the doomsday nearer.

However, pollution can be reduced by a judicious choice of economic and environmental policies and environmental investments. This is only possible through economic growth rather than by zero economic growth, as the model emphasises.

(f) Price System:

The LTG model neglects the price system and the dynamics of the market system. The model predicts that unlimited economic growth will lead to the depletion of non-renewable resources. But resource optimist economists do not agree with this view.

According to them, as the scarcity of resources increases, their prices will rise which will, in turn, affect non-renewable resources in four different ways :

(i) With the rise in their prices, their direct consumption may be reduced;

(ii) The use of high-priced resources in production will fall by substituting techniques that are less intensive in their use;

(iii) High prices of non-renewable resources will encourage the search for new sources such as atomic energy for power generation; and

(iv) Their high prices will provide incentives for the development of substitutes for these resources through new technologies such as bio-gas for power. Thus the efficiency of the market mechanism seems to be one reason why the most gloomy predictions for the depletion of non-renewable resources have failed.

(g) Zero Economic Growth:

The LTG report suggests a zero rate of economic growth in order to stop the rise in the pollution level. Critics point out that if a positive rate of growth will lead to doom, a zero growth rate will do the same but on a smaller time table. Instead, they argue that economic growth, especially in developing countries, will provide more resources that can be used to reduce pollution by supplying potable water, sanitation facilities, providing better housing facilities and reducing congestion in urban areas.

Moreover, economic growth is the only hope for developing countries to bring people out of the vicious circle of poverty and raise their standard of living. Thus the very idea of a zero rate of economic growth is fanciful.

Its implications:

The Limits to Growth report highlights the dangers posed by the relentless pursuit of material wealth by the developed countries. It warns readers about the consequences of unconstrained growth by the industrialised countries.

Depletion of non-renewable resources, deterioration of environment and the population explosion. The report calls forth policy makers, NGOs and the people in general to protect environment, save non-renewal resources and control population.

Another important policy prescription of the LTG model is that the governments should voluntarily adopt a zero growth policy. Such a policy would require world redistribution of income and wealth. For zero economic growth, the redistribution of income and wealth both within and between countries would be on a very large scale. It can only be possible by force which would lead to upheavals between the rich and the poor. Moreover, the model fails to explain how redistribution of income and wealth can be affected with zero growth rate.

The Solow Model of Growth: Assumptions and Weaknesses – Explained!
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5 Towards a Contemporary Understanding of The Limits to Growth

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A Synopsis: Limits to Growth: The 30-Year Update

The 30-Year Update

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THE DRIVING FORCE: EXPONENTIAL GROWTH

Nonrenewable Resources

THE SCENARIOS

TRANSITIONS TO A SUSTAINABLE WORLD

THE SUSTAINABLE SOCIETY

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Introduction:

Assumptions of the Model: