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Heading for the cliff in a 2.5 ton battery car?
– In a dream of eternal growth
Haven't had a car in twelve years. I cycle, walk or take public transport. Rent a car when the need arises. Usually a battery operated Toyota with the designation Bz4x. The reflections appear when I back it into the parking lot after a pleasant ride.
1. It's ugly but great to drive, comfortable and packed with electronic goodies. A rolling palace of technology.
2. It weighs two and a half tons but needs only 6.9 seconds to reach 100 km/h. (My first car, an Opel Kadett, weighed 650 kg.)
3. If everyone has a two and a half ton car, our civilisation collapses.
To my surprise, I heard a reporter at the liberal market magazine The Economist express similar thoughts in a podcast the other week. He said something like: We have to think about whether everyone really should be driving around in cars that weigh several tons. The objection sounded like heresy against the market liberal belief in eternal economic growth.
Have since investigated the history of heresies a little more closely. What appears to be the most stubborn feature was launched in the early 1970s. A group of researchers at MIT University in the USA then issued an alarming report about the consequences of continued global growth.
Based on a global computer model, the researchers examined the five basic factors that limit growth: population growth, agricultural production, depletion of non-renewable resources, industrial production and the generation of pollution.
The report was designated World3 and pointed towards a societal collapse that begins with an economic decline, probably at the turn of the century in 2100.
Only one scenario, designated SW (stabilized world), showed that a future collapse can be avoided or at least controlled. It assumed that the overall societal goals were reprioritised. No small change in other words.
The report was published by the Club of Rome, an international association that engages in international political issues. The published World3 report in the book Limits to Growth in 1972, which sold millions of copies, generated debate and was forcefully refuted.
One of the most significant critics of the report in the 1970s was the American economist and Nobel laureate Robert Solow. As an economist, he should have questioned the calculations of society's economic gains, since natural resources are not included among the assets of the planet's balance sheet.
A company that does not record the reduced value of the assets in the financial statements is, as you know, cheating with the accounting. The profit can pave the way for bankruptcy in the long term.
Solow did not deny the problem but anticipated a correction of the development pointed out by the MIT researchers. Partly through price increases on raw materials, partly through taxes that halted the depletion of scarce resources.
However, the book Limits to Growth continued to appear in updated editions - continued to be dismissed, including by The Economist – and supported. The journal American Scientist which analysed World3 in 2012 stated that the forecast was not entirely correct but that the main messages were fixed:
There are limits.
A steeply rising growth curve is unsustainable.
A society that measures prosperity in exponential growth is in bad shape.
Nine years later, in 2021, econometrician and sustainability researcher Gaya Herrington examined whether World3 holds up when newly available data is taken into account, including on global warming.
Herrington noted that Solow's predictions of rising prices and regulatory taxes had not materialised. From the end of the 1970s, instead, a long period of deregulation of the market began, led by another Nobel laureate, Milton Friedman, and carried out politically with Ronald Reagan and Margaret Thatcher at the head.
The wave of globalization that followed led to sharply falling prices. The average price of a basket of 50 commodities, from uranium and rubber to tea and shrimp, fell 72% worldwide between 1980 and 2018.
Nor were scarce resources taxed more highly. Solow was wrong here too. Studies by the World Bank in 2014 and the OECD in 2017 show that neither the costs of pollution nor the depletion of non-renewable resources have been balanced by taxes. Furthermore, fossil fuels are still supported by large government subsidies.
After modelling World3 with new data, Herrington compiled four scenarios.
The first two start from business as usual, of which the first ends with societal collapse due to dwindling natural resources. The second is based on the assumption that a doubling of natural resource extraction is possible – and leads to collapse due to environmental degradation and climate change.
The third, CT (Comprehensive Technology) points to opportunities to avoid collapse. It requires exceptional technological progress in, among other things, resource use and the environment. The price for it is an economic decline due to high technology costs.
Only the fourth scenario can provide human welfare at a high level. It presupposes that CT is carried out, and that society's priorities are reassessed.
It is inevitable that growth can no longer remain an overall goal in the rich world, Herrington believes. Industrial production needs to be limited. Values, politics and human behaviour change. Environment, health and education are prioritised.
Footnote: There are more scholarly reports besides Gaya Herrington's that dismiss constant growth as a societal goal (or that the material growth, factories, skyscrapers, cars, etc. can be replaced by services such as hairdressers, teachers, physical therapists, etc.). The magazine Foreign Policy addresses three similar reports (among others from the UN Environment Program in 2017) in an article in 2018: Why Growth Can’t Be Green
Sources:
4Gaya Herrington, Earth4 All Deep Dive, 2022.
5Gaya Herrington, 2022: Five Insights for Avoiding Global Collapse
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