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9 LIMITS TO GROWTH

"It is important to demonstrate that we are, for practical purposes, limited to our own small
planet."
Paul Ehrlich
Growth is a recurrent theme in the discussions of life-growth in output, growth in population,
growth in the costs of some of 'the better things in life'. Many of the indicators of quality of life
are said to possess, explosive character of compounding growth. Compounding growth always
and unavoidably becomes explosive in the long run. Compounding growth of a variable is
depicted by a geometrical expansion in the magnitude of the variable (2, 4, 8, 16 etc.) as time
varies arithmetically (1,2, 3, 4).
Prof. Jay Forrester of MIT, has predicted a deterioration in the quality of life in future. This dire
prediction has been supported by many biologists and scientists, like Barry Commoner, Paul
and Anne Ehrlich. In fact two recent studies use elaborate computerised models of the world,
which trace out paths of future history characterised by a violent collapse of the world system
1. The "World Dynamics" model by Forrester, and 2. The Limits to Growth by the Meadows
Team.
Barry Commoner predicted that the present course of environmental degradation, if continued
will destroy the capability of the environment to support a reasonably civilised human society.
To avert this he prescribed a state of 'no growth' in capital and productive system. These verbal
non-mathematical arguments were supported by the complex mathematical model 'Limits to
Growth' prepared by the 'Club of Rome' under the leadership of Dennis L. Meadows.
CLUB OF ROME
The Club of Rome was a loose-knit group of about seventy-five men from twenty-five nations
the

members

being eminent

scientists, industrialists, economists, sociologists and

educators. It is more appropriately, a 'elitist multinational intellectual brotherhood', with about


seventy-five members, united by a common conviction that the possibilities of continuous
growth have been exhausted and timely action is vital if a planetary collapse is to be averted.
The club was originally founded by Aurelio Peccei. In June 1970, the club planned a project

entitled "The Predicament of Mankind". Aurelio Peccei Hugo Theimann, Edward Pestel and
others had already prepared a list of preliminary goals, a survey of methodologies and a
statement of the 'Problematique'what social and economic forces will accompany the
transition of the world from growth to equilibrium. What was lacking was a suitable
methodology to deal with the complex interactions of the world economic system. It was at this
time that Jay Forrester's World Dynamics was published. This world Model I was soon refined
and examined in greater details by Meadows and his team of Club of Rome. This Club of Rome
model was published in 1972; it predicted that the collapse of the world as a result of depletion
of limited resources and increase in the levels of pollution, will not take very long perhaps only
a few decades. The policy implication of the model is that "to circumvent the disaster, we must
stop short of the limits imposed by nature on our activities".
BASIC THESIS OF THE MODEL
Limits to Growth is a study about the future of our planet and on the predicament of mankind.
The basic thesis in the Limits to Growth model is that infinite growth is impossible on a finite
planet. The book postulated that exponential growth in population, industrial output,
agricultural and natural resource consumption, and the pollution from all these activities
would result in severe constraints on all known global resources by 2050 2070.
According to Mahbub Ul Haq, the basic thesis of the Limits to Growth model can be analysed
as follows:
"Many critical variables in our global societyparticularly population and industrial
productionhave been growing at a constant percentage rate so that, by now, the absolute
increase each year is extremely large. Such increases will become increasingly unmanageable
unless deliberate action is taken to prevent such exponential growth.
However, physical resourcescultivable land and non-renewable mineralsand the earth's
capacity to absorb pollution are finite. Sooner or later, the exponential growth in population and
industrial production will bump into this physical ceiling and will then plunge downward with a
sudden and uncontrollable decline in both population and industrial capacity. Since
technological progress cannot expand all physical resources indefinitely, it would be better to
establish conscious limits on our future growth rather than to let nature establish them for us in
catastrophic fashion".

There are five basic factors that ultimately limit growth in this planet population, agricultural
production, natural resource, industrial production and pollution. According to the Meadows
team continued exponential growth in worlds population, industrial output, agricultural and
natural resource consumption and pollution from these activities would result in severe
constraints on all global resources by 2050 to 2070 . The model is built specifically to
investigate five major trends of global concern:

rapid population growth,


accelerating industrialization
exponential increase in demand for agricultural output
depletion of natural resources
deteriorating environment.

The conclusions of the Meadows team are:


1. If the present growth trends in world population, industrialization, pollution, food
production, and resource depletion continue unchanged, the limits to growth on this planet will
be reached sometime within the next one hundred years. The most probable result will be a
rather sudden and uncontrollable decline in both population and industrial capacity.
2. It is possible to alter these growth trends and to establish a condition of ecological and
economic stability that is sustainable far into the future.
3. If the world's people decide to strive for this second outcome rather than the first, the sooner
they begin working to attain it, the greater will be their chances of success.
According to Turner, Four key elements are required to understand the L T G Model. These
are:

the presence of positive and negative feed back loops and the relative strength of these

fed back loops.


the presence of resources such as renewable and non renewable resources, their

recovery potential and the rate of degradation.


delays in signals from one part of the world system to another which can serious
consequence on a possible solution which implies inter temporal effects of adverse

environmental degradation.
The last is treating the world system as a complete system of sub systems which calls
for a holistic approach that requires taking into consideration the impacts on all the
sectors simultaneously.

FACTORS AFFECTING GROWTH IN THE MODEL


There are five basic factors that ultimately limit growth in this planet population,
agricultural production, natural resource, industrial production and pollution.
The limits model postulated in 1972 that world population had been growing
exponentially in the last century and that if the present rate of growth continued, this

world's population of 3.6 billion in 1972 would double in the next thirty-five years.
The model in a similar way highlights, the growth of demand for Renewable resources:

including land and food production;


Growth in the demand for non-renewable resources like the gold, zinc, lead, tin,
uranium, silver and other minerals;

Industrial growth influenced by rate of investment and depreciation,


finally the model explains increase in pollution levels depending on capital
consumption.

Each of the five factors mentioned in the model, interacts constantly with all the others.
furthermore, over long time periods each of these factors also feeds back to influence itself.
o population cannot grow without food
o food production is increased by growth of capital
o more capital requires more resources
o discarded resources become pollution
o pollution interferes with the growth of both population and food
One of the reasons for the widespread attention paid to the 'Limits to Growth' model was that it
derives its conclusion from a computerised global model which incorporates the essential interconnections between resource-use, population and pollution. In the model the variable 'Quality
of Life' is held to depend positively on food supplies and industrial outputs, and negatively on
population density and pollution. Then food output, industrial output, population and pollution
are interlinked in various ways. For example, population growth is positively related to food
output but food output is negatively related to pollution levels which in turn is positively
related to industrial output. These links are called "feedback mechanisms". The feedback
mechanism could be positive or negative. A positive feedback is one where the growth in one
variable causes a change in another which causes further growth in initial variables. On the

other hand, when the growth in one variable causes changes in another which reduces the
growth in the initial variable, it is a negative feedback.
A simplified and slightly modified model of Meadows and Forrester depicting die above interrelationship is given in figure 9.1

Figure 9.1
A Simplified Model of Variables Limiting Economic Growth
Q Total output of goods and services Services N - Population L - A Unit. of land
E - amount of exhaustible resources K - of Capital resources T - State of technical
knowledge P - Amount of Environmental Pollution.
The figure 9. 1 highlights me inter-relationships between five limiting

factorsshortage

of maintainable natural resources, of non-maintainable natural resources of man-made


capital assets, level of environmental pollution and size of population. In the figure solid
lines represent positive and broken lines represent negative feedback. Thus in the figure,
output per head Q/N is assumed to be higher.

Higher is the amount of maintainable natural resources, or L/N


Higher is the amount of remaining stock of non-maintainable (exhaustible) natural

resources per head E/N


Higher is the amount of man-made capital assets per head K/N,
More advanced in the state of technology (T), and
Lower is the level of pollution
PREDICTIONS OF THE MODEL

The model predicted that if the present growth trends in world population, industrialization,
pollution, food production, and resource depletion continue unchanged, the limits to growth
on this planet will be reached sometime within the next one hundred years. There are some
basic truths which Prof. Meadows emphasised through their work.

There must be an end sooner or later to the exponential growth of population and
output and the limit to such a growth may come upon us unexpectedly if we are not

careful.
The ultimate limit to growth may become effective either because of the exhaustion
of non-maintainable natural resources or because of pressure upon the limited
supply of maintainable natural resources or because of the chocking effects of
excessive environmental pollution.

The results of the model were arrived through computer simulation, which assumes some
mathematical relationship to be true and uses the computer to determine what sort of future
it implies.
The authors describe the process:
". . . the collapse occurs because of non-renewable resources depletion. The industrial
capital stock grows to a level that requires an enormous input of resources. In the very
process of that growth, it depletes a large fraction of the resource reserves available. . . .
Finally investment cannot keep up with the depreciation and the industrial base collapses
taking with it the services and agricultural systems, which have become dependent on
industrial inputs. . . . Population finally decreases when the death rate is driven 'upward by
rack of food and health services'. Hence Forrester and Meadows concluded mat if there is
no major change in the present system, population and industrial growth will certainly stop
within the next century at the latest. Their prescription calls for a transition to a world of
Zero Economic Growth."
CRITICISMS
1. The assumption on non-renewable resources has been criticized by Mahbub Ul Haq. He
criticises the model's assumption that reserve of the non-renewable resources was finite and
would increase only by five times over the next one hundred years. The
model suggests that mankind faces a final curtain about one hundred years from now
through depletion of non-renewable resources. However, the figures on reserves of nonrenewable resources show increase in the reserves of some resources. Further, the

pessimism of the assumption of non-renewable resources becomes even more evident if one
considers that the concept of resources itself is a dynamic one. Many things become
resources over a period of time. The expansion of the last one hundred years has mainly
been rendered possible with the new resources of petroleum, aluminium and atomic and
other sources of energy. For example, there exists a vast potential for exploiting resources
on the sea bed. Reserves of nodular materialsdistributed over the ocean floor, are
estimated to be sufficient to sustain a mining rate of four hundred million tonnes a year
virtually for an unlimited period of time. If only one hundred million tonnes of nodules are
recovered every yearit would add to the annual production of copper, nickel, manganese
and cobalt to the extent of roughly one-fourth, three times, six times and twelve times
respectively compared to current world production levels. Thus the generalisation of the
'limitsmodel about complete disappearance of all renewable resources, at a particular
point of time, in the future, is a figment of imagination. The problem is not one of expecting
natural resources to accommodate for ever our current patterns of growth, production and
consumption. Clearly they will not. However, as resources become scarce, they tend to get
recycled and reused thus paving the way for the efficient use of resources. Hence, they will
last long enough to allow us time to make deliberate adjustments in the way we use them so
that resource-needs can be met indefinitely.'
2. Role of technological improvement and input substitution ignored: A major criticism of
the LTG model has been the omission of technological improvement and input substitution.
It has been pointed out that the model assumes a fixed stock of exhaustible, nonrenewable
resources. The on-going production activities are said to result in irretrievable loss of these
resources. But continuing technological improvements which facilitates more effective use
of the same fixed stock of resources and the scope of input substitution seriously undercut
the no-growth argument. Prof. William Nordhaus, who made a study of the ForresterMeadows Model, refers to it as 'iron law of resource use'. To make the model more realistic,
Nordhaus allowed for substitution among inputs in the process of production. Similarly the
model assumed that population, capital stock and pollution would grow at exponential ratio,
but the technology to fight pollution would not grow at exponential rate. This assumption
made the model inherently unstable.

Turning to the issue of population growth, the LTG model predicts that there is an optimal
size of population and any excessive population above this optimum size can become
destructive. It assumed in 1972, that population will continue to grow exponentially to
double itself in another thirty-five years. But empirical studies suggest a 'demographic
transition' during the process of economic growth, as a result of growing affluence that
dampens the rate of new births.
While the limits-model speaks of continued economic growth as impossible, the critics of
the model not only have established it as a possibility, but some economists argue that
continued economic growth is undesirable. This argument implies a choice. We can either
follow a continued economic growth or reach a state of zero economic growth. It is argued
that continued economic growth involves high social and cultural costs and results in
general degradation of the quality of life. Perhaps that is why continued economic growth is
considered as undesirable.
The assumptions regarding pollution are criticised as the weakest part of the model, as one
devoid of any scientific basis. The model claims that pollution rises at the same speed as the
growth of capital stock and further assumes that the earth's capacity to absorb pollutants is
four times the present annual level and that pollution levels beyond certain limits will start
affecting human mortality. While it may be true that accumulating pollution levels will
deteriorate quality of life and health, there is little evidence to show that life itself will be
destroyed. What is more, the authors do not consider that higher levels of industrial
development will allow societies to devote additional resources to taking care of the
pollution problem without sacrificing continued economic growth. Further, it is only with
continued economic growth, that the additional resources, required to achieve the desired
standards of air and water quality, can be raised. 6. Some economists say that 'Zero
Economic Growth' itself makes demand on resources. Hence ZEG merely postpones a
collapse, which is done even by a negative growth. Any rate of economic activity produces
an eventual collapse.
The role of price mechanism is not considered by the LTG model. As resources become
scarcer, price will rise and new technology will be stimulated along with search for new
materials and substitutes. However, this does not invalidate LTG thesis because the

exponentially increasing impact of growth nullifies any of the adaptive behaviour we might
expect from the market system.
Critics have exposed faults in the mathematics and underlying assumption. Many critics
have criticised the limits model for using arbitrary numbers. They argue that it makes little
sense to test for the sensitivity of the model or to changes in parameter value, if the initial
parameter value is arbitrarily chosen. It is further pointed out that the nature of resource
estimates in LTG model is dubious. The reserve estimates of resources have been revised
over time and are likely to change again in our own life timehence the model based on
such old estimates cannot yield proper results.
POLICY IMPLICATIONS
A major policy conclusion from the model is the prescription of a Zero Growth Rateboth
in population and material production. The model did not consider the choices open to
society; even if physical limits to growth were conceded. First, there is the choice between
development and defense it is said that an 'environment quality' conscious society could
devote less to defense which consumes a major share of world resources and generates a
high pollution and more to development. Secondly, there is the choice of patterns growth
a less resource consuming different pattern of consumption could be chosen. Finally, it
has been suggested that the rich nations could stop growing and the developing nations can
grow without creating pressures on global physical limits.
A second major policy concern is the world income distribution. The model's prescription
that the collapse of the world can be avoided by zero economic growth implies the
possibility of massive redistribution of income. For, if present world income distribution is
freezed, zero economic growth will not save the world. "It would only bring about a
confrontation between the haves and the have nots". It is said that the question of
distribution of income was recognised by the limits model but the model did not discuss as
to how such a massive redistribution of income can be effected in a stagnant world.
Update on Limit to Growth
On the 20th anniversary of the publication of Limits to Growth, the team updated Limits in
a book called Beyond the Limits. Beyond the Limits argued that in many areas we had
expanded our demands on the planet's resources and sinks beyond what could be sustained
over time. The main challenge identified in Beyond the Limits was how to move the world
back into sustainable territory.

In a new study, Limits to Growth: The 30-Year Update, the authors are far more pessimistic
than they were in 1972 and conclude that humanity is dangerously in a state of overshoot.
Some of the signs of such an overshoot are:

Sea level has risen 10-20 cm since 1900. Most non-polar glaciers are retreating, and the
extent and thickness of Arctic sea ice is decreasing in summer.

In 1998 more than 45 percent of the globe's people had to live on incomes averaging $2
a day or less. while, the richest one fifth of the world's population has 85 percent of the
global GNP. The gap between rich and poor, is widening.

Around 75 percent of the world's oceanic fisheries were fished at or beyond capacity.

( FAO estimate , 2002)The North Atlantic cod have been almost pushed to biological
extinction.

Nearly 38 percent, or nearly 1.4 billion acres, of currently used agricultural land has
been degraded.

They point out that we are drawing on the world's resources faster than they can be
restored, and we are releasing wastes and pollutants faster than the Earth can absorb them
or render them harmless. They are leading us toward global environmental and economic
collapse but there may still be time to address these problems and soften their impact.
They warn that much must change if the world is to avoid the serious consequences of
overshoot in the 21st century.
CONCLUSION
When The Limits to Growth was first published in 1972, the model was attacked by many
who didn't understand or misrepresented its assertions, dismissing it as an exaggeration. But
the happenings in the last 30 years only validate the book's warnings. In the word of
Mathew Simmons, the noted energy economist, the most incredible aspect of the book is
the accuracy of the basic trend extrapolation concerns after thirty years. He adds that there
is nothing in the book which has so far been even vaguely invalidated and states that the

chilling warnings of how powerful exponential growth rate can be are right on the track. In
the words of Mathew Simmons:
"The most amazing aspect of the book is how accurate many of the basic trend
extrapolations ... still are some 30 years later." Thirty years ago, it seemed unimaginable
that humanity could expand its numbers and economy enough to alter the Earth's natural
systems. But experience with the global climate system and the stratospheric ozone layer
have proved them wrong. Simmons points out that the LtG was never a doomsday book.
Rather it was hoped that it would trigger a change in the flow of human trends to avoid
such a doomsday.
To conclude it is clear that the appropriate response to environmental problems is not to
prevent the expansion of the economy, but rather to provide a powerful set of incentives to
reduce those activities that degrade the environment. With such incentives as a basic part of
the economic structure, the inevitable catastrophe envisioned may be avoided'. Continued
economic growth and the associated increases in standards of living are consistent with
improvements in environmental quality, if producers and consumers economise on their use
of environmental resources. Economists today prescribe a policy of 'sustainable growth' for
global equilibrium, from an ecological and economic point of view.