The Great Disruption (8 page)

To understand the threat we face here, we have to resort to global ecosystem science, an area most people find intimidating and confusing. However, we simply have no choice. Given the time it takes to change human instincts, we are going to have to work with what we've got!

So my response to this question is that you either accept the science, articulated by groups of experts and based on a rational assessment, or you don't. This is the way it is, because most of us don't see, and critically
won't
see, sufficient physical manifestations of ecosystem collapse in our lives until the process is well and truly under way.

So the answer is yes, it really is that bad, and as we covered earlier, the scientific consensus is clear on that point.

So to summarize, this is our baseline, the place from where we can start to discuss how the future is likely to unfold. We have a problem, a Very Big Problem, because we have already passed the limits of the planet's capacity to support our economy. Limits that when crossed are unforgiving and will impact us directly.

So what happens next?

Here we must first dive deeper into the problem, but don't worry, I promise I will bring you back out again. So stay with me for the whole ride!

CHAPTER 4

Beyond the Limits—The Great Disruption

The plans we have been making for our economies, our companies, and our lives have all been based on a key assumption that is clearly wrong. This assumption is that our current economic model will carry on unless we
choose
to change it—in other words, no action means more of the same.

This is not surprising. For fifty years, eminent scientists, economists, and philosophers have correctly presented these issues as a warning rather than a forecast—
if
we don't change,
this
will be the result. In this context,
choice
has framed the debate—the choice to change before the consequences become serious.

That has led to endless debates, scientific, philosophical, ideological, and political. Many argued the warnings were wrong, or at least exaggerated. Others argued the warnings were right but that we would comfortably address them in the natural course of events. They argued humans are smart and always come up with new technologies and behaviors through the market. We would fix the problems and so avoid the consequences we would otherwise face. Others have argued that consumerism is a bad culture for humanity—that it leads to bad social outcomes and lives without meaning—so we should try to develop a better economic model for society in order to enhance our quality of life.

Many of these debates continue today. My message is that you can now leave them all behind. They are of relevance only to historians. We didn't change. So now change will be forced upon us by actual physical consequences. Here's why.

It's all about the math, and it's simple math at that. We have an economy, tightly integrated into an ecosystem that is already operating at about 140 percent of capacity, as we discussed earlier. While different studies have variations in the details, at its core this conclusion is not conjecture; it is scientific fact.

Now we plan to run that economy faster and harder. First we plan to increase the population to over 9 billion by 2050. The UN high projection sees a population of 10.5 billion, but let's work with the medium projection of just over 9 billion.
1
This amounts to an average annual growth rate of about 0.7 percent over the coming decades. Even under the UN's most optimistic projection, we'll still be dealing with a staggering 8 billion. So going forward, we can assume an increase in population of approximately a third. So that gives us a Very Big Problem times 1.33. That would by itself present a Very, Very Big Problem, but that's just the beginning.

We also plan to grow per capita income around the world even faster than we are growing the population. According to International Monetary Fund (IMF) and Australian Treasury estimates, by 2050 we can expect global output per capita to be three times the size of output per capita in 2005.
2
This amounts to a growth of around 2.5 percent each year. Let's make this clear—this means that year after year, each individual produces and consumes 2.5 percent more than the year before, meaning that by 2050, the world economy would be around three times larger than that of 2005—
even if the population didn't grow at all
.

Goldman Sachs has another set of data and predictions that reach similar conclusions. They forecast that while per capita GDP will approximately double in the G7 developed economies by 2050, the real growth in per capita income will occur in the BRIC (Brazil, Russia, India, and China) and N-11 (Next Eleven, the large developing economies that along with the BRIC have the potential to overtake the G7 as the world's largest economies this century). In these economies, Goldman Sachs sees per capita income increasing on average by almost ten times between 2006 and 2050.
3
These countries already are (in the case of China) or are rapidly becoming the world's major economies.

When we add population increases to per capita income increases, we can see a world in 2050 where the economy is many times the size of today's. According to the IMF and Australian Treasury figures, it will be five times larger. According to accounting firm PricewaterhouseCoopers (PwC), we can forecast an average global growth rate of 3.2 percent a year in purchasing power terms until 2050, which over forty years means an economy more than 3.5 times larger than today's.
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So now we have a Very Big Problem times 3.5 or maybe times 5. That's a planet now running at 140 percent of capacity that will subsequently run at somewhere between 500 and 700 percent of capacity. Yes, it is true, that there is potential for significant efficiency gains that will decrease resource use and pollution per dollar of output, but that has a natural limit—we can make things lighter and cleaner, but in the end we still have to make them. This combined with the fact that we keep making more of them means efficiency gains will not even come close to compensating for the growth we plan for. Consider the following.

Over the thirty years to 2009, world resource use per unit of GDP decreased by 30 percent. That means that each year on average, we have used our resources 1.2 percent more efficiently than the year before.
5
This trend in the use of general resources has largely been matched in the particular case of energy use, with energy use per unit of GDP declining 33 percent between 1970 and 2007, or about 1.1 percent per year.
6
If such trends continue, we'll be using resources 38 percent more efficiently by 2050. This seems like good progress.

And yet as suggested by the earlier numbers, such “decoupling” or efficiency gains have been far offset by rising per capita incomes and population growth—in fact, as we'll come back to, increased efficiency seems to actually encourage increased consumption. So since 1990, the Kyoto Protocol base year, emissions have risen 40 percent despite these efficiency gains. When each of us demands and expects our incomes to increase 2.5 percent a year, using 1.2 percent less resource per dollar of income doesn't avoid the overwhelming logic—our environmental impact continues to grow and grow. Today, as a global average, an individual consumes 22 kg of resources each day—but regionally, consumption ranges from just 10 kg for the average African to 100 kg for the average Australian. On current trends, we can expect that to continue rising.

Putting the numbers together, including continued efficiency gains, we plan to create an economy which in 2050 is running at somewhere between 300 percent and 400 percent of capacity. Based on their own data sets and projections, the Global Footprint Network has warned that we are on course to be running at 200% of capacity by the early 2030s—two planets' worth.
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Having only one planet makes this a rather significant problem.

Consider as well that when I say we plan to grow the economy by this amount, this is not just a casual forecast or the current policy. This is the absolute underpinning idea behind the global economy and society and is pursued by virtually all participants with steely determination and political focus. With few exceptions, every government regardless of its political system believes it must deliver economic growth to its constituents or it will be removed from power. So even taking the lower PwC estimate, our economy will be 3.5 times bigger than today's. That's the overwhelming logic of compound growth—a seemingly small growth of 3.2 percent in purchasing power each year produces a global economy that doubles in size
every
twenty-two years. So if we start at 140 percent of capacity in 2009, then twenty-two years takes us to 280 percent of capacity in 2031 and forty-four years takes us to 560 percent in 2053.

It is
not
going to happen.

Not because it's economically, environmentally, and politically challenging. Not because we don't want it to happen. Not because doing so would damage the environment. It's not going to happen because achieving it would defy the laws of physics, biology, and chemistry or of mathematics. Those laws are firmly established and are not negotiable.

This means the assumptions we are all making about global society—that we will bring the poor out of poverty, that we will carry on creating jobs, food, and basic needs for the more than two billion new global citizens and the existing seven billion or so, that we in the West will continue to increase our financial and material standard of living, that the world, despite conflicts here and there, will carry on in relative stability—are a grand delusion.

I repeat—it's not going to happen.

So what will? We will face the Great Disruption. First, the economy will simply not grow. The earth is full; there is nowhere to put an economy that is twice the size of the earth, let alone five times the size. We will try hard to grow it; indeed, we will throw everything we have at the task, as we did when growth stalled in 2008. We will have some success, and growth will occur in individual countries and companies, and at different times it will occur globally for periods. But it will not happen on a significant scale or for sustained periods, for many decades to come. It will be prevented from doing so by the physical constraints of resource availability and the physical response of the global ecosystem, particularly the climate, on which our economy depends.

The faster we grow, the faster we will hit the limits and the harder and more dangerously we will bounce off them. So ironically, our obsession with economic growth will force the end of economic growth.

While our economy overall stagnates within this cycle of growing and shrinking for several decades, with all the associated political, social, and economic challenges that will present, we will also have to deal with the human and economic consequences of the systemic breakdown of the environment on which we depend.

In combination, this means we are entering a period of economic stagnation, geopolitical instability, and ecological chaos, during which we will need to both cope with all of that
and
begin the process of reinventing the global economic and political model under which we operate. I am confident that the latter will be part of the mix because there are only two ways this can unfold.

As happens with any system facing its limits, we will either shift to a higher order of existence or break down to a lower-order system. In other words, we will either evolve to a more intelligent, conscious, and stable civilization or we will enter what James Lovelock believes is inevitable, our terminal decline, or what Jared Diamond would call collapse. Either way, we're now, in my view, inevitably going to pass through a rough patch on the way there, and in the geopolitical, economic, and climate chaos involved I expect we'll tragically lose a few billion people.

Mmm. A moment for reflection … maybe a few moments.…

At this point, everyone who confronts this logic will have one or more of the following emotional responses. A common response is despair and a sense of the utter hopelessness of it all. Understandable. Some go to anger, either at themselves for being part of this idiotic behavior or at the world and those in charge for leading us here. Others go into denial, either “Oh, we've heard all this before, we always sort it out and we will again” or “What a lot of rubbish, the science is wrong, your analysis is flawed.” Personally, I've had all of these responses, even the last one, and considered them each carefully.

In the end, I have always come back to the overwhelming logic of the math, the science, and the rigor of the scientific process. People will always argue about different models, numbers, and forecasts. They will do different analyses and present alternative scenarios. The problem we face is not affected by such disputes because the scale of the problem is so clear. Running at 140 percent of capacity, then trying to increase output to even just 200 percent of capacity, let alone to 500 percent or 700 percent of capacity, means we are going to hit the wall.

Over the past five years, I have presented these ideas to business, political, and community audiences around the world and answered thousands of questions in response. The most common responses, other than stunned silence, are the “Yes, but what about …” questions.

So let's deal with these questions first, while you're working through the emotional responses to the inevitability of what I'm arguing. We'll return to the latter, including why I now live with great hope, after you've had a little time for your right brain to process your emotional responses while your left brain is reading! I separate these two types of responses because we need to consider our situation with our whole being and give legitimacy to both logical
and
emotional responses.

Applying logical, rational thinking helps ensure we don't live in artificial hope or become misled by our ideological beliefs or what we
want
to be the case.

I find this is best done using the mathematical equation famously expressed by Paul Ehrlich and others some forty years ago.
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The Ehrlich equation, I = P × A × T, states that environmental impact (I) of human activity is a product of the size of the population (P) times the affluence or income level per person (A) times the technological intensity of economic output or the impact associated with each dollar we spend (T).

What this says is that only three core things drive our environmental impact: population, affluence, and technology (including our behavior with it). This means we have only three levers we can pull to lower our environmental impact. We can have fewer people, we can have less affluence, or we can have lower impact per dollar spent, through either better technology or change in our behavior with that technology.

Remembering this equation helps us analyze the issue based on the data rather than on what we want to be true.

Within the context of those three levers, I will give you my answers to the three questions I am most often asked when I present these arguments.