The Great Disruption (11 page)

The issue is not therefore whether growth is stopping, the issue is
how
it will stop,
when
we will accept that it has, and
how
we will then adjust to our new reality. So when you hear arguments in defense of growth, consider them not as the case against ending it, because this is not a decision we will get to make. Think of them as more evidence of how challenging its inevitable end will be.

This cloud does have a silver lining, however. Economic growth has not been delivering on its promise of increased prosperity anyway, not once people are out of poverty. What the numbers from numerous studies show is that once societies move past approximately $15,000 per capita income, neither objective measures of quality of life nor subjective measures like life satisfaction show any material improvement. This applies across the board in all political systems and cultures with only minor variations. It even applies to such basic measures as life expectancy, infant mortality, education, and health—areas where you'd think money would buy progress.
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In measures of life satisfaction, the story is even more interesting. The evidence ranges from growth having no positive impact after basic needs are met to growth actually having negative impacts on some important aspects of prosperity.

As the
Prosperity Without Growth
report argued:

For example, in British society since the early 1970s incomes have on average doubled. But the “loneliness index” increased in every single region measured. In fact, according to one of the report's authors, “even the weakest communities in 1971 were stronger than any community now.” “Increased wealth and improved access to transport has made it easier for people to move for work, for retirement, for schools, for a new life,” reports the BBC.… In other words, some degree of responsibility for the change appears to be attributable to growth itself.

We all have personal experience of this phenomenon—how wealth has increased but quality of life hasn't.

While the data on lack of improvement for society overall is clear, there is one important and interesting exception to the lack of a wealth/happiness link and one that explains a core driver of the market's success at motivating personal effort.

Having more or less income than those we compare ourselves with, at the local or societal level, does have an impact on perceived life satisfaction. This explains why people work hard to get ahead and compete within their organizations and society. While on the one hand this seems like a useful attribute, motivating people to work hard and strive to better their lives, it means that our focus on growing the economy, with the associated pollution and environmental damage, delivers no net gain for society as a whole. We just change positions on the dance floor. This is a rather profound design flaw.

Of course, many have argued for a long time that consumerism is socially unhealthy. Not just environmentalists, but religious leaders, economists, philosophers, and artists. They point to the destructive physical impacts of consumerism, but also to the negative social and values impacts of the pursuit of material sources of satisfaction rather than more meaningful ones.

Many of them blame capitalism and in particular corporate marketers. This has some validity in explaining the extreme consumerism of recent decades, but it is hard to argue that this is the underlying cause.

As Professor Tim Jackson argues, consumerism runs deep:

Material goods continue to entrance us, long past the point our material needs are met. The clue to the puzzle lies in our tendency to imbue material things with social and psychological meanings. A wealth of evidence from consumer research and anthropology now supports this point. And the insight is devastating. Consumer goods provide a symbolic language in which we communicate continually with each other, not just about raw stuff, but about what really matters to us: family, friendship, sense of belonging, community, identity, social status, meaning and purpose in life.

… The “language of goods” allows us to communicate with each other—most obviously about social status, but also about identity, social affiliation, and even—through giving and receiving gifts, for example—about our feelings for each other.

It is certainly true that corporate marketers build on and at times abuse this tendency, encouraging behavior that can become bizarre at the extremities: personal vehicles the size of small homes, equipped with multiple TV screens and refrigerators; family homes big enough to house a small community with TVs in every room; food consumption and wastage that goes so far beyond meeting needs that it borders on the obscene. All these are examples of marketing gone mad, and encouraging such behavior is unethical marketing, hiding behind consumers' right to choose. As much as we like to find people to blame—and in this case they're easy to find—the underlying causes are in us and the choices we make about our lives.

However, growth is about far more than consumerism. It is a complex system of interlocking processes.

One of these processes ensures that efficiency will never address the underlying problems of growth's ecological impact. Efficiency, while hard to argue against given the obvious ecological benefits of less stuff and the consumer benefit of lower costs, actually just re-creates the problem it solves.

Market-driven efficiency reduces the resources and labor used to create goods. This lowers costs, thereby increasing demand and enabling people to buy greater quantities of the more efficiently produced goods. This is well understood in the experience of recent decades. The money gained through energy savings, for example, is often used to buy more energy-using appliances and services. Dramatically more efficient car engines over the 1970s to 1990s led to heavier cars laden with new features and accessories.

The system in the end feeds upon itself and, like many addictions, creates its own cycle of dependency. We want more stuff to communicate with one another, to fill the void of meaning, and to compete to show we are successful relative to others. Our companies and countries then compete to deliver these products by becoming more efficient, thus lowering costs and enabling more consumption, but creating less employment. We then need to grow the economy to keep employment up so people can keep buying these more efficiently produced goods and to avoid the political instability widespread unemployment would otherwise lead to. Unemployment would lead to lower life satisfaction because lack of money prevents citizens effectively engaging in a society driven by consumerism, as in the earlier example from the United Kingdom of loneliness levels increasing with societal wealth.

It is a system both pathological, because it doesn't work, and incredibly effective at driving itself in a cycle of reinforcement.

Prosperity Without Growth
again:

These understandings provide us with our clearest insight yet into the enormity of the challenge implied in delivering a truly sustainable form of prosperity. Perhaps first and foremost, that challenge compels us to develop a different kind of economic structure. But it's clear that this task isn't sufficient. We also have to find a way through the institutional and social constraints that lock us into a failing system. In particular, we need to identify opportunities for change within society—changes in values, changes in lifestyles, changes in social structure—that will free us from the damaging social logic of consumerism.

So we have a system design problem. The problem we face now is not that we can't redesign it and find ways to address all these challenges. We can certainly do so, and the work to define those changes we need to make is well under way. They are challenging and complex changes, particularly in transition, but they are realistic and achievable. We will come back to these ways forward, and there is much good news to have on this front, including immediate actions we can take in our own lives.

No, the problem is not the lack of a way forward; the problem is that the system is so comprehensive and self-reinforcing, we will resist the need for change until we have no choice. Until we're in the gutter, we won't face up to our addiction.

A realistic comparison is to observe our response to the relatively easier challenge of climate change. Despite forty years of research and twenty years of very clear science and economic logic and the fact the transition to a net zero carbon economy will create many winners, we have failed almost completely to deliberately initiate change ahead of the crisis.

So when it comes to the transition to a steady-state economy, letting go of growth and consumerism, confronting the challenge of how we address the cancer of global poverty without the total pie getting any bigger,
and
dealing with the sustainability-driven transformation of the entire global economy, the system is going to resist change and do so fiercely. It will take a serious crisis to force the issue, and that's why that crisis is inevitably coming.

In summary, growth is deeply ingrained in our global political, economic, and cultural systems. While change is inevitable, growth is so ingrained that this transition will not come easily. So even when growth stops, we will try hard to get it moving again, as we did in 2008. As a result, we will see growth return and then we'll argue, “See, we can still grow!” Then we'll hit the wall again because of the ecological damage and resource constraints that growth creates, and we'll bounce off the growth limits and shrink again. Each time we'll argue it was some other cause and we can fix it with a narrowly focused solution. We will stay in this cycle of denial for a while, denying the reality that we have a system design problem.

We will basically keep trying to treat our drug addiction with the provision of more drugs. We will do this until we're in the gutter.

The financial crisis of 2008 was a case in point, a taste of what's to come. As a talk-back radio caller I heard in the middle of the crisis said in response to the Australian government sending a check for $900 to most citizens as part of the national stimulus package:

So we have this crisis caused by people using money they don't have, to buy stuff they don't need, and in doing so helping to drive the planet to the edge of collapse. Now the best our government can do in response is to give us more money that they haven't got, so we can do more of the same. Is that really the best we can do? Is that how far we've come?
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CHAPTER 6

Global Foreshock—The Year That Growth Stopped

When it first became clear to me in 2005 that we were heading for an ecological and economic crash, I wanted to test the idea with a broad audience. So I wrote up the arguments in a letter called “Scream Crash Boom,” and sent it to my network. Over the months that followed, I received hundreds of responses from around the world as it spread virally to thousands of people. It had clearly struck a chord, with responses from CEOs to government ministers to grassroots activists. Many people sensed that the endgame for our current economic model had begun.

As a result of the interest the letter sparked, I was invited to present my arguments around the world. I spoke to groups of business executives at corporate retreats, to activists, to policy makers, to university seminars, and so on.

The general response was one of reluctant acceptance of the potential accuracy of my thesis but it was a kind of removed acceptance. When I spoke as an invited guest at corporate retreats, I often felt as if I were there for “intellectual entertainment” rather than for the arguments being considered in the context of business strategy. This surprised me a little, given I was arguing there would be discontinuous change in the market at some point, probably in less than a decade—a meaningful time frame for senior executives.

The reason why became clearer when I more methodically tested the response through my work on the core faculty of the Prince of Wales's Business and Sustainability Programme (BSP), run by the Cambridge University Programme for Sustainability Leadership. I was able to test the thesis over three years with a broad cross section of leaders from dozens of countries and from all sectors of society and business. These executives generally had little prior knowledge of sustainability issues, and the BSP seminars ran for four days, giving me a chance to go deeper in exploring their reactions.

The responses were wide-ranging and gave a number of insights into how the collective corporate mind works and why change is hard to achieve. One of the most significant insights was the sense of powerlessness in the face of big-picture trends. While some rejected the thesis completely, those who accepted it generally responded with a passiveness that I still find surprising. It was kind of, “Oh well, we can't do anything about that so we'll just have to observe it unfold.” Many of them, however, separated this quite clearly as their professional, analytical reaction. Alongside it, usually in the bar, they articulated a personal, emotional response of concern for the future, particularly for their family and their personal career choices.

For three years I traveled the world, arguing the case that we were in a slow-motion global car crash; that we were hitting the ecological and resource limits of the global economy, and the resulting economic crisis was inevitable and imminent.

Then in early 2008, it started to become clear that the moment had arrived. What I had seen from mid-2006 to mid-2008 was the emergence of the two “crash indicators” I had been arguing would show the economy had clearly outgrown the earth's limits. The two indicators I had been looking for were: 1) resource constraints forcing prices up and 2) ecosystem changes accelerating at a scale suggesting that systemic shifts and tipping points were under way.

I saw both of these clearly emerging by early 2008. At the time, though, most of my audiences saw the global economy going gangbusters with spectacular growth, particularly in China and other parts of the developing world. The Dow had recently been trading in the 12,000 to 14,000 range, and while it had backed off to the lower end of that because of problems in the finance sector, they could see no signs of imminent danger to the global economy. So my argument—that this spectacular growth was driving us into the wall and would soon stop as a direct and causal result—was a difficult proposition for them to internalize.

It was particularly challenging for those operating daily in the global market economy. I remember one BSP seminar at Cambridge University in the United Kingdom in April 2008 with fifty delegates, mostly senior executives from global companies, with some from government and NGOs. I presented my case, with the economic consequences being put particularly firmly. I said economic collapse was now inevitable and with it the value of both their retirement savings and the companies that employed them. When I asked who agreed with the basic direction of my thesis, only three people out of fifty raised their hands! The questioning was aggressive and particularly dismissive of the idea that these ecological trends, which were generally accepted, would have this level of economic impact. They mostly wrote me off as an extremist and a merchant of doom.

The faculty at these seminars met daily to take a temperature check of the delegates' mood and the seminar's progress, so we discussed this reaction the next morning. While we were surprised by the strength of their response, on reflection we could see what was behind it. These business executives were deeply enmeshed in the global market, with their careers and personal lives firmly wrapped up in the system. Every day they were surrounded by people who accepted that economic growth was good for the world. To them, this view was not a political belief, but a simple fact.

They also believed that spreading the gospel of economic growth across the global economy was the only way to address the deep and grinding poverty we had addressed earlier in the seminar; poverty was in sharp contrast with their personal lives, and they genuinely felt it must be addressed.

As a result of all this, accepting my argument would require them to question their lives at a deep level. These were good people who had chosen to attend a seminar about global sustainability and social issues out of concern for the world and their role in it. So accepting the idea that the market they were driving, the machine they spent every day maintaining and expanding, was going to fail to deliver people out of poverty, destroy the global environment, wreck their children's future, and in the process cost them their personal financial security was never going to be easy.

I always found such push-back personally challenging. Even putting aside the ego challenge of being rounded on by a room of highly educated, successful people, it always made me question again whether my analysis and assumptions were right. I recognized that in general when you think you're right and everyone else in the room is wrong, you may well be slightly mad!

In my case, I have often been the only one in the room who believed what I was saying, but that was because I chose to go to that room to spread the message. I also have the good fortune to have regular contact in my work with the Cambridge faculty and elsewhere, with some of the world's top scientists, economists, and technology experts, who by 2008 largely agreed with the logic of my view, with the major question being timing.

So while I challenged myself constantly in case I was missing something, the evidence that reinforced my case continued to mount. The scientific evidence over late 2007 to early 2008 had been particularly distressing. The most dramatic was the accelerated melting of the northern polar ice cap. In the summer melt season of 2007, the arctic sea ice reached a new record low, with more than one million square kilometers less ice than the previous record low set only in 2005, and 41 percent below the 1978–2000 average.
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The IPCC climate models had predicted consistent melting, but this was so far ahead of their forecasts that it sent shock waves through the science community. Professor Mark Serreze, director of the U.S. National Snow and Ice Data Center and an arctic ice expert, reported his shock at how the ice levels had “simply fallen off a cliff.” Along with others, he argued that if trends continued, all summer ice might disappear by 2030, a full seventy years earlier than many of the models had predicted. We were and are witnessing a classic feedback cycle—recent research suggests that one of the greatest causes of the warming arctic is the
lack of ice
itself, as seawater reflects less solar radiation than ice.
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As there is less ice, so there will be even less in following years.

To me this was just one of a number of indications of the emerging breakdown of the planet's ecological systems. While individual glaciers, droughts, and floods all give some indication of direction, something as large and significant as the northern polar ice caps was an indication of a systemwide shift. It was also a positive-feedback risk globally, with dark blue water absorbing heat whereas ice reflected it. This meant local melting led to local and global warming, leading to more melting, and so on.

Other scientific reports around that time showed more early signs of acceleration and systemwide impact. Examples included the reports of methane bubbling to the surface in lakes of meltwater in the massive area of frozen tundra. This frozen earth keeps billions of tons of methane locked out of the atmosphere, and its release is perhaps the single biggest tipping-point risk. The methane involved is such a powerful greenhouse gas and is there in such large quantities that its release could dwarf human emissions and accelerate warming beyond anything we could control.

On the broader issues of systemic change, the oceans were showing signs of major shifts as well. A series of reports indicated the oceans were acidifying with unexpected speed. This process, caused by the oceans absorbing excessive CO
2
in the atmosphere, has two impacts. First, it becomes a self-reinforcing climate feedback loop because it threatens the ocean ecosystem's ability to absorb CO
2
, leaving more in the atmosphere to heat the planet. Second, it has the potential to wreak havoc on the global marine ecosystem by preventing marine creatures like prawns from producing hard shells and slowing coral growth, threatening changes across the whole marine food chain.

Making these individual signs worse was that every global parameter we could measure was tracking at or worse than the upper end of the IPCC forecasts that create the basis for policy. These included the amount of sea level rise, the rate of sea level rise, the volume of emissions, the levels of CO
2
concentrations in the atmosphere, the recorded increases in average global temperatures, and so on. This meant we had two things happening in parallel: The causes of the problem were worse than expected, and the response of the ecosystem was worse than expected. It was a sobering period.

I knew, however, from previous experience that while ecosystem indicators of accelerating change were evidence to me of the limits being reached, they were not evidence to most people and wouldn't get much attention except from those already aligned.

It would require
economic
indicators that we were actually hitting the limits to really gain attention. The most obvious candidates for these were commodity prices, particularly food and oil.

Oil was a good candidate for convincing evidence because it had long been predicted that we would at some point reach “peak oil”—the point after which oil extraction can no longer be increased. There was a clear and established link between economic growth and oil consumption that made the “growth hitting its limits” logic simple for people to understand. This would also be a good test of the techno-optimist view—that markets self-correct because as resources run out, prices rise and alternatives come onstream. (While this is obviously correct in theory and over time, there are considerable challenges in the politics and economics of the transition and timing unless the price rises are steady and slow, which they rarely are.)

Peak oil is a good example of limits being reached because of the suddenness of the impact, comparable conceptually to the collapse of fisheries we discussed earlier. It's not that oil will soon run out; in fact nowhere close to it. Part of the way through global supplies, the rate of extraction of oil reaches a maximum as remaining reserves become increasingly difficult to extract. It's thus not the amount of oil that limits global supply, but rather the rate at which we can extract it. While production slows, demand continues to rise and in combination the price becomes volatile and increases rapidly. This is because oil is such a crucial part of our economy and is hard to replace quickly. The U.S. Department of Energy reported that the only way to avoid massive economic loss from a serious energy crisis would be to start preparing twenty to thirty years in advance. That was a good thought but would have been a more useful one thirty years ago!

So as oil prices hit new highs in 2008, it started to look like game on. However, while it's easy to explain resource limits being hit with a single commodity like oil, it's harder to communicate the linkages between systemwide resources and ecological limits and their economic impact. This is partly because of the incredible system complexity we have now built into the global economy. Food was therefore going to be an even more important example than oil because it brought this complex system of ecological, social, and economic drivers into a single indicator—global food prices. Food prices effectively measure all the issues we've been discussing around sustainability. Ecological drivers like soil quality, water supply, and extreme climate events mix in with social trends like increasing wealth-driving food choices and economic trends such as the shift of the corn crop into biofuels with government subsidies for corn-based ethanol.

From 2005 onward, we had seen increasing impacts of environmental and social pressures on food supplies. As argued by global experts like Lester Brown of the Earth Policy Institute, these pressures were coming together with great momentum after years of forecasts that they would do so. On the supply side, these included a challenging array of issues such as less unused arable land, loss of cropland to development and industry, overpumped aquifers, falling water tables, overallocated rivers limiting irrigation expansion, slowing growth in crop yields, increasing soil erosion, and deserts expanding due to overgrazing, overplowing, and deforestation. Many of these were assessed as ecosystem services in the
Millennium Ecosystem Assessment
we discussed earlier.