* Author of Chasing Rainbows: Economic Myths, Environmental Facts (2010) —————- On 30 September, Tim Worstall responded to my highlighting his (albeit potentially unwitting) involvement in the production of Andrew Montford’s Hockey Stick Illusion book. In so doing, Tim has made clear that he accepts that climate change “is happening, it’s a problem, it’s anthropogenic and we ought to do something about it”. This very clear statement was very welcome; and stands in stark contrast with my attempt to summarise his position without actually having read his Chasing Rainbows book from cover-to-cover! This may well have been unwise, but I do think I got it mainly right: My ambiguous and misleading remark that Tim is “ideologically opposed to market intervention” does not sit well alongside that in my next sentence that he believes “we need more globalisation and freer markets”. However, the latter would appear to be correct. Leaving aside some initial confusion over my references to Greek mythology, the main thing we seemed to disagree on was interpreting the writings of former World Bank economist Herman Daly who, as I have highlighted elsewhere, is famous for saying things like “the Earth may be developing but it is not growing!” and has therefore spent much of his life advancing the idea of a steady-state economy (also known as ecological economics). However, Tim’s response to this was that many people misinterpret Daly and that “we can have GDP growth… just not greater resource use” and that “…growth will be constrained by the advance of technology“. Furthermore, in response to my suggestion that the interplay between unit efficiency and the scale of production is such that resource consumption will always accelerate (I was thinking of our use of motor cars), Tim suggested that, in developed economies at least, recycling will prevent perpetual growth in resource depletion (he was thinking of our re-use of metals). This difference of opinion is, I think, a neat summary of the potential for Ecological Modernisation to fail to dematerialise our economies and decouple environmental degradation from economic growth. However, aren’t we all missing the point that the ‘elephant in the room’ is in fact growth itself? I believe Daly was very clear on this point. For example, he said “[w]ith continued growth in production, the economic subsystem must eventually overwhelm the capacity of the global ecosystem to sustain it“. Therefore, whereas Tim says that this does not exclude growth in the total value of goods and services (TFP or GDP growth?), as recently as 2004, Daly quoted Aleksandr Solzhenitsyn as having said, “Society must cease to look upon ‘progress’ as something desirable. Eternal ‘progress’ is a nonsensical myth. What must be implemented is a not a steadily expanding economy but a zero growth economy; a stable economy”. So, Tim, can we resolve this apparent contradiction? Since you mention energy and the Sun, Daly is also fond of quoting Sir Arthur Eddington, who once said, “But if your theory is found to be against the Second Law of Thermodynamics, I can give you no hope; there is nothing for it but to collapse in deepest humiliation”. Since energy can neither be created or destroyed (merely turned from useful forms such as fossil fuel to less useful forms such as heat), is it not significant that, as of 27 September, humanity has demanded a level of services from nature equivalent to what the planet can provide for all of 2012? Whilst we may be currently pursuing red-herrings such as wind farms (instead of tidal power), as a species, our current energy usage is quite literally unsustainable (and our numbers are still growing). Entropy is slowly converting useful energy into less-useful energy. Humanity is therefore overdrawn at its Ecosystem bank account. End of story. Surely?
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Anthropocene Reality 
A good blog, Rick, one of your best, I do have a small remark though …. “Ideas, inventions and Innovations” Seems to me that both you and Tim expect the world (with regards new technologies) to not change very much or at least only a little; perhaps you neglected to think about it. I would respectfully like to remind you both that every time the world has became stagnant in economic growth, or otherwise …. new technologies, new ideas and new innovations have come to light that have propelled our civilization’s progress in leaps and bounds. The steam engine, the electric motor, oil, the car, the plane and so on, all of them created new world wide industries that gave jobs to millions, if not billions, and helped us forward. Don’t neglect the old saying, “Necessity is the mother of all inventions” As some one who deals in such stuff I can assure you, new stuff will come along real soon 🙂
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You are very kind, Donald. Thanks for this comment (and all the others). With regard to innovation, this is what I mean by Prometheanism (following John Dryzek’s lead). As Sir Nicholas Stern points out in A Blueprint for a Safer Planet (2009), the nature and scale of the problem we now face is unprecedented and, therefore, just as conventional cost-benefit analysis methods do not apply, the likelihood is that innovation will fail to solve the problem completely. Unless, by innovation, you envisage, as does Professor Stephen Hawking CBE, that humanity will escape the consequences of AGW by colonising space! However, that is not what I call dealing with the problem. Therefore, as I said to Tim Worstall on Friday, “I would like to say I admire your optimism, but I don’t. Neither, of course, do I share it“.
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OK, Re growth, there are three reasonable positions to take: 1) Growth can carry on. 2) Growth can’t carry on. 3) Depends what sort of growth you’re talking about. Which is where that distinction between growth from the use of more resources and growth from adding more value to resources comes in. Let us take, just for a moment, an imaginary position. One where we abstract no new non-renewable resources from the environment. Where renewables are extracted only at their renewable rate. So we absolutely cannot have economic growth of the type that consumes more resources. So, in this situation can we have economic growth at all? Yes, we most certainly can. Because economic growth is defined as the increase in the value of goods and services produced. So it is still open to us to increase the value. This can be done in several ways: we might invent a new technology that uses less of, say, copper, to do a task that we already perform. Recall, we’re abstracting no new copper from the environment, just recycling what we have. But now we, say, use less of it than we used to to make PC motherboards (maybe we work out how to make the wires thinner, fold them in new ways, route them better, make the whole motherboard smaller, whatever). This now frees up some of our scarce resource of recycled copper to do other things with. Maybe we make more motherboards. Maybe we make copper bracelets to beat rheumatism. As a result of our advance in technology we now have the same number of motherboards as we used to plus copper braclets, or we have more motherboards. We are richer, economic growth has occured despite our very strict limitation upon resource use. Or, we might invent something entirely new to do with that copper. Instead of building PC motherboards we go and build smartphone motherboards. We think that, perhaps, being able to do a little less computing but a bit more talking to each other is more valuable. So, we’ve not increased our resource use, we’re still using our limited stock of recycled copper, but we have aded more value because we value smart phones more than we do PCs. Economic growth has once again occured. Another way of putting this is that resources are indeed a limit to growth. But they’re not the defining one. There is this interplay between growth from the use of more resources and growth from the adding of more value to resources. Only when we run out of new methods to do that latter does growth necessarily stop. Which means that, even in our model where resources are constrained to what we already have, growth only stops when technology stops advancing. Please note this is very different from saying that technology will solve everything: that isn’t the argument at all. Nor is it even necessarily stating that continued technological development is desirable. It’s purely a logical construct to point out that resource limitations are not the binding constraint upon economic growth. And, even if Daly himself somtimes ignores his own analysis, this is what his steady state economy is. Exactly that model that I’ve given above. He describes it as qualitative growth not quantitative growth, but it’s the same point: growth in value added not growth in volume. ‘I believe Daly was very clear on this point. For example, he said “[w]ith continued growth in production, the economic subsystem must eventually overwhelm the capacity of the global ecosystem to sustain it.”‘ He’s using production here to mean volume of stuff produced. Which doesn’t conflict with the model above at all. ‘Daly quoted Aleksandr Solzhenitsyn as having said, “Society must cease to look upon ‘progress’ as something desirable. Eternal ‘progress’ is a nonsensical myth. What must be implemented is a not a steadily expanding economy but a zero growth economy; a stable economy”. So, Tim, can we resolve this apparent contradiction?‘ Probably by pointing out that Sasha S. was a great novelist, a very brave historian and a bit of an economic dipshit. His ruminations upon eonomic structures are of no more value than mine on the interminable boredom of Tolstoy’s novels. BTW, I have been making fun of the ecological footprint for the globe calculations for some years now. It all started as the PhD thesis of Wakernagel and he’s turned it into a thriving business: good luck to him on that. But the actual calculations are an entire farrago. For example, the ecological footprint of nuclear power is defined as being the same as that of coal. Which is a nonsense, as anyone can see. Moreover, land is counted only once. Take land that is being used to grow wheat. We count it, according to these calculations, as being used only to grow wheat. We all also emit CO2. Entirely true. So there must be land or ocean or atmosphere somewhere which is absorbing that CO2. But land is only counted once: so the CO2 absorbed by the growing wheat is not included: there is no room in the calculations for dual use of land. Both absorbing CO2 and also growing food. Which is of course a nonsense. For it means that even if we were in fact living entirely sustainably, we’d still by these calculations be using too much land. So I don’t place a great deal of value on the numbers they provide. ‘Since energy can neither be created or destroyed‘ This is absolutely true. If the Earth were a closed system with regard to energy then we would indeed have a very large problem. However it isn’t. Look up (wearning dark glasses) at the day time sky nd you’ll see a very large nuclear furnace which is pumping energy into hte Earth system. We’re simply not a closed system with regard to energy. What is it, 1 Watt/hr per m2 of the planet’s surface? Something like that. Thousands of times what humanity uses currently as energy. Now, when the Sun does go out, some billions of years hopefully, then we do have a problem, yes. But until then we’re just not a closed energy system.
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Many thanks for coming back to me on this, Tim, and for such a thorough and well-considered response. However, given its length, I hope you do not mind that I have tweaked its presentation to help readers follow it better (but will accept that I have not altered its substance in any way)? With regards to flaws in Wackernagel’s calculations (and Earth Overshoot Day), I am not in a position to know but, on the face of it, your criticisms appear to have some validity. With regards to the Second Law of Thermodynamics, I am glad you agree with it! Furthermore, as I have made clear elsewhere, I share your distaste for red-herrings such as wind power; and can see a great deal of scope for mankind using solar (and tidal) energy to meet its needs. So can David MacKay (Sustainable Energy: without the hot air), although he thinks that we in the West are using far too much energy and must use less (if for no other reason than the transition to a zero carbon economy will probably take a long time). Given your very helpful, prior acknowledgement that AGW is real and must be dealt with, it might seem churlish for me to continue to argue… However, a future state-of-being where no new resources are abstracted from the environment looks to me to be a very distant prospect; and time is a commodity we have greatly wasted, and of which we are now painfully short. Therefore, I really do hope that you are not actually denying that there are (and must be) limits to growth; and/or that there is an optimum human population for this planet beyond which lies at least compromise, if not overshoot and collapse. On the assumption that you do accept some validity to limits to growth arguments – and even if I will have to re-classify you as a Cornucopian (i.e. having faith in nature’s bounty rather than human ingenuity) – I hope you are not suggesting, as Julian Simon once did, that… “humanity now has the ability (or knowledge) to make it possible to feed, clothe, and supply energy to an ever-growing population for the next 7 billion years ”? If you are, you may like to have a look at what Paul and Anna Ehrlich’s response was to this in Can modernisation be “ecological”? – Part 2.
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“However, a future state-of-being where no new resources are abstracted from the environment looks to me to be a very distant prospect” No, no. I put this forward purely as a logical concept, to show that resource scaricty is not the binding constraint upon economic growth. I also actually said that I was doing that. So you cannot come back and say that that is unlikely. For it’s an example of logic, not an expression of probability. “Therefore, I really do hope that you are not actually denying that there are (and must be) limits to growth” I am denying that resource scarcity is the binding constraint upon economic growth, yes. For the reasons given above through that logical construct. I do not deny at all that there are a limited number of iron atoms on the planet; that in the absence of asteroid collection we cannot build more things out of iron than we have iron atoms available (substitute your favourite element there); that we cannot use mmore energy than the system contains. These are all obvious truths. But, as I say, they’re not actually the binding constraints upon economic growth. Because there is economic growth which is not created by the consumption of more respources, but by the adding of more value to them. Thus the binding constraint is our knowledge of how to add more value, not the availability of resources. BTW, as to our actually hitting those resource constraints. The iron one of course we’re still millenia away from, if we would ever get there. I agree that the ability of the atmosphere to absorb more CO2 emissions is a constraint; but then we know that. That’s why we’ve got global warming. In terms of the other physical constraints to growth, I don’t think that any of them are binding as yet. “and/or that there is an optimum human population for this planet beyond which lies at least compromise, if not overshoot and collapse.” I’m always worried about that word “optimum“. Depends on who is defining it and how you see. Yes, obviously, there are certain physical constraints which limit population in theory. But I don’t think we’re ever going to get anywhere near them. Population (UN prediction) is going to reach 9 billion then fall back to 7 billion by 2100. Gradual decline thereafter. Our empirical experience is that when people get rich (umm, roughly $8,000 a head GDP in current $ terms) then birthrate falls dramatically and population stabilises and then falls. The world is getting rich, for the first time ever, and we do expect the developing countries to take on the same demographics aas the currently rich countries. Population as a problem is over, dealt with, to my mind. “On the assumption that you do accept some validity to limits to growth arguments” Depends which arguments really. Can we abstract all the energy from the system? No. Can we have 300 billion people on the planet? No. Can we have exponential increases in resource use for the next billion years? No. Do I think that any of these are relevant limits to economic growth? No. For there’s a huge difference between theoretical limits to growth (10 people per square metre of ice free land for example) and the one’s we’re likely to face. For example, it would take an insect entomologist (like Ehrlich) to think that humans would actually breed in such conditions. No one who has ever observed actual human beings would think that they would.
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Forgive me Tim. I clearly lost sight of where hypothetical argument ended and opinion began. I think I was distracted by all the talk of copper; a commodity whose price has increased rapidly in recent years and, whereas some developing countires like Bolivia are highly dependent on the income such metals bring, they are also very much aware of the environmental damage being done by their exploitation. To be fair to Ehrlich, he was, like you, merely using logic to point out the stupidity of Simon’s claim. So, you have explained your thinking and for that I am grateful. Your view, however, remains much more optimistic than mine. This is mainly because large numbers of organisations remain openly-sceptical of things that you and the ASI accept as real. Until we silence the sceptics and end the pointless debate about things that are already happening, we cannot begin to make serious progress on mitigation and/or adaptation. Assuming that you also accept the carbon budget principle (i.e. it is the cumulative total of CO2 emissions that is critical), then you will agree that the longer we delay serious action, the harder it will be to make any action effective? If I have not explained myself clearly, please see my comments about research by Dr Myles Allen in 2009, which appears at the end of Why are we still waiting for the EU to act? (19 August).
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“then you will agree that the longer we delay serious action, the harder it will be to make any action effective?” No: again for economic reasons as outlined by Stern. Our real aim is to maximise human utility over time and generations. Anything we do about CO2 now has a cost: some of that cost inevitably falling on future generations as they will be less rich than they could be. Similarly, doing nothing about CO2 has a cost because future generations will be poorer than they could be as a result of climate change. To an economist (and I emphasise that I am not one, just an interested amateur) this is a simple problem: we want to set the system so that what the future loses from being poorer as a result of our not having growth now is equal to what the future loses by us having growth now and CO2 emissions. In short, it all becomes “what is the price of the alternatives?” What is the damage done by climate change, what is the damage done by trying to avert is. Now, in my day job, I’m vaguely involved in this renewable energy world. The metals that I deal with are vital to certain technologies (specifically, a certain type of fuel cell and the next generation of windmill blades). I would say, in that Hayekian sense, that I have lovel knowledge of what’s going on here. And I can see, quite clearly, that the current generation of renewables are vastly expensive: but that cost is coming down very fast. Solar PV, for example, is falling 4% a quarter, near 20% a year. Currently it’s some 4 time coal per kWhr. At these current rates it’s less than a decade for it to be properly, unsubsidised, price comparable. Similar things, even if not quite so fast, are happening with solid oxide fuel cells and windmills. Which, to an economist, changes the numbers a bit. If we wait a decade or two then these new technologies do not in fact have a cost at all. For they are directly price comparable with our current ones. The cost to the future of our waiting that decade to close down the coal plants is minimal: the savings to us, the increase in wealth in the future, of our waiting the decade to install the effective and efficient technologies is large. The speed at which renewables are becoming economic means we should wait: a few years, a decade or two and no more, and we’ll happily install solar because it is cheap. Far from renewables getting cheap fast meaning we should all install them now, while they’re expensive, it tells us that we should wait until they are cheap and then install them. The opposite of what Huhne, for example, is insisting we do.
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If you are rejecting the analysis of Dr Myles Allen and the majority of those that contributed to the 4 Degrees and Beyond Conference in Oxford two years ago, we will have to agree to disagree. Ditto, if you are also rejecting the conclsuions of Sir Nicholas Stern (that conventional CBA rules do not apply) in A Blueprint for a safer Planet (2009). However, as for current DECC policy, I have written to Chris Huhne and my MP more than once to express my disappointment with their failure to embrace genuinely workable renewable energy sources such as tidal energy; and with the folly of not pursuing or promoting micro- and/or distributed- power generation schemes.
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TW: “The speed at which renewables are becoming economic means we should wait…” wonderful. Business as usual, with no respect for the science that has been telling us for decades that we cannot afford to delay action.
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