Importance of Natural Resources

Plan B — is there an alternative to economic growth?: Miklós Antal at TEDxDanubia 2014

Plan B: Is there an alternative
to economic growth? Imagine that a family takes a trip to
the mountains. They are walking on a path that looked
quite good in the beginning when they somehow got on it. But now it’s
getting increasingly difficult. It’s narrow and steep and there’s a real
danger of falling off the edge, especially for the kids. And it is too
late to turn back. The question I would like to address is
whether at this point it would be useful to have a map and to look at it. Just to see if there’s
an alternative way to go. The answer can be informative
for a much bigger journey which is in many ways very similar. The
path on which the majority of the world population has found itself is the path
of economic growth. More exactly, a path on which GDP growth is a
non-negotiable target of economic and social policy. We got on
this path a few hundred years ago when increasing population density
and easier trade made it possible for many to
abandon self-sufficiency. Instead of producing almost
everything for themselves more and more people specialized on
something and satisfied their needs through exchange with others. Markets grew quickly and people became
mutually dependent on each other. Market competition made the productivity
of any specialized activity essential for success, which led to the
improvement of tools and machines. Those who did not increase productivity, however, could lose their jobs. But many of
these people were not able to satisfy their own needs anymore, for instance, because they had no access
to land. So the problem of unemployment appeared. The main solution was to increase
total production in the economy so that workers can find new jobs.
Therefore, economic growth rates and changes of
unemployment became tightly correlated. The extreme example for this is the
United States where the relationship between GDP reduction, shown in gray,
and the rise of unemployment is almost automatic.
This correlation, however, is just one of the factors that make
current economies dependent on growth. A second one is related to money. If
there are more products and services, then the amount of their virtual
equivalents, which is money, can grow as well without generating
inflation. Sharing more money is easier, especially if the costs of growth can be
pushed onto other species, countries or generations. So then, growth means that the
average income is higher, tax revenues are higher. Governments can
spend more on poverty reduction, health care and education, or give more money to the CEOs
who will help to re-elect them. States can also borrow more, and usually
at a lower cost, which again helps to increase public expenditure. Moreover, larger economies are more
powerful in the global economic and military competition. The extremely influential global financial
sector is a further proponent of growth because they stand to lose a lot of
money if investments are cut back and default rates increase in the absence of growth.
And this leads to a third, systemic cause of growth dependence:
self-amplification in the economic system. Today, most of the important economic
variables are connected in a way that any positive or negative change
is reinforced. If there is growth and optimism, then new business investments create jobs,
wages earned in these jobs increase aggregate spending, and the amount of money can grow in the
economy through relatively easy credit. If, on the other hand, growth and
expectations are negative, then investments stop, unemployment soars,
real incomes fall, and debt problems increase.
We are either on an upward spiral or a downward spiral.
Stability is always fragile. And this is
partly due to rules and institutions we could change. Yet, increasing stability receives much less attention in
economics and politics than staying on, or getting back to, the
upward spiral. This path, however, has become life-threatening.
Most people have a hunch that endless economic growth is not
sustainable on a finite planet. But let’s see what science says about
this! It is a fact that past economic growth has been accompanied by increasingly serious environmental
problems, such as climate change, the chemical and physical change of our
environment, and the loss of biodiversity and ecosystems. The main drivers of these problems are
energy, materials and land use. If environmental problems are to be
solved in a growing economy, then these drivers have to be
decoupled from economic activity at an extremely fast pace,
and at a global scale. We haven’t seen that happening
in the past. For example, energy use rose only slightly slower
than GDP and the correlation between the two is so strong that even economic recessions or
slowdowns can be easily identified on the energy graph. Carbon emissions show almost exactly the
same pattern because CO2 emitted per Joule of energy has barely changed
in the last forty years. Any decarbonization due to windmills,
solar panels and other cleaner technologies has been offset by the increasing
share of dirty fuels, such as coal in China.
For materials use, a different chart leads to
similar conclusions. Plotting per capita materials
consumption against GDP for several countries reveals the correlation between
economic activity and materials use. The authors conclude that
current modes of development both in emerging and already
industrialized economies are fundamentally unsustainable. This
is the consensus opinion in science. For land use, this snapshot taken
from Jonathan Foley’s TED talk shows where we stand after a couple of
decades of global economic growth. The least green and brown areas where
agricultural expansion is still possible and the climate is not too hostile are mostly in tropical countries.
In fact, cropland has been expanding there by
48,000 square kilometers a year, mostly at the expense
of natural ecosystems. Rising demand for food, especially for
animal products has been in the background of this change. Consequences are dramatic. Future economic growth can be different.
It can be so much greener. Cleaner technologies and many of the
existing environmental initiatives are inevitable for a successful
environmental strategy and they can make a big difference.
Nevertheless, there are very strong reasons to doubt
that green growth is really possible. First, in several cases we are well
beyond environmental limits. This means that just stopping the growth
of environmental pressure is not enough; we have to sharply reduce it it.
With further economic growth this would require absolutely
unprecedented decoupling between GDP and environmental pressure. Climate change is one example.
To have a reasonable chance of limiting global temperature rise to
2 degrees by the end of the century, which, by the way, may not be
enough to avoid extraordinary intergenerational
injustice according to leading climate scientists, so for this not too ambitious goal, the
decarbonization of the world economy would have to be faster throughout
the next forty years than it has ever been
since the Second World War. In other words, we need faster
improvement each and every year for several decades than in the years after the oil price
shocks, when we had a very strong motivation and many easy opportunities
to cut energy use. Second, more than half of the world
population lives in countries where consumption is rising rapidly. More than
three billion people are moving up the food chain and starting to use more materials.
As a result, demand is skyrocketing, which further
increases required decoupling rates. In addition, environmental efficiency
is low in most emerging economies, So it is possible that each and every
country in the world increases its on efficiency, but the overall global
efficiency average goes down, simply because less efficient
economies grow faster. Third, most easily available
resources have been used up. We are now drilling for oil in Arctic
waters, mining minerals that are much less concentrated than a century ago, and converting land for farming
that is less productive or more ecologically valuable than
existing agricultural areas. For this reason, environmental impacts
per unit of production are rising, which is the opposite of decoupling. A fourth concern is that absolute
biological and physical limits of efficiency are not too far in certain cases. Further increasing crop yields, for
example, has proven to be difficult in several major countries. Limits
of energy efficiency will also be a constraint if we scale up
efforts to cut energy use. Fifth, there is a huge
physical lock-in effect. Existing infrastructure has been
built to be used. Highways, coal-fired power plants and
inefficient buildings will not be abandoned overnight, and inefficient city structures
will change even slower. A sixth reason for skepticism about the rapid
decoupling of environmental pressure from economic activity is
inertia in social systems. Changing the habits of individuals and
overcoming the influence of vested interests is extremely difficult, which again limits the speed of decoupling. And finally, efforts to solve
environmental problems can be accompanied by unwanted side-effects.
If you save energy and spend the associated
money savings on something else, then the embodied energy of the
product you purchased partly offsets the initial energy savings. This is just one of several
rebound effects. Besides, it is also possible that the
solution to one problem makes the solution to other
problems more difficult. For example, fertilizers increase
crop yields but generate widespread pollution that kills marine life. Renewable energies help to reduce carbon
emissions but increase demand for metals. And the list could be continued indefinitely. At this point, it may be fair to conclude that the path on which growth
is a binding condition is really dangerous.
Beyond this path, however, there’s uncharted territory.
We see some promising directions, like the reduction of working
hours or salary caps, but we don’t really know how to
run an economy without growth. Furthermore, we don’t really know
how to reduce dependence on growth. And what’s even more surprising,
we are not really trying to find it out. Given that lower consumption could
reduce absolute environmental pressure and the required speed of decoupling,
plus there is scientific evidence that increasing wealth does not bring happiness above a
threshold, this is almost unbelievable. How can we not be thinking about
strategies to reduce dependence on growth? How can we assume that
sustainable prosperity is always more feasible on a path of
relentless growth than finding alternative routes? How can we ignore or rule out
options we’ve never understood? Because this is what we are doing right
now. Leading economic journals or top economists never question growth. The environmental
strategy of the OECD and the World Bank is just green growth, there is no plan B. In academia, there is no funding for
research on growth dependence and choosing this critically important
topic may even put your carrier at risk. There is a frightening collective denial
in macroeconomics and politics, which hurts people and the planet. We have to change this.
Academic, public and policy discussions, as well
as local experiments, are needed to understand how dependence on
growth could be reduced. The benefits and difficulties of these
strategies have to be compared with those of business as usual scenarios in which
periods of growth and crisis alternate. Such a comparison can help us to
reflect on our priorities. Take the reduction of working time
as an example. This may be one of the strategies to
decouple unemployment from growth and to simultaneously reduce
environmental pressure, but there are many open questions. Under what social and economic
conditions would people prefer to work earn and consume less, while spending
more time with their families and enjoying more free time?
What incentives would employers need to facilitate this? What macroeconomic consequences should
we expect and is it possible to cope with the difficulties? If we want to answer questions
like these, we will. With major projects to explore the many
complexities of non-growing economies and the recognition of efforts, we can make it cool to
work on these issues. The only thing that can prevent
progress is a failure to admit that looking beyond the
current paradigm can be useful. This attitude must be challenged. Governments have to provide funding
for research and experiments and we, the people, have to create
the social context in which researchers and decision makers
are motivated to address these issues. We have to openly question the primacy
of growth and those who take it for granted. We have to appreciate efforts that
may lead to alternatives and celebrate successes. And we have to stick to values that
go far beyond consumption. Because of course it is a part of human
nature to strive for more in a material sense, but it is not the only part. And it
depends on our socio-economic systems whether we strengthen one set
of values or another. Personally, I’m not only concerned about
our relationship with nature because of food security,
pollution-related health impacts or environmental refugees, but also because
of the promise of a more fulfilling life. I want a future, in which there is no
drilling or mining in priceless natural reserves, in which delegates from poor
countries don’t have to cry at climate negotiations, and where families, including children,
can have a journey that is as safe as possible.
For this, we desperately need a map
with more than one path. Thank you.

Reader Comments

  1. That is one great talk and a brilliant presentation. Thank you Mr. Antal for sharing this with us. The world needs more people like you, and more people need to hear this!

  2. If you agree with the message of the talk, please sign and share this petition:

  3. I wish I could sign a petition for more people like Miklos… Don't stop, Miklos… You are the voice of millions…

    The map certainly does have more than one path but the choices might not be defined by growth or not-growth. Limiting the choices in this way is the tragedy of the green movement who for four decades have cast themselves into self-exile by equating growth and consumerism and opposing both. Politicians need growth as armour against their inability to actually solve the problems. They've discovered that growth tends to go up whether they make smart or dumb decisions and irrespective of most events. So if you want a plan B you either leave politicians out of it or show them how to get growth by radical decoupling – which means actually reversing or solving the problems that previous growth has created.

    This is not particularly difficult to plan or to do but it can't be done if our thinking is fixed on politically-doomed no-growth proposals. The debate about growth or no growth has the attraction of reducing the complexity of multiple interlocked unsustainable patterns into a single simple binary choice. However linear thinking is always misleading, whether pro or against growth. A small effort with systems thinking reveals numerous options to get absolute decoupling at a speed and scale beyond what has been seen historically. We just need to use our imagination and intelligence to create these possibilities not to sit there arguing against them.

  5. If you think more people should hear this message, please flag the talk as good here:

  6. Another reason we need growth is demographics. But even without it, if economic growth stops, then you are condemning millions of people to a perpetual state of hunger and poverty. It's basically telling poor people they will never have the chance to escape poverty. And redistribution of wealth is not a solution because if you understand the basics of finance, we are able to create capital thanks to mathematical models that allow risk to be subdued and credit to be created for ourselves from future growth. If not for growth then the models would not work and thus we wouldn't have those resources to redistribute in the first place Or even build our society for that matter. Because by economic growth, we are really talking about the creation of value. Historically the development of finance was the primary motor of human development ever since the Renaissance. We would be giving up on civilization alongside scientific and technological advances, since it's thanks to the mathematical framework of finance that we have been able to create a modern economy propelling human capital which begets intellectual capital which begets science, innovation, and technological revolutions. The issue of economic growth is the issue of the development and evolution of human civilization in general. The solution is not to commit civilizational suicide, rather use the advances of civilization to create radical solutions that will allow us to continue our evolution as a species.

  7. The MAIN DRIVING FACTOR behind the requirememt for growth is population growth . If the East and Africa follow the suit of countries like Germany and Japan and reduce population growth or actually reverse it , almost all issues will get solved naturally . For a flat , stable economy , the population has to be flat and stable ( As we see in countries like Lichtenstein )

  8. no problem to decrease dependence on growth, but… all people want growth because everyone want's to live better, especially the poor ones. green growth is very possible – all the governments of the world need to do is green tax on external cost like pollution and environmental damage. You say the oil and materials for energy are less abundant now, but what will happen if there will be developments in nuclear energy – that can provide million times more power for a mass unit of fuel = BIG GROWTH with little environmental price, just this leap can sustain population of trillion humans, and from there we got a huge nuclear reactor in the sky – the sun – that can sustain almost infinite growth in economy and population.

  9. We need to have a basic income which will cause people to reducing work hours to 5-20/hrs per week.

    We can give poor people needed low interest loans for people if they get a injection of a vasectomy gel. High-school dropouts have 3 children vs 1 child for college graduates.

  10. If you lived on easter island 100 years ago, would you have the foresight to talk with your neighbour(s) and tell them to be less greedy and limit child production???
    This is a taboo subject…yet the logical conclusion is brother will eventually kill brother for the last morsel of food!!! If we cannot engage somehow in this conversation, the UN Agenda 21 will force us into their madness…

  11. Seriously underrated talk. I have recently started studying this paradigm and it's inspiring

  12. Thank you for this TED Talk. My favorite about it is that you have bamboo in the back of your presentation. Bamboo matures within 3 to 5 years and has steel like properties. Currently there are around 10.000 products that can be produced from it, while also being an essential resource for building/construction. It is the most incredible renewable resoruce to me and I believe if we would promote it more, we could create greener jobs and greener economies. Since it almost dies every 10 years, we even can promote its harvest and use(unlike conventional trees)

  13. The U.S. rewards poverty and childbearing by individuals who cannot provide for themselves. That is REALLY why so many individuals from other Nations attempt to relocate here.

  14. We need to force America to stop forcing all nations into slavery for tiny temp wages and say all people should own all things, which is what America has been doing forever by starting wars, teaching torture, and much more. ("Rogue State" by Wm Blum)

  15. Miklós Antal, Is there a transcript of your talk? I would like it. I think you and I should be working together to actually solve these problems.

  16. 4:00
    Former Federal Reserve Chairman Alan Greenspan answers your question:
    "If the workers are more insecure, that's very healthy for the society, because if workers are insecure they won't ask for wages, they won't go on strike, they won't call for benefits; they'll serve the masters gladly and passively. And that's optimal for corporations."

  17. If we don’t change there will be no world for our children and theirs. Social and ecological responsibility should be the new currency in which we try to expand

  18. YES!!! THIS is the answer I've been seeking! I've been aware for some time that global warming is a farce, and confused as to why authorities continue to push it while falsifying data, as limiting CO2 growth can only come at the very real expense of poor countries who need to industrialize in order to grow out of poverty. Policy makers had already decided, and nearly 100 years ago, that global warming will be Miklos Antal's alternative solution to this unsustainable global economic growth: limit the economic growth to those countries already developed. Those populations behind at this point will stay behind to balance the global resource cost of the wealthy. In addition, they have already dumbed down the populations, so now they are pushing for socialism that will destroy and "reset" economies, while reducing populations through starvation and executions, and yet still allow the wealthy and connected to ride high. Its the perfect plan and it will, unfortunately, work perfectly.

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