Balancing Infinite Growth and Planetary Limit

Imagine discovering a magical gold coin that doubles in value every 25 years. In 75 years, you'd only have eight coins. However, fast forward 1,000 years, and you'd possess over a trillion coins. Astonishingly, in a mere 4,600 years, the weight of these gold coins would surpass that of the observable universe. This phenomenon exemplifies exponential growth. While a real-life golden goose-coin remains elusive, something nearly as significant has been steadily growing over the past two centuries—the global economy.

Many economists argue that an ever-expanding economy is crucial for enhancing people's lives. They contend that if the global economy ceases to grow, conflicts would arise over the finite value available, instead of working towards generating new value. This raises a crucial question: Can infinite growth be sustained on a finite planet?

Economic growth is measured by tracking the total financial value of a country's or the world's production and market sales. These products fulfill basic needs and contribute to individual and collective well-being. However, they also require resources for their invention, construction, and maintenance. Consider a smartphone as an example. Its value lies in the aluminum, gallium, and silicon it contains—resources that require energy and effort to mine, refine, and transform into a functional device. Additionally, the value stems from the design, software development, and even marketing efforts.

Growing the economy entails producing more goods or inventing new ones. Nevertheless, both approaches require resources and energy. The question arises: Won't we eventually exhaust these resources? To answer this, we must examine what goes into the economy (labor, capital, and natural resources) and what it produces (value). Over the past two centuries, economies have become exponentially more efficient in generating value. If we continue upgrading our economies to become increasingly efficient, we could theoretically produce more value using the same or even fewer resources.

Efficiency improvements primarily rely on new technologies. However, introducing new technology not only enhances efficiency but also creates new demands, leading to increased resource utilization. The pressing concern is not the imminent depletion of most resources but rather the impact of the global economy, particularly in rich nations, on climate change and the destruction of vital natural environments. These ecosystems, such as soil, forests, and fisheries, are crucial for sustaining civilization.

Economists differ in their approaches to addressing this challenge. Some believe that new ideas and human ingenuity will solve the problems caused by exponential growth. They argue that the same exponential growth in resource and energy use that fueled economic expansion will also spark innovative solutions. For instance, Germany managed to grow its GDP by 16% between 2000 and 2014 while reducing CO2 emissions by 12%. However, these efforts may not be sufficient to limit global warming to 1.5 degrees Celsius.

Others advocate for a complete reengineering of our economies. They propose transitioning to a post-growth economy that shifts the focus from endless growth to improving essential aspects such as renewable energy, healthcare, and public transportation. Post-growth economists suggest guaranteeing living wages, reducing wealth and income inequality, and ensuring universal access to public services. In such an economy, people would be less reliant on jobs for their livelihoods and healthcare, potentially enabling a reduction in the production of less necessary goods. However, challenges arise, such as defining what is necessary, resolving disagreements, and addressing the potential consequences of dismantling entire industries.

The approach of relying solely on new ideas to solve the problems or advocating for fundamental economic changes both present their complexities. Ultimately, finding a balance between benefiting everyone and preserving our planet is a crucial endeavor that necessitates innovative solutions and thoughtful decision-making.

Henrik Leandro