The relationship between ecology and economics
Our persistent global economic malaise is rooted in ecology. As a consequence of our ever-increasing exploitation since the inception of our industrial revolution, the vast majority of earth’s finite and non-replenishing nonrenewable natural resources (NNRs)—fossil fuels, metals, and non-metallic minerals—are becoming increasingly scarce globally.
The result is diminishing real economic output (GDP) levels, currently for NNR deficient Western nations with high societal support costs, high material living standards, and declining global economic competitiveness, such as the US, and soon for the world at large.
NNRs: NNRs—fossil fuels, metals, and non-metallic minerals—enable our industrialized way of life. They serve as the building blocks that comprise our industrialized infrastructure and societal support systems, as the raw material inputs to our industrialized economies, and as the primary energy sources that power our industrialized societies.
Unfortunately, through our incessant pursuit of global industrialism, we have been systematically eliminating the finite and non-replenishing NNRs upon which our industrialized way of life and our very existence depend.
Humanity’s Predicament: the Great Recession marked a transition point in humanity’s industrial lifestyle paradigm—going forward, there will not be “enough” globally available, economically viable NNRs to restore our global economic growth trajectory to its pre-recession level on a continuous basis. Under the best case scenario, global economic output (GDP) will increase at a declining rate, peak, and go into terminal decline within the next few decades.
The Cause: increasingly, the cost reductions associated with our ongoing improvements in NNR exploration, extraction, production, and processing technologies are no longer sufficient to offset the cost increases associated with continuously declining NNR quality—newly discovered NNR deposits are fewer, smaller, less accessible, and of lower grade and purity.
Ironically, while human ingenuity and technical innovations that increase economically viable NNR supply levels are experiencing diminishing returns, human ingenuity and technical innovations that increase our NNR demand levels appear to be unlimited. Global requirements for newly mined NNRs of nearly every type continue to increase unabated.
The Result: as industrialized and industrializing nations attempt to recover economically from the Great Recession—i.e., to reestablish their pre-recession economic output (GDP) levels and growth trajectories:
- Global NNR demand levels will increase,
- Which will cause increasingly costly NNR supplies to be exploited,
- Which will cause NNR price levels to increase,
- Which will cause NNR demand levels to decrease (demand destruction),
- Which will cause economic output (GDP) levels to diminish and the economic recovery to abort.
This “start-stop” economic recovery scenario manifested itself between 2009 and 2011. And, as global NNR scarcity becomes increasingly pervasive during successive economic recovery attempts, NNR demand destruction will occur at ever-lower “ceilings” or thresholds, and global economic output (GDP) levels and societal wellbeing levels—population and material living standard levels—will ratchet downward.
The Implications: both our natural resource utilization behavior, which is heavily oriented toward enormous and ever-increasing quantities of finite, non-replenishing, and increasingly scarce NNRs, and our industrial lifestyle paradigm, which is enabled by our natural resource utilization behavior, are unsustainable—actually physically impossible—going forward.
Furthermore, because the fundamental cause underlying our predicament is ecological—not economic or political—our attempted economic and political “fixes” cannot possibly work. No combination of private and public “investments”, “policies”, and “initiatives” can enable us to extract enough economically viable NNRs to perpetuate our industrial lifestyle paradigm.
The Consequence: our transition to a sustainable lifestyle paradigm, within which a drastically reduced subset of our current global population will experience pre-industrial, subsistence level material living standards, is both inevitable and imminent.
And, because we are culturally incapable of implementing a voluntary transition to sustainability, our transition will occur catastrophically, through self-inflicted global societal collapse. As a species that has been conditioned since the inception or our industrial revolution to expect “continuously more and more”, we will not accept gracefully our new reality of “continuously less and less”.
For details and supporting evidence see “Scarcity—Humanity’s Final Chapter?”
Chris Clugston’s Bio
Since 2006, I have conducted extensive independent research into the area of “sustainability”, with a focus on nonrenewable natural resource (NNR) scarcity. NNRs are the fossil fuels, metals, and nonmetallic minerals that enable our modern industrial existence.
I have sought to quantify from a combined ecological and economic perspective the extent to which America and humanity are living unsustainably beyond our means, and to articulate the causes, magnitude, implications, and consequences associated with our “predicament”.
My previous work experience includes thirty years in the high technology electronics industry, primarily with information technology sector companies. I held management level positions in marketing, sales, finance, and M&A, prior to becoming a corporate chief executive and later a management consultant.
I received an AB/Political Science, Magna Cum Laude and Phi Beta Kappa from Penn State University, and an MBA/Finance with High Distinction from Temple University.