Limits to Growth

by Terence Jeyaretnam

Did you know that the notion of a census commenced in 1801, due to a debate about the size of population in Britain, and its continued growth would lend itself to poverty?  It was fuelled by a now famous book An Essay on the Principle of Population by Reverend Thomas Robert Malthus.

Malthus thought that the dangers of population growth would preclude endless progress towards a utopian society: "The power of population is indefinitely greater than the power in the earth to produce subsistence for man".  Some 174 years later, and based on the same notion, came Limits to Growth by The Club of Rome in 1972.  Twelve million copies were distributed in 37 languages.  Most scenarios resulted in an on-going growth of population and of the economy until a turning point at around 2030. Only drastic measures for environmental protection proved to be suitable to change this systems behaviour, and only under these circumstances, scenarios could be calculated in which both world population and wealth could remain at a constant level.

So, is there a limit to growth? If so, what are the implications, the risks and the opportunities?  And, how through all of this do we leave a better planet for future generations?

Resource peaks and price shocks

Based on known data, we are getting a sense of the peaks forming in global reserves.  Take oil as an example.  A 2009 report by the UK Energy Research Centre concluded that the debate over exactly when we will reach "peak oil" is irrelevant - that no matter what new oil fields we discover, global oil production will start declining in 2030 at the very latest.  The report, which reviewed over 500 research studies, suggests that global oil production could peak any time from right now to as late as 2030.

The peak Phosphorus debate is also on, and is much more acute.  Peak phosphorus ‘Hubbert’ curve suggests global reserves peaking at around 2030.  A key difference between peak oil and peak phosphorus, is that oil can be replaced with other forms of energy whereas there is no known substitute for phosphorus in food production, and, without phosphorus, we cannot produce food.

Peak food is also on the agenda.  The clearest fact that we will soon be experiencing a food crisis is that over the past decade the amount of grain left over at the beginning of the next harvest, has continually been decreasing.  Furthermore, marine species loss is accelerating and threatening human well-being, according to a report published in the journal Science. And if the long-term trend continues, all fish and seafood species are projected to collapse by 2048.  Several areas globally have already been declared protected, with bans on fishing.

Response of a new generation

Some of the above causes have been instrumental in recent riots in countries such as Egypt, Libya and London.  The London riot, which is being described as a riot of consumption by a generation that has been most deluged by market growth advertising – ingraining concepts such as more, latest, coolest, slickest, must-haves, updating, downloading and what’s in.  On the one hand we are seeing commodity price shocks result in chaos, and on the other hand we are seeing an increasing divide between what people are ‘expected to have’ versus what people are ‘able to afford’ – how does one feel about not being able to afford an ipad, for example.

One of the narrow segments of society with the ear to the beat of the new generation is pop culture.  Interestingly, two of my favourite modern-day artists highlight the change in sentiment within pop culture over the past few years.  Bruno Mars in ‘I wanna be a billionaire’ sings about buying all the things he never had, whereas the more recent lyrics by Jessie J in Price Tag turns the notion on its head by saying ‘why is everybody so obsessed? Money can’t buy us happiness, Can we all slow down and enjoy right now, Guarantee we’ll be feelin’ alright!’

Business in a slowing world

Relative to the past two decades, the next decade to two decades would be around learning to work within a de-leveraging, low-growth economy, both globally and locally.  Availability of credit, sovereign debt, increasing costs of resources, increasing labour costs in developing economies, increasing environmental management costs and increasing costs of climate change will all contribute to this.  Traditional forms of business will only experience organic growth. Some sectors that have grown obese in a slowing market will go backwards. But others will grow at a faster rate.

So if you’re in business for the next two to three decades, think about some of these mega trends, and during those slow periods, use the time productively to innovate within an unfolding paradigm change around resource limitations. Think about opportunities in efficiency gains, technology, re-use, social enterprises and environmental growth markets and how these may help your business streak ahead.

 

Terence Jeyaretnam is a Director of Net Balance (terence@netbalance.com), 
one of the world’s leading sustainability advisory firms.
Terence is based in Melbourne.