Topic: Degrowth; Limits to Growth

There’s Only One Way to Avoid Climate Catastrophe: ‘De-growing’ our Economy. Jason Hickel,. Resilience. Oct. 20 , 2017.

By sharing what we already have more fairly, we can render additional economic growth unnecessary. 

In this sense, de-growth is nothing at all like austerity. In fact, it’s exactly the opposite. Austerity means cutting social spending and slashing taxes on the rich in order to – supposedly – keep the economy growing. This has crushing consequences for ordinary people’s lives. De-growth, by contrast, calls for cutting the excesses of the richest while redistributing existing resources and investing in social goods – universal healthcare, education, affordable housing etc. The whole point is to sustain and even improve human wellbeing without the need for endless economic expansion. De-growth is a philosophy that insists that our economy is already more than abundant enough for all of us – if only we learn how to share it. 

One easy way to do this would be to roll out a universal basic income and fund it through new progressive taxes – taxes on carbon, on land, on resource use, on financial transactions, and so on. This is the most sensible and elegant way to share our abundance, and it comes with an added benefit: if the basic income is high enough, it will free people to walk away from unnecessary jobs that produce unnecessary stuff, releasing some of the pressure on our planet. 

Crucially, de-growth does not mean we have to get rid of the stock of stuff that we already have, as a nation: houses, furniture, shoes, museums, railways, whatever. In fact, it doesn’t even mean that we have to stop producing and consuming new stuff. It just means we have to reduce the amount of new stuff that we produce and consume each year. When you see it this way, it’s really not so threatening. If we degrow by 5 per cent per year (which is what scientists say is necessary), that means we have to cut our consumption of new stuff by 5 per cent. It’s easy to make up for that by just repairing and reusing stuff we already have. And we can encourage this more creative approach to stuff by curbing advertising, like Sao Paulo, Chennai and other cities have done. 

Of course, there are deeper, more structural dimensions of our economy that we will have to change. One of the reasons we need growth is to pay off all the debt that’s sloshing around in our economy. In fact, our entire money system is based on debt: more than 90 per cent of the currency circulating in our economy is loans created out of thin air by commercial banks. The problem with debt is that it comes with interest, and to pay off interest at a compound rate we have to work, earn, and sell more and more each year. 

In this sense, every dollar of new money we create heats up the planet. But cancel the debt and shift to a debt-free currency, and suddenly we don’t have to labour under this relentless pressure. There are already plenty of ideas out there for how to do this. 

Still, we have to be honest with ourselves: : the Stern Review projects that climate change is set to cost us 5-20 per cent of global GDP per year, which is going to violently change our economy beyond all recognition, and cause enormous human suffering in the process. The storms that churned across the Atlantic this summer are only a small taste of what is to come. The choice is clear: either we evolve into a future beyond capitalism, or we won’t have a future at all.

Limits to growth redux: A system dynamics model for assessing energy and climate change constraints to global growth. Thomas Ansell and Steve Cayzer, via ScienceDirect. Sept. 2018.


The Infinite Desire for Growth: A Review. Stumbling and Mumbling. June 22, 2018.


Why degrowth is the only responsible way forward: A reduction of economic activity is necessary and just – and can lead to human flourishing. Joël Foramitti, Marula Tsagkari, Christos Zografos, openDemocracy. Sept 19, 2019.



The global economy, heat engines, and economic collapse. Tim Garrett, Nephologue. Aug. 17, 2018.

British Petroleum provides some pretty nice tools for visualizing energy consumption like the figure above which drives home effectively the point of just how fast our demand for energy is growing, roughly quadrupling in the past 50 odd years.

In order to understand this growth better, I think it's important to ask why we need energy in the first place. This may seem like a pretty bone-headed question -- of course we need energy. But energy is not an essential ingredient in traditional macro-economic models. In the best case energy is treated as a quantity that can be "substituted" for other ingredients of the global economy as capital and labor. 

As a physicist, this seems totally nuts as our individual ability to work rests on the availability of energy. We're not somehow divorced from the laws of the universe. I've never heard of someone being an effective element of the labor force who had completely ceased to eat. And food sure doesn't materialize without work being done. 

Instead, I think it's appropriate to treat civilization as a what can be termed a thermodynamic heat engine. The idea of a heat engine was first envisioned by French engineers in the early 1800s. In a car, work is done to propel a car forward by consuming the chemical energy in gasoline at high temperatures and dissipating it as waste heat at low temperatures with the pistons moving up and down in between. 

In one way, we're very similar. We consume energy to go through the cyclic motions of going to and from work and the grocery store, sending out internet search requests, and pumping our hearts. All these actions require a temperature gradient where energy is released at high temperatures and dissipate at cold temperatures, whether with our cars, our computers, or the gradient from the inside to exteriors of our bodies. In fact, we can see all of human civilization as a "super-organism" that consumes primary energy to engage in all of its internal circulations, ultimately radiating waste heat to the atmosphere and then to cool of space. 

High potential primary energy resources like oil and coal sustain civilization’s circulations against dissipation of waste heat. ‘Useless’ energy ultimately flows to space through the cold planetary blackbody temperature of 255 K. In between lies civilization, including people, their activities, and all their associated circulations, whether or not they are part of the GDP.

Civilization Growth 

A key difference between human civilization and a car is that it can grow. By growing, its thermodynamic engine expands. A larger engine consumes more, dissipates more, and does work ever faster. This positive feedback provides a recipe for exponential growth. 

Civilization uses energy consumption mostly to sustain existing circulations. A small fraction is also used to grow civilization through an incorporation of new raw materials (e.g. iron and wood) into its structure. Thermodynamically, this is possible only if civilization consumes a little more energy than it dissipates. A small fraction of the energy that is consumed is available to incorporate raw materials to build civilization. 

We’re actually pretty familiar with this. If we eat too much we get fat. I’m told that consuming an extra 3500 calories beyond what we need leads to a pound of weight gain. This is the energy required for the body to turn food into flesh.

A child consumes food today in some proportion to the child’s body mass. The child experiences a production of mass if there is a convergence of energetic flows such that it dissipates less heat than is contained in the food energy eaten. The child’s current size is directly a consequence of an accumulation of prior mass production. Its current rate of food consumption is also a consequence of prior production. As the child grows it eats more. As the child approaches adulthood, the disequilibrium between consumption and dissipation narrows, and (hopefully!) the production of new mass stalls.

So economic production, or the GDP, can be seen as the consequence of this imbalance: production is positive only when primary energy consumption is greater than the rate at which civilization dissipates energy due to all it’s internal circulations. If production is positive, civilization is able to incorporate raw materials into its structure. It grows, and then uses the added population and infrastructure created with the materials to consume even more energy.

Collapse 

I think this is what is happening with the BP statistics. Because the GWP exists, we grow, and then use our growth to access more energy which we can then consume with the higher infrastructure demands. The relevant equation is that every 1000 dollars of year 2005 inflation-adjusted gross world product requires 7.1 additional Watts of power capacity to be added, independent of the year that is considered. 

Right now, energy consumption is continuing to grow rapidly, sustaining an ever larger GWP. But it is not the rate of energy consumption that supports the GWP, but the rate of growth of energy consumption that supports the GWP. 

This important distinction is flat out frightening. The implication is that if we cease to grow energy and raw material consumption globally, then the global economy must collapse. But if don't cease to grow energy consumption and raw material consumption then we still collapse due to climate change and environmental destruction. Is there no way out?

On the thermodynamic origins of economic wealth. Tim Garrett, Nephologue. Sep. 10, 2018.

What are the origins of wealth? 

Economics textbooks describe wealth as an accumulation of all financially valuable resources. It is our collective beliefs that give this accumulated stock value. Human labor uses this stock to produce more stuff through the GDP thereby enabling overall wealth to grow with time.

At least on the face of it, this view of the economy makes a lot of sense. Economists have mathematical equations that express these ideas providing quantitative descriptions for how and why the economy grows. 

Yet something still seems unsatisfyingly magical. Why should we believe in the concept of economic value in the first place?. The existence of a financial system is hardly obvious. It hasn’t always existed through history, even during periods where people produced and consumed. And most of what we do in our lives (fortunately) doesn’t involve any exchange of currency at all. We are able to enjoy a good moment of each other’s company without having to pay a single cent. 

The economy and the second law 

Sure, financial wealth is a human quantity, but we are still part of the physical universe. No matter how rich we may be, we are all equal subjects of its rules. 

Chief among these rules is the Second Law of Thermodynamics. The Second Law has been expressed in many ways that are either wrong, strangely mystical, or maddeningly vague. It doesn't have to be this way. The most straightforward is to view the direction of time as a flow of matter that redistributes energy to ever lower potentials. Drop something it falls. It was up, now it’s down; air flows from high to low gravitational potential or pressure to make the winds. Easy. 

 

Take the waterwheel in a mill. A mill consumes high gravitational potential energy from a flowing stream. The flow drives the wheel circulations and finishes its journey in the stream below where the potential energy is becomes unusable. The total capacity of the mill to dissipate potential energy, its size or “stock”, is something we can estimate by looking at the size of the mill and noting how fast it circulates.


 

Or how about a hurricane? The pressure difference between the eye of the hurricane and its surroundings provides the potential energy with which to drive the winds while the hurricane constantly loses energy by radiating to space. Again the hurricane has a size or "stock" that defines its power. 

What does this have to do with the economy? Well, everything. Our perceptions are based on neuronal activity in the form of cyclical transfers of charge from high to low potential in our brains. The cycles are sustained by by high potential calories in food that we dissipate as waste heat from our bodies. Our food is produced with high potential fossil fuels that we burn to till the land, produce fertilizer and transport from farm to market. We get to and from market using gasoline that is dissipated in our cars. The money we use to buy food comes from the fruits of our labors staring at computers that that themselves dissipate energy as they make computations with a certain cycle frequency and transfer data to and from other computers along communication networks, all of which turns high potential energy to low potential waste heat.

But can we really reduce all this to something as simple as a waterwheel or hurricane? There’s 7+ billion of us, our brains are so complicated, and the economy is so big.

 

All the circulations in civilization are ultimately derived from the consumption and dissipation of high energy density “primary energy resources”. As a global organism, our civilization collectively feeds on the energy in coal, oil, natural gas, uranium, hydroelectric power and renewables. Civilization continually consumes these resources to accomplish two things: the first is to propel all civilization’s internal back-and-forth “economic” circulations along its accumulated networks; the second is to incorporate raw materials into our structure in order to grow and maintain our current size against the ever present forces of dissipation and decay. 

Energy, from whatever source, powers our machines, our telecommunications, modern agriculture, and the supply of the meals that give us the energy to sustain our thoughts, attention, and perceptions. Without energy, civilization would no longer be measurable. Everything would grind to a halt. Nothing would work. Lacking food, we would be dead and our attention span with it. The gradient that meaningfully distinguishes civilization from its environment would disappear. Value would vanish. 

Wealth is power 

Stepping back to see the world economy as a simple physical object, one where people are only part of a larger whole, would be a stretch for a traditional economist hung up on the idea that wealth must be restricted to physical capital rather than people. But, crucially, unlike traditional models, it is an idea that can be rigorously tested and potentially disproved. It is a hypothesis that is falsifiable.

I have shown in peer-reviewed studies published in Climatic Change, Earth System Dynamics, and Earth’s Future that the observed relationship between the current rate of energy consumption or power of civilization, and its total economic wealth (not the GDP), is a fixed constant of 7.1 ± 0.1 milliwatts per inflation-adjusted 2005 dollar. 

Equivalently, every 2005 dollar requires 324 kiloJoules be consumed over a year to sustain its value. In 2010, the global energy consumption rate of about 17 TW sustained about 2352 trillion 2005 dollars of global wealth. In 1970, both numbers were about half this. Both quantities have increased slowly by about 1.4% per year to 2.2% per year averaging a growth rate of 1.90% /year. The ratio of the two quantities has stayed nearly constant over a time period when both wealth and energy consumption have more than doubled and the rates of growth have increased by about 50%. Currency is the psychological manifestation of a capacity to dissipate energy.

Can wealth continue to grow? 

What this means is that we must continue to grow our capacity to consume primary energy reserves just to grow our wealth. We should never conclude that growth can’t continue over coming decades, as some claim in perennial doomsday predictions. It’s just that there is nothing stronger than inertia to guarantee that it will. The water wheel in the picture above can rot or the river can dry. Hurricane low pressures can dissolve. For us, continued consumption growth may quite plausibly become too difficult due to depletion of energy and mineral reserves or accelerating environmental disasters such as climate change. If this happens, all our efforts to produce growth can be expected to be more than offset by decay. 

At some point, all systems experience decay and collapse. We’ve seen the waxing and waning of civilizations throughout history. Historical studies suggest that any long-term decline in a society’s capacity to consume forebodes hyper-inflation, war, and population decline. The question for us should not be whether collapse will happen, but when, and whether it will be slow or sudden.

OPINION: SOONER OR LATER, WE HAVE TO STOP ECONOMIC GROWTH — AND WE’LL BE BETTER FOR IT. Richard Heinberg Ensia. Jan. 8, 2019.

The end of growth will come one day, perhaps very soon, whether we’re ready or not. If we plan for and manage it, we could well wind up with greater well-being.

Both the U.S. economy and the global economy have expanded dramatically in the past century, as have life expectancies and material progress. Economists raised in this period of plenty assume that growth is good, necessary even, and should continue forever and ever without end, amen. Growth delivers jobs, returns on investment and higher tax revenues. What’s not to like? We’ve gotten so accustomed to growth that governments, corporations and banks now depend on it. It’s no exaggeration to say that we’re collectively addicted to growth.

The trouble is, a bigger economy uses more stuff than a smaller one, and we happen to live on a finite planet. So, an end to growth is inevitable. Ending growth is also desirable if we want to leave some stuff (minerals, forests, biodiversity and stable climate) for our kids and their kids. Further, if growth is meant to have anything to do with increasing quality of life, there is plenty of evidence to suggest it has passed the point of diminishing returns: Even though the U.S. economy is 5.5 times bigger now than it was in 1960 (in terms of real GDP), America is losing ground on its happiness index.

So how do we stop growth without making life miserable — and maybe even making it better?

To start with, there are two strategies that many people already agree on. We should substitute good consumption for bad, for example using renewable energy instead of fossil fuels. And we should use stuff more efficiently — making products that last longer and then repairing and recycling them instead of tossing them in a landfill. The reason these strategies are uncontroversial is that they reduce growth’s environmental damage without impinging on growth itself.

But renewable energy technology still requires materials (aluminum, glass, silicon and copper for solar panels; concrete, steel, copper and neodymium for wind turbines). And efficiency has limits. For example, we can reduce the time required to send a message to nearly zero, but from then on improvements are infinitesimal. In other words, substitution and efficiency are good, but they’re not sufficient. Even if we somehow arrive at a near-virtual economy, if it is growing we’ll still use more stuff, and the result will be pollution and resource depletion. Sooner or later, we have to do away with growth directly.

Getting Off Growth

If we’ve built our institutions to depend on growth, doesn’t that imply social pain and chaos if we go cold turkey? Perhaps. Getting off growth without a lot of needless disruption will require coordinated systemic changes, and those in turn will need nearly everyone’s buy-in. Policymakers will have to be transparent with regard to their actions, and citizens will want reliable information and incentives. Success will depend on minimizing pain and maximizing benefit.

The main key will be to focus on increasing equality. During the century of expansion, growth produced winners and losers, but many people tolerated economic inequality because they believed (usually mistakenly) that they’d one day get their share of the growth economy. During economic contraction, the best way to make the situation tolerable to a majority of people will be to increase equality. From a social standpoint, equality will serve as a substitute for growth. Policies to achieve equity are already widely discussed, and include full, guaranteed employment; a guaranteed minimum income; progressive taxation; and a maximum income.

Meanwhile we could begin to boost quality of life simply by tracking it more explicitly: instead of focusing government policy on boosting GDP (the total dollar value of all goods and services produced domestically), why not aim to increase Gross National Happiness — as measured by a selected group of social indicators?

These are ways to make economic shrinkage palatable; but how would policymakers actually go about putting the brakes on growth?

One tactic would be to implement a shorter workweek. If people are working less, the economy will slow down — and meanwhile, everyone will have more time for family, rest and cultural activities.

We could also de-financialize the economy, discouraging wasteful speculation with a financial transaction tax and a 100 percent reserve requirement for banks.

Stabilizing population levels (by incentivizing small families and offering free reproductive health care) would make it easier to achieve equity and would also cap the numbers of both producers and consumers.

Caps should also be placed on resource extraction and pollution. Start with fossil fuels: annually declining caps on coal, oil and gas extraction would reduce energy use while protecting the climate.

Cooperative Conservatism

Altogether, reining in growth would come with a raft of environmental benefits. Carbon emissions would decline; resources ranging from forests to fish to topsoil would be preserved for future generations; and space would be left for other creatures, protecting the diversity of life on our precious planet. And these environmental benefits would quickly accrue to people, making life more beautiful, easy and happy for everyone.

Granted, we’re talking about an unprecedented, coordinated economic shift that would require political will and courage. The result might be hard to pigeonhole in the capitalist-socialist terms of reference with which most of us are familiar. Perhaps we could think of it as cooperative conservatism (since its goal would be to conserve nature while maximizing mutual aid). It would require a lot of creative thinking on everyone’s part.

Sound difficult? Here’s the thing: ultimately, it’s not optional. The end of growth will come one day, perhaps very soon, whether we’re ready or not. If we plan for and manage it, we could well wind up with greater well-being. If we don’t, we could find ourselves like Wile E. Coyote plunging off a cliff. Engineering a happy conclusion to the growth binge of the past century might be challenging. But it’s not impossible; whereas what we’re currently trying to do — maintain perpetual growth of the economy on a finite planet — most assuredly is.

2019: World Economy Is Reaching Growth Limits; Expect Low Oil Prices, Financial Turbulence. Gail Tverberg, our finite world. Jan. 9, 2019.

What seems to be happening is that the world economy is reaching Limits to Growth, as predicted in the computer simulations modeled in the 1972 book, The Limits to Growth. In fact, the base model of that set of simulations indicated that peak industrial output per capita might be reached right about now. Peak food per capitamight be reached about the same time.

You won't like downsizing. Norman Pagett, medium. Aug. 24, 2018.

‘Downsizing’ isn’t going to be a gradual shift into a state of bucolic peasantry where life carries on as it always has, with a few minor changes. 

The slightest slowdown of our current economy by just a few percentage points brings an immediate chaos of unemployment and global destabilisation.