The earth and human systems
The economic system
Today economic system (also economic order) is a system of production, resource allocation and distribution of goods and services within a society or a given geographic area. It includes the combination of the various institutions, agencies, entities, decision-making processes and patterns of consumption that comprise the economic structure of a given community. As such, an economic system is a type of social system. The mode of production is a related concept.
All economic systems have three basic questions to ask:
- what to produce, how to produce
- what quantities
- who receives the output of production
The study of economic systems includes how these various agencies and institutions are linked to one another, how information flows between them and the social relations within the system (including property rights and the structure of management). The analysis of economic systems traditionally focused on the dichotomies and comparisons between market economies and planned economies and on the distinctions between capitalism and socialism. Subsequently, the categorization of economic systems expanded to include other topics and models that do not conform to the traditional dichotomy. Today the dominant form of economic organisation at the world level is based on market-oriented mixed economies - Source
All economic systems have three basic questions to ask:
- what to produce, how to produce
- what quantities
- who receives the output of production
The study of economic systems includes how these various agencies and institutions are linked to one another, how information flows between them and the social relations within the system (including property rights and the structure of management). The analysis of economic systems traditionally focused on the dichotomies and comparisons between market economies and planned economies and on the distinctions between capitalism and socialism. Subsequently, the categorization of economic systems expanded to include other topics and models that do not conform to the traditional dichotomy. Today the dominant form of economic organisation at the world level is based on market-oriented mixed economies - Source
Economic growth - the road to Destruction
Economic growth is the increase in the inflation-adjusted market value
of the goods and services produced by an economy over time. It is conventionally measured as the percent rate of increase in real gross domestic product, or real GDP.
Growth is usually calculated inreal terms - i.e., inflation-adjusted
terms – to eliminate the distorting effect of inflation on the price of goods produced. Measurement of economic growth
uses national income accounting. Since economic growth is measured as the annual percent change of gross domestic product (GDP), it has all the advantages and drawbacks of that measure. The economic growth rates of nations are commonly compared using the ratio of the GDP
to population or per-capita income.
The "rate of economic growth" refers to the geometric annual rate of growth in GDP between the first and the last year over a period of time. This growth rate is the trend in the average level of GDP over the period, which ignores the fluctuations in the GDP around this trend.
An increase in economic growth caused by more efficient use of inputs (increased productivity of labor, physical capital, energy or materials) is referred to as intensive growth. GDP growth caused only by increases in the amount of inputs available for use (increased population, new territory) is called extensive growth.
Development of new goods and services also creates economic growth - Source
The "rate of economic growth" refers to the geometric annual rate of growth in GDP between the first and the last year over a period of time. This growth rate is the trend in the average level of GDP over the period, which ignores the fluctuations in the GDP around this trend.
An increase in economic growth caused by more efficient use of inputs (increased productivity of labor, physical capital, energy or materials) is referred to as intensive growth. GDP growth caused only by increases in the amount of inputs available for use (increased population, new territory) is called extensive growth.
Development of new goods and services also creates economic growth - Source
The Limits to Growth
The Limits to Growth
(LTG) is a 1972 report on the computer simulation
of exponential economic and population growth with a finite supply of resources. Funded by the Volkswagen Foundation
and commissioned by the Club of Rome, the findings of the study were first presented at international gatherings in Moscow and Rio de Janeiro in the summer of 1971. The report's authors are Donella H. Meadows, Dennis L. Meadows, Jørgen Randers, and William W. Behrens III, representing a team of 17 researchers.
Since its publication, some 30 million copies of the book in 30 languages have been purchased. It continues to generate debate and has been the subject of several subsequent publications. Recently, The Limits to Growth: The 30-Year Update was published in 2004, and in 2012, a 40-year forecast from Jørgen Randers, one of the book's original authors, was published as 2052: A Global Forecast for the Next Forty Years.
Purpose
In commissioning the MIT team to undertake the project that resulted in LTG, the Club of Rome had two objectives:
In commissioning the MIT team to undertake the project that resulted in LTG, the Club of Rome had two objectives:
- Gain insights into the limits of our world system and the constraints it puts on human numbers and activity.
- Identify and study the dominant elements, and their interactions, that influence the long-term behavior of world systems.
Methodology
The study used the World3 computer model to simulate the consequence of interactions between the earth and human systems. The model was based on the work of Jay Forrester of MIT, as described in his book World Dynamics.
The model was based on five variables: "population, food production, industrialization, pollution, and consumption of nonrenewable natural resources". At the time of the study, all these variables were increasing and were assumed to continue to grow exponentially, while the ability of technology to increase resources grew only linearly.
The authors intended to explore the possibility of a sustainable feedback pattern that would be achieved by altering growth trends among the five variables under three scenarios. They noted that their projections for the values of the variables in each scenario were predictions "only in the most limited sense of the word", and were only indications of the system's behavioral tendencies. Two of the scenarios saw "overshoot and collapse" of the global system by the mid- to latter-part of the 21st century, while a third scenario resulted in a "stabilized world".
The study used the World3 computer model to simulate the consequence of interactions between the earth and human systems. The model was based on the work of Jay Forrester of MIT, as described in his book World Dynamics.
The model was based on five variables: "population, food production, industrialization, pollution, and consumption of nonrenewable natural resources". At the time of the study, all these variables were increasing and were assumed to continue to grow exponentially, while the ability of technology to increase resources grew only linearly.
The authors intended to explore the possibility of a sustainable feedback pattern that would be achieved by altering growth trends among the five variables under three scenarios. They noted that their projections for the values of the variables in each scenario were predictions "only in the most limited sense of the word", and were only indications of the system's behavioral tendencies. Two of the scenarios saw "overshoot and collapse" of the global system by the mid- to latter-part of the 21st century, while a third scenario resulted in a "stabilized world".
Conclusions
After reviewing their computer simulations, the research team came to the following conclusions:
1# Given business as usual, i.e., no changes to historical growth trends, the limits to growth on earth would become evident by 2072, leading to "sudden and uncontrollable decline in both population and industrial capacity".
This includes the following:
3# The sooner the world's people start striving for the second outcome above, the better the chance of achieving it.
After reviewing their computer simulations, the research team came to the following conclusions:
1# Given business as usual, i.e., no changes to historical growth trends, the limits to growth on earth would become evident by 2072, leading to "sudden and uncontrollable decline in both population and industrial capacity".
This includes the following:
- Global Industrial output per capita reaches a peak around 2008, followed by a rapid decline
- Global Food per capita reaches a peak around 2020, followed by a rapid decline
- Global Services per capita reaches a peak around 2020, followed by a rapid decline
- Global population reaches a peak in 2030, followed by a rapid decline
3# The sooner the world's people start striving for the second outcome above, the better the chance of achieving it.
In 2008, Graham Turner at the Commonwealth Scientific and Industrial Research Organisation
(CSIRO) in Australia published a paper called "A Comparison of 'The Limits to Growth' with Thirty Years of Reality". It compared the past thirty years of data with the scenarios laid out in the 1972 book and found that changes in industrial production, food production, and pollution are all congruent with one of the book's three scenarios—that of "business as usual". This scenario in Limits points to economic and societal collapse in the 21st century.
In 2010, Nørgård, Peet, and Ragnarsdóttir called the book a "pioneering report". They said that, "its approach remains useful and that its conclusions are still surprisingly valid ... unfortunately the report has been largely dismissed by critics as a doomsday prophecy that has not held up to scrutiny."
In 2011, Ugo Bardi published a book-length academic study of The Limits to Growth, its methods and historical reception and concluded that "The warnings that we received in 1972 ... are becoming increasingly more worrisome as reality seems to be following closely the curves that the ... scenario had generated." A popular analysis of the accuracy of the report by science writer Richard Heinberg was also published.
In 2012, the Smithsonian Institution held a symposium entitled "Perspectives on Limits to Growth". Another symposium was held in Hanover, Germany entitled "Already Beyond?
In 2016, a report published by the UK All-Party Parliamentary Group on Limits to Growth concluded that "there is unsettling evidence that society is still following the 'standard run' of the original study – in which overshoot leads to an eventual collapse of production and living standards". The report also points out that some issues not fully addressed in the original 1972 report, such as climate change, present additional challenges for human development.
On 14 March 2019, the Club of Rome issued an official statement in support of Greta Thunberg and the school strikes for climate, urging governments across the world to respond to this call for action and cut global carbon emissions.
In 2010, Nørgård, Peet, and Ragnarsdóttir called the book a "pioneering report". They said that, "its approach remains useful and that its conclusions are still surprisingly valid ... unfortunately the report has been largely dismissed by critics as a doomsday prophecy that has not held up to scrutiny."
In 2011, Ugo Bardi published a book-length academic study of The Limits to Growth, its methods and historical reception and concluded that "The warnings that we received in 1972 ... are becoming increasingly more worrisome as reality seems to be following closely the curves that the ... scenario had generated." A popular analysis of the accuracy of the report by science writer Richard Heinberg was also published.
In 2012, the Smithsonian Institution held a symposium entitled "Perspectives on Limits to Growth". Another symposium was held in Hanover, Germany entitled "Already Beyond?
In 2016, a report published by the UK All-Party Parliamentary Group on Limits to Growth concluded that "there is unsettling evidence that society is still following the 'standard run' of the original study – in which overshoot leads to an eventual collapse of production and living standards". The report also points out that some issues not fully addressed in the original 1972 report, such as climate change, present additional challenges for human development.
On 14 March 2019, the Club of Rome issued an official statement in support of Greta Thunberg and the school strikes for climate, urging governments across the world to respond to this call for action and cut global carbon emissions.
2052: A Global Forecast for the Next Forty Years
2052 – A Global Forecast for the Next Forty Years
is a 2012 book describing trends in global development. It is written by Jørgen Randers and is a follow-up to The Limits to Growth, which in 1972 was the first worldwide report by the Club of Rome.
It differs in three ways from the previous report. First, it does not describe an impending disaster scenario, but shows only trends. Secondly, it is to be read in the light of experience since 1972, namely, that all of humanity has responded to the report, but with a delay of 20 to 40 years. Thirdly, it offers not only future scenarios, it makes concrete proposals on how the individual should respond to emerging developments.
It differs in three ways from the previous report. First, it does not describe an impending disaster scenario, but shows only trends. Secondly, it is to be read in the light of experience since 1972, namely, that all of humanity has responded to the report, but with a delay of 20 to 40 years. Thirdly, it offers not only future scenarios, it makes concrete proposals on how the individual should respond to emerging developments.
Randers repeatedly points out that he does not want to predict specific events, only general trends.
Global forecast -
The underlying logic of the prognosis
Randers's reflections are based on two central questions: "What will happen to the consumer over the next 40 years?" and "Under what conditions – in which social and natural environment – will this future consumption take place?" (p. 78). He uses computer models to make sure feedback effects are not overlooked.
Forecast on population and consumption
World population will decline from about 2040. The working population will peak around 2030. Productivity will grow, but encounter obstacles. The gross domestic product will grow, but more and more slowly. Investments – forced and voluntary – will increase. New costs will be incurred. Adaptation and disaster costs will explode. The state will become more involved. Consumption will stagnate and decline in some places.
Forecast on energy and CO2
Energy efficiency will continue to increase. Energy demand is expected to rise, but not indefinitely. CO2 emissions from energy consumption will peak in 2030. The average global temperature will rise by more than two degrees, causing serious problems.
Forecast on nutrition and ecological footprint
The race for natural resources will be hard, the biocapacity of the world will be exploited more and more. The cities will become richer sources of raw materials for metal than the mineral deposits in nature (urban mining). In the same way that zoos have already become the last refuge for many endangered species, parks will assume this role for nature in general.
The non-physical future
Randers argues that the global gross domestic product will fail to increase as it has in the past because of population decline, general aging and declining productivity growth.
The Internet will give rise to a completely new understanding of what is private and public. Knowledge will not be a scarce resource any more, but this will not lead to more rational decisions in most cases because knowledge on its own is not sufficient to change behavior when strong interests are involved. Therefore, it is likely that a "greenkeeping force" will be set up to enforce environmentally positive behavior, similar to the peacekeeping forces (blue berets) of today.
Randers's reflections are based on two central questions: "What will happen to the consumer over the next 40 years?" and "Under what conditions – in which social and natural environment – will this future consumption take place?" (p. 78). He uses computer models to make sure feedback effects are not overlooked.
Forecast on population and consumption
World population will decline from about 2040. The working population will peak around 2030. Productivity will grow, but encounter obstacles. The gross domestic product will grow, but more and more slowly. Investments – forced and voluntary – will increase. New costs will be incurred. Adaptation and disaster costs will explode. The state will become more involved. Consumption will stagnate and decline in some places.
Forecast on energy and CO2
Energy efficiency will continue to increase. Energy demand is expected to rise, but not indefinitely. CO2 emissions from energy consumption will peak in 2030. The average global temperature will rise by more than two degrees, causing serious problems.
Forecast on nutrition and ecological footprint
The race for natural resources will be hard, the biocapacity of the world will be exploited more and more. The cities will become richer sources of raw materials for metal than the mineral deposits in nature (urban mining). In the same way that zoos have already become the last refuge for many endangered species, parks will assume this role for nature in general.
The non-physical future
Randers argues that the global gross domestic product will fail to increase as it has in the past because of population decline, general aging and declining productivity growth.
The Internet will give rise to a completely new understanding of what is private and public. Knowledge will not be a scarce resource any more, but this will not lead to more rational decisions in most cases because knowledge on its own is not sufficient to change behavior when strong interests are involved. Therefore, it is likely that a "greenkeeping force" will be set up to enforce environmentally positive behavior, similar to the peacekeeping forces (blue berets) of today.
What can be done?
Randers references UN recommendations and gives 20 pieces of advice concerning individual behavior.
In short words he states - Concretely, in order to create a better world for our grandchildren, we should:
Randers references UN recommendations and gives 20 pieces of advice concerning individual behavior.
In short words he states - Concretely, in order to create a better world for our grandchildren, we should:
- Have fewer children, especially in the rich world.
- Reduce the ecological footprint, first by slowing the use of coal, oil and gas in the rich world.
- Construct a low-carbon energy system in the poor world, paid for by the rich.
- Create institutions that counter national short-termism.