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Demolishing the Decoupling Myth

While down under for the Australian theatrical premiere of GrowthBusters, I had the good fortune to spend several hours sitting on the porch of George Trembath’s home near Maleny, sipping tea and coffee and having a deep conversation with George (of Pachacuti Project) and ecological economist Richard Sanders. I jokingly called it the Maleny Summit. I invited Richard to share some thoughts with us for my blog series honoring the 40th anniversary of The Limits to Growth.

maleny-summit-caption-300x225 I’m glad Richard chose to write about “decoupling.” We cling so tenaciously to our dogma of everlasting growth that we dream up fairy tales to explain how we can overcome physical limits. One common tale is the idea that economic growth can occur without increasing extraction of natural resources and emission of waste. This notion is called decoupling: economic growth is decoupled from growth in natural resource consumption. Some degree of decoupling has been occurring as our economy emphasizes services over manufacturing, and as we increase efficiency. It’s been happening at a very slow rate, however.

Dave Gardner
Filmmaker

Demolishing the Decoupling Myth

By Richard Sanders

One of the core arguments used by economists who accept physical limits to growth but argue economic growth can continue forever is that economic growth can be decoupled from physical growth through efficiency gains.

The common rejoinder to this argument is to invoke the Jevons Effect – that efficiency gains are more than offset by increased consumption of the more efficient product. However, this is not a strong argument because while the Jevons Effect is often observed, there is no necessity that it occurs.

There is a much stronger argument that decoupling is mathematically impossible in the longer term. It is valid for the global economy as a whole which exceeded the planet’s biophysical carrying capacity in the 1980s.

The mathematics of decoupling requires that efficiency gains increase exponentially through time at the same rate as economic growth so that there is no resultant increase in the material throughput of the economy.

To illustrate this, consider economic growth of 5% per annum and decoupling (efficiency gains) also proceeding at 5% per annum, such that the overall impact remains constant.  It follows that economic growth and efficiency gains will both double approximately every 13 years. Thus, things will be twice as efficient in 13 years, four times as efficient in 26 years, 8 times as efficient in 39 years, 16 times as efficient in 52 years and 256 times as efficient in 104 years, … etc.

In the real world (as opposed to the imaginary world of economic thought) it becomes harder and harder to achieve efficiency gains through time (law of diminishing returns), not easier and easier as the flawed economic logic of decoupling demands. Myth demolished.

Richard Sanders is Principal Planning Officer for Queensland’s Department of Environment and Resource Management. He is also director of the Queensland Chapter of Center for the Advancement of the Steady State Economy. He is also executive officer of Quest 2025, an initiative to help people create an ecologically sustainable world.

Richard is a visionary systems thinker who has grappled with the questions of what the sustainable society would necessarily look like in principle (based on ecological and thermodynamic imperatives), the transitionary technical and social pathways necessary to get there, and the democratic political processes necessary to bring about such a transition.

If you find this information at all compelling, if you’re concerned about the prospects for a civilization hell-bent to grow forever on a finite planet, please take the Think Small Pledge and encourage your friends, family and colleagues to do so. Thank you.

Dave Gardner is the director of the new documentary, GrowthBusters: Hooked on Growth, which uncovers the cultural forces that keep us pursuing growth in the face of overwhelming evidence we’ve outgrown the planet.

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    Fons Nouwens

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    Our business/ government culture has another fault that seems built in. To balance compound 5% growth with efficiency gains, efficiency gains need to compound too. And the faster we drive, the further ahead we need to look.
    I don’t see business or government looking past the next financial year or election.
    Papamaria

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