2.1 Sustainability Economics

Limits to Growth Concept

The limits to growth concept posits that unlimited economic growth is not possible - that at some point the world's growing population will consume too great a quantity of natural resources (such as clean water and fossil fuels) for human society to exist. Reverend Thomas Robert Malthus (1766–1834) raised the issue of the growing population in the context of limited food resources in his "An Essay on the Principle of Population". He postulated that "population, when unchecked, increases in a geometric ratio. Subsistence increases only in an arithmetical ratio". In other words, that human growth would outpace the ability of natural resources to keep up. This was in contrast to the overall positive sentiment of the era of continued human progress and improvement, and he viewed humans to "be condemned to a perpetual oscillation between happiness and misery, and after every effort remain still at an immeasurable distance from the wished-for goal". As a reverend, Malthus sought to explain why there was poverty and misery, and he believed the reason to be directly attributable to shortages of resources (means of sustenance, such as food).

The limits to growth perspective reached the global public with the 1972 publication of Limits to Growth, a research study by the Massachusetts Institute of Technology (MIT) Systems Lab, released by the Club of Rome. Since its publication, the book has sold millions of copies in thirty different languages.

MIT scientists ran a computer simulation of an integrated global model (called World3) that linked the world economy with the environment. The five main variables in the model were world population, industrial production, food production, resource consumption, and pollution. The authors explored interrelationships and feedback patterns by altering growth trends among the five variables.

The model predicted that continued growth in the global economy would lead to global population and economic collapse in the mid-twenty-first century as a result of increased ecological damage and decreased resources. They also found that collapse could be avoided with changes in policy, behavior, and technology.

The study presented, what was for many at the time, a novel finding that the demands of the human population could exceed the carrying capacity of the earth. The MIT group identified the need to stabilize growth so that humans could live within the ability of the earth's natural system to provide a sustainable yield of resources essential to human life. They found that technology alone could prolong but not prevent a system collapse. In an increased technology scenario in which 75 percent of materials were recycled, pollution reduced to 70 percent of 1970 levels, and agricultural land yields increase 100 percent, world collapse was pushed off to the end of the twenty-first century.

Here is an illustrative example of the concept of limits to growth. Assume that five acres of grassland is required to sustainably feed one cow annually. This means that five acres is able to regenerate itself and support the grazing of one cow and that this same cycle of growth and consumption can occur year after year. In other words, the carrying capacity of five acres of grassland is one cow. If you were a farmer with one hundred acres of grassland and you had one cow, there would be more than enough grass available to feed that one cow and have the grass regenerate itself for perpetuity. The farmer could add up to twenty cows on the one hundred acres and every year the grassland would produce enough grass to feed all twenty cows.

Now suppose the farmer wants to increase his annual profits, and he adds another ten cows to the one hundred acres. There probably is enough grass to feed those cows for that year, but now the overgrazing is compromising the ability of the grass to replenish itself. The resource base degrades because the demands on the grassland are greater than its capacity. Perhaps the next year only 90 percent of the grass grows back, and it is not as healthy as before. Continuous overgrazing further degrades the grassland until it is no longer capable of supporting any cattle.

What would happen instead if the farmer believing that he can push profits even further decided to increase the herd size each year by another ten cows? Then the degradation of grassland will proceed at an even faster rate. Even if the farmer does achieve some short-term profitability increase by exploiting the grassland, it is at the expense of productive grassland in the future. Once damaged, it may take years or decades for the grassland to recover or it may never return to its former productive capacity.

This example illustrates the basic concept of limits to growth - that at some point rising resource demand runs into some very hard resource limitations.