GHG and Carbon Emission Trading, Revenue-Neutral Carbon Taxes, and Cap-and-Trade Alternatives
Cap-and-trade is not the best option that we have to curb greenhouse gases. A revenue-neutral taxation approach (similar to carbon pricing) would be better and further serve to reduce resource depletion and toxic contaminants.
Those of us who grew
up in the 1960s and 1970s will probably have little trouble
recognizing the roots of this work. In 1980 Alvin Toffler wrote a
book called The Third Wave.
It developed an analytical view of the world based on the
concept of waves of change transforming society in fundamental ways
as they washed over the earth.
The book was highly
popular and became part of the culture of the time along other works
such as E.F. Schumacher's (1974), Small Is Beautiful: A Study of
Economics as if People Mattered, which argued that smaller-scale
technologies and operations were better because of their lower
impact on the environment relative to the earth's power to heal
Toffler's First Wave
Some 10,000 years ago,
humans were organized in small groups of nomadic hunter-gatherers.
Their diet consisted of the animals they managed to kill as well as
edible plants such as roots, nuts, grains, and berries. They would
move on to a new area once the old one had been depleted of its food
Their tools were very
basic. They included such things as hand axes, flint cutters and
scrapers, bone needles, etc. (Beers, 1986, p. 21). Even today, that
way of life still exists in some tribes in the forests of New Guinea
and Brazil. Toffler refers to that era as the Pre-First Wave
(500,000 BCE to about 10,000 BCE).
People were often on
the brink of starvation, at least compared to today's standards. Of
course, some groups of hunter-gatherers were better off, especially
if the land was generous and the food supply, abundant. However, as
they moved around constantly, they could not gather huge stores of
food to help them survive through droughts, harsh winters, and other
vagaries of the weather. They were at the mercy of the elements and
the climate. Life in general was precarious.
Then the First Wave
hit. It started about 10,000 years ago. People began uncovering
some of nature's secrets, such as how to grow food. They learned to
gather seeds, till the ground, plant, and harvest. Many of their
early crops were the same as today's staples. Beans and maize
(corn) were grown in Central and South America. Rice was cultivated
in Asia, and wheat and barley, in the Middle East and Africa (Beers,
1986, p. 22). People also began herding certain types of animals,
for example, sheep and goats. Progressively, the new knowledge and
tools were shared and spread around the world. That was the
beginning of the Agricultural Revolution.
Agriculture had a
tremendous impact on how people lived. Firstly, it increased the
supply of food as the new practices were more efficient than simple
gathering. Crops were more plentiful and could be grown more
reliably. Domesticated animals were a readily available supply of
proteins. Once a herd was built to the point where people could
live off the surplus cattle, it became a fully sustainable source of
people to alter their way of life. It took a lot of time and work
to prepare the soil for cultivation. Suitable land had to be found
and cleared. Seeds had to be gathered and stored over the winter.
Because of this, people became increasingly sedentary and began
settling around the most fertile areas.
In turn, it allowed
them to build storage structures and start accumulating a surplus of
food, which would help them get through winters and difficult times
and significantly increase their odds of survival. Over time,
settlements grew into cities which in turn gave rise to various
The ability to
accumulate surpluses resulted in another change within society: the
concentration of power. As extra food could be amassed, it could
also be passed on to the next generation. Stores of grains and
herds of cattle could be handed down from parents to children. At
birth, humans were no longer starting on an equal footing. Those
inheriting huge surpluses had major advantages over others. They
could trade surpluses for better tools or additional land and become
even more successful. Over time, that process concentrated power
and eventually led to the appearance of hierarchies and social
There were obviously
the rich (the nobility) and the poor (the peasantry and the slaves),
but other classes also evolved. As agricultural practices
intensified, tools became more elaborate and demanded more expertise
in their fabrication. As well, as some people became wealthy, they
no longer needed to make things or do the work themselves. They
could just buy them or hire someone. As a result, a certain amount
of specialization developed and a new class emerged, the artisans.
Two other groups also
came into being from the fact that societies were better off
economically and could afford to support more people not directly
involved in food production. The military was one of them. The
priesthood was the other one.
The First Wave ran its
course over a 10,000-year span. It took society from dispersed
small bands of humans roaming the land in constant search of
food—often just one step ahead of starvation and death—to the
vast civilizations and empires of the Indus Valley and Mesopotamia.
Then the Second Wave hit.
Toffler's Second Wave
The Second Wave is
closely associated with the Industrial Revolution. Toffler
discussed some of its precursors, for example, the extraction of
petroleum on a Greek island around 400 BCE. Large population
centers were emerging in Asia and South America. Currency systems
and trade routes became established in Europe. However, the Second
Wave did not really take off until other developments occurred.
agricultural economies were mostly based on self-sufficiency.
Eventually, that began changing. Trade expanded. People started
concentrating on the production of fewer goods and exchanged them
for what they needed. Specialization increased and the division of
labor was born. That was the beginning of the Industrial
Revolution, the Second Wave.
good in many ways. People were able to do what they could do best.
This allowed them to acquire more experience and knowledge relating
to their work. Quality and production levels increased. This
process culminated with the invention of the assembly line
(first implemented by Henry Ford in 1914), in which each worker in a
factory specializes in very few steps of a job that is otherwise
the assembly line led together to mass production, or the
fabrication on a large scale of goods that are identical. It gave
rise to enormous efficiencies and cost reduction and transformed the
agricultural society of the time. Mass production made many of the
luxuries reserved for the rich affordable to the masses but rendered
factory work somewhat mindless and alienating.
Medieval Markets and Price
Today, we live in a
On the one hand, governments, organizations, and companies will
generally pick the lowest bids for the contracts they award,
assuming everything else is equal. On the other, consumer prices
are determined by demand and competition between suppliers in the
This was not the case
in medieval times, at least in Europe. Prices were fixed by Church
authorities and quality—as opposed to quantity—was prioritized.
Production standards had to be met and selling a given product for
higher than the set price was deemed immoral. So was underpaying
organized in guilds, which worked in cooperation with other
authorities to set standards. They did not compete against one
another—which was viewed as subversive by Church ideology—but
cooperated (Baillargeon, 2002, p. 39-40, 68). Religious authorities
were heavily involved in shaping economic activities. St. Thomas
Aquinas (1235-1274), an influential Catholic theologian (author of
was a well-known advocate of the just price.
has changed immensely in that respect. Everything nowadays is about
efficiency and profits, rather than quality. Where prices are not
fixed, consumers haggle in order to pay producers the lowest
possible price, and vendors try to get as much as they can for their
goods. Companies compete against each other.
Toffler's Third Wave
Toffler places the
Third Wave's origins in the 1970s with the first oil crisis. Up
until that time, industrialization had reigned supreme. Economies
were growing, unemployment was low, and everybody reaped the
benefits of the assembly line and mass production. When the
Organization of Petroleum Exporting Countries (OPEC) almost
quadrupled the price of oil in 1973, all the euphoria came to a
According to Toffler,
this is when industrialization met its first significant challenge,
forcing economies to alter their course. They would move away from
single and concentrated sources of energy such as fossil fuels to
smaller-scale, more varied and dispersed alternatives such as solar
and wind power. This is now beginning to take place.
The essence of the
Third Wave itself was not about fossil fuels but rather an
information age that would change the world in more ways than one.
Its influence would extend to all areas of human activity. Rapid
communications would enable the decentralization of businesses into
satellite offices and eventually lead to the rise of the electronic
cottage, the home office. This would reduce unnecessary
commuting, therefore decrease pollution and the dependency on
foreign sources of energy.
These are just some of
the topics covered by Toffler in 1980. The Information Age has
transformed just about every aspect of our lives, from the home
environment, to the way we learn in school, to access to
information, to how we buy the goods and services we need everyday.
Unfortunately, it has had little effect on reducing dependency on
The Fourth Wave
The Fourth Wave might
be a little bit more difficult to pin down as it is much broader in
scope than the earlier three. Toffler argued that change was
happening at a faster pace as time went on. His First Wave took
some 10,000 years to run its course before being challenged by the
second, which ran for about 350 years. The Third Wave is only about
four decades old, but already the world has been entering a new era.
For a few years now,
we have been feeling the effects of global warming. Babies in most
developed countries are now born with dozens of toxic chemicals and
carcinogens in their tissues. Some of the world's renewable
resources, for example fisheries, are being lost to
overexploitation, environmental damage, and toxicity. Worse, we
seem incapable of averting any of it. For decades these problems
grew mostly silently, but only now are we really starting to feel
The Fourth Wave is
partly the cumulation of environmental problems and their
destructive effects, and partly the potential for reversing those in
a dramatic way with targeted changes to the economic system, changes
which could translate into an environmental revolution in as little
as a decade.
The first book of the
Waves of the Future series, The 21st
Century Environmental Revolution, argues that we have the means
today to bring about an environmental revolution and that it can be
done in a financially feasible way. The knowledge already exists,
and the economic instruments needed for it are well known and have
been tried and tested.
proposed, the Green Economic Environment (GEE),
is essentially revenue neutral, meaning that neither governments nor
businesses or taxpayers would have to pay the bill. This would
ensure support from all sectors of society and make the approach
both economically feasible and politically viable.
The Fourth Wave could
transform the world as we know it and lead to a much greener planet
and eventually to a sustainable economy, but our failure to act, and
to do so decisively with a strategy like the GEE, will result in a
continued accumulation of problems and our children living in an
increasingly polluted and harmful environment.
The Fifth Wave
While the current
situation regarding pollution and greenhouse gases is serious, the
depletion of nonfuel minerals (metals) is acutely critical. Unlike
fossil fuels, which have alternatives that are fully renewable and
available at relatively low prices, metals are generally not
substitutable. Once they run out, it is the end of the road.
Economically exploitable reserves of nonfuel minerals are not
counted in centuries, but in years and decades. Some metals are
already in short supply, and most will become scarce, undergoing
stiff price increases in a few decades.
To make things worse,
the world population is growing rapidly and would continue to do so
for decades even if we tried to stop it. It now stands at almost 7
billion people and, according to UN estimates, will not peak until
it reaches over 10 billion, assuming a moderate fertility variant
(United Nations Department of Economic and Social Affairs, 2010).
Population growth will
increase the demand for, among other things, non-renewable
resources. Its effect will be to propel us towards a
depletion wall, a point at which most minerals will run scarce and
see doubling and tripling in prices over very short periods of time.
Because metals are non-renewable and not readily replaceable, there
will be no way out, only acute shortages getting worse and worse.
The Depletion Wall will likely be the worst crisis that the
international community has ever faced and could result in a world
collapse in the second half of the century.
Resources and the Economy—A Historical
Humanity has faced
many challenges in the past. Centuries ago, wars and epidemics were
probably the main sources of concern. In the last few decades,
conflicts have remained an issue, but mineral resources have played
an increasing role on the world scene. Islamic terrorism makes
headlines everyday, but the issue is intimately related to minerals.
Oil has played a role in funding it and is an underlying cause of
war in the Middle East.
Crashing the World Economy
It is really in
1973—when the first oil crisis hit—that mineral resources began
playing a major role in the international arena. The huge increases
in the price of petroleum driven by the Organization of the
Petroleum Exporting Countries (OPEC) sent shock waves through the
world economy. The rise in the cost of energy meant that not only
gasoline but also consumer goods became more expensive.
In response to the
hardships created by rising oil prices, governments began borrowing.
Trying to catch up or stay abreast with the increasing cost of
living, labor unions negotiated contracts that called for wage hikes
sometimes in the double digits, which lead to equally high inflation
Many of us will
remember this as a time of economic hardships. Interest rates were
kept high to reduce inflation but worsened unemployment, which was
already at an elevated level. In the 1980s and 1990s, governments
ran huge deficits on account of the high interests they paid on
their national debts, which, as a result, often mushroomed and even
put some countries on the brink of bankruptcy. To bring budgets
back into the black, they reduced many of the services, programs,
and social benefits.
Crashing the World Economy Again
In 2008, thirty-five
years after the first oil crisis, the world economy crashed again.
While bankers were generally held responsible for it, some people
put a large part of the blame on high oil prices and OPEC. Jeff
chief economist at CIBC World Markets and author of Why
Your World Is About To Get a Whole Lot Smaller,
argued that the rise to unprecedented levels of the price of oil
bore a significant part of the blame for the crash. In 2009, he
Between 2005 and 2007, soaring
oil prices transferred roughly a trillion dollars from consumers'
wallets throughout the OECD to OPEC producers. And when gasoline
prices were $4 per gallon last Memorial Day weekend (or as much as
$1.50 per liter in Canada), many North American households found
themselves paying more to fill their gas tanks than feed their
families. (2009, June 02)
On the one hand,
massive amounts of money were taken out of Western and other
economies—and the pockets of homeowners— and shipped out express
to the Middle East as opposed to being used for mortgage payments or
the purchase of local goods which would have created jobs and
increased wealth domestically. On the other hand, excessive oil
prices drove inflation up, which in turn resulted in significantly
higher mortgage rates and caused many homeowners to default on their
While bankers were
certainly at fault in managing risks, OPEC's greed in terms of oil
prices does bear some of the responsibility for the recent banking
crisis. As such, OPEC and resource speculation were at least partly
involved in crashing the world economy once again.
In the aftermath of
the subprime mortgage crisis, the environment continues to take a
backseat to everything else. World hunger has now passed the
one-billion person mark (Food and Agriculture Organization of the
United Nations, 2009). The problem gained intensity with the rise
in the cost of food from peak oil prices in 2007 and 2008 and then
with the subprime mortgage crisis. OPEC has every intention of
raising oil prices back up as soon as the current recession is over.
In the last four
decades alone, resource shortages and speculation have had a
dramatic impact on the world economy and poverty. How much more of
this can we take? What happens when most metals start running
scarce and speculation kicks in?
We are already decades
down the depletion road, with the world economy having crashed twice
already on that account. Yet, nobody seems to notice or heed the
lessons of the past.
The Baby Boomers' Debt
Since the 1970s,
governments have been borrowing heavily to pay for a variety of
programs and infrastructural projects. While the North American
general government gross debt dropped somewhat in the mid
1990s and early 2000s, it reached over 80% of GDP (Gross Domestic
Product, an approximate measure of a country's total annual
production) in Canada and stood above 90% of it in the US in 2010.
It was also high for most European countries and Japan, for which it
reached over 200% (International Monetary Fund, October, 2010, World
economic and financial surveys. World economic outlook database).
For decades baby
boomers have not been paying their way. Countries started borrowing
heavily in the 1970s to solve their financial problems and, with few
exceptions, have never stopped doing so since. The idea is to
simply pass national debt down to our children. Borrowing money and
paying it back is called a loan. Borrowing and not paying back is
commonly referred to as theft.
Not only have we,
baby boomers, accumulated massive debts at the national level, but
we are also responsible for a huge amount of environmental
destruction, resulting in the loss and degradation of many resources
as well as a huge cleanup bill for, again, our children. Some
believe that the world population needs to keep increasing—resulting
in further environmental destruction, cleanup bills, depletion of
non-renewable resources, and hunger—in order to support the
increase in healthcare costs associated with the aging of the baby
The 20th Century's Environmental
century has seen many successes. Medicine, knowledge, and
technology have advanced by leaps and bounds. However,
environmental contamination and degradation have increased at an
alarming rate. Pollutants are found just about everywhere, from
newborns' tissues to polar regions.
Mercury is harming
the oceans' fisheries. The flesh of beached whales is so toxic that
it cannot be disposed of in regular dump sites. A lot of our
freshwater systems are also contaminated. And it is only getting
worse. Babies are born with dozens of harmful chemicals already in
The toxicity of some
substances has been common knowledge for centuries. Anne
Nadakavukaren (2000), an author and lecturer in environmental
health, reported that the harmful effects of lead poisoning were
discovered well over two thousand years ago. Mercury was also a
known cause of death during the Roman Empire, slaves in Spain
suffering the lethal consequences of its fumes in mines (p. 225).
But, we, in the 20th
century, were smarter than people in those times. Fuel companies
added lead to gasoline to boost its performance, spreading the toxic
metal thinly everywhere in our living environment. The practice has
been regulated and stopped. However, that it occurred in the first
place is aberrant.
As far as mercury is
concerned, there is still very little regulation. It is used in
many industrial processes, in the pulp and paper industries among
others. It is a major problem as the liquid metal evaporates into
the atmosphere and spreads around the world. It bioaccumulates
(i.e. does not get eliminated through the digestive system) in fish
and animals. Native populations in northern Canada—an area that
most would think in pristine condition and pollution free—are
seriously affected by the problem as their diet depends on fish and
ocean mammals, many of which now have significant concentrations of
mercury in their tissues.
Despite having known
about the danger of mercury for centuries, little has changed. If
anything, things are getting worse. Over the decades, its
concentration in the environment has increased. The toxic metal is
now found in tuna fish—an ocean species that has supported and fed
many for centuries—in concentrations high enough to be harmful to
pregnant women and young children.
PCBs, a range of
toxic compounds, are now pervasive in the environment all around the
world, and still being used in closed systems despite their
production having been banned in the US in 1976. Nadakavukaren
(2000) reported that by that time the contaminant was being detected
in almost all the breast milk samples of American women tested (p.
Recent research in
the US has shown brominated fire retardants—a known thyroid
toxin—to also be present in mothers' milk in surprisingly high
concentrations and in all the samples examined (Lunder and Sharp,
2003, September 23).
This is just a
snapshot of what is going on. Even more shocking than the data is
that we are doing very little about these things. Only the worse
issues are addressed. We deal with the tip of the tip of the
iceberg, only taking action after much damage has been done.
The conservation of
non-renewable resources is even lower down on the priority list.
Saving trees is on the news regularly, but who has heard of the
depletion crisis? It is not on any government's agenda. On the
contrary, the faster we mine metallic resources, the more jobs are
The planet has been
around for about five billion years and needs to sustain the
thousands of generations to come. We do not want to wipe out the
world's non-renewable resources on top of the harm we have already
done to the environment. The Depletion Wall is perhaps the biggest
challenge that this generation and its children will face.
This is what the Fifth
Wave is about. Either we will take
preemptive action—although time may have already run out for
this—and change the very nature of the world economy in order to
soften up the impact ahead, or we will hit the Depletion Wall at
full speed and reap the consequences of our inaction. One way or
the other, the Fifth Wave will transform the world we live in.
2. The Green Economic Environment
The first book of the
Waves of the Future series, The 21st
Century Environmental Revolution,
focused on a strategy for the environment and the conservation of
non-renewable resources: the Green Economic Environment
This chapter will
briefly review the approach and discuss its underlying logic, solid
economic foundation, and political justification, all of which make
the difference between brushing it off as an idealistic plan and
realizing that it would be much cheaper and more feasible than other
approaches. Unlike most other environmental strategies it addresses
the problem of resource depletion in a meaningful way.
The GEE's First Pillar: Resource Conservation
Every ounce of ore
that we dig out of the ground every year ends up in the environment.
As per the basic law of physics that states that nothing is
created nor destroyed, one ton of ore eventually equals one ton
of garbage in the environment as metals do not magically disappear
after they have been used. Some, such as lead and mercury, are
toxic and contaminate land and water. Others are not harmful in
themselves but still pose a problem as they eventually end up in
landfill sites, when not in the environment at large.
In addition, the
mining and transformation of metals into finished goods requires
energy—which means the release of greenhouse gases into the
atmosphere—and involves a battery of chemicals, many of which are
highly toxic. Finally, the disposal of garbage is often a source of
pollution as well.
A logical conclusion
from this is that reducing our consumption of non-renewable
resources would also significantly decrease pollution. As such,
conservation would yield a double dividend by reducing our
environmental impact and saving resources for future generations.
In other words, we
can achieve twice as much as we currently do with the funding and
social support that exist at the moment. Conservation must be
central in a comprehensive environmental strategy, rather than a
secondary goal or a minor issue as it is often the case.
This is the first
pillar on which the approach developed in The 21st
Century Environmental Revolution is based. If we were able to
decrease our consumption of non-renewable resources by 50% over the
next decade, garbage would drop by dozens of percentage points and
pollution would be significantly reduced. The positive impact on
the environment would be staggering in terms of reduced pollution
and the massive cut in the amount of garbage produced every day.
The Second Pillar: Revenue Neutrality
The second pillar has
to do with funding. Money is always the main stumbling block for
many socioeconomic issues, including the environment. Nothing gets
done due to a lack of financial support. People do not want to pay
more taxes, and governments will not raise those of corporations for
both political and economic reasons.
The only way for a
comprehensive and effective environmental strategy to ever be
implemented is to ensure that nobody has to pay for it, i.e. that it
is revenue or cost neutral. This is one of the cornerstones of the
Green Economic Environment and what makes it a serious contender in
terms of environmental strategy as we go forward.
Designing an approach
based on conservation is easy. Developing one that does not cost
anything is a different story. Under a GEE system, money would be
taken with one hand and given back with the other, taxpayers
essentially breaking even in the end. The approach rests on
deterrence taxation, such as exists on cigarettes and alcohol in
many countries, but handled in a revenue-neutral way.
principle of the strategy is that, one way or another, taxes have to
be collected to pay for social services, roads, the army, and
government operations. When income is taxed, only one benefit is
derived: the filling of the government's coffers. One million
dollars' worth of taxation produces one million dollars' worth of
However, if taxes
were to come from environmental sources (deterrence levies on toxic
chemicals, unenvironmental goods, etc.), two benefits would be
derived from the same tax: money to fill the government's coffers
and an incentive to protect the environment. One million dollars'
worth of taxation would produce one million dollars' worth of
services plus one million dollars' worth of deterrence to pollute
In essence, the
strategy would create a new landscape for businesses and people,
making unenvironmental goods and behaviors more expensive, therefore
acting as a deterrent for what is harmful to the environment and bad
for society. Consumers would see themselves compensated for the new
levies—which would be charged at the producer level to maximize
efficiency—through lower taxation on income and on general retail
sales. Revenue neutrality makes the GEE much more politically
viable than any other strategy currently available.
Creating a green
economic environment has several advantages in addition to revenue
neutrality. Deterrence taxation is currently used in many
countries. It is well understood and does not conflict with the
economy in general. In other words, the GEE is a system that has
essentially been tried and tested already.
In terms of firepower
for the environment, the potential of the Green Economic Environment
is just massive. In 2000, governments' tax take in the US and
Canada alone was over two trillion dollars. A significant part of
that could easily have come from environmental levies instead of
taxes on income and not cost anyone an additional penny.
This is an unheard of
amount of deterrence, one that could be used for the environment and
one that is available year after year without increasing overall
taxation. In fact, most environmental issues are ones of
deterrence: we want to deter the use of toxic chemicals, the
consumption of non-renewable resources, etc.
In many cases,
environmental problems can be addressed by increasing either funding
or deterrence. While raising taxes is unpopular, deterrence can be
generated at no cost (as a second dividend) simply by shifting
taxation. The real beauty of the system and why it would work is
that deterrence is essentially free. The GEE would be the first
large-scale environmental strategy that could be afforded by both
developed and developing countries.
One of the most
powerful aspects of the approach is that it works with the economic
system and private sector. It does not call for higher taxation or
massive spending. Businesses and markets would continue to operate
normally, if with slightly modified rules. The levies charged to
producers would be passed down to consumers and would not affect the
competitiveness of individual businesses within a given industry as
they would be charged equally to all.
In a green economic
environment, pollution and the depletion of natural resources would
no longer be rewarded with profits. What would become lucrative is
the conversion to cleaner energy and processes, the elimination of
toxic chemicals and their replacement with green alternatives, the
reduction of greenhouse gas emissions, the use of environmentally
friendly products, the conservation of non-renewable resources, etc.
Under the new
structure, the more companies do this, the higher the profits would
be. The GEE would transform the worst enemies of the environment
and resources—the market system and the industry—into their best
allies. The incentive for companies to do better would be
continuous (unlike regulations) and move businesses to make the
world greener not only up to the minimum standard but beyond it, and
do so year after year.
destructive economic system would become a large part of the
solution to today's environmental problems, a massive and powerful
force for the betterment of the world. The strength and spirit of
the GEE lies in the idea of restructuring the economy so that there
is profit in preserving resources and the environment rather than in
The Third Pillar: Depopulation
There is another
pillar to the environmental strategy discussed above: depopulation.
Fewer people on the planet would result in lower consumption levels
and yield triple benefits: less garbage, less pollution, and reduced
use of natural resources. As such, depopulation should be as
central to an environmental strategy as the conservation of
Of course, this does
not mean that regulations regarding toxic or harmful chemicals
should not be part of an environmental strategy. In fact, they are
a component of the GEE but not its mainstay. The conservation of
non-renewable resources and depopulation are center stage because
they offer respectively two and three times the impact of other
strategies. This is an extremely significant factor since national
initiatives and international environmental accords often fail over
costs and financial matters.
The Failure of the Economic System
It always seems that
the world is perpetually hanging on the hopes of an economic
recovery or faster growth. If only we had more money, the world's
problems could be solved. While this avenue might have been helpful
in the past, we have reached a point in history where even economic
growth will not help.
Remember the summer
of 2008 when the economy was going full steam ahead? The production
of biofuels started to compete with food for land. The news
headlines talked of food riots on account of a tripling of the price
of rice. There are just too many people to feed, and statistics are
fairly explicit on the issue. Almost 15% of the world's population
doesn't have enough food to meet its nutritional requirements.
In addition to this,
economic growth accelerated the depletion of non-renewable
resources, resulting in higher mineral prices and inflation. While
it might have been the solution in times of plenty, economic
expansion will make things worse in a future of diminishing
Everything that we do
and consume has an environmental impact. Organic food, for example,
may appear to have no negative effect on nature, no environmental
footprint. However, the machinery used to harvest crops,
whether they are organic or not, is primarily made of metal, the
extraction and processing of which has a significant environmental
footprint. Goods have to be transported to markets, again with
vehicles being made primarily of metal and generally powered by
fossil fuels. The farmers that produce organic foods have to live
in houses that are made of a number of components that are not
always environmentally friendly.
The point is, nobody
and nothing is perfectly green although some types of products do
have a much smaller environmental footprint. As such, both
continued economic expansion and population growth are bad for the
environment even in the greenest of worlds.
An aspect of the
growth debate is that people in developed countries consume a lot
more goods and resources and have a much higher impact on the
environment than do individuals in poorer parts of the world. On
the other hand, developing countries have some of the largest and
fastest-growing populations on the planet.
As such, in either
case, rising standards of living will result in a significant
increase in consumption levels and have disastrous consequences for
both the environment and the depletion of resources. In turn, this
will mean higher mineral prices, which will eat away at potential
improvements in standards of living. Growth will increasingly be
limited in its ability to alleviate problems in the future.
Let's now take a
closer look at the past—and a possible future—and see how other
societies have collapsed or dramatically declined as a result of
their own actions.