Broken records

The 1972 Limits to Growth is more relevant than ever

The UNEP published in the run up to the COP28 a report called Broken Record, with as subtitle “Temperatures hit new highs, yet world fails to cut emissions (again). Not very promising literature.

This reminded me of another broken record, the Limits to Growth report of the Club of Rome from 1972 and the newest update and recalibration of the original model they used. Here is the latest study. Another broken record, but every replication study shows the robustness of the original model: we still follow more or less the Business As Usual (BAU) scenario on the way to….collapse. This addresses the core of the systems problem we have at hand: Still, the pervasive idea that we can always have more, without any limits.

Some history

Back in the early 1970s, the Club of Rome raised awareness about the unsustainability of the economic system by publishing different future scenarios in their book Limits to Growth. The main message of the limits to growth was that continuous growth in industrial output could not be sustained indefinitely. Effectively, humanity can choose its limit or, at some point, reach an imposed limitation, at which time a decline in human welfare will become unavoidable.

Source: Limits to Growth (1972), p 124

The first and probably best known scenario is called the “standard run” or “business as usual” (BAU), which shows an exponential growth dynamic of the system and leads to the overshoot and collapse mode triggered by the depletion of non-renewable resources. The other scenarios (twelve in total) describe changes in the model's parameterisation and assumptions about technological and societal developments.

In the years after publication, the model and its conclusions received widespread criticism from different sides (see for overview here), claiming that the predictions were wrong (by people who believed the current system was right) and the methodology was wrong.

A systems problem

Why is the Limits to Growth (LtG) report so important from a system economics lens? Well, for me this is quite obvious. But let’s repeat the arguments.

First, the LtG report is about root causes. The root cause was growth: the exponential growth of energy use, material flows, food production and population against the earth’s physical limits, as stated by Meadows and Meadows in 2007. Although GDP is not in the model (however industrial output and service production are), it is clear that this relates to the (current) discussion on degrowth, post-growth, et cetera. As I shared in a previous post, we have a growth-dependent system.

Second, the arguments were, and are, against the main narrative about economics: Growth has limits. Even more so, we have to discuss the limits we run into to make more sensible policies. Also against the main economic narrative was the way of modelling: non-linear, non-equilibrium, stocks and flows, all things (neoclassical) Dynamic Stochastic General Equilibrium (DSGE) models are not about. And not to forget: no (explicit) prices to adjust market behaviour.

Third, a system lens. Instead of concentrating on one (economic) domain and looking reductionist to ‘a’ equilibrium, the approach of LtG was from a systems perspective. From the introduction “Its purposes are to foster understanding of the varied but interdependent components-economic, political, natural, and social-that make up the global system in which we all live; to bring that new understanding to the attention of policy-makers and the public worldwide; and in this way to promote new policy initiatives and action. “ (p. 9). In addition to that, no definite definitions about any variables, the absense of linear causality, no optimum solutions, liminality, uncertainty and path-dependency. Important elements to understand current and future developments.

Updates

Turner made an update in 2008 and 2012 and Gaya Herrington made an update in 2021. Without going into all the details, the conclusion was the same: the World3 model that quite a good job in their scenarios.

The newest update, from Arjuna Nebel, Alexander King, Ruben Williamowski and Tim Schell is both a recalibration and a data update. Their conclusions are in favour of the (original) model, not on human progress (figure below):

“The rough trajectories of non-renewable resources, industrial output, and food do not differ much from BAU. Only the timing and height of the peaks are different. The food peak is higher and shifts a few years into the future. A similar behavior can be seen in the industrial curve, the peak rises, but moves into the past. The initial resource value is higher than in BAU, but the curve of the graph still follows the sam course and the approximate value of this variable for today is almost the same. The population curve is almost identical to BAU. The biggest difference is in the trajectory of the pollution. Th epeak of the curve declines and shifts about 50 years into the future.” (p. 8)

and

“Here, the model results clearly indicate the imminent end of the exponential growth curve. The excessive consumption of resources by industry and industrial agriculture to feed a growing world population is depleting reserves to the point where the system is no longer sustainable. Pollution lags behind industrial growth and does not peak until the end of the century. Peaks are followed by sharp declines in several characteristics. This interconnected collapse, or, as it has been called by Heinberg and Miller (2023), polycrisis, occurring between 2024 and 2030 is caused by resource depletion, not pollution. The increase in environmental pollution occurs later and with a lower peak” (p.11)

Source: Recalibration of limits to growth, 2023

As the authors rightfully stress, based on this model, it is impossible to say what will happen after a tipping point has been reached. Probably, all relationships will become different, which might result in slower collapse, recoveries or jumping from one state to another. In other words, fundamental uncertainty that can not be modelled beforehand.

In short, it is very clear that the dynamics of the model are still valid nowadays.

The history over the last fifty years indicates that (1) ever-increasing economic activity (economic growth) is every year a more significant threat to our natural environment, (2) scientific evidence has become available that there are ecological boundaries to economic activity, and (3) policymakers up till now generally have failed to implement a solution.

What to do?

Let’s go back into history to understand where to go. More specifically, the Meadows and Meadows paper from 2007. They refer to a gathering dating back to 1978 (!), involving system modelers who collectively endorsed certain key principles.

The proceedings commenced with the enumeration of foundational assumptions that underpin prevailing policies:

1. Any kind of economic growth is desirable and possible.

2. The future will be just like the present, only bigger.

3. If environmental limits exist at all, they are far away.

4. Scarcity is the permanent condition of humankind. There is not enough of anything to go around; equal sharing would mean common poverty; therefore, sharing is impossible, and the poor will always be with us.

5. Competition works better than cooperation; it is a win/lose world, a zero-sum game.

6. All changes should be put off as long as possible.

7. Business as usual will make the poor rich someday.

8. Technical changes are inevitable welcome, and effective; institutional changes are rare and dangerous and probably will not work.

9. The future is to be predicted, not chosen.

10. People, nations, the economy, and the environment are all separate from each other, and each can rise or fall separately from the other. Solutions designed for one sector can work without worrying about their side effects in other sectors.

11. We know what we are doing.

The group of modellers came with a different list:

1. There's no known physical or technical barrier preventing the fulfilment of basic needs worldwide in the foreseeable future. Current inadequacies stem from societal and political structures, values, norms, and worldviews, not physical scarcities.

2. Population and material capital can't infinitely expand on a finite planet.

3. There's insufficient reliable information on the Earth's capacity to sustain population and capital growth. Optimists and pessimists interpret existing partial information differently.

4. Continuing "business as usual" won't lead to a desirable future. It will widen the rich-poor gap, exacerbate resource and environmental issues, and worsen economic conditions.

5. Current trends won't likely persist. The global socio-economic system will transition over the next three decades, becoming quantitatively and qualitatively different.

6. The exact nature of this future state is undetermined but depends on current decisions and changes.

7. Early policy changes will likely have more impact with less effort due to momentum in global processes. Delaying action may lead to problems too advanced to avoid.

8. While technical changes are expected, restructuring social, economic, and political systems is more effective in ensuring a desirable future.

9. Interdependencies among peoples and nations globally are greater than commonly imagined, with actions in one part of the world having unpredictable consequences.

10. Due to these interdependencies, single, simple measures may be counterproductive. Decisions should consider the broadest possible context across space, time, and knowledge areas.

11. Cooperative approaches tend to be more beneficial in the long run than competitive ones in achieving individual or national goals.

12. Many plans and international agreements often assume inconsistent or unrealistic worldviews, leading to policies enacted for unattainable outcomes.

We do not have to invent new ideas: we only have to implement, the right, old ones.

Of course, we have Earth4all of the Club of Rome trying to practice this preaching.

But it is not enough. It is not landing in major policy making

Why are we not doing that?