Monday, July 23, 2007

Economics on Crack - Our Addiction to Growth

Jean Chretien was addicted to it. He wanted to "grow" Canada's population through immigration to create new taxpayers to provide for the aging citizenry. Stephen Harper wants to grow Canada's fossil fuel industry until we become an "energy superpower."

Growth - it's the crack cocaine of economics. It's intoxicating and highly addictive but, like crack, it cannot end well. Why not? Because growth in all its manifestations is about consumption. It entails consumption of resources of all descriptions in a manner devised to then increase consumption. It's akin to keeping your foot pressed hard on the gas pedal as you accelerate toward a wall.

In some respects our civilization has already hit that wall, even if it's not apparent quite yet. Take groundwater, for example. In Asia and other parts of the world, including the US, agriculture has been built on exploitation of groundwater. Year after year we've pumped water to the surface faster than these aquifers can recharge. We want to drain the swimming pool and yet still dive into it. Do you think that's very bright?

Then there's the global warming wall. Again it's tied directly to growth and consumption. The recalcitrant, like our own Stephen Harper, want to make a token gesture in the form of activity-based greenhouse gas reductions, called "intensity" targets. An intensity based system, for example, calls for a 10% reduction in GHG emissions per barrel of oil. That reduction, however, is rendered meaningless by a 200% increase - or growth - in production. Now you have a problem that is 180% of what it was before you imposed reductions. It only works if you don't accept that we're already putting out more than our maximum limit of GHG emissions.

But wait, there's other progress to be had. Take ethanol, for example. It's renewable and somewhat cleaner than fossil fuels so let's go that way. Unfortunately we prefer to produce ethanol from corn. Why? Because those who grow corn and those beholden to them want it to be made from corn. But what does it take to grow corn? Farmland, fertilizers, pesticides, and lots and lots of water and fossil fuels. Water? You got it. So we're taking two already over exploited resources - fossil fuel and ground water - throwing in a bunch of chemical fertilizers and pesticides - and taking a renewable resource out of the global food supply. That sounds reasonable, doesn't it?

For decades man has been creating a deficit balance in the world's resource inventory - renewable and non. Whether you like to hear this or not, we're going to have to find different ways of doing things and that's going to take a tide change in our values. We're going to have to see constant, accelerating growth not as an answer but for what it is - a very serious and immediate threat to our wellbeing. In other words, we're going to have to learn to live within our means environmentally just as we expect ourselves to live within our means fiscally.

This isn't just something we ought to do or something we need to do. It's something we're going to have to do and if you don't believe it, you're defying gravity. The era of trying to grow our way out of our problems is over.


M. Simon said...

Without growth there is no way to support the social welfare policies you favor.

The Mound of Sound said...

Social welfare policies aren't dependent on growth provided expectations are reasonable. You have an American perspective on these things that has been disproved in most Western nations.

Anonymous said...

As Elizabeth May put it
"Unlimited economic growth is the ideology of the cancer cell"

We have to find a new zero growth model and make it work or we are destined to die in our own filth or freeze in the dark, it's that simple.

The Mound of Sound said...

Green, you're right. I'm just not sure that even zero growth is going to work. We have to adjust to the limits of this biosphere. Lovelock speaks of "sustainable retreat". In essence, it means getting smaller, consuming less, by abandoning counterproductive practices in order to retain as much of our core strengths as possible.

Northern PoV said...

Economists hate inverse population pyramids. They are only defending/expressing our evolutionary pattern.. ie grow.
I fear things will have to become much worse before we can force ourselves as a species to evolve past the dependence on population growth.
In the meantime, we do what we can.
nice post, certainly worth discussing

The Mound of Sound said...

Ron, I fear you're right. things will have to get a lot worse before we can see the growth problem for what it is. So many aspects of our society are predicated upon growth that abandoning the addiction is bound to cause real dislocation. Still, it's a reality that is inevitable.

Anonymous said...

I'm not sure that one of your underlying premises--that growth by definition necessarily means increasing consumption of resources--is inescapable in the post-industrial economy. The digital economy could theoretically growth infinitely with only a small resource overhead, and economies can grow while becoming more energy efficient, and more reliant on renewables for that energy. Etc.

The Mound of Sound said...

Anon, we're running out of time for theoretical posturing. The digital economy you postulate has no bearing on either our industrial, fossil-fuel driven society or on those of the emerging industrial states, China and India. There is no way we're going to stop those economies from growing and we'll all pay a price for that. Renewables - maybe can supplant some fossil fuel consumption but not nearly enough. We're already drawing down the planet's resources at an unsustainable rate. We've been in that mode for at least two decades. All the windmills in the world aren't going to sort out resource exhaustion problems such as potable, fresh water distribution.

Anonymous said...

We certainly don't need further immigration into Canada if we are serious about producing at a sustainable rate. Why are we so bent on providing extra for China and India. We can still produce what ever our population can handle but we are so influenced by greedy global corperations and want to be just like them. Sustainability is the answer but like you say, we need to do it now.

D said...

Mound of Sound - I have often enjoyed your posts but some of your comments here astonish me.

Take your argument (against?) ethanol production.

Yes it takes water and pesticides to grow but what do you suggest we do if producing corn for ethanol is so bad?

Soybean ethanol takes the same amount of energy, and lets face it, no farmer is going to grow soybeans for ethanol if he's not going to, at the very least, break even on his expenses.

And I don't meant to burst your anti-fertilizer bubble, but a professor of mine, whose family owns a very large potato farm in southern Ontario, brought in a chart of soil samples to our Rural Development class from the last 35 years of farming. Oddly enough, the soil quality actually improved from when they first began farming on that particular plot of land after thirty-some years of using heavy fertilizers, although, they always kept a close eye on the phosphorous levels in the ground.

Responsible farmers who pay close attention to their crops and to their land won't burn it out. Irresponsible farming, usually from the smallest farms who cannot afford the latest technology and scientific instruments, will lead to the poisoning of groundwater and degradation of good land if they burn it out by carelessly throwing large amounts of chemicals and pesticides all over everything.

I'm wondering if you'd prefer we go back to riding horses instead of growing crops for the production of ethanol?

The Mound of Sound said...

Dylan, the corn/ethanol issue is primarily an American problem. In parts of the US grain belt aquifers are already running dry. My point is that taking farmland out of food production and putting it into biofuel production is a bad decision. You should take a look at the latest UN assessment of the problem or consider the tortilla unrest in Mexico to understand that this really isn't a "local" production issue. I'm not anti-fertilizer in the sense you suggest. All I was trying to point out is that this is another cost of biofuel production. By the way, was it the fertilizer that improved the soil or the manner in which the land was farmed? I think most farmland is in better shape today in Canada. It's where water depletion/exhaustion is an issue - the US, sub-Saharan Africa, India and China for example - that arable land is under stress and vulnerable to desertification.

Anonymous said...

The moves towards bio fuels diverts, land, water, fertilizer, pesticide, and labour to the production of fuel vs food. The impact of this shift cannot but lower the total carrying capability of the planet.

The end game for all this is going to be increased resource wars as the previously exported supluses from Canadain/U.S. Ukraine etc, grain belts moves to internal energy production rather than feeding the world. Like early history or even medieval times peoples will move on their neigbours for access to water, land, energy.

There are also issues of ethanol corrosion of engines, less potential energy per gallon, the energy to create ethenol vs it's potential energy(for corn it does not look positive).

The fact is we are going to have no choice but move backwards to some degree in the amount of personal energy we use, and hold or shrink long term populations or we will run out of resources and have a most dramatic die off and a likely loss of the ability to sustain our current tech level.

Stone age no, but we will have to prioritize.

Keep medicine or keep air travel and vacationing.

Freeze in the dark or make smaller more rational homes.

Drive or eat.

The glory days of endless growth are gone, oil, water, base metals, rare earths, are all in shortage Short of strip mining the world we have to draw the line and curb demand rather than endlessly attempting to increase supply

The Mound of Sound said...

Green, you're absolutely right. We are going to have to learn to do with less, to live smaller, and that doesn't mean returning to some Stone Age. We've got to use less energy, plain and simple. No one needs a Hummer to go to the grocery store.
Resource wars, unfortunately, are now a reality. A UN study showed how warfare has been transformed from conflicts between countries into conflicts within countries as rival groups contest access to essentials such as water.
Those of us in the West, and particularly North America, prefer not to consider the price being paid, now and in the decades to come, by the poorest people on the planet who are the first to feel the devastating effects of our greenhouse gas emissions. They're taking it in the neck - from us.