“Continued economic growth is unsustainable under a ‘business as usual’ model.”
“Doughnut Economics: Seven Ways to Think Like a 21st Century Economist” – the economy should distribute wealth fairly, regenerate the resources that it uses, and allow people to prosper. None of this should depend on economic growth. [Kate Raworth]
‘THE LIMITS TO GROWTH’: TODAY:
The ‘Great Life’ chosen today in the longstanding Radio 4 programme was a member of the team behind “The Limits to Growth” report – which came out in 1972:
Born in Illinois in 1941, Dana Meadows studied Chemistry and Molecular Biology, before turning her back on a post doc position at Harvard, to pursue environmentalism. She joined her husband Dennis Meadows as part of the team working on Professor Jay Forester’s World3 computer model of the world economy at MIT and wrote the report on the results of that model, which predicted overshoot and collapse if economic growth were not curbed. The report, called Limits to Growth, was published in 1972 to much publicity, alarm and ridicule.
Donella said “We were at MIT. We had been trained in science. The way we thought about the future was utterly logical: if you tell people there’s a disaster ahead, they will change course. If you give them a choice between a good future and a bad one, they will pick the good. They might even be grateful. Naive, weren’t we?”
Following the publication of Limits to Growth, Dana dedicated her life to living by the principles of sustainability (a word coined by the Limits to Growth team) and to teaching the principles of ‘systems’ thinking, which she believed could help people understand and live more harmoniously with the planet.
Choosing Dana is Economist Kate Raworth, who believes that economics needs a broader, more holistic model to be fit for the 21st century. To this end, she founded the Doughnut Economics Action Lab, which champions regenerative and distributive economics, that can meet the needs of people within the means of the living planet. Kate never met Dana, but felt an immediate kinship when she picked up her book, Thinking in Systems, and now believes that all children should be taught to think about the balancing and reinforcing loops of systems.
Global carbon emissions have risen to their highest levels in history. Recently, researchers have warned that the Earth may already be past its safe limits for humanity. According to the Intergovernmental Panel on Climate Change, preventing irreversible damage to the natural environment depends on holding the world below 1.5C of warming, and climate scientists calculate that the emissions of high-income countries need to decrease at 10 times their current rate to achieve this. Electric cars will be essential to this, but if nations are to meet stringent emissions targets and avoid soaring electricity demand, there will need to be fewer cars on the road. The problem is that there are few templates for an economy that radically shrinks the world’s carbon footprint without also shrinking our quality of life.
The economist Kate Raworth believes she has a solution. It is possible, she argues, to design an economy that allows humans and the environment to thrive. Doing so will mean rejecting much of what defined 20th-century economics. This is the essential premise of her only book, Doughnut Economics: Seven Ways to Think Like a 21st Century Economist, which became a surprise hit when it was published in 2017. The book, which has been translated into 21 languages, brings to mind a charismatic professor dispensing heterodox wisdom to a roomful of students. “Citizens of 2050 are being taught an economic mindset that is rooted in the textbooks of 1950, which in turn are rooted in the theories of 1850,” Raworth writes. By exposing the flaws in these old theories, such as the idea that economic growth will massively reduce inequality, or that humans are merely self-interested individuals, Raworth wants to show how our thinking has been constrained by economic concepts that are fundamentally unsuited to the great challenges of this century.
To Raworth, the ideal economy of the future can be captured in a single image: a ring doughnut. Its outer crust represents an ecological limit, while its inner ring represents a social foundation. To step beyond the ecological limit will damage the environment beyond repair. To fall below the social foundation will mean some people go without the things they need to live well, such as food, housing or income. Her argument is that economies must be designed so they operate inside this ring, enabling humans and the environment to flourish. The doughnut is premised on three central ideas: the economy should distribute wealth fairly, regenerate the resources that it uses, and allow people to prosper. None of this, Raworth argues, should depend on economic growth.
‘THE LIMITS TO GROWTH’: FIFTY YEARS AGO:
The Club of Rome report came out in 1972 – and was very much a product of its time:
The 1970s launched an environmental reckoning across the U.S. Spurred by rising public concern, corporations and national leaders pledged to protect resources, and created new laws and agencies to lead that effort. Amid these discussions, a group of researchers at MIT tackled a far-reaching question: How long can humanity keep growing and consuming at its current rate?
As an environmental economist, I tend to be skeptical that any one model can explain how the global economy operates at a single point in time, let alone predict global conditions in 2100. Nonetheless, I believe “The Limits to Growth” got a larger point right: Humans must limit and soon reduce their aggregate production of greenhouse gas emissions. The authors anticipated the potential for the world’s economy to shift to cleaner sources of energy, noting that “If man’s energy needs are someday supplied by nuclear power instead of fossil fuels, this increase in atmospheric carbon dioxide will eventually cease, one hopes before it has had any measurable ecological or climatological effect.”
The 1972 report has received intense criticism – but has been validated since:
In 1997, the Italian economist Giorgio Nebbia observed that the negative reaction to the LTG study came from at least four sources: those who saw the book as a threat to their business or industry; professional economists, who saw LTG as an uncredentialed encroachment on their professional perquisites; the Catholic church, which bridled at the suggestion that overpopulation was one of mankind’s major problems; finally, the political left, which saw the LTG study as a scam by the elites designed to trick workers into believing that a proletarian paradise was a pipe dream.
In 2020, an analysis by Gaya Herrington, then Director of Sustainability Services of KPMG US, was published in Yale University‘s Journal of Industrial Ecology. The study assessed whether, given key data known in 2020 about factors important for the “Limits to Growth” report, the original report’s conclusions are supported. In particular, the 2020 study examined updated quantitative information about ten factors, namely population, fertility rates, mortality rates, industrial output, food production, services, non-renewable resources, persistent pollution, human welfare, and ecological footprint, and concluded that the “Limits to Growth” prediction is essentially correct in that continued economic growth is unsustainable under a “business as usual” model. The study found that current empirical data is broadly consistent with the 1972 projections and that if major changes to the consumption of resources are not undertaken, economic growth will peak and then rapidly decline by around 2040.