Nov. 12 (Bloomberg) -- Now that the U.S. presidential election is over, attention has turned to the challenge of keeping the world’s largest economy growing. The underlying assumption is that growth is always the proper goal.
What if that assumption were wrong? Given our current economic malaise, and the obvious needs of the poor in developing nations, growth may be the only sensible aim in the short term. But what if, in the very long term, economic growth had some natural limit, beyond which it actually became detrimental to the survival of the human race?
This idea has been treated as heresy every time it has been raised, first by Thomas Malthus two centuries ago, and again by the famous Limits to Growth analysis initiated in the 1970s by the Club of Rome think tank. Yet heresies have at times turned out to be true. And this one has some pretty good logic on its side.
The argument takes many forms, but for me the most convincing centers on energy. Nothing in physics is more fundamental. The “E” of Einstein’s famous E=mc^2 is the vital quantity behind all action and motion. It is never created or destroyed, it merely changes form. The energy in Hurricane Sandy hasn’t vanished. It has transmogrified into destroyed buildings, felled trees and vast quantities of heat -- released by rains -- spread across the eastern U.S.
Every organism, from a tiny bacterium to an elephant, relies on a steady flow of energy to maintain its physical function, warding off the cold equilibrium of death. Homo sapiens is no exception, both individually and collectively. Humans use a constantly increasing amount of energy to keep themselves warm and to fuel increasing economic activity. Over the past three centuries, in the U.S. and globally, energy use has increased at an average annual rate of about 3 percent or so, which means we now use roughly 10,000 times as much energy as we did 300 years ago.
Most people -- certainly most economists and politicians -- seem to expect such growth to continue indefinitely, as we grow ever richer through technology and innovation. All we need are clean energy sources -- a green revolution, perhaps, or a final breakthrough in harnessing nuclear fusion -- to guarantee our growth and prosperity.
Such expectations ignore a big problem, and it’s not the possibility of running out of energy. In the long run, the danger is that we will use too much of it, no matter how we obtain it. Discovering a source of limitless free energy could actually be a disaster.
Here’s why. Most of the energy we use unavoidably ends up as heat in the environment. Heat your house and it will eventually escape to the air outside. Drive your car and you heat the engine and tires, stirring the air along the way. Run any machine or factory and you will create heat. The more energy we use, the more the environment should tend to warm up.
Currently, this dynamic is nothing to worry about. It’s not even a small contributor to climate change. All told, we gather and use only one part in 10,000 of all the energy arriving at the Earth from the sun. This amounts to less than 1 percent of the energy imbalance linked to carbon-dioxide emissions, which trap the sun’s heat in the Earth’s atmosphere.
In the long term, though, our energy use alone can easily eclipse emissions as the primary driver of global warming.
Consider what now looks like an impossibly rosy scenario: Our leaders act over the next few decades to limit carbon-dioxide levels so that warming linked to them stops by 2050. In that case, an annual increase of only 1 percent in energy use -- very slow growth by historical standards -- would be enough to cause noticeable climate change in about 150 years, according to research by Nick E.B. Cowern and Chihak Ahn of Newcastle University. If we want our economy to grow at, say, 3 percent a year in the long run, with energy use rising 2 to 3 percent each year, then the numbers suggest we will actually boil the oceans in only a few centuries. (Physicist Tom Murphy of the University of California at San Diego offers an informative and amusing look at the logical consequences of exponential growth in energy use on his blog Do the Math.)
Needless to say, we can’t do that. But if energy use has limits, so may economic growth. So far, at least, nobody has found a way to decouple the two. Data on economic growth and energy across many nations over the period 1980 to 2003 show that larger economies as a rule require more energy. Energy use doesn’t appear to grow quite as fast as economic output -- there’s an efficiency of scale that begins to kick in. The pattern looks remarkably like one known from biology: Big animals use more energy than small ones, but are slightly more efficient pound for pound. Economies might have something like a metabolism.
In the absence of a miraculous decoupling, we’re faced with a daunting prospect. In the West, our economies are designed around growth and would collapse without it. Slowing growth, if and when it happens, will require an attendant transformation of the very foundations of economic organization -- a transformation of a kind that no one can now honestly imagine. The few thinkers who have tried -- such as economist Herman Daly -- have generally been ignored by the mainstream.
Perhaps a few supersmart economists out there at places like Harvard, Chicago and MIT are at work now, at least part time, trying to imagine a future beyond growth, thinking about how we might prepare ourselves and organize our economies differently. I hope so.
(Mark Buchanan, a theoretical physicist and the author of “The Social Atom: Why the Rich Get Richer, Cheaters Get Caught and Your Neighbor Usually Looks Like You,” is a Bloomberg View columnist. The opinions expressed are his own.)
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Today’s highlights: the editors on re-examining the cost of federal flood insurance and on ending the opacity at the European Central Bank; William D. Cohan on Obama’s next economic team; Noah Feldman on how same-sex marriage and marijuana votes can influence the Supreme Court; Albert R. Hunt on Obama’s ideal fiscal-cliff point man; Simon Johnson on candidates for Treasury secretary; Colin Woodard on the regional philosophies behind Obama’s and Romney’s supporters.
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