The Limits to Growth Introduction: This presentation explores the physical limits to economic growth. In other words, are there limits imposed by the environment and resource depletion that might slow or halt economic growth? By Oliver Bettis BSc(Hons) FIA FCII, January 2012
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The Limits to Growth
Introduction:
This presentation explores the physical limits to economic growth.
In other words, are there limits imposed by the environment and resource depletion that might slow or halt economic growth?
By Oliver Bettis BSc(Hons) FIA FCII, January 2012
Resource and Environmental Limits to Economic Growth
1. Key concepts: we live in an exponential world
2. Resource limits to economic growth: e.g. peak oil
3. Environmental limits to economic growth: e.g.climate change
4. Making sense of the data: The Limits to Growth
5. Prosperity without growth?
6. Red pill or blue pill?
The Earth
• Previous slide is view of our planet from Apollo 17.
• The atmosphere is a very thin layer, less than 2% of the size of the Earth (atmosphere = 100km vs Earth radius = 6400km).
"Here we have a serious problem: America is addicted to oil, which is often imported from unstable parts of the world,“George W. Bush, 2006 State of the Union address
Doubling Time• Approx. doubling time = 70/(Growth Rate in %)
Reason: 70 ≈ 100*ln(2)
• E.g. 7% growth means doubling time of 70/7 = 10 years
Resource used during doubling periodFor a resource which is used up at a constantly increasing rate:
• In the time it takes to double the rate of use, the amount of resource used will be the same as the resource used in all prior doubling periods combined.
Key Concepts Example: 7% growth
Rate of Resource Use Versus Time
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Time, years
7%Growth
Key Concepts Cumulative Resource Use @7% growth
Cumulative Resource Use
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0.0 20.0 40.0 60.0 80.0 100.0
CumulativeResource Used
10th doubling period.Same resource used as in previous 9 periods combined.
Key Concepts Is growth always good?
• Imagine a business plan which says:– Increase profit margin– & increase market share at the
same time
• Many things have an optimal size – further growth is bad– E.g . People!
Question: Is economic growth always good?
We live in an exponential worldTechnology and knowledge