Endless Growth vs Finite World

Infinite Growth with finite resources ?

The question of the possibility of continuous, or continued, or limitless, growth in a finite world is one of the common question related to the situation of the world in the 21st century. Many thinkers explain that we need to change our growth culture to adopt a "de-growth " or decline mindset. This commonly heard opinion is based on the idea that since our economies are based on finite resources, endless growth is impossible (actually constant consumption is also impossible, hence the de-growth hypothesis). If you have done so already, you may read Gaya Herrington in "You can't have infinite growth on a a finite world, or can you ?". This reasoning seems pretty obvious for physical outputs linked directy to finite resources as inputs, thus it should also apply to composite or less material outcomes such as GDP. However, you should be suspicious of the adjective "obvious" as well as the "finite/infinite" combination.

System Dynamics is a useful framework to have a closer look at this question. It helps to avoid a static inventory/ consumption view, but to recognize that our world and economies form a dynamic systems where inputs, oucomes and their dependencies  change constantly. Resources are flows, outputs are flows, and there is a dynamic substitution and recycling mesh that makes the system complex. This has been well explained by Philippe Silberzahn in his article "why we do not live in a finite word". It does not mean that the argument of finite resources does not hold, it means that the system may move in many ways and keep producing more growth/value/outcome while consumptions decreases or stops. Growth is actually multi-dimensional, so we may feel "satisfaction growth" or "GDP growth" while many components  of the outcome are stagnating or declining.

There is a simple equation to characterize the sustainable use of a finite resource. For one single resource R with inventory I, let us suppose that we consume a  fraction X% of the current inventory on the first year, while technology progress, process efficiency or any other signal such as price increase makes the need reduce by Y% each year. This consumption scheme is sustainable if X is less that Y. Anyone with high-school math skill can check that X x sigma(i = 0 to infinity | (1 + (1-X)^i) = X / Y. What this means that there is a sustainable way to consume indefinitely a finite resource. If there are few ressources, this is a strong constraint, but with a large /dense graph of substitution paths, it means that the world is less finite than it seems 😊 (cf  Philippe Silberzahn's argument). One may argue that this sustainable consumption policy is too wise to reflect conscious choices for our current societies, but price-driven scarcity may force a sustainable behavior by construction.

This does not mean that the questions of our finit limits is not critical, nor that infinite growth is possible. The questioning of growth is sound and justified, but it must be placed in a system context and qualified. What System Dynamics says is that there must be a consistency between the rhythm of starvation due to resource finiteness and the evolution of the consumption path (this is precisely what the EM3 - Energy Matters Modeling Manifesto - states). This is indeed what  CCEM shows : the effect of the finite resources shows very clearly and they will impact strongly the next centuries. Finite resources, fossil fuel, minerals will become scarce and the negative impact on the economy will be real. De-growth is not a theoretical concerns, it has started in Europe more than 10 years ago (as shown by GDP as soon as you factor inflation out).

What  System Dynamics show is not  suprising : there are roughly three stages of  finite resource consumption. A first the  reserves (known inventory) seems unlimited, which yields both growth and waste and commodity prices. When  we start  to  foresee the  end of  accessible  inventory as a function of cost, we see the price increase and the  beginning of recycling, with still  a fair amount of waste . Then we reach the last step of scarcity  managed by prices ( or by conflicts and  preeemptions) where the previously mentioned network of substitution develops, waste goes down, recycling intensifies and  usages are progressively restricted to few high-value-added use cases. This is what we see , by design, when running CCEM simulations.

To conclude, we can end with two observations. First,  we live in a world of finite resources, multiples paths of substitution and infinite opportunities – it quite normal that, at the same time, we experience the finiteness and the boundaries, and we also envision continuous growth (not infinite growth). Second, System Dynamics is a great tool to assess sustainability, when we think in flows vs stocks, substitution paths, positive and negative feedback loops.