Growth Restrictions

The aspiration of unrestricted growth whereby successive generations outdo their predecessors is looking somewhat precarious. We’re not concerned here with arguing about the quality of life and whether or not our grandparents were happier people – although that conversation is worth having another time. We’d like to explore the constraints that are now in place limiting our current potential to achieve economic growth. There are conflicting opinions on the matter so we’ll tread very carefully.

The economic growth that we have witnessed since the Industrial Revolution is very closely tied to energy. The more growth we have produced the more energy we have consumed. MMPI has long been an advocate of the idea that without growth there is no hope. But there is a problem! Industry derives its energy largely from fossil fuels like coal and oil. Clearly, these resources cannot last indefinitely; that places a restriction on growth. If we could find a way to raise GDP levels (economic growth) without consuming energy we’d be sorted. But that seems a far-fetched fantasy! So we’re faced with a classic dilemma. We know the answer and the question but we don’t know what to do in the meantime.

A full 50% of the fossil fuels that humans have ever burned has been expended since 1990 – 82% since 1960.* This is what mathematicians call exponential growth; a curve that climbs steeper and steeper. That might be fine for wonks working with graph paper but, in reality; it requires ever-increasing new sources of energy to be found to fuel this growth. These new energy sources are not there or are not there in sufficient quantities and at the right prices to take over from oil. The logical conclusion is that growth will have to slow down (even retract) or we’ll have to pay a lot more for our expectations.

This is not scaremongering (although sceptics most definitely demur). The agenda is well scripted. It’s just so difficult to get minds focused on it. Consumers do not have much of an idea how industry works. Goods and new-fangled convenience gadgets just arrive in the stores for their delectation. How much energy was consumed getting them there is not a conscious calculation. Paradoxically, Brexit may elicit some practical examples of logjams that we didn’t realise existed.

Managing consumer expectations will be very important. Given the resourcefulness of human thought it is very likely that solutions will be found to the energy versus growth conundrum. But those solutions may not come about as quickly as consumers expect. There may be periods of retraction and thwarted ambitions. It would be ideal if the political will was there to address these issues but, alas, the 4-5 year re-election cycles are too short to tackle long-term strategic matters.

Renewable energy suggests it may be a viable alternative but this will not happen soon; and, anyway, it will require huge investment. Meanwhile, we’ll just continue to deplete what we have until we fashion a new way.

 

*(Source: https://www.nationalobserver.com/2019/07/31/opinion/fossil-fuel-burning-leaps-new-record-crushing-clean-energy-and-climate-efforts)