After reading this article you will learn about:- 1. Predictions of Limits to Growth Model 2. Graphic Explanation of Limits to Growth Model 3. Criticisms 4. Implications 5. Conclusion.
Predictions of Limits to Growth Model:
The predictions (or conclusions) of the Limits to Growth (LTG) Model are based on its basic thesis that “the continued growth leads to infinite quantities that just do not fit into a finite world.”
This basic thesis can be analysed as under:
1. The future world population level, food production and industrial production will first grow exponentially, become increasingly unmanageable and then collapse during the 21th century.
2. The collapse follows because the world economy will reach its physical limits in terms of non-renewable resources, agricultural land and the earth’s capacity to absorb excessive pollution which are finite.
3. Eleven vital minerals such as copper, gold, lead, mercury, natural gas, oil, silver, tin and zinc are being exhausted. If, in addition, industrial production continues to increase, that too will give rise to catastrophic results.
4. If the present growth trends in world population, industrialisation, pollution levels, food problem and resource depletion continue unchanged, the limits to growth on this planet will be reached within the next one hundred years. The most probable results will be a rather sudden and uncontrollable decline in both population and industrial capacity sometime before the year 2010.
5. Since technological progress cannot expand physical resources infinitely, it would be wise to put limits on our future growth rather than await the doomsday within the coming 50 or 100 years.
6. This catastrophe can be averted by controlling the growth rate of output
and population, reducing the pollution levels, and thus achieving a global equilibrium with zero growth.
Thus the Limits to Growth model developed an interactive simulation model that produced a variety of scenarios which were especially useful for defining what was to be prevented. It stressed that pollution, high population growth rate, and shortages of food and resources make the future prospects of the world bleak which will lead to catastrophic results.
Since the resources are finite and are likely to be depleted within 50 or 100 years, people should change their attitude towards the use of resources, their reproduction and pollution levels so as to save the world from collapse.
Graphic Explanation of Limits to Growth Model:
The Limits to Growth Model is explained in Figure 1 (A), (B) and (C). Time in years is taken on the horizontal axis beginning from the year 1900 to 2100. In Panel (A), resources are measured along the vertical axis and are represented by the downward sloping R curve. Since such resources as oil, natural gas, copper, lead, etc. are fixed, they are being continuously depleted over time from the year 1900 and beyond 2100.
In Panel (B), the growth of population and food supply are measured on the vertical axis and are represented by the P and F curves respectively. They are shown to increase upto point E at the same rate from 1900 to 2000 year. But beyond the year 2000, the population curve P continues to rise, while the food production curve F rises at a diminishing rate and then starts declining by 2100.
In Panel (C), the curve PN shows the pollution level which continues to rise beyond the year 2010 and if not checked in time, will lead to catastrophic results in the world.
Criticisms of Limits to Growth Model:
The Limits to Growth was an alarming report predicting the collapse of the world economy in the 21st century. It sold ten million copies in over thirty languages and had considerable impact on economic and political thinking and provided an impetus to antigrowth sentiment.
In fact, the world community was divided into two groups – the resource pessimists and the resource optimists.
The former accepted the predictions of the report and the latter criticised them on the following grounds:
1. Static Reserve Index:
The limits to growth model has been criticised for assuming that the non-renewable resources are scarce and are likely to be exhausted by the year 2100. This perspective is based on the use of the static reserve index (i.e. reserve to use ratio) which is the ratio of current reserves to current consumption.
The current reserves represent known resources that are economically extractable. The index expresses the number of years until the resources are depleted, given that there will be no additions to the known resources and also the future annual use of the reserves remain at the current level.
But the static reserve index is flawed because it neglects technological development in recycling and reuse of resources and the possibility of substituting scarce materials for abundant resources, Further, with the discoveries of new deposits of oil, gas, etc., the size of reserves may increase overtime despite their continuing extraction.
2. Technological Development:
This model neglects technological developments in resource extraction, use and substitution. In fact, the size of reserves of non-renewable resources has been increasing due to rapid technological development which makes the extraction of sub-economic stocks of resources less expensive. Moreover, scarcity of resources has led to technological developments in new resources such as atomic energy, bio-gas, etc. for industrial and human use. According to Giddens, “It is the world of endless change and endless expansion which the LTG report overlooks.”
3. Food Production:
The limits to growth model assumes the availability of limited land and consequent decline in food production. According to H. Kahn, “whenever certain limits are reached, new technologies are introduced with the passage of time. These technologies effectively either remove the limit or as time passes a subsequent technology can remove the limit.” Kahn sees production rising with the invention of new technologies as in the case of the Green Revolution in developing countries which has increased food production and solved their food problem.
4. Population Growth:
The limits to growth model predicted that the world population growing at an exponential rate would be 7 billion in 2000. If the mortality rate continues to decline without lowering the fertility rate, it will be 14.4 billion in 2030. But the world population has not grown exponentially.
It was 6 billion in 2000, as against 7 billion predicted in the model. Highly populated countries like China and India have slowed down their population growth rates by adopting birth control measures. Moreover, empirical studies have shown that economic growth accompanied by rising incomes lowers the fertility rate.
The LTG model assumes that the level of pollution is increasing exponentially in the world due to growth in agricultural and industrial activities. Consequently, the degradation of environment will adversely affect the quality and existence of human life, and flora and fauna.
No doubt, pollution of the environment is a serious problem, yet both developed and developing countries are trying to bring down pollution levels by using cleaner technologies. So there is no need for pessimism that pollution will bring the doomsday nearer.
However, pollution can be reduced by a judicious choice of economic and environmental policies and environmental investments. This is only possible through economic growth rather than by zero economic growth, as the model emphasises.
6. Price System:
The LTG model neglects the price system and the dynamics of the market system. The model predicts that unlimited economic growth will lead to the depletion of non-renewable resources. But resource optimist economists do not agree with this view.
According to them, as the scarcity of resources increases, their prices will rise which will, in turn, affect non-renewable resources in four different ways:
(i) with the rise in their prices, their direct consumption may be reduced;
(ii) the use of high-priced resources in production will fall by substituting techniques that are less intensive in their use;
(iii) high prices of non-renewable resources will encourage the search for new sources such as atomic energy for power generation; and
(iv) their high prices will provide incentives for the development of substitutes for these resources through new technologies such as bio-gas for power. Thus the efficiency of the market mechanism seems to be one reason why the most gloomy predictions for the depletion of non-renewable resources have failed.
7. Zero Economic Growth:
The LTG report suggests a zero rate of economic growth in order to stop the rise in the pollution level. Critics point out that if a positive rate of growth will lead to doom, a zero growth rate will do the same but on a smaller time table.
Instead, they argue that economic growth, especially in developing countries, will provide more resources that can be used to reduce pollution by supplying potable water, sanitation facilities, providing better housing facilities and reducing congestion in urban areas.
Moreover, economic growth is the only hope for developing countries to bring people out of the vicious circle of poverty and raise their standard of living. Thus the very idea of a zero rate of economic growth is fanciful.
Implications of Limits to Growth Model:
The Limits to Growth model highlights the dangers posed by the relentless pursuit of material wealth by the developed countries. It warns readers about the consequences of unconstrained growth by the industrialised countries.
Depletion of non-renewable resources, deterioration of environment and of population explosion. The report calls forth policy makers, NGOs and the people in general to protect environment, save non-renewal resources and control population.
Another important policy prescription of the LTG model is that the governments should voluntarily adopt a zero growth policy. Such a policy would require world redistribution of income and wealth. For zero economic growth, the redistribution of income and wealth both within and between countries would be on a very large scale.
It can only be possible by force which would lead to upheavals between the rich and the poor. Moreover, the model fails to explain how redistribution of income and wealth can be effected with zero growth rate.
Conclusion to Limits to Growth Model:
Despite its criticisms, the LTG model is a landmark in pointing out to the world community about the macro effects of economic growth on environment, unlimited exploitation of non-renewable resources and population growth.
It lays stress on policies for use and conservation of resources and preservation of environment so as to ensure a better world in the future. The report was harbinger of the World Commission on Environment and Development which brought out its seminal report entitled Our Common Future on Sustainable Development, the Earth summit at Rio de Janeiro and International Protocols at Montreal and Kyoto.