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Involuntary degrowth and its consequences
We are in a double bind. Growing the economy will cause catastrophic climate change and massive biological extinction. But not growing the economy will lead to lots of suffering under the current neoclassical economic structure. Of course, we could chose to change our entire economic system so that its in line with the biophysical reality we live in, i.e. we would have to give up on growing materially and lower our consumption radically but do so in a more orderly and just fashion. But no, we have made no such decision, instead every government on Earth is trying to push its economy to grow further while dabbling in some greenwashing on the side.
Because we, especially the ruling elites, don't like the alternatives we have to choose from in this dilemma we have tried to maintained status quo at any cost. With the consequence of rapidly rising inequalities, failing infrastructures, collapsing ecosystems, climate disruption and failing states. But now this strategy has reached its end game. The global economy which has been stagnating and on life-support by central bankers stimulus for over a decade is starting to fall apart. All the while people around the world are electing unsavory authoritarian leaders “strong men”, that promote heavy extractive practices, due to increasing mistrust of the ruling elite. The latest example being Brazil.
And nowhere in the mainstream media or from elected politicians do we hear about the underlying issues of our current predicament. About how net energy decline restricts growth and forces the economy to contract. The fact that trying to push for further material growth now costs more than it benefits society. Or that it's simply not possible to fuel our current overconsumptive, overpopulated and destructive techno-industrial society with renewable energy. Not to mention the fact that it's not desirable since it would destroy the ecosystems upon which our very survival depends.
Using total factor productivity as an indicator of returns on innovation, Bonaiuti (2018) has shown how industrial nations have gone through three industrial revolutions of which the latest is now coming to an end. After the peak in the 1930s, when global oil and gas EROI hit a peak, productivity decreased until it reached only 0.34% in the period 1973-95. When US oil production peaked and massive privatization and debt accumulation took off to fund further consumption. The third industrial revolution, known as ICT, has not been powerful enough to compensate for the declining returns of the second industrial revolution. This is evidence that advanced capitalist societies such as the US, Europe and Japan have entered a phase of declining marginal returns or involuntary degrowth with detrimental impacts on societies capacity to maintain its institutional framework.
Total Factor Productivity % of the Private Non-Farm Business Sector (1750-2014). Source: Bonaiuti (2018)
Historical estimate of the global EROI of oil. Source: Court and Fizaine (2017)
In other words, fundamental resources are becoming scarce and expensive and we are becoming poorer and cannot afford to maintain or grow our current society so it starts to crumble. This shows up in the economy in terms of increasingly expensive basic resources like food, rising levels of debt, rising income inequality, underinvestment in infrastructure (e.g. health care, education, railways), and higher unemployment etc.
People are experiencing their living standards falling while politicians are telling them everything is just fine as is, or that the issue can be solved by tweaking the system. But this is no longer enough, people are fed up with false promises and incompetent governments. And rightly so, but the thing people don't realise is the fundamental drivers of our current situation and the fact that no matter how much more they exploit and destroy nature will it improve their lives. Actually, the opposite is true, it only undermines their own wellbeing in the long run. Only investments into low-energy infrastructure and restructuring of the entire economy, focusing on increasing social and ecological capital, can lessen people's suffering. Yet people around the world are voting for violent idiots that promises economic growth by aggressive exploitation of the remaining ecosystems that sustain all biological life.
For example, if the new president of Brazil Jair Bolsonaro has his way the Amazon rainforest will be decimated to give way for unsustainable soy plantations. The biodiverse rich region and home to traditional peoples will be destroyed and the ecosystems capacity to oxygenate the planet and store carbon will be greatly impacted. Bolsonaro also has plans to legalise the use of weapons on a wider scale which will probably lead to further indiscriminate killings of people trying to safeguard the Amazon and promote wide scale illegal logging. This of course will only undermine Brazilians wellbeing but the majority believe the opposite to be true.
Economic decline led by net energy decline doesn't have to result in despotism, although it can. A number of other factors are likely influencing how politics in resource scarce times turns out. Weak institutions, dysfunctional media, high levels of inequality, high population growth, high levels of private debt, a powerful military, and high vulnerability to changes in environment are other generic factors likely playing a role. Other factors tied directly to energy include: high dependency on food imports, government budgets tied to fossil fuel exports, high per capita energy use, and high dependency on energy imports.
There are several measures governments and organisations can take to reduce the risk of a society falling into the hands of a dictator. For example by promoting independent media, investing in low-energy infrastructure, reducing political polarization, strengthening democratic institutions, discouraging inequality, building local food production capacity, decentralising the economic and political system, limiting population growth, and reducing financial instability. In other words, the opposite of what many governments are trying to do currently. So people need to wake up to the realities of our situation and demand change, but such change needs to be guided by the understanding of biophysical realities. Otherwise it is doomed to fail, will only promote further violence and destruction.
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As I see it, we are too many people in this biosphere. We are too many who wants cars, refrigirators,tv's and every thingh. You can blame it on western capitalism. Or you could blame it on Chinese communistic consumerism.
ReplyDeleteWho ever you blame it on, the final blame is on too many people burning oil and coal and using enviromental toxins.
Wouldn't the natural answer be to have less people in the biosphere, so that nature could have a chance to survive.
Well, sure the fundamental problem is too many people overexploiting the biosphere. Its not so much about blame as it is to get people to understand the fundamental dynamics of our current dilemma. If we assume we have some sort of agency and that not everything is deterministic then I think most people would prefer to see a more orderly decline in population than through war and disease. So there are things we could to to minimize harm but if we choose to do it or not is another question.
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