Physical Limits to Economic Growth

Perspectives of Economic, Social, and Complexity Science

Roberto Burlando, Angelo Tartaglia, Roberto Burlando, Angelo Tartaglia

• Editorial: Routledge
• Año: 2017
• ISBN:
  9781315314945
• Edición: 1
• Categoría: Commerce
• Categoría: Commerce Général

The debate on the physical limits and constraints to the economic growth of globalized society is now widespread. This book explores the physical and economic aspects of the conflict between humans, with their thoughtless focus on growth through material production, and environmental constraints.

In the context of the looming shortage of material resources and the latest science on climate change, Physical Limits to Economic Growth offers new insights which provide a broad and comprehensive picture of the conflict between humans and environmental constraints. The authors' approach goes beyond the boundaries of specialized disciplines to explore climate change, resource depletion, technical innovation and the interactions between these within the socio-economic-institutional systems we live in. This volume looks at opportunities for rethinking these systems if we moved away from fossil fuel dependence, while considering the status of current mainstream economic thinking around this subject.

Physical Limits to Economic Growth provides a genuine interdisciplinary examination of the physical limits to economic growth. It will be of interest to both students and academics in various disciplines in the areas of natural sciences, climate change and economics.

1 The limits to material resources

Ugo Bardi

1 Introduction

The concept that mineral resources are finite and irreplaceable is relatively modern, probably expressed for the first time by Georg Bauer (also known as Agricola) in the sixteenth century. In a more general sense, the idea that all natural resources are finite seems to have appeared for the first time in economics with the work of Thomas Malthus, “An Essay on the Principle of Population”, published from 1798 to 1826. Possibly under the influence of Malthus, economics as a scientific discipline developed during the nineteenth century as a set of concepts and ideas aimed at optimizing the use of limited resources. The result was bleak enough that Thomas Carlyle defined economics as “the dismal science”. The concept of finiteness of the earth and of its resources had profound influence in various fields of science. In biology, it affected Darwin’s thought and his theory of evolution by natural selection, published in 1858. Then, the idea that all living beings were part of the same global entity goes back to the 1920s, when Vladimir Vernadsky coined the term biosphere.¹ The concept became widely known in the 1960s, when James Lovelock developed the concept of Gaia,² borrowing the name of the ancient earth divinity to describe the planetary ecosystem. Today, the concept of Gaia remains a valid metaphor and, if life is a single, giant organism, it follows that it is tied to the limits of the whole planet.

While physical or (“hard”) sciences were evolving in the direction of emphasizing the limitation of the earth system, economics gradually moved in the opposite direction. It lost the dismal veneer that it had acquires during the nineteenth century and became much more optimistic in terms of the availability of mineral resources. The process was gradual. In 1931, Harold Hotelling proposed the model that today takes the name of “Hotelling’s rule”.³ The model can be seen as relatively pessimistic in the sense that it assumes that mineral resources are finite and non-replaceable. However, it also assumes that mineral resources can always be replaced by a suitable “backstop resource” when the price of the initial resource has risen enough to make the substitution convenient in economic terms. In time, the attitude of the mainstream economics thought seems to have evolved in the direction of maintaining that the physical limits to the amount of mineral deposits are either unimportant for the foreseeable future, or that they could be always circumvented by substitution or other methods. This is a position explored in particular by the group known as the “Austrian School”.⁴ An extreme form of this view in terms of unbounded optimism can be found in the work by Simon,⁵ where we can read that mineral resources should be considered as actually “infinite”.

A different approach to the issue can be defined as “physical” in the sense that it emphasizes the physical limits to resources. This approach was set on a quantitative basis starting in the 1970s with the development of “system dynamics”, a method of calculation that allows one to examine the behaviour of a multi-component system where each component affects several others.⁶ The first attempt to use this method in order to describe the evolution of the human industrial system was proposed by Jay Forrester in 1971 with a study titled “World Dynamics”.⁷ A more detailed study was performed in parallel with the study titled “The Limits to Growth” in 1972.⁸ In both studies, it was found that the gradual increase of the costs of extraction of mineral resources, coupled with the growing costs of pollution abatement, would eventually lead to the world’s industrial and agricultural output to peak and start an irreversible decline at some moment during the twenty-first century.

The results of the “Limits to Growth” study have been always controversial, as described for instance in Bardi in 2011.⁹ However, the accusations made against the study were often unsubstantiated, such as the common one of having generated “wrong predictions”. As described in detail, for instance, in Bardi in 2014,¹⁰ the depletion process was correctly described in “The Limits to Growth” study in the assumption that the problem is not the finiteness of the amount of each element in the earth’s crust. Obviously, elements cannot be destroyed and the earth is a system where the amounts of existing materials remain approximately constant in time. The depletion problem lies in the gradual dissipation of the energy potentials of the mineral deposits. These potentials were created over geological times by the energy provided mainly by geological forces but also with the contribution of biological processes and direct solar irradiations. These mineral deposits embed enormous amounts of energy, a condition that has allowed humankind to separate and collect the pure elements from their ores at a relatively low energy cost. But, with time, the high-grade ores are extracted and dispersed and the industry must move to lower grade ores. The result is that the energy cost of the production of mineral commodities increases with time. If this processes were to continue for a long time, eventually, there will not exist any exploitable mineral ores and the earth’s crust may reach the condition defined as “Thanatia” in the book by the same title by Valero in 2014.¹¹ Such a condition corresponds to a “dead” earth from a mineral viewpoint: a planet where the energy cost needed to collect and separate elements from the undifferentiated crust in the amounts that are typical of the present industrial system is so high that it unthinkable to do so, unless it were possible for humankind to deploy flows of energy that today are unimaginable.¹² There is no need of the extreme condition called “Thanatia” to arrive to a condition in which the extraction of most minerals from their remaining ores may become so expensive in terms of the energy required that it would be beyond the means of the world’s industrial system. The problem is enhanced by the fact that the concentration of many common mineral resources appears not to be linearly related to their abundance, but shows a “dead zone,” also called the “mineralogical barrier”,¹³ a range of concentrations intermediate between exploitable deposits and the undifferentiated crust where there amount of the mineral resources is nearly zero.

The situation, however, may not be so bleak. There is nothing in thermodynamics that says that a non-isolated system must reach a state of “entropy death,” that is, a stable condition of maximum entropy. Systems which have access to external energy potentials tend, rather, to reach a condition defined as “homeostasis”, where the system maintains its parameters in an average static or slowly changing condition, while dissipating the available potentials. This property has been described for the first time by Ilya Prigogine¹⁴ in terms of the formation of “dissipation structures” that maximize the flow of energy.^15,16 In the case of the earth’s surface, the system is exposed to a large flux of energy in the form of sunlight, with a minor but significant supplement in the form of geothermal energy. These two flows have kept the earth’s biosphere in homeostatic conditions for billions of years. The biosphere is a material system and it needs minerals for its elements to function. These minerals can only come from the non-living parts of the earth system, from the atmosphere, the hydrosphere and the geosphere. The history of the biosphere shows that specific portions of it may suffer from “mineral depletion” of one or several elements during specific periods of time. However, on the average, we can say that the biosphere has attained the state that we define as a “circular economy” when referred to the industrial system; that is, the biosphere is able to recycle all its components at 100 percent. So, if the earth’s ecosystem has remained in an average homeostatic condition for such long times, can the human industrial system achieve a similar condition? In other words, can a true circular economy be achieved? We will see that such a condition is not impossible, even though it will involve important changes in the way the industrial system works.

2 The biosphere as a homeostatic system

The earth’s ecosphere is a portion of space clustered near the earth’s surface, where multiple systems (the biosphere, the geosphere, the atmosphere, etc.) interact with one another. The term biosphere indicates the ensemble of the living creatures (or biota) and it is composed by a wide variety of organisms occupying mainly the land areas of the continents and shallow water bodies. All the systems that we define as “living” share similar characteristics in terms of overall chemical composition and structure. In thermodynamic terms, these living systems are characterized by their capability of retaining their state by repair or reproduction; with the material contents of organisms being replaced by mechanisms generated by an external flow or exergy. This property is normally called metabolism. The flow of energy that maintains metabolism active in the biosphere comes from sunlight, and the first step of the processing of this flow is the series of chemical reactions called photosynthesis. In this process, specialized structures in living cells use solar energy to strip hydrogen out of water molecules. In a subsequent series of reactions, the hydrogen atoms are combined with carbon dioxide to form the organic compounds that are the building blocks of organisms. Metabolic processes show multiple steps of degradation of the original exergy input carried out by different species in the ecosystem, a series of processes often called the “trophic chain”. The final result of this chain of metabolic processes is the reforming the original water and carbon dioxide molecules, thereby closing the cycle of the materials involved in the process.

The amount of energy processed by metabolic processes in the biosphere is huge if compared to human standards. The average total flow of solar energy that reaches the earth’s surface estimated as 89,000 TW¹⁷ or 87,000 TW¹⁸. An estimate of the fraction of this energy processed by the biosphere can be obtained from the value of the gross planetary production (GPP), that is the amount of biological carbon generated by the biosphere. This amount is estimated as 105–177 Pg of carbon per year.¹⁹ Taking into account that reducing six moles of CO₂ to one mole of hexose requires approximately 9,450 kJ,...