A Finite World
Joe Romm posted Jeremy Grantham's report about how the age of abundance is over. The summary of the summary is:
The world is using up its natural resources at an alarming rate, and this has caused a permanent shift in their value. We all need to adjust our behavior to this new environment. It would help if we did it quickly.
Pointing out that our current expectations of growth cannot be sustained in a finite world, he talks about how the innumeracy of people is one reason we persist in imagining this natural law can be overruled. He tells how he asked some quants to calculate the wealth generated from compounded growth from the time of ancient Egypt.
Four years ago I was talking to a group of super quants, mostly PhDs in mathematics, about finance and the environment. I used the growth rate of the global economy back then – 4.5% for two years, back to back – and I argued that it was the growth rate to which we now aspired. To point to the ludicrous unsustainability of this compound growth I suggested that we imagine the Ancient Egyptians (an example I had offered in my July 2008 Letter) whose gods, pharaohs, language, and general culture lasted for well over 3,000 years. Starting with only a cubic meter of physical possessions (to make calculations easy), I asked how much physical wealth they would have had 3,000 years later at 4.5% compounded growth. Now, these were trained mathematicians, so I teased them: “Come on, make a guess. Internalize the general idea. You know it’s a very big number.” And the answers came back: “Miles deep around the planet,” “No, it’s much bigger than that, from here to the moon.” Big quantities to be sure, but no one came close. In fact, not one of these potential experts came within one billionth of 1% of the actual number, which is approximately 10^57, a number so vast that it could not be squeezed into a billion of our Solar Systems. Go on, check it. If trained mathematicians get it so wrong, how can an ordinary specimen of Homo Sapiens have a clue?
Overall, the analysis was very good, but I felt that his conclusion was misdirected (perhaps because he also looked at the problem as a way to gain wealth?). He spent quite a bit of time reaffirming the challenge of climate change and the problem with the end of cheap petrocarbons but then concludes that the USA should do okay even as the world starts running out of resources because we have so much coal and more technology for getting at dirtier and more dangerous oil. Yet, this is like acknowledging that meth is addictive, then cheering because we have all the ingredients for making more meth. We need to accelerate the green economy, not waste more water and land with extracting carbon-based energy. Our future depends on making the change as fast as possible and getting off the substance that is poisoning our planet.
* updated as per bartcopfan's correction.