China confronts the limits to growth

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Economic growth is slowly but surely coming to an end, not for a few quarters or years, but to an end. It will still take some time given the mighty momentum behind it, as well as the power of our denial, but the signs are clear that both processes have begun.

Let me be clear that I’m not talking here about the long philosophical debate on the relative merits of growth – that rich countries getting richer does not improve their quality of life. What we face now is not a political choice – it’s too late for that. We have put in place the processes that will force the end of growth and nothing can now be done to change course.

China is perhaps the best example, exaggerating all that is good and bad about the growth model. We have seen spectacular rates of growth in recent decades and with it, many hundreds of millions of people being brought out of poverty. These people are now enjoying the fruits that global growth has delivered to many of us over the last century in technology, health and easy access to food. On the other hand China has paid an enormous price for this growth, in air pollution, degraded soil quality, spoiled waterways and longer term risks to food supply. It is now even taking from the USA the ignominious title of being the world’s largest current contributor to climate change (though we mustn’t forget China’s per capita emissions are still dwarfed by the pollution rate in the OECD countries).

So China sums up the paradox of the global economy, and provides an accelerated and exaggerated example of the problem. On the surface the growth model seems appealing, indeed powerful and invigorating.  Everyone who has witnessed the growth machine at work in China in recent decades comes away in awe and wonder at the pace and scale of its achievements.

China has now, however, become the best example that demonstrates that the Great Disruption is underway – the state we have now entered, as I argued in my last column. In the same way China provides an exaggerated case of the good aspects of growth, they are now hitting the limits we are hitting globally, but doing so faster and harder, making it more noticeable and harder to deny. So unlike our political leaders, the Chinese leadership is slowly but surely facing reality. They observe their high growth rates, they observe the degradation in both their environment and limits to resource availability and they draw the obvious connection. Prime Minister Wen recently told parliament that “growing resource and environmental constraints are hindering growth.”

The Minister for the Environment gave deeper insights into their views when he recently said “In China’s thousands of years of civilization, the conflict between humankind and nature has never been as serious as it is today…. The depletion, deterioration and exhaustion of resources and the worsening ecological environment have become bottlenecks and grave impediments to economic and social development.”

You got it Mr Zhou – grave impediments to growth. They haven’t yet come to the conclusion that these are in fact “impenetrable limits to growth”. But they will.

Their response gives us good insights into what we are all going to face and also to the considerable benefits our response will bring when it comes. As we hit the limits to growth we will desperately and aggressively pursue clean technology and other measures to reduce the impacts we are having on the global ecosystem and to respond to our limited resource supply. We will think this will be enough to keep growth going.

China is again a good example of what we can expect. They are doing all they can to slow down the cause of the problem with aggressive targets and action, and the economic benefits they will gain in doing so will be considerable. In renewable energy, electric cars, high speed trains and many other areas China is investing heavily and looking more and more like it’s going to lead the world in this, the next industrial revolution. They are even deliberately slowing down the rate of their economic growth, recognizing this is the primary cause of their problem, to give themselves more time to adapt.

As well as benefiting their economic competitiveness, their approach will bring considerable benefits to all of us, with new energy technologies being taken to scale and prices falling as a result. We can expect some sensational developments in this area with tomorrow’s Googles and Microsofts all positioning right now across China to be the global winners in this epic opportunity.

But in the end China will, like us, have to face the reality that economic growth has its limits. We can argue about what they are and when they will hit, but the idea of an infinite growth on a finite planet is quite delusional. Just do the math yourself and ask how big do you think the economy can get? Tim Jackson, author or Prosperity without Growth did this and concluded:

“The global economy is almost five times the size it was half a century ago. If it continues to grow at the same rate the economy will be 80 times that size by the year 2100.”

The Global Footprint Network calculates that we need around 150% of the available land on planet earth to support our current economy, which means we’re burning up our capital every day to maintain the current state, let alone support any further growth. So you have to ask yourself, even allowing for sensational improvements in efficiency and technology, how big can the economy get before the physical limits are hit? Twice as big as the planet? Three times?

Despite the clear, rational logic, denial will be strong. People will argue oil price spikes are being caused by political unrest, not the underlying reality of peak oil. That food shortages are caused by market inefficiencies, not the underlying reality of climate change and the broken model of oil dependent, non renewable industrial agriculture. The worse the crisis gets, the more fanciful the excuses will become. That is the nature of denial. Given this is a serious addiction we have developed this denial will be strong.

But in the end, this is not philosophy – it’s physics and chemistry. Remember this:  the core proposition our economic model is based on is a simple but impossible concept – infinite growth on a finite planet. So that means the end will come. The sooner we start getting ready, the better off we’ll be when it arrives.

12 thoughts on “China confronts the limits to growth

  1. The denial is a thing that has already started. Witness these ridiculous anti carbon tax rallies. People are willfully uninformed and latching onto anything – climate denial, left wing conspiracies – that will justify and help perpetuate their current rate of consumption and affluence.
    It doesn’t give me much faith in the ability of people to make sacrifices in the face of all this.

  2. Hi Paul,
    I agree with all that you have written in this Chronicle, except for one thing. You write: “We have seen spectacular rates of growth in recent decades and with it, many hundreds of millions of people being brought out of poverty. ”

    My view is that these hundreds of millions of peasants have not been brought out of poverty, but into poverty. Yes, material existence, to some degree, has been improved, and I suppose that many of these people would think the new urban/industrial life is better.

    However given the other elements of the situation that you comment about (eg, pollution, health effects, environmental degradation) and some that you don’t mention (eg, bad working conditions re health and safety, & distances from family) another view is possible. An alternative view is that the new ‘life’ for the developing new China is actually impoverishing the people (as well as nature). Peasant society (in much of China) is essentially sustainable – has been for thousands of years – although, yes with drought and flood.

    We need to ask: what sort of society/economy do we want? The lesson is, among other things, about the language & concepts we use: dose a sustainable society/economy that is materially poorer really describe poverty? Ursula Le Guin’s ‘The Dispossessed’ holds a lot of answers, as well as a lot of excellent questions.

    In the end an alternative ethical basis for society, which includes an alternative economic system, is necessary.

    Still enjoying the blueberries?
    All the best,

    Ciao, Sid.

  3. There is a converging catastrophe rolling down on us. First component is the demand for growth – growth to pay for accumulated debt, growth to feed the rapid expansion in world population (2.5 bn in 1950, 6.8 bn today, 9.5 bn by mid range estimate, in 2050). Most of that growth is going to demand oil, for fertiliser, for transport, and for just about everything else,,, and oil is going to be hard and dangerous to get, and very, very expensive.

    And then there’s the effects of climate change: unpredictable and extreme weather, which impacts on cropping, warming and acidifying oceans and over fishing in a depleted environment.

    I suppose its possible that humankind will sit down together in peace and justice, and plan a possible future.. Failing that, and given that atmospheric carbon is running at about 380ppm, and increasing at around ~1.4% pa (but accelerating: there’s a second differential in there somewhere: remember the methane blowing out of the melting permafrost?) Say doubling in 50 years (or less).

    So that’s getting close to 800 ppm. But try telling people. Their eyes glaze over and they move away. And we’ve got this guy Abbot, who may be trying out for the Tea Party….

    Is it game over? Endsville? Could be.

  4. Yes the mad panic and action at the last minute is how “we” operate, especially over something as tricky as this and with big interests in status quo. I think it is important to be creative in visioning what a steady future might look like. Help ourselves and others “see” and look forward to the future. Like a Rain forest ? In Permaculture Bill Mollison teaches that it is not standing still. It is dynamic balance, like a moving bike. There is plenty of activity. Would a large tribe occupying a valley that met all their needs welcome more people? Would they work for growth? Only if they had to fight others. But they might work for better quality, for more spare time to dance and sing, for medical skills to ease pain and care for each other. They might like to know more and enjoy it more.
    In other words there is plenty to do. And, now that “we” have learned how to raise capital and undertake large scale enterprises, “we” will need the same organisational capacity to go flat out in replacing the dinosaur industrial world with the new sustainable world. We can be very busy “capitalists” fixing the place up. Meanwhile of course all shifting ourselves to more sensible living.
    Meaningful enterprise does not stop, but old unsustainable ways must. Like you say. Its not just philosophy any more.

  5. I agree we are adding green house gases, though I’m not sure the science models are entirely right, even though I understand the thermo dynamics. Our economic model is unsustainable, no question about it. Renewable energy is not infinite as some think. Only a finite amount of energy from the sun is delivered on a daily bases.

    Human “progress” is restricted by this, unless by some magic we can discover a truly infinite energy source.

  6. I recently retired after 35 years as an addictions counselor, so I appreciate the power and endurance of denial. Having stared into the face of that denial for all those years I have some real concerns about our prospects for breaking through that denial in time to have a chance at salvaging civilization. In addiction the mounting cost of the adverse consequences is what eventually leads to reality breaking through. Unfortunately denial sometimes won out and the addict died. In any case, despair is not an option and we just have to keep beating on the door. Your book has given me some hope to hang onto.

  7. So far I’ve only read these reviews of Paul’s book. As John Maynard Keyes once famously said, “In the long run we are all dead”. And so I suspect we will never fully grasp the imperatives of national and global sustainability until we also learn to accept the essentially finite nature of our lives, of this planet earth, of the sun and indeed of our universe. So it’s finally time to reject Gatsby’s “orgiastic future that year by year recedes before us”. It’s time to accept the “aesthetic contemplation” which the Dutch sailors “neither understood nor desired” so that good sustainable government can at last begin.

  8. Thanks for putting global warming into perspective in ‘The Great Disruption’. The inevitability of the end of growth is a useful thought to hold onto. It is comforting in a grim kind of way to realise that there are forces more powerful even than us humans working to get the message across.

    Looking forward to getting to hear you in person in Melbourne 20 June 2011

  9. One problem with many of the renewables compared to traditional forms of energy is it’s relatively low energy density, requiring large amounts of land, and more importantly resources such as copper, iron, steel, some rare earths for wind turbines, CSP plants, and fields of PV panels. If the renewable route were to be fully implemented, Stephen Leeb predicts a major spike in the cost of industrial commodities. This would put a crimp on renewable deployment. So these are not a panacea. The Carbon Mitigation Initiative, “Princeton wedge theory” shows how much of a struggle it will be, but doable, not just renewables, but with a number of strategies that include efficiency, renewables, nuclear, CCS, natural gas.

    Long term, I see limits to growth where bulk materials are involved. As with Ray Kurzweil, I do not see limits to information technology and intelligence. It is possible to envision most of future GDP growth in terms in the knowledge economy and services. So let us grow in our connectedness, in our creativity, imagination, education, intellect and wisdom.

  10. The first thing probably you should do is to start distributing your book “The Great Disruption” as a freeware everywhere you can, to more people you can, incl. here on your web site. This will be your great imput! Popularize your book and take financial support only to cover your inevitable expenses!

    The change that we all need has to start from inside our souls – through education and awakening people have to begin to hate money and stop running after them. But just me and you and another thousands of people is nothing – at least half of the mankind has to start thinking in this way, to achieve any efficient results.

  11. I have recently become aquainted with your work through your interview with Ali Moore on ABC Lateline. I am still complaining to the ABC about Ms Moore’s concluding remark ;

    ALI MOORE: “Well look, sadly we are out of time but I guess the message from you both is that we can get over this, the world is not doomed. At least you are both confident that we have the ability to take the action should we choose to.”

    SO I have been involved with the Steady State Economy programme and am an avid reader of Herman Daly. I will be reading your book in the near future.

    However, agreeing with Sid Paressi, I should like to add to the theory about the growth in China. I recently left Australia and now live in Barcelona but had a great trip, by train through Asia and Russia. What I found in Beijing where I spent 7 days, was a tale of disaster. Yes there is great economic progress, it can even be stated that China is soon to be the world leader in environmental initiatives, BUT, the speed at which this has happened has left much of the country open to corruption and what would be in western terms, illegal practises.

    It seem that every day I was there, and since, new revalations about people trying to make a quick buck at the expense of ordinary Chinese citizens emerge. Melamine in milk which affected hundreds of thousands of people and killed 5 babies, food colouring to make pork “look” like beef, dough additives in packed rolls sold in supermarkets, dogs being transported between states to be served up in restaurants, and since then, the most “comical” if you could call it that – exploding water melons.

    What has evolved in western society, along with prosperity, is a legal framework which allows people the safe knowledge that their interests and welfare are being protected from exploitation. This has taken hundreds of years.

    When the Chinese progress is measured, it should not just be looked at simply as a GDP number, or even an emissions generated or saved number. We are talking about impacts on human beings, and sadly, this does not seem to be considered until after the “crime” has been committed.

    It was no surprise to read a survey of the top income earners in China, 60% of whome wished to leave the country, for fear of being accused of cronyism or corruption. It is my view, and it is one that Chairman Hu Jintau has spoken about regularly, is the need for an ethical base for China’s prosperity, this is currently not evident.

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