Saturday, July 31, 2010

Sustainable Growth: An Impossibility Theorem by Herman E. Daly and Kenneth N. Townsend (1993)

Economists will complain that growth in GNP is a mixture of quantitative and qualitative increase and therefore not strictly subject to physical laws. They have a point. Precisely because quantitative and qualitative change are very different it is best to keep them separate and call them by the different names already provided in the dictionary. To grow means "to increase naturally in size by the addition of material through assimilation or accretion." To develop means "to expand or realize the potentialities of; to bring gradually to a fuller, greater, or better state." When something grows it gets bigger. When something develops it gets different. The earth ecosystem develops (evolves), but does not grow. Its subsystem, the economy, must eventually stop growing, but can continue to develop. The term "sustainable development" therefore makes sense for the economy, but only if it is understood as "development without growth"—i.e., qualitative improvement of a physical economic base that is maintained in a steady state by a throughput of matter-energy that is within the regenerative and assimilative capacities of the ecosystem. Currently the term "sustainable development" is used as a synonym for the oxymoronic "sustainable growth." It must be saved from this perdition.

Politically it is very difficult to admit that growth, with its almost religious connotations of ultimate goodness, must be limited. But it is precisely the nonsustainability of growth that gives urgency to the concept of sustainable development. The earth will not tolerate the doubling of even one grain of wheat 64 times, yet in the past two centuries we have developed a culture dependent on exponential growth for its economic stability (Hubbert, 1976). Sustainable development is a cultural adaptation made by society as it becomes aware of the emerging necessity of nongrowth. Even "green growth" is not sustainable. There is a limit to the population of trees the earth can support, just as there is a limit to the populations of humans and of automobiles. To delude ourselves into believing that growth is still possible and desirable if only we label it "sustainable" or color it "green" will just delay the inevitable transition and make it more painful.

That's 17 years ago, so he had reason to feel that we would make the transition in time.

More recent article by Herman E. Daly paints a picture of a sustainable economy:

Read the whole thing

And yet another one:

One problem for the SSE already raised by the demographic
transition to a non growing population is that it necessarily results in an
increase in the average age of the population—more retirees relative to
workers. Adjustment requires either higher taxes, older retirement age, or
reduced retirement pensions. The system is hardly in “crisis”, but these
adjustments are surely needed to achieve sustainability. For many
countries net immigration has become a larger source of population
growth than natural increase. Immigration may temporarily ease the age
structure problem, but the steady-state population requires that births
plus in-migrants equal deaths plus out-migrants. It is hard to say which is
more politically incorrect, birth limits or immigration limits? Many prefer
denial of arithmetic to facing either one

A Steady-State Economy

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