The Great Disruption (25 page)

What if the United States, saddled by debt and military costs and well behind in the race to new energy technologies, continues to drift as emerging countries like Brazil, India, and South Korea forge ahead? What if China can maintain stability and lead the way on the environmental and technology transformation now under way? Will China's very different approach to decision making, democratic freedoms, and open society be a hindrance, as many commentators argue? Or will it be an advantage, enabling them to leapfrog in technology and drive change without the pesky limitations of Western democracies' corporate lobbying and populist politics slowing down change?

If China succeeds and the United States fails, the implications could go well beyond the shift in economic competitiveness and wealth. It could undermine the moral authority of democracy and lead to a shift in global geopolitics back toward autocratic regimes. The worse the crisis of the Great Disruption becomes, the greater the risk this will occur. What's at stake here is more than economic success.

Such a result is certainly not inevitable; after all, the United States and United Kingdom led the victory in World War II against nondemocratic enemies. And there are many powerful and proven economic benefits to democracy and freedom, with the U.S. success in technology and innovation often being put forward as an example. Likewise many argue that China's restrictions on freedom will lead that country to political instability and possible breakdown.

Nonetheless, however many of us view democracy as a superior system, we should not lose sight of the inherent risk to it in the period we are entering. This is now a high-stakes game.

Whichever way all these issues unfold—and it is probably the most unpredictable area of all—what is very clear is this: The social, security, and economic implications of climate change and sustainability will force a major realignment in world geopolitics. In this process, responsiveness to change will determine the winners and losers, not a preexisting power or authority.

On a smaller stage, one of the more interesting developments will be the response of “victim” countries, those nations that have contributed little to the problem but face catastrophic impacts. Alongside this will be the legal and economic conflicts in rich countries over the relative contribution and impacts on different sectors, companies, and individuals. As the world enters a full-scale physical and economic crisis, people will be looking for revenge on the perpetrators. This will be messy and complex but will certainly occur.

It's not hard to imagine how this might unfold. When low-lying countries like Tuvalu, Kiribati, or the Maldives cease to exist because they're under water, their citizens are going to be pretty cranky. In all likelihood they're going to want to blame someone and seek retribution. Also in all likelihood the world will (sadly) largely ignore them no matter how just their cause, because these countries are small and not very powerful.

However, when great swaths of countries like Bangladesh, China, India, and the United States become affected, when we have hundreds of millions of refugees, geopolitical conflict, and trillions of dollars of real estate devalued by risk of sea level rise or extreme weather, we will no longer be able to ignore the question of cause and accountability.

Some of this will play out in the geopolitical realm, where poor countries demand compensation from those rich countries whose pollution largely caused the problem. These poor countries will expect military and food aid to deal with the consequences. Some of it will play out in the courts as individuals, countries, and companies sue those they consider responsible, first for the pollution and second for the decades of prevarication and delay, particularly by deliberate cover-ups or misrepresentation of the science. Some of the world's biggest corporations will be on the firing line. Will today's coal and oil companies become tomorrow's asbestos or tobacco companies?

As well as legal actions and campaigns attacking reputation, some of this will be simple economic transfer within the economy as governments force the costs of pollution onto the companies that create it. A 2010 study
2
suggested the economic costs of the environmental damage caused by the top three thousand companies in the world were around $2.2 trillion for the year 2008. This represented about one third of all their profits. At some point, governments and others will be coming after these profits that have been “taken from the environment.”

Sadly, it is also seems inevitable that some of this will play out in acts of terrorism against countries and companies. Whether or not you believe terrorism is caused by injustice, it is certainly fueled by it. Many long conflicts throughout history have been created by the loss of land or the sense of injustice at damage done to a culture or group of people.

There is surely no greater injustice than the elimination of your country's existence or the death of many of its people—especially when it's done for the sake of more cup holders in your car or a larger television for the spare room.

CHAPTER 14

The Elephant in the Room—Growth Doesn't Work

This century is going to be a wild and exhilarating ride. The pace of change will be breathtaking and the twists and turns unpredictable. We will face the real and present danger of falling off the cliff and plunging to our demise. Assuming we make it as I think we will, the year 2100 will be met with a huge planetary sigh of relief: Phew, that was intense!

But in telling that whole story, we have a ways to go yet. It may seem like a fair bit to cope with—the economic crisis of the Great Disruption, followed by the one-degree war and the complete transformation of the global economy to zero net carbon, all happening in parallel to a global realignment of geopolitical power, accompanied by widespread military and social conflict from ecosystem breakdown. All that, however, is just act one.

Now we come to the most exciting and most significant part of our journey.

Despite achieving all of the above, we will still have one more obstacle to clear before we move to the next stage of humanity's development. We can be sure of this because of where we started, with the physical limits of the planet.

Exploring this is the subject for the remainder of the book, so before we do so, let's take a moment to remind ourselves of the story so far.

We started with the acceptance that, despite fifty-odd years of investigation, science, and talk about the limits to growth, little has changed. With the global economy now hitting the limits of both the planet's finite physical resources and its capacity to absorb our impact, this economy is grinding to a halt. It is doing so messily and unevenly, but the effect will be the same. This will unleash a crisis that will be recognized in two successive phases.

The first phase of recognition will be the failure of growth, which will be a massive economic and political crisis because our global system is based on the assumption that economic growth is the foundational source of our society's prosperity and success. It is the way we are supposed to consistently and indefinitely improve the quality of life for all, including bringing the poor out of poverty. It is also how we are supposed to amass the resources and technology needed to address all our other social and environmental challenges. So the failure of growth will be correctly seen as the failure of the underpinning idea behind our progress. The cultural, political, and values consequences of this will be profound. Therefore we will resist acceptance for some time while we desperately try to restart growth.

The second phase will be the recognition that the end of growth is being caused by hitting the planet's physical limits. This, as we detailed earlier, will have consequences across the global system, including reinforcing the end-of-growth crisis by convincing people it is not a temporary problem. With widespread humanitarian, social, political, and physical impacts, there will then be enormous pressure on our global political, security, and economic system.

We then covered that once we woke up, the response of this system would be swift and dramatic. The established power elites will see climate change as the cause of the crisis and as a threat to their ongoing power and influence because it puts the whole model of progress into question. They will then act swiftly to address that problem, along the lines outlined in the one-degree war plan Jorgen Randers and I drew up. They will be successful in addressing climate change because, as we covered earlier, human ingenuity combined with a global warlike mobilization by governments will be able to achieve extraordinary things and do so remarkably quickly, even with the predicted late start.

Initially this will be seen as the solution to the failure of growth, because the extraordinary level of economic activity that will be required to achieve the elimination of net CO
2
emissions from the economy will create exciting new companies and industries and cause a realignment of national competitiveness. In the short term, this will appear to put growth back on track. Indeed, on the surface it will have all the hallmarks of a breakthrough that proves the power of markets and economic growth.

This creative destruction on steroids will be a sight to see, and we all look forward to watching the failure of some old economy dinosaurs and the birth of tomorrow's giants in renewable energy and other climate-friendly solutions. We will see amazing breakthroughs in technology that significantly enhance our lives and show just how good we are when we get focused on fixing things. Our cities will be cleaner, our transport cheaper, and our agriculture transformed. These will be exciting developments and will bring great benefit to humanity, not least of all by averting global economic and social collapse.

This phase of transition, however, will inevitably be messy, with chaos and volatility at the social, economic, and political levels in various countries at various times.

Despite the challenges involved and the decades of what will effectively be a war mobilization, we will get through all this. We will then be very pleased that we dodged the climate bullet that threatened to bring us down. We will be able to celebrate our resilience and our ingenuity, the brilliance of the human mind, and the power of innovation and markets to drive rapid global change when government puts in place the rules to guide it.

However, it will not be enough.

This is because, as we covered in the first half of the book, the problem is not climate change. That is just a symptom. The problem is the delusion that we can have infinite quantitative economic growth, that we can keep having more and more stuff, on a finite planet. We cannot, and that is just a fact.

We can and will perform what today feels like economic miracles, like eliminating the coal, oil, and gas industries and replacing them with new ones. We can use our extraordinary ingenuity to find ways to transform agriculture, cities, and transport systems. We can do all this while keeping the global economy and society within some general sense of order.

We can do all that, but we can't change the laws of physics and biology. For as long as we have a society that defines progress through material wealth, we will just keep hitting the wall defined by those laws again and again until we wake up.

At this stage, we can't know which particular physical limit beyond climate will force this issue. However, with nine billion people aspiring to a Western standard of material living, we can be sure the limits will be hit.

The
Planetary Boundaries
report released by the Stockholm Resilience Centre suggested there were nine boundaries we cannot cross and maintain a sustainable economy. They are climate change, stratospheric ozone, land use change, freshwater use, biological diversity, ocean acidification, nitrogen and phosphorous inputs to the biosphere and oceans, aerosol loading, and chemical pollution. Of course, such individual boundaries are useful to define the challenge and measure progress, but as the report points out, the system is all connected and crossing one boundary will increase the likelihood we will cross others. So it is likely we will face several of the boundaries at once.

While that list adequately defines the physical ecosystem limits, there are many other limits as well, including good old-fashioned resource limits. Where do we think we'll get the iron ore and other materials to build the cars we will need if all nine billion people achieve their aspiration by 2050 to live like Americans? Even if they all emit no CO
2
, building and maintaining six billion cars, ten times the current number globally, would still require an extraordinary amount of materials that can come only from nature.

Some would argue we will develop new, natural biomaterials to build our cars—plastics that come from plants. On what part of our already shrinking arable land supply, then further stressed by rapidly shifting climatic zones, do they think we will grow the food and graze the cattle to feed us the advanced diet nine billion people aspire to, if we have to
also
grow the trees and plants to make plastics for six billion cars and the rest of our products? Not to mention the land needed to grow the trees and plants we will need to make the paper and timber for nine billion people
and
grow the trees and crops we will need to absorb the already emitted CO
2
and also create the biofuels for our cars and planes (noting that the corn required to fill one twenty-five-gallon SUV tank can feed one person for a full year). Altogether, this makes a lot more land than we've got. When you look at the system as a whole, you realize many otherwise appealing solutions can't
all
happen.

The list can go on. Into the metals for electronics, the fish for our protein, the building materials to house nine billion people, the water for our water-intensive manufacturing, agriculture, and lifestyles. And on and on.… We can replace coal with solar power, but we can't build houses, cars, and phones out of air.

Will there be extraordinary innovation and changes in materials and agriculture? Absolutely. There will be breakthroughs in technology that will take our breath away with their simplicity and brilliance. We will all wonder why we didn't do it much earlier. However, despite those breakthroughs, which I am very excited about, it is delusional to believe we can keep growing a materially based economy without hitting the physical limits of the planet. You can debate the precise timing, but not the basic principle. An infinite growth economy on a finite planet just doesn't add up. This is the way it is, and we have to accept that, along with its implications. As Senator Daniel Patrick Moynihan said: “Everyone is entitled to his own opinion, but not to his own facts.”

So despite our herculean efforts on climate change, we will not have solved the underlying problem. The growth economy cannot and will not continue to grow.

So this is where we are in our story. The now emerging failure of growth means our current model of social and economic progress is now in the messy and painful process of dying.

The
only
choices we get to make are how and when we change, not whether. We
have
to redesign the economy, and with it much of our politics, personal expectations, and market, to fit in with the immovable physical reality of a finite planet. As one of the leading economists in this area, Professor Herman Daly, described it:

The closer the economy approaches the scale of the whole Earth the more it will have to conform to the physical behavior mode of the Earth. That behavior mode is a steady state—a system that permits qualitative development but not aggregate quantitative growth.
1

While the end of growth is inevitable, there are many choices to make in how we respond. Choices about when we begin the process and what we change to. We need a steady-state economy, one that doesn't grow or rely on growth for its stability and functioning. Don't confuse steady state as in “still and not developing,” though. We have to design an economy that is rich in progress and increasing prosperity, but not destructive in physical impact. This means we will replace it with a much deeper and thoughtful approach to human development, one that will improve the quality of life for all.

This is the topic for the remaining chapters: to put forward some ideas about what choices we need to make, at the personal, corporate, national, and global levels.

While this change is inevitable and ultimately positive, there will still be a great deal of angst. Remember how people attacked
The Limits to Growth
in 1972. Leaving behind growth is going to be challenging for many people, and they will defend the old approach. This requires us to be clear on what we have to leave behind. What do we have to lose? How well has the growth economy been working for us?

The basic premise of growth, the promise made by its advocates, is that we will all be better off if the economy grows. Yes, the rich get richer, but the poor get richer as well. So as long as we're all becoming better off, the system is working and we're all happy; that's the claim. The marketing of this model of organizing society has been extraordinarily successful. All around the world, regardless of political system, people have aspired with few exceptions to apply some form of the Western model of market economy to their lives in the belief they would be better off. So has it delivered?

Let's look at the answer from two perspectives, the global capacity of the system—is the economy strong and able to keep delivering?—and the personal human level—is it making our lives better?

At the system capacity, the answer is certainly, on balance, no. What we have achieved is what Professor Herman Daly called “uneconomic growth.” In economist-speak this means “the quantitative expansion of the economic subsystem increases environmental and social costs faster than production benefits, making us poorer not richer, at least in high-consumption countries.”

In other words, while we appear to be getting richer because we have more stuff, we are spending all sorts of hidden capital to get that stuff, so our actual real net wealth is going down, not up. This is like maxing out your credit cards and buying holidays, new clothes, and TVs. You feel rich for a month, then the credit card bill comes in and you can't pay it, so you have to sell your house to do so. Numerous economic analyses, such as the
Millennium Ecosystem Assessment
, show that the net wealth (total capital stock) of the human economy is degrading faster than we are creating new wealth. So while the amount of money in the system increases and the measures of economic activity rise in volume, value is in fact being destroyed, not created. That means economic growth is failing to deliver greater wealth—it is in fact uneconomic.

Of course, it doesn't feel like that on the ground. In the West, we've never had it so good with regard to our material lifestyle. And if you're one of the hundreds of millions of people in China, India, and elsewhere who have come out of grinding poverty over recent decades and are now living better lives, it also feels great. All that, however, is just like the lifestyle funded by credit cards. It does feel good … until the bill comes in and you lose your house. My argument is that this is the decade when the bill arrives, and if we're not careful, we'll lose the big house.