Confronting Hidden Threats to Sustainability (Part 1): Economic Boundaries

What questions are being overlooked or underappreciated when we talk about the world of tomorrow? This is the first of three exclusive sneak peeks into our newest State of the World publication, scheduled for official release April 13, 2015. Join us for the launch symposium in Washington, DC or livestream online.

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Could expensive energy spell the end of economic growth and undermine our welfare?

The prosperous economies and the culture of growth that industrialized nations take for normal, and that most other nations aspire to, rest on cheap (mainly fossil) energy. But we already have tapped the easy energy stores, so the push for continued growth is taking increasing amounts of energy and investment money, leaving less for every other activity.

Moreover, energy prices are walking a tightrope: energy must be costly enough to be profitable for producers, yet cheap enough to be affordable to consumers. Higher energy prices are needed to support ongoing fossil energy development, but higher prices also mean economic malaise and rising debt. Only a fundamental rethinking of the purpose of economies—away from perpetual growth—can address the conundrum of increasingly expensive energy.

“We urgently need institutions and populations to begin to prepare, physically and psychologically, for a world with the same or less each year instead of more—a mindset that is not in our collective psyches or even imaginations.”

– Nathan John Hagens in Energy, Credit, and the End of Growth (Chapter 2)


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Is never-ending economic growth a threat that is hidden in plain view?

Economic growth drives most environmental problems, and it has produced a world in which human activities have grown too large for the planet to accommodate them sustainably. Forests are scalped, rivers run dry, species are going extinct, and humans are changing the climate, all driven by the pursuit of growth.

Yet few recognize that growth itself needs to be abandoned as a national goal. Growth is widely regarded as inevitable and indispensable, but as a matter of national policy it is barely 50 years old. Fortunately, an economy that is not driven by growth of material throughput—yet that still offers adequate employment and reduces inequality and environmental impact—is achievable.

“Our preoccupation with economic growth often has impeded action on issues that really will improve human well-being and the prospects for all life on Earth. This is the trouble with growth.”

Peter A. Victor and Tim Jackson in The Trouble with Growth (Chapter 3)


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Can we avoid locking our investments into unsustainable economic activities?

Continued investments in a fossil fuel-centered energy system—and especially in such forms of  “extreme energy” as tar sands, Arctic oil deposits, shale oil and gas, and mountaintop-removal coal—will lock societies onto a dead-end path.

Scientists are warning that the bulk of the world’s proven fossil fuel resources can never be touched if the world wants to avoid runaway climate change. Further investing in them—and thus enlarging the carbon “bubble”—exposes not only energy companies and fossil fuel exporters to incalculable risk, but also pension funds, municipal authorities, and others who invest in such companies for long-term financial returns. Absent alternative policies, the world may confront an unpalatable choice between climate chaos and economic doom.

“Visionary management of policies, companies, and investments is needed to ensure that new investments are consistent with environmental health and resilience, and that economies are weaned, smoothly and efficiently, off investments that are harmful to sustainability.”

Ben Caldecott in Avoiding Stranded Assets (Chapter 4)


These questions feature chapters by contributing authors in State of the World 2015. Want to hear from the authors? Join us on April 13, 2015 for the launch symposium in Washington, DC or livestream online.

About State of the World 2015: Confronting Hidden Threats to Sustainability:

State of the World 2015 coverWe think we understand environmental damage: pollution, water scarcity, a warming world. But these problems are just the tip of the iceberg. Deeper issues include food insecurity, financial assets drained of value by environmental damage, and a rapid rise in diseases of animal origin. These and other problems are among the underreported consequences of an unsustainable global system.

In State of the World 2015, experts  explore hidden threats to sustainability and how to address them. Eight key issues are addressed in depth, along with the central question of how we can develop resilience to these and other shocks. With the latest edition of State of the World, the authorities at Worldwatch bring to light challenges we can no longer afford to ignore. Get your copy today.

6 thoughts on “Confronting Hidden Threats to Sustainability (Part 1): Economic Boundaries”

  1. Politicians and green campaigners have been locked into a mexican standoff about growth for over 40 years. Since the politicians run the planet this has meant green-type policies get neglected and global problems run rampant. I don’t think we can win this by either continuing the standoff or by giving in to BAU growth. There is a 3rd option that the author doesn’t consider here; of growth being a political imperative. They need it to look good, to get tax revenues and to get elected despite not actually solving any problems. This suggests a possible new green strategy of saying HOW to get growth rather than whether. Politicians would listen if our message was that fossil-fuelled growth is self-defeating (due to costs and impacts) but that the economy could be simply rejigged to seek growth in ways that do not undermine future growth.

    Please see my site (linked from my name above) for a way to do this. The OECD also have a recent blog on it, http://oecdinsights.org/2015/02/23/seeing-paradigm-change

    Could this help? Or has the green movement opposed growth for so long that any other strategy is sacrilege?

  2. James: in fact multiple “green” voices have been talking up a green economy for years: low carbon growth, decoupled growth, steady state development etc etc. I fear this is not shifting the argument much further because the entrenched positions of BAU are not in fact based on a logical assessment of risk, but an economic paradigm taught as a science, but which in fact is an ideology. There is little rational thought here. It is a belief system, with growth as a central tenet of the faith. It won’t shift in the face of logic or reasoning: just like any other religion. I fear we simply need to build an alternative architecture as soon as possible, and show by doing; if we are lucky, this will provide an alternative for those who are not already gripped by the paradigmatic lock in place, and if we’re very lucky, we might have something else in position when that paradigm collapses in on itself.

  3. I’m fascinated by the growth imperative, where/if it exists, the implications for system change. Steve Keen has recently debunked the commonly held belief that the money supply must be constantly growing in order to create money to repay interest on debt-based money, but I suspect there are other dynamics within the capitalist system which create a need for growth. To my mind it is crucial to pinpoint these and identify economic processes which have ceased to function in this era of secular stagnation which is identified in the first part of this article. Anyone have any pointers here?

    Even if no economic imperative exists, as James says above, there appears to be a political imperative for growth which needs to be addressed – “if you can’t beat them, join them”.

  4. Great question Nick. Pinpointing the dynamics that create the political imperative for growth is the key to unlocking what can otherwise seem like an impenetrable ideology.
    My suggestion is to start with what politicians get from growth. Basically it’s tax revenues, prestige and immunity against their own failure to actually solve problems (since dumb policies often also boost growth). See 4.9 of my paper on this, http://blindspot.org.uk/wpb/wp-content/uploads/2013/05/GreysonNaplespaper.pdf

    From this perspective we can escape the mexican standoff of eternally asking politicians for something they cannot give. We could easily and quickly build the necessary alternative architecture. For example bank-led money-supply is a growth killer and cause of needless austerity. So greens could push policy to immediately fix this – if they were not too busy opposing growth! http://blindspot.org.uk/seventh-policy-switch/

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