Martin Wolf, chief economics journalist at the Financial Times, argues
that economic growth must be sustained during the 21st century.
If we count with a modest 3 per cent annual growth rate, this means that after 100 years - corrected for inflation - the world would consume 19 times more than today.
After only one generation, that is by 2033, we would consume twice today's resources.
This is really a recipe for disaster, since the world's environments are already being stressed far beyond sustainable levels.
Jeffrey Sachs said "The world is bursting at its seams", in his last year lecture on the BBC. Frankly, we believe Mr Sachs is dreaming. On the one hand he says "We are over-hunting, over-fishing, and over-gathering just about anything that grows slowly or moves slowly. If we can catch it we kill it." On the other hand he seems to believe that saving lives and increasing standards of living in Africa wiwill not increase the human pressure on the environment.
Factually, raising standards of living is always increasing both and population size and the pressure on the environment. This is valid for all counties, poor and rich. The earth, however, is already overburdened by humanity, of which a minority is lving in exuberant and wasteful luxury.
Therefore IF we recognise the needs of the poor to better their lives, we then MUST reduce our resource consumption in the rich part of the world at least by an equal amount.
But - since the world is already "bursting at its seams", being poisoned and depleted - we must actually reduce more in our rich quarters. We have no choice. The earth is finite and non-renewable resources cannot be brought back by technology, hope or optimism.
Martin Wolf recognised limits last year. Now he is correctly questioning the feasibility of Jeffrey Sachs's "big-push investment strategy". To Martin Wolf's doubts we would add our certainty that investment will increase unsustainability levels even higher. A better lifestyle requires more water, more land, more food. This exactly is the mechanism that is leading to environmental degradation in many countries, not only in Africa.
Jeffrey Sachs is scientifically as naive as one can be, in believing that we can deal with the environmental "challenges" and have economic growth simultaneously. Growth can definitively not be made compatible with sustaining the global commons"
The "great question" is indeed "whether we can become master of ourselves", albeit not in the 21st century but in the next couple of years. We appear having reached to top level of oil extraction rates - Peak Oil - this year next year or after some more years, it does not really matter. Thereafter the affluence of oil and natural gas will decline, at ever faster rates. This will entail a reduction of industrial and agriculturals production and pose the world for almost unsurmountable problems of restructuring. It will end globalisation and much of motorised transportation. People will again have to work where they live. The megacities will empty and people will find manual work in agriculture and demechanised trades.
We need to stop talking illusionary and/or furture "solutions" that are firmly embedded in the Business As Usual scenarios of "Sustainable wealth", "sustainable growth", "immaterial growth" and the like. If we don't see the material realities, or if we continue denying them, we our human Titanic will sink in the floods of climate change and the void of resources gone forever. We will not nobly quit the scene but rather in final wars for the last crumbs of bread and dry feet.
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Martin Wolf's and Jeffrey Sachs's desaster scenarios:Copyright notice) Is it possible for the vast mass of humanity to enjoy the living standards of today's high-income countries? This is, arguably, the biggest question confronting humanity in the 21st century. It is today's version of the doubts expressed by Thomas Malthus, two centuries ago, about the possibility of enduring rises in living standards. On the answer depends the destiny of our progeny. It will determine whether this will be a world of hope rather than despair and of peace rather than conflict.
This - not the effectiveness of its particular prescriptions - is the biggest question raised by the report of the growth commission discussed here last week . It is also the focus of a powerful new book by Jeffrey Sachs, director of Columbia University's Earth Institute*.
The challenge is stark. World real incomes per head could rise 4.5 times by 2050 and world population by 40 per cent. This would mean a sixfold increase in global output, concentrated in the developing world (see charts). Is such an increase feasible? The answer he gives is: yes and no - yes, because changes in incentives, technology and social and political institutions would make a benign outcome feasible; and no, because the path we are now on is unsustainable. Professor Sachs is an optimistic prophet of doom. He falls in between those environmentalists who see no solution and those free-marketeers who see no problem.
By inclination, I am far closer to the latter than the former. But it has become evident, at least to me, that the human impact on the planet on which we depend has risen to enormous proportions. We have treated the global commons as if they were free. Self-evidently, they are not.
Prof Sachs emphasises three goals: first, "the end of extreme poverty by 2025 and improved economic security within the rich countries as well"; second, "stabilisation of the world's population at 8bn or below by 2050 through a voluntary reduction of fertility rates"; and, third, "sustainable systems of energy, land and resources use that avert the most dangerous trends of climate change, species extinction, and destruction of ecosystems". Finally, to achieve these ends, he recommends "a new approach to global problem-solving based on co-operation among nations and the dynamism and creativity of the non-governmental sector".
One might view the first of the above goals as that of prosperity for everybody. Population control is related to this end because the world's poorest people are burdened by the costs of rearing its largest families. Finally, only by managing the global commons will it be possible to sustain rising living standards.
The most illuminating concept in the book is that of the "anthropocene" - the era in which human activities dominate the world. Peter Vitousek of Stanford University has documented the ways in which humanity has appropriated the bounty of the earth for its own use: human beings now exploit 50 per cent of the terrestrial photosynthetic potential; they have put up a quarter of the carbon dioxide now in the atmosphere; they use 60 per cent of the accessible river run-off; they are responsible for 60 per cent of the earth's nitrogen fixation; they are responsible for a fifth of all plant invasions; over the past two millennia they have made extinct a quarter of all bird species; and they have exploited or over-exploited more than half of the world's fisheries.
Like it or not, we humans are now in charge. So what should we do? In his response, Prof Sachs shares the optimism of most Americans: we must fix it, but, he insists, we can do so only together. In this great venture, he argues, the US must share the leadership, but it cannot dictate to the rest of humanity.
In regard to the dynamics of catch-up growth in developing countries, Prof Sachs' views are close to those of the growth commission. More distinctive is his recommendation of an aid-supported, big-push investment strategy, aimed at lifting the world's poorest people, predominantly Africans, out of the poverty traps into which, in his judgment, they have fallen. Prof Sachs has made notable contributions to our understanding of the obstacles to development created by geography, the environment and devastating diseases such as malaria. In the current book, he emphasises how shortages of water are contributing to poverty and conflict across the planet.
Yet I am more sceptical than Prof Sachs of the returns to the big-push strategy. In many cases, it will fail. But it has to be tried, because there is no morally tolerable or credible alternative. I agree, too, that huge efforts must be made to accelerate the fertility decline in the world's poorest countries, albeit on a voluntary basis.
Now suppose that economic growth then spreads across the planet, as we would wish. Can it be sustainable? Prof Sachs is notably optimistic on direct resource inputs into growth. His view is that fossil fuel resources, renewable energy and availability of fresh water should be sufficient to support continued growth over the next half century. But this would almost certainly require a transition from oil-based energy technologies to ones based on coal and renewables. Energy would, almost certainly, be much more expensive than in the 1985-2000 period, but not prohibitively so.
The challenge, in Prof Sachs' view, is rather to make growth compatible with sustaining the global commons: species survival and, above all, climate change. Yet what is perhaps most intriguing of all is the optimism he shows on the latter task. While he embraces the view that climate change is a huge threat, he also believes it can be dealt with at modest cost, provided suitable incentives are put in place: less than 1 per cent of global income.
In all, in fact, Prof Sachs believes we can achieve all the goals he has set - elimination of mass poverty, population control and environmental sustainability - for less than 2 per cent of global incomes. This is about half a year's global growth and, as such, surely cheap at the price.
This, then, is an analysis that manages to be both pessimistic and optimistic at the same time. One might not be quite as optimistic about the cost of the solutions. But one must recognise the salience of the challenges. If economic growth halted, conflict among the world's people would risk becoming unmanageable. If the environmental consequences proved overwhelming, the costs of growth would become unbearable. We are the masters of our planet now. The great question for the 21st century is whether we can also become masters of ourselves. - email@example.com
*Common Wealth: Economics for a Crowded Planet (Allen Lane, 2008)
We have reproduced this article for scientific reference reasons only . Copyright The Financial Times 10 June 2008