Economic Growth

Is Economic Growth Environmentally Sustainable?

Economic growth and environmental renewal go hand-in-hand.


Weerpat Kiatdumrong/Dreamstime

Is economic growth environmentally sustainable? No, say a group of prominent ecological economists led by the Australian hydrologist James Ward. In a new PLoS ONE article—"Is Decoupling GDP Growth from Environmental Impact Possible?"—they offer an analysis inspired by the 1972 neo-Malthusian classic The Limits to Growth. They even suggest that The Limits to Growth's projections with regard to population, food production, pollution, and the depletion of nonrenewable resources are still on track. In other words, they think we're still heading for a collapse.

I think they're wrong. But they're wrong in an instructive way.

The authors describe two types of "decoupling," relative and absolute. Relative decoupling means that economic growth increases faster than rates of growth in material and energy consumption and environmental impact. Between 1990 and 2012, for example, China's GDP rose 20-fold while its energy use increased by a factor of four and its material use by a factor of five. Basically this entails increases in efficiency that result in using fewer resources to produce more value. Absolute decoupling is what happens when continued economic growth actually lessens resource use and impacts on the natural environment, that is, creating more value while using less stuff. Essentially humanity becomes richer while withdrawing from nature.

To demonstrate that continued economic growth is unsustainable, the authors recycle the hoary I=PAT model devised in 1972 by the Stanford entomologist and population alarmist Paul Ehrlich and the Harvard environmental policy professor (and chief Obama science adviser) John Holdren. Human Impact on the environment is supposed to equal to Population x Affluence/consumption x Technology. All of these are presumed to intensify and worsen humanity's impact on the natural world.

In Ward and company's updated version of I=PAT, the sustainability of economic growth largely depends on Technology trends. Absolute decoupling from resource consumption or pollutant emissions requires technological intensity of use and emissions to decrease by at least the same annual percentage as the economy is growing. For example, if the economy is growing at three percent per year, technological intensity must reduce 20-fold over 100 years to maintain steady levels of resource consumption or emissions. If technological intensity is faster then resource use and emissions will decline over time, which would result in greater wealth creation with ever lessening resource consumption and environmental spillovers.

Once they've set up their I=PAT analysis, Ward and his colleagues assert that "for non-substitutable resources such as land, water, raw materials and energy, we argue that whilst efficiency gains may be possible, there are minimum requirements for these resources that are ultimately governed by physical realities." Among the "physical realities" they mention are limits on plant photosynthesis, the conversion efficiencies of plants into meat, the amount of water needed to grow crops, that all supposedly determine the amount of agricultural land required to feed humanity. They also cite "the upper limits to energy and material efficiencies govern minimum resource throughput required for economic production." To illustrate the operation of their version of the I=PAT equation, they apply it to a recent study that projected it would be possible for Australia's economy to grow 7-fold while simultaneously reducing resource and energy use and lowering environmental pressures through 2050.

They crank the notion that there are nonsubstitutable physical limits on material and energy resources through their equations until 2100, and they find that eventually consumption of both rise at the same rate as economic growth. QED: Economic growth is unsustainable. Or as they report, "Permanent decoupling (absolute or relative) is impossible for essential, non-substitutable resources because the efficiency gains are ultimately governed by physical limits." Malthus wins again!

Or does he?

GDP growth—increases in the monetary value of all finished goods and services—is a crude measure for improvements in human well-being. Nevertheless, rising incomes (GDP per capita) correlate with lots of good things that nearly everybody wants, including access to more and better food, longer and healthier lives, more educational opportunities, and greater scope for life choices. Ward and his colleagues are clearly right that there is only so much physical stuff on the Earth, but even they know that wealth is not created simply by using more stuff. Where they go wrong (as so many Malthusians do) is by implicitly assuming that there are limits to human creativity.

Interestingly, Ward and his colleagues, like Malthus before them, focus on the supposed limits to agricultural productivity. For example, they cite the limits to photosynthesis, which will limit the amount of food that humanity can produce. But as they acknowledge, human population may not continue to increase. In fact, global fertility rates have been decelerating for many decades now, and demographer Wolfgang Lutz calculates that world population will peak after the middle of this century and begin falling. Since the number of mouths to feed will stabilize and people can eat only so much, it is unlikely that the biophysical limits of agriculture on Earth will be exceeded.

But it gets even better. Agricultural productivity is improving.

Consider the biophysical limit on photosynthesis cited by the study. In fact, researchers are already making progress on installing more efficient C-4 photosynthesis into rice and wheat, which would boost yields by as much as 50 percent. British researchers just announced that they had figured out how to boost photosynthetic efficiency to create a super-wheat would increase yields by 20 percent.

In a 2015 article for the Breakthrough Journal, "The Return of Nature: How Technology Liberates the Environment," Jesse H. Ausubel of Rockefeller University reviews how humanity is already decoupling in many ways from the natural world. "A series of 'decouplings' is occurring, so that our economy no longer advances in tandem with exploitation of land, forests, water, and minerals," he writes. "American use of almost everything except information seems to be peaking." He notes that agricultural applications of fertilizer and water in the U.S. peaked in the 1980s while yields continued to increase. Thanks to increasing agricultural productivity, humanity is already at "peak farmland"; as a result, "an area the size of India or of the United States east of the Mississippi could be released globally from agriculture over the next 50 years or so."

Ward is worried about biophysical limits on water use. But as Ausubel notes, U.S. water use has peaked and has declined below the level of 1970. What about meat? Ausubel notes the greater efficiency with which chickens and cultivated fish turn grains and plant matter into meat. In any event, the future of farming is not fields but factories. Innovators are already seeking to replace the entire dairy industry with milk, yogurt, and cheeses made by genetically modified bacteria grown in tanks. Others are figuring how to culture meat in vat.

Ausubel also notes that many countries have already been through or are about to enter the "forest transition," in which forests begin to expand. Roger Sedjo, a forest economist at Resources of the Future, has projected that by the middle of this century most of world's industrial wood will be produced from planted forests covering a remarkably small land area, perhaps only 5 to 10 percent of the extent of today's global forest. Shrinking farms and ranches and expanding forests will do a lot toward turning around the alarming global reduction in wildlife.

How about unsubstitutable stuff? Are we running out of that? Ausubel notes that the U.S. has apparently already achieved absolute decoupling—call it peak stuff—for a lot of materials, including plastics, paper, timber, phosphate, aluminum, steel, and copper. And he reports relative decoupling for 53 other commodities, all of which are likely heading toward absolute decoupling.

Additive manufacturing is also known as 3-D printing, in which machines build up new items one layer at a time. The Advanced Manufacturing Office suggested that additive manufacturing can reduce material needs and costs by up to 90 percent. And instead of the replacement of worn-out items, their material can simply be recycled through a printer to return it to good-as-new condition using only 2 to 25 percent of the energy required to make new parts. 3-D printing on demand will also eliminate storage and inventory costs, and will significantly cut transportation costs. Nanomanufacturing—building atom-by-atom—will likely engender a fourth industrial revolution by spurring exponential economic growth while reducing human demands for material resources.

Ward and company project that Australians will be using 250 percent more energy by 2100. Is there an upper limit to energy production that implies unsustainability? In their analysis, the ecological economists apparently assume that energy supplies are limited. Why this is not clear, unless their model implicitly assumes a growing consumption of fossil fuels (and even then, the world is not close to running out of those). But there is a source of energy that, for all practical purposes, is limitless and has few deleterious environmental effects: nuclear power. If demand for primary energy were to double by 2050, a back-of-the-envelope calculation finds that the entire world's energy needs could be supplied by 6,000 conventional nuclear power plants. The deployment of fast reactors would supply "renewable" energy for thousands of years. The development of thorium reactors could also supply thousands of years of energy. And both could do so without harming the environment. (Waste heat at that scale would not be much of a problem.) Such power sources are in any relevant sense "decoupled" from the natural world, since their fuel cycles produce little pollution.

Recall that GDP measures the monetary value of all finished goods and services. Finished goods will become a shrinking part of the world's economy as more people gain access to food, clothing, housing, transportation, and so forth. Already, services account for 80 percent of U.S. GDP and 80 percent of civilian employment. Instead of stuff, people will want to spend time creating and enjoying themselves. As technological progress enables economic growth, people will consume more pixels and less petroleum, more massages and less mortar, more handicrafts and less hardwood.

Ultimately, Ward and his colleagues make the same mistake as Malthus and the Limits to Growth folks: They extrapolate trends without taking adequate account of human ingenuity. Will it be possible to grow the economy 7-fold over this century while reducing resource consumption and restoring the natural world? Yes.

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71 responses to “Is Economic Growth Environmentally Sustainable?

  1. Ah, Malthusians and Luddites, always with us. Always wrong.

    1. You dare insult the followers of King Ludd!?

      1. There was a luddite king? I bet he was a prog.

        1. Although the origin of the name Luddite (/?l?d.a?t/) is uncertain, the movement is said to be named after Ned Ludd, a young apprentice who allegedly smashed two stocking frames in 1779 and whose name had become emblematic of machine destroyers.[4][5][6] The name evolved into the imaginary General Ludd or King Ludd,

          He certainly threw tantrums like a prog. And may be fictional.

          1. Rage against the machine

            1. I really doubt that’s something the Zach de la Rocha variety of retard would reference.

        2. Irony?

    2. +1 Bet

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  2. Damn Australians. If they’d just stick to drinking beer and BBQing shrimp, the world would be a better place.

  3. “Is economic growth environmentally sustainable? No, say a group of prominent ecological economists led by the Australian hydrologist James Ward. In a new PLoS ONE article?”Is Decoupling GDP Growth from Environmental Impact Possible?”?they offer an analysis inspired by the 1972 neo-Malthusian classic The Limits to Growth. They even suggest that The Limits to Growth’s projections with regard to population, food production, pollution, and the depletion of nonrenewable resources are still on track. In other words, they think we’re still heading for a collapse.”

    They’re perfectly welcome to give up all their earthly goods, live in a cave, and forage for sustenance in the fields. Is anyone stopping them? I think not, but I have this strong feeling that they won’t.

    1. Like our old friend the pale-skinned Native used to say, it won’t make a difference until everyone gives up modern technology. Therefore modern technology must be used to convince people to give up modern technology.

      1. Like our old friend the pale-skinned Native used to say, it won’t make a difference until everyone gives up modern technology and 99.95% promptly starve to death.

        The impact reduction comes from that second part, not so much from the first bit.

  4. You mean, like, you can have a huge library of books, music and movies stored electronically? No fucking way.

    1. There will never be a shortage of derp.

  5. First world problems, worrying about having too much stuff. Ain’t nothing a good plague won’t cure.

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  7. …prominent ecological economists led by the Australian hydrologist James Ward.

    Not to digress, but WTF is an ‘ecological economist?’

    1. Someone who failed both ecology and economics.

    2. One that recycles old economic models, like mercantilism.

  8. Part of the systemic confusion comes from the fact that we hide the tremendous deflationary forces of technology by inflating the money supply. So instead of thinking of economic growth as a mix of greater efficiency and increased consumption, people tend to think that every % of growth comes from a proportional increase in consumption (because if stuff can be made more efficiently why does it keep increasing in cost?).

    The Limits To Growth people used technology as a multiplicative factor of impact, because, in their minds, all it could ever lead to was more powerful chainsaws, more efficient oil wells and faster combine harvesters.

    1. A bigger systemic confusion is that markets cannot possibly deal with ‘sustainability’ unless/until intergenerational interests are priced into markets. And I don’t know of any instance where that has happened and don’t even know HOW it could happen. That said – government or anything else has the same problem since future generations don’t vote either.

      So basically, we are perfectly happy to screw the future – and then rationalize that we aren’t because ‘technology’.

  9. IN 1798 Thomas Robert Malthus inaugurated a grand tradition of environmentalism with his best-selling pamphlet on population. Malthus argued with impeccable logic but distinctly peccable premises that since population tended to increase geometrically (1,2,4,8 ) and food supply to increase arithmetically (1,2,3,4 ), the starvation of Great Britain was inevitable and imminent. Almost everybody thought he was right. He was wrong.

    In 1865 an influential book by Stanley Jevons argued with equally good logic and equally flawed premises that Britain would run out of coal in a few short years’ time. In 1914, the United States Bureau of Mines predicted that American oil reserves would last ten years. In 1939 and again in 1951, the Department of the Interior said American oil would last 13 years.

    Wrong, wrong, wrong and wrong.

    “Plenty of Gloom”,The Economist, Dec 18th 1997

    1. I hope that predictions of a short life-span for fracking wells are similarly flawed.

  10. Ron’s articles are always so refreshing.

      1. That’s not a narrowed gaze!

  11. If someone is predicting the end of the world, they are wrong.
    Not even democrats with a government grant can do that.

  12. “Others are figuring how to culture meat in vat.”

    +1 Snowpiercer

  13. limits on plant photosynthesis, the conversion efficiencies of plants into meat

    Others are figuring how to culture meat in vat.

    Both of these rather strongly assume that eating anything won’t become pass?

  14. Here’s something i never hear any of these neo-malthusians mention =

    since the early 1970s, US GDP has grown from ~1 trillion to close to ~20 trillion

    yet the environment in the US is far “cleaner” today than in the 1970s.

    We have far less smog; far less pollution in the great lakes; people are far healthier; our North American wildlife areas have seen a rebound in the populations of formerly-endangered species (e.g. grizzly bears, bald eagles, alligators, condors, etc)

    The “carbon intensity” has declined in a pretty-linear path since that point – showing an inverse relationship between GDP growth and ‘greenhouse gas’ impact.

    In short = we get richer, and we get cleaner.

    But where in the media do you ever hear anyone pointing out the obvious facts? You don’t get clicks with good news. Doom will always sell better than benign reality.

    1. “people are far healthier”

      How did you arrive at this? Average likespan of the White American Male has actually declined. Asthma has increased dramatically over the last generation and so has diabetes. So has obesity and depression.

      1. White males aren’t the whole US population, and health isn’t the same as life expectancy. Furthermore, when it comes to health, you have to separate involuntary morbidity from lifestyle-based and choice-based morbidity (accidents, obesity, HIV, many cancers, many forms of heart disease).

        So, a better statement would be: you have the choice to live far healthier and longer than you could 50 years ago; however, many people choose not to.

        1. Why is asthma becoming so popular that people are choosing to suffer from it? I’ve always thought it too be one of the less pleasant diseases to choose from. What’s the attraction?

          1. They may have chosen it thinking it was autism, as it’s really trendy.

            1. “autism, as it’s really trendy”

              Trendy, not healthy.

              1. Stupid commenter, stupid comments.

          2. Why is asthma becoming so popular that people are choosing to suffer from it? I’ve always thought it too be one of the less pleasant diseases to choose from. What’s the attraction?

            Your sarcasm is misplaced. Obviously, just because people in general can live much healthier and longer lives today than 50 years ago doesn’t mean that every single disease is becoming less frequent.

            As for why asthma and allergies are on the rise, that does seem to be related to lifestyle after all: excessive hygiene, obesity and vitamin D deficiency seem to contribute.

            Did that answer your question?

            1. “Did that answer your question?”

              No, My question was how do you arrive at this. Maybe you could tell me how the rise of various diseases and the decline in lifespan add up to ‘we’ve never been healthier.’

              1. Geez, you’re like Bill Clinton debating the meaning of “is”. Look at the facts:

                (1) American life expectancy has increased over the last half century.

                (2) Morbidity has decreased over the last half century.

                (3) The discrepancy of life expectancy between the US and Europe is largely due to lifestyle choices.

                (4) Modern medicine can and does prevent and cure a lot of diseases that used to cause morbidity or death.

                Make of those facts whatever you want. If you think those facts mean that “we” are not getting healthier, be my guest. I think such a view is stupid.

                1. ” American life expectancy has increased over the last half century.”

                  I’ve already mentioned that life expectancy for White American Males is declining. That’s not an indication that we’ve never been healthier. Whether they are dying sooner by choice or not is immaterial.

    2. yet the environment in the US is far “cleaner” today than in the 1970s.
      And that happened all by itself, without environmental activists working on it. Thank them.

      No wait, thank Nixon.

      In short = we get richer, and we get cleaner.

      All magically. Without even free markets. Why not continue with status quo?

      1. All magically. Without even free markets. Why not continue with status quo?

        The US has been near the top in terms of economic freedoms. Furthermore, economic freedoms are positively correlated with these benefits, and as the US has been slowly sliding back in terms of economic freedoms, it has also been doing worse in these areas.

        So, the upshot is, we should push for more economic freedoms, even beyond what we have had historically, because according to all we know, that will probably improve wealth, health, and the environment.

  15. Thanks. This is the first article I’ve read from a non-lefty source to acknowledge the terrifying fall in wildlife numbers and the first one anywhere to actually point to something hopeful about it.

    1. Terrifying fall? Deer are so plentiful in my area of OH that sharpshooters are hired to thin out the herds to keep them from starving to death. And that’s AFTER gun season and primitive weapons season…

      1. and wolves, you can have all of them here in the NW, they are to blame directly for our falling elk numbers.

        1. Isn’t that how it’s supposed to work? The wolves keep the elk population at a reasonable level?

          Besides, to both of you, there are more animals whose numbers have collapsed, including a disturbing number of food fish, than have recovered recently. See, for one piece of evidence, this: PNAS

  16. “and people can eat only so much,”

    Challenge accepted, Ron.

    1. You gonna eat all that?

  17. “Essentially humanity becomes richer while withdrawing from nature.”

    How is withdrawal from nature anything but an impoverishment, no matter what GDP figures are ginned up?

  18. Between asteroid mining, new fission and fusion power plants, new biotech, and renewable energy, none of those limits apply anymore. Large parts of our economy may also move into virtual worlds, which completely decouples resource usage from economic activity.

  19. Between asteroid mining, new fission and fusion power plants, new biotech, and renewable energy, none of those limits apply anymore. Large parts of our economy may also move into virtual worlds, which completely decouples resource usage from economic activity.

  20. I would like to suggest the “Telosian Solution” as a cure for Liberalism. Virtual reality is the ultimate tiny house and it would keep them from breeding.

    All you would need is a good marketing campaign and some modest advances to current technology. It could work!

  21. Evidently they failed to read Julian Simon…mistake #1….

    1. You mean the guy who punked the Malthusians? The guy who turned their idiot claims upside down? THAT Julian Simon? Yeah, they clearly did not read him.

  22. Can we stop with the nanobot nonsense? Please? Pretty, pretty please? “Nanomanufacturing” really amounts to nothing more than standard semicon processes (vacuum dep & etch, wet etch, photolitho, possibly nanoimprint if they can solve the alignment problems, CMP, etc.) There are no magic ribosomes making buildings out of diamond and there won’t be.

    And 3D printing will never be cost effective for volume manufacturing. It’s too slow and uses too much capital for what it produces. Bulk processes will always be more cost efficient (injection molding, hydroforming, etc.). It is and will forever remain useful for low rate production (customization) or re-production (obsolete spares) and prototyping.

    And don’t say “fast” when you mean “breeder.” Just because the two are frequently linked doesn’t mean that they’re the same. Even better to simply reference Gen IV class (of which I have a strong preference for molten salts).

    1. Whare are you responding to? Nobody said anything about nanobots, 3D printing, or fast breeders. Are you a time traveler responding to comments not even made yet?

      1. Bailey brought it up. And yeah it’s silly.

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  24. You misunderstand me. This is a proposal to enable self-selected extinction for that portion of humanity that has proven itself incapable of understanding simple economics and are already living in a fantasy world while making a healthy profit at the same time.

    This is not an original idea. But, it still has merit. The opportunity for organ harvesting alone would be tremendous! I bet you could get them to pay extra for the service if you “promised” to remove only their evil “Right” kidney and “donate” it to the needy.

    A way for then to live in a “real” Worker’s Paradise and be kind to Gaia. A way for the rest of us to cull out the mental defectives.

  25. “Because, PROG-RESS!” is as much a faith-based proposition as “Because, DO-OM.” You might as well go out and stand on a street corner wearing rags and holding up a sign that says, “THE SOLUTION IS NIGH!” right next to the guy with the sign that says “THE END IS NIGH!” and next to the third guy with the sign, “JESUS SAVES.”

    There are a lot of problems that human ingenuity cannot and will never solve because they are fundamentally not technological or technical problems; these unsolvable problems are usually political.

    For instance, we have the technology today to ensure clean air for the entire planet, but we don’t have a political solution (moral or not) to make everybody buy and use this technology. Sure, free-market believers like myself argue that eventually the cost of clean air technology will drop enough that everybody will willingly buy it of their own volition, but that isn’t really true. There will always be persons who weigh the expense relative to other expenses in their lives and choose not to buy the clean air tech (or more likely, they will attempt to push the cost onto others, which is the same as pushing it back onto themselves). Then, we essentially have societies weighing the costs as collectives, and that is exactly what we see today: China and India don’t think it’s worth spending the money on clean air tech; the USA does.

    1. we essentially have societies weighing the costs as collectives

      Fuck off, slaver.

  26. I’m an actual economist. I=PAT is nonsense on its face. Affluence and technology do not automatically increase environmental impact.

    Case in point- compare a modern, standard model of Toyota to a standard car from say 60 years ago. Is it more expensive and technologically superior? Yes, in every way. Does it require more impact on the environment? NO! It’s less. Weigh them, the modern car is lighter and gets better mileage and is more durable. Fewer raw materials are required to make it, operate it, maintain it and replace it (longer service life too). ‘100,000 miles, time for a new car!’ vs ‘100,000 miles, time for a tuneup!’…

    Some people just have an irrational hate for people not being poor.

    1. “Case in point- compare a modern, standard model of Toyota to a standard car from say 60 years ago.”

      If you know anything about cars, you’ll know the biggest difference between the cars of today and 60 years ago is the amount and sophistication of the electronics on board. Much the same with aircraft. You have to take into account the vast infrastructure of the electronics industry and its massive impact on the environment.

    2. Some people just have an irrational hate for people not being poor.

      And mtrueman shows up right on time. The word is not irrational it is “evil”.

      1. Do you want to make a proper assessment of the impact or are you satisfied with the half assed offerings of an ‘actual economist?’ That’s the question, and please leave my evilness out of this.

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  29. “I think they’re wrong. But they’re wrong in an instructive way.”

    Nice way of expressing.

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