The limits to growth
Imagine there is a lake in a distant forest. On the surface of the lake a plant is growing. It suffocates all life below. The plant has already been there for a 1,000 days and it grows at a rate of 100% each day. If the lake is already covered half by the plant then how many days are left to save the remaining life in the lake? The correct answer is one day.
The plant doubles in size in one day. As the lake is already half covered it will be fully covered the next day, even though the plant was there already for 1,000 days. This is the power of exponential growth. And it ends suddenly. As soon as the lake is fully covered, the plant has no more room for growth. For every leaf the plant adds, another leaf has to die.
The lake represents Earth. The plant represents humanity. The leafs are people like you and me. No more room for growth may mean that for every child that is born, someone has to die. It is estimated that as of 1971 humans use more of the Earth’s resources than nature can replenish. Currently we use one-and-a-half times as much as nature can replace. By 2050 three Earths may be needed to sustain humanity. Make no mistake, this is the “last day”.
The end may come suddenly. Most people don’t see it coming. Some people believe that the end can’t be avoided. They are preparing for the worst. In 1970 a group of scientists called the Club Of Rome predicted “the end” when natural resources would run out. They expected it to happen shortly after the year 2000. It didn’t happen until now, but that doesn’t mean that the current path of humanity can continue for much longer.
This is the end
This is the end
My only friend
– The Doors, The End
The depletion of natural resources and the degradation of our planet are amongst the most serious challenges we are facing. If these challenges are not addressed adequately, billions of humans may die of hunger, pollution, resource wars and ecological disasters. Poverty may spread because of the depletion of natural resources.
Perhaps new technologies will become available in the future that can deal with these issues but we don’t know whether that will happen and when. Even when these new technologies become available in the future, we may still have to bridge a gap in time and adapt our lifestyles until that happens.
The average temperature on Earth is expected to rise by three degrees Celsius by the year 2100. It has already risen by one degree Celsius since the year 1900. Such a rise in temperature may alter the weather globally and cause massive harvests fails. Polar ice may melt so that the sea level will rise and low-lying territory where more than 500 million people currently live, may be lost. The main cause of the temperature rise is our use of fossil fuels.
There is a lot of uncertainty about the accuracy of the estimates regarding the consequences of climate change as was the case with the predictions made by the Club Of Rome. The impact of rising carbon dioxide levels on the weather are hard to predict. The estimates of the climate scientists are the best we currently have as were the estimates made by the Club Of Rome in 1970.
Ignoring climate change is like playing Russian roulette with the future of humanity without knowing exactly how many bullets are in the revolver, but sensing that it is two to five out of six. Taking action may result in wasting an unprecedented amount of effort and resources on combating climate change if these predictions are wrong. But you need to pull the trigger to know that.
Drastic actions like ending frivolous uses of fossil fuels and investing massively in clean sources of energy appear unavoidable. Several scientists believe that nuclear energy is cleaner than fossil fuels. There may be accidents and dangerous waste, but they believe that nuclear energy will cause fewer deaths than fossil fuels.
An incident in my life makes me cautious about nuclear energy. In 1994 I met my wife Ingrid. In 1995 we spent our first holidays together in the Dutch province of Zeeland. During one of our trips we came across a village named Kwadendamme. The English translation of this name is Evildam. Ingrid was driving. Suddenly she hit the brakes. I was lucky to have my seatbelts fastened. “Antiques,” she cried. By the side of the road was a small shabby shed with a sign “King’s Antiques”. Inside were piles of stuff. An elderly couple entered the shed via a back door. They may have been in their seventies or eighties. They may have the only real antiques in the shop.
Ingrid was browsing the shelves and soon she found a doll. 185 guilders (85 euros) was the price tag. Ingrid kept on staring in bewilderment. “This doll isn’t very old but the price reflects that,” the old lady said. Later Ingrid told me that she had seen this doll a few years earlier in a store chain. Back then the price was 9 guilders (4 euros). We were about to leave, but then the old man said: “Don’t go yet, there’s another hall.” He pointed at the back door. Behind the shed was a small place and another shed. It may have been a henhouse previously. I could hardly stand upright in there. It was filled with even more stuff.
Just after we left Kwadendamme we found ourselves on route N666 (National Route 666) to Borssele. Back then I already found this to be a bit peculiar, not only because of the route N666 passing Kwadendamme (Evildam), but even more so because it was the route to Borssele, which is the site of the only remaining Dutch nuclear power plant. The N666 ends near Borssele next to a village named ‘s Heerenhoek, which can be translated into The Lord’s Corner. With the benefit of hindsight, this probably is not a coincidence, and The Maker may have left this mark.
The other Dutch nuclear power plant was located in Dodewaard. It had been closed in 1997. Dodewaard can be translated into Death Holm, which is a bit spooky considering that Route 666 leads to Borssele. The Dodewaard area is 66.5 square kilometres, close enough to 66.6 to be a bit eerie. If this is an omen with regard to nuclear energy, it isn’t a good one. I would therefore not recommend using nuclear energy using the technologies that are currently available. It may be more dangerous than scientists believe.
Nuclear fusion can be a lot safer than nuclear fission, which is the type of nuclear energy that is currently available. If something goes wrong with nuclear fusion, the process dies out. It can’t go out of control like nuclear fission. The nuclear waste would also be more manageable. Nuclear waste from fission will be dangerous for thousands of years, while nuclear waste from fusion is safe after one hundred years.
There may be energy from nuclear fusion within a few decades, but that’s still far from certain. It is extremely challenging to generate energy from nuclear fusion. It requires working with temperatures of 150 million degrees Celsius. Scientists now estimate that nuclear fusion may be available by 2050, but only if the technical issues are solved.
Nuclear fusion could bring us unlimited energy at virtually no cost. In that case it would be possible to recycle much more than we currently do as the value of the recycled materials is now often lower than the cost of the energy needed to reclaim them. Even though developments in the field of nuclear fusion seem promising, it is still far from certain that it will be available soon. And as long as it isn’t available, living within the limits of our planet may require considerable sacrifices.
Climate change gets a lot of attention but there are several other environmental disasters happening at the same time. Many species of plants and animals have become extinct or are on the brink of extinction because humans destroy their habitat. On average, there was 60% decline in the size of populations of mammals, birds, fish, reptiles, and amphibians in the last 40 years.1 There is hardly any wildlife left.
To put it into perspective, one can compare the total weight of all humans and their domesticated animals with the remaining wildlife, which are all the wild animals except insects and microbes. The seven billion humans on this planet together weigh 300 million tonnes. All the domesticated animals, such as pigs, cows, horses and sheep, together weigh 700 million tonnes. By comparison, all the remaining large wildlife on planet Earth, such as lions, elephants, whales, crocodiles and penguins, together weigh less than 100 million tonnes.2
And then there is pollution. The list with problems caused by the exponential growth of human activities is long. This is perhaps not a complete list:
– depletion of natural resources, especially fossil fuels;
– shortage of drinking water;
– air pollution, water pollution, soil contamination and noise;
– deforestation and loss of ecosystems that sustain global atmospheric oxygen and carbon dioxide balance;
– loss of arable land and a growth of deserts;
– increased chance of new epidemics;
– low life expectancy in countries with fastest growing populations;
– unhygienic living conditions for many because of water resource depletion and discharge of raw sewage and waste disposal;
– more crime rate as people revert to stealing in order to survive;
– conflict over scarce resources leading to wars;
– fewer personal freedoms and more restrictive laws.
Why produce garbage if it is thrown away?
Wealthy countries are throw-away societies. There is an excessive use of disposable items. Why should we recycle garbage when we can use more durable goods? Why are there so many packaging materials? For instance, liquids be transported in tanks and consumers could fill up their bottles at the supermarket. Why isn’t anybody dong this? Marketeers believe that the packaging and not the content is what makes a product unique. This is irrational. The amount of packaging can be reduced significantly.
There may be no other option than to curb polluting activities, the consumption of raw materials and carbon emissions. Frivolous consumption may need to be banned if it uses too many scarce resources. Harmful activities that are difficult to end may need to be taxed and the proceeds of these taxes may be used to reduce taxes on labour, so that labour can replace energy and materials consumption where possible. These changes can make it more attractive to recycle and to make products longer lasting. Tariffs may need to be put on products from countries that do not comply to these standards.
A mother in waiting once asked the biologist Midas Dekkers what she could do to raise her child as environmentally friendly as possible. Dekkers then said that nothing affects the environment more badly than having a child. For the environment it is better to cut down one hundred hectares of tropical rainforest than to have a child, he added. It may be a good idea to limit the number of children, for instance to one child per couple.
Apart from people wanting to have children, many poor people seek security. They worry about making ends meet. The depletion of natural resources is probably not on their mind. The only long-term plan of many poor people is having children who can care for them when they are old. Even though poor people do not use a lot of resources, they often have many children, and if we like them to prosper, that could be a problem.
If the rights of a couple to have a child can be sold, wealthy people may bid up the price of these rights, and poor people can have a pension out of selling them. There are some ethical issues with such a measure as it may result in poor people having fewer children and people from specific ethnicities opting for this more often than others. The limits of our planet are such a serious issue that these consequences may need to be accepted. And on the bright side, fewer children may be raised in poverty.
Meat consumption causes animal suffering. Meat has other disadvantages. Animals used for consumption eat food humans could eat. It takes three to seven kilograms of grain to produce one kilogram of meat. Meat production also contributes to climate change. It will be hard to change human diets unless substitutes for meat become available that taste nearly as good as meat itself.
It’s the economy stupid!
It is often argued that the economy is unsustainable because of short-term thinking. The economy must grow in order to have positive returns on investments, and it is believed that returns on investments need to be positive otherwise the economy would collapse. The economic time horizons of individual people are reflected in their time preferences. The time horizon of the economy as a whole is reflected in the interest rate.
The lower the interest rate, the longer the time horizon of the economy can be. The following example from the Strohalm Foundation illustrates this.
Suppose that a cheap house will last 33 years and costs € 200,000 to build. The yearly cost of the house will be € 6,060 (€ 200,000 divided by 33). A more expensive house costs € 400,000 but will last a hundred years. It will cost only € 4,000 per year. For € 2,060 per year less, you can build a house that lasts three times as long.
After applying for a mortgage the math changes. If the interest rate is 10%, the expensive house will not only cost € 4,000 per year in write-offs, but during the first year there will be an additional interest charge of € 40,000 (10% of € 400,000).
The long-lasting house now costs € 44,000 in the first year. The cheaper house now appears less expensive again. There is a yearly write off of € 6,060 but during the first year there is only € 20,000 in interest charges. Total costs for the first year are only € 26,060. Interest charges make the less durable house cheaper.3
The example shows that without interest charges there is a tendency to select long-term solutions. Interest charges make long-term solutions less economical. Interest promotes a short-term bias in the economy. It may explain why natural resources like rainforests are squandered for short term profits. If interest rates are high, it may be more profitable to cut down a rainforest and to put the proceeds at interest rather than to manage the forest in a sustainable way.
Only, things are not as simple as the example suggests. For example, the building materials of the cheap house might be recycled to build a new house. And technology changes. For example, if cars had been built to last 100 years, most old cars would still be around. This could be a problem as old cars are more polluting and use more fuel. Nevertheless, the example shows that long-term investments can be more attractive when interest rates are lower.
This also applies to investments in renewable energy. For instance, a solar panel that costs € 100, lasts 15 years, and generates € 150 worth in electricity in the course of these 15 years, is feasible at an interest rate of 5% but not at an interest rate of 10%. Many investments in making the economy sustainable may have low returns and are only feasible when interest rates are low. Low and negative interest rates can also deal with low economic growth. That may be needed for living within the limits of the planet.
Currently the economy is fragile and prone to crisis because of usury and the impossibility of negative interest rates. A tax on cash can negative interest rates possible. Combined with a prohibition of usury or positive interest rates, this can make the economy robust and shock-proof as there could always be liquidity in financial markets. Natural Money may make it possible to start radical economic reforms.
Living within the limits of the planet
It’s easier to finance a great endeavour from investments than from taxation because nobody wants to pay taxes but everybody is happy to invest. This explains the success of the European empires that conquered the world after the Middle Ages. England, France, Spain and the Netherlands were much poorer and smaller than China, India or the Ottoman Empire, but they didn’t finance their conquests with taxation like the other empires, but with investment capital.
Europe came out on top because European conquerors took loans from banks and investors to buy ships, cannons, and to pay soldiers. Profits from the new trade routes and colonies enabled them to repay the loans and build trust so they could receive more credit next time.2 This logic can be applied to making the economy sustainable. The challenge is so enormous that it may not be possible to finance it by taxes.
Taxes could be used to discourage harmful activities. Banning harmful activities may be even better if that is feasible. For instance, gas guzzling SUVs, large mansions and private jets can easily be prohibited because you can’t use them without being seen. That may not apply to activities that can easily go underground. If a tax or a prohibition fosters crime and illicit markets, more harm is done than good.
When interest rates are negative, the time horizon of the economy could go to eternity so that it makes sense to invest in making the economy sustainable. A few examples from history can illustrate this. In the Middle Ages some areas in Europe had currencies with a holding fee like Natural Money. As there hardly was economic growth, interest rates were negative. It was the era of Europe’s great cathedrals. These cathedrals were built for eternity. As better investment opportunities were absent, wealthy towns people spent their excess money on cathedrals.3 For similar reasons, the people of Wörgl planted trees as the proceeds of the wood were expected to occur in the distant future.3
A bit of calculus can show why the time horizon of the economy can go to eternity when interest rates are negative. If the interest rate is 5%, putting € 1 in a bank account turns into € 1,05 after a year, so you would rather have € 1 now than in one year’s time, even when you need the money in one year’s time. That’s because you can put the money on a bank account at interest. At an interest rate of 5%, € 100 in one year’s time is worth € 95.25 now. The distant future has even less value. The same € 100 in one hundred year’s time is worth only € 0.59 now. And € 100 after 1000 years has no value at all in the present.
At an interest rate of -5%, you would prefer to have the money when you need it, otherwise you would end up with less. At an interest rate of -5%, € 100 in one year’s time would be worth € 105. The same € 100 in one hundred year’s time would be worth € 13,501 now. And € 100 after 1000 years would be worth more than everything there is in the present. That may explain why townspeople in Europe in the Middle Ages spent their excess money on cathedrals. This peculiar logic may help us to come into terms with the limits our planet poses on human activities.
Living within the limits of the planet may require unprecedented investments in the future. These investments may require low or even negative interest rates as their returns may be low or even negative. Only low and negative interest rates can make these investments economical. Everyone who has money to save can help by shifting money from consumption to saving and investing. The more people act like capitalists, the lower interest rates may go, and the more sustainable the economy may become.
Nothing but flowers
The challenge is so huge that it seems impossible. It can only succeed when we believe that we can make it happen and that we are going to make it happen. In the past no appropriate action has been taken so drastic measures may be inevitable. It probably will not be easy to make you accept the proposed measures. They may require a sacrifice you never imagined you would make. The economy may become like a wartime economy where every scrap is saved for victory.
The measures can have undesirable side-effects. For instance, China had a one-child-policy for decades. Many parents preferred a son so baby girls were often killed. Nowadays many men in China can’t find a wife. Another example is tropical rainforests making room for palm oil plantations that produce ‘renewable energy’. We need to deal with undesirable side-effects as soon as they emerge.
Only God knows what the future will look like. When everything ends well, you may not be satisfied with the outcome, even when you realise that the alternative would have been worse. The Garden Of Eden was a Paradise for Eve and Adam, but it may not be for us. Most people will adapt over time. And if you have trouble adapting, you can think of the children of the future. They won’t remember this era from personal experience. They may be happy with the way things will be.
Here we stand
Like an Adam and an Eve
The Garden of Eden
Two fools in love
So beautiful and strong
The birds in the trees
Are smiling upon them
From the age of the dinosaurs
Cars have run on gasoline
Where, where have they gone?
And as things fell apart
Nobody paid much attention
You got it, you got it
I dream of cherry pies,
Candy bars, and chocolate chip cookies
You got it, you got it
We used to microwave
Now we just eat nuts and berries
You got it, you got it
This was a discount store,
Now it’s turned into a cornfield
You’ve got it, you’ve got it
Don’t leave me stranded here
I can’t get used to this lifestyle
– Talking Heads, Nothing But Flowers
Featured image: Judgement Day. Royal Museum Of Fine Arts of Belgium. Rama (2008). Wikimedia Commons. Public Domain.
Other image: Why produce garbage when it is thrown away all the same. Loesje. Loesje.org.
1. Living Planet Report. World Wildlife Fund (2018). [link]
2. Sapiens: A Brief History Of Humankind. Yuval Noah Harari (2014). Harvil Secker.
3. The Future of Money: Creating New Wealth, Work and a Wiser World. Lietaer, Bernard (2001). Random House.