Reposted from the Worldwatch Institute's blog with permission. What questions are being overlooked or underappreciated when we talk about the world of tomorrow? This is the first of three exclusive sneak peeks into our newest State of the World publication, scheduled for official release April 13, 2015. Join us for the launch symposium in Washington, DC or livestream online.
Could expensive energy spell the end of economic growth and undermine our welfare?
The prosperous economies and the culture of growth that industrialized nations take for normal, and that most other nations aspire to, rest on cheap (mainly fossil) energy. But we already have tapped the easy energy stores, so the push for continued growth is taking increasing amounts of energy and investment money, leaving less for every other activity. Moreover, energy prices are walking a tightrope: energy must be costly enough to be profitable for producers, yet cheap enough to be affordable to consumers. Higher energy prices are needed to support ongoing fossil energy development, but higher prices also mean economic malaise and rising debt. Only a fundamental rethinking of the purpose of economies—away from perpetual growth—can address the conundrum of increasingly expensive energy.
“We urgently need institutions and populations to begin to prepare, physically and psychologically, for a world with the same or less each year instead of more—a mindset that is not in our collective psyches or even imaginations.” —Nathan John Hagens in “Energy, Credit, and the End of Growth” (Chapter 2)
Is never-ending economic growth a threat that is hidden in plain view?
Economic growth drives most environmental problems, and it has produced a world in which human activities have grown too large for the planet to accommodate them sustainably. Forests are scalped, rivers run dry, species are going extinct, and humans are changing the climate, all driven by the pursuit of growth. Yet few recognize that growth itself needs to be abandoned as a national goal. Growth is widely regarded as inevitable and indispensable, but as a matter of national policy it is barely 50 years old. Fortunately, an economy that is not driven by growth of material throughput—yet that still offers adequate employment and reduces inequality and environmental impact—is achievable.
“Our preoccupation with economic growth often has impeded action on issues that really will improve human well-being and the prospects for all life on Earth. This is the trouble with growth.” —Peter A. Victor and Tim Jackson in “The Trouble with Growth” (Chapter 3)
Can we avoid locking our investments into unsustainable economic activities?
Continued investments in a fossil fuel-centered energy system—and especially in such forms of “extreme energy” as tar sands, Arctic oil deposits, shale oil and gas, and mountaintop-removal coal—will lock societies onto a dead-end path. Scientists are warning that the bulk of the world’s proven fossil fuel resources can never be touched if the world wants to avoid runaway climate change. Further investing in them—and thus enlarging the carbon “bubble”—exposes not only energy companies and fossil fuel exporters to incalculable risk, but also pension funds, municipal authorities, and others who invest in such companies for long-term financial returns. Absent alternative policies, the world may confront an unpalatable choice between climate chaos and economic doom.
“Visionary management of policies, companies, and investments is needed to ensure that new investments are consistent with environmental health and resilience, and that economies are weaned, smoothly and efficiently, off investments that are harmful to sustainability.” —Ben Caldecott in “Avoiding Stranded Assets” (Chapter 4)