A balanced forecast and a great book
Reviewed in the United Kingdom on 24 October 2013
Jorgen Randers is one of the authors of the 1972 Limits to Growth (LtG) report and this book marks the 40th anniversary of its publication. After a 20-year and a 30-year update of the report written by the original collective, this is a very personal update of what the world's limits to growth imply for the decades ahead. It is Randers' best guess as what might happen over the next forty years. He has produced a very readable book, spiced by 2-4 page long "glimpses" of the future by guest authors.
At the outset, Randers reminds his readers that the aim of LtG was to signal the importance of foresighted action on environmental matter. Only so can the world hope to avoid ecological "overshoot", i.e. using more ecological services than the planet can sustainably provide. Nowadays this is measured in terms of the "ecological footprint". When LtG was published it was close to 1 earth (i.e. borderline sustainable); now it stands at 1.5 (overshoot), and business as usual (BaU) will get us to 3 by 2050. In overshoot, the world draws down natural capital year by year and the situation is literally unsustainable, and just two options exist going forward: "managed decline" towards a footprint that fits the earth, or "uncontrolled collapse induced by nature."
Randers, describing himself as a lifelong worrier, has thus seen his and his co-authors' warnings go unheeded for the past forty years. As a consequence, and prior to writing 2052, he was convinced that humanity was heading for collapse. But in making his forecast he says he became less pessimistic. To the uninitiated the book will be a depressing read - but one could say it's about time they did catch up with reality! To those well-versed in environmental and climate change-literature it does contain quite a few interesting and new sparks of hope.
So from that vantage point, the story he tells - his forecast - is one of qualified hope: the world will not collapse before mid-century (good for me; of marginal assurance for my kids), but we'll find ourselves in 2052 in a "cliff hanger" situation (Randers' term). Greenhouse gas emissions will be back at their 2012 level, having peaked in 2030, which will induce a global temperature rise of 2 degrees above pre-industrial. It's not all lost, but the future of humanity in the second half of the century will depend on luck and skill. Luck in so far as the 2-3 degree temperature rise will or will not trigger run-away climate change; skill when it comes to our grandchildren's ability to manage the impoverished planet better than we have done. At any rate, the forty years after 2052 will be much more dire than the next forty.
What Randers describes is effectively a "soft collision" with the planetary boundaries, much softer than expected in business-as-usual, a path that - if continued - would make "uncontrolled collapse" unavoidable; "managed decline" is still possible.
So how does this life-long worrier and sceptic about humanity's ability for foresighted collective action come out with a forecast that pushes ecological Armageddon out towards the far horizon?
The answer lies in his view of the development of two prime movers of growth, population and labour productivity over the next decades. For both, his assumption deviate markedly from the usual "median" population and "standard long-term growth" projections:
Firstly: low population growth. Randers predicts world population to peak at 8 billion around 2040. This is in his view the consequence of the migrations to cities: where a child in a rural setting is an extra pair of hands, in the city it is one more mouth to feed. The workforce (15-65 year olds) will peak even earlier at around 5.5 billion.
Secondly: Low labour productivity growth: Randers extrapolates the steady decline in productivity growth from 1970-2010 out over the next forty years, so that it averages 1.5% per year over the next forty years.
Together, this leads to a GDP that in 2052 is 2.2 times today's GDP, as compared to 3.2 times today under business-as-usual with median projections for population and productivity growth. So the planet is saved (at least from imminent ecological disaster) by involuntary forces of the urbanites disinclination to procreate and fizzling out of productivity growth.
Based on these two educated guesses and a handful of other guesses at major trends, Randers pieces together his story - his forecast. Having predicted GDP on the basis of demographics and an initial productivity guess, he considers the effects of a social feedback loop in which per capita consumption is the key metric. (Its distribution across the world, across social strata and across generations gets ample attention.) The main feedback to productivity from this social loop is through "social tension", which - when strong - will dampen productivity growth. Randers identifies intergenerational inequity and climate chance as the main causes of social tension in the coming decades. Their likely presence thus further justifies the low productivity growth estimate earlier inferred from the downward trend line of labour productivity.
"Consumption" is what is left of GDP after "Investments" have been paid. Investments, in Randers definition "includes everything society does in a year in order to maintain high levels of production in future years. Investment includes the construction of buildings, roads, machinery, equipment, power plants, mine shafts, cars, airplanes, trains, and more" and is the sum of both private and public investment. Likewise, consumption is also the sum of private ("a TV or a hamburger") and public ("such as when you enjoy a military parade, receive food vouchers, or are taken to a publicly financed hospital in a state owned ambulance paid for by your taxes"). The investment cycle is the other feedback loop in Randers' model, and this is where the challenges of energy, CO2 and climate change kick in. Future investments will have to go up because of humanity needs ever more energy, it needs to manage the associated CO2 emissions down, and it must deliver all this in a world in which natural resources are perhaps not scarce, but surely more difficult to extract than earlier.
The current situation is that the world on average invests 25%, leaving the remaining 75% for consumption, and this split has been remarkably constant over the past 40 years. At the same time there have been regional disparities: in the US the investment share has been under 20% for most time during the past generation; in China it is above 40%. These difference are important for how regions will cope with challenges of the coming decades as we will see in a bit.
Based on the explicit assumption that the impact of climate change will be felt in the coming decades already (and that thus climate change will over that time gradually become an uncontested fact), Randers forecasts a mix of "voluntary" and "forced" investments. Voluntary investments are investments in clean tech and low-carbon technologies to gradually reduce fossil fuel dependence and CO2 emissions; forced investments are for climate change adaptation measures and for the increasingly costly repairs and relief operations following extreme weather events. He has both types of investment grow to 6% of GDP by the end of the scenario period. As with other aspects of his work, there is a self-reinforcing logic to this 50/50 mix of forced and voluntary investments: a world that has proven to be hesitant to invest in voluntary measures will over time become more inclined to do them still as forced investments make clear that climate change is real. (This assumption behind this is that adaptation without mitigation is a logical non-starter for without mitigation, adaptation costs will quickly spin out of control.)
Most attention in the book goes to China and the US. They are the biggest nations in relevant respects and the story articulates quite different responses. The narrative is not without its problems, but has intuitive appeal and works well as a means of archetyping the spectrum of responses. In brief: China is a fast-growing country with a high investment rate, governed by autocrats; the US is a country with a stagnating economy, a history of more than a generation of underinvested, and with institutions of governance that are mired in factional strife and thereby unable to compromise on, let alone implement, solutions to the big issues it and the world faces. These are the underlying facts and factors that polarize the China/US stories.
Randers has a deeply pessimistic view on the ability of democratic nations to stand up to the challenges of the coming decades. This is stated at the outset more or less as an article of faith:
"Humanity, as I had feared, will not rise to the occasion, at least not rapidly enough to avoid unnecessary damage. The complex and time-consuming decision making of democratic nation-states will ensure that." [p.6]
To counterbalance this pessimism, Randers is rather sanguine about autocratic China's ability to address the same. So China is cast in the heroic role of leading the world on the path towards sustainability. How this is seen to work in practice is illustrated in the following, quoted from the section "Modified Capitalism: A Stronger Role for Wise Government":
"By 2052, China will have shown the world how a strong government is much better at solving the type of challenges humanity will face in the twenty-first century. China will easily redirect the 5% of their GDP that is required to solve the oncoming barrage of problems. And they will do so while the market economies are dithering about whether to use another hundred billion US dollars (less than 0.1% of their GDP) to support climate friendly technology." [p.212]
It is easy to understand Randers' personal frustration about Western inaction over the years since 1972. Many of us share it. Still, a flight from democracy towards technocratic autocracy, "wise rulers" is not without danger - something that Randers fails to address. Certainly the chequered record of intellectuals' sympathy for autocracy, from Plato to the fellow-travellers, should make us think twice.
In conclusion I would say that Randers has written a magnificent book. While overall the tone is sombre, there are elements of hope throughout its 400 pages. The task for humanity as a collective and for humans as individuals will be to build on these and made them stronger. It is in this spirit that Randers writes his parting words: "Please help me make my forecast wrong. Together we could create a much better world."
On reflection this is a surprisingly democratic cri de coeur from a man who is a confirmed sceptic on collective action. In the light of his hopeful views on wise leadership he might have ended: "My forecast may well be wrong, because as we have seen so often in history Cometh the hour, cometh the man."
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