Estuaries Vol. 16, No. 4, p. 919-922 December 1993 Technical Notes and Comments Beyond the Limits: The Growth Debate and the Role of Limits Dealing With an Uncertain Future The "growth" debate is often presented in both the academic literature and the media as one over ROBERT COSTANZA methodological issues. For example, the computer Maryland International Institute for model (called World3) that the Meadows' devel- Ecological Economics oped (Meadows et al. 1972; Meadows et al. 1992) is often criticized on methodological grounds (e.g., Center for Environmental and Estuarine Studies Cole et al. 1973). The most often cited difficulties University of Maryland System are that it did not include prices explicitly, that it Box 38 assumed resources were ultimately limited, and that Solomons, Maryland 20688-0038 it did not present estimates of the statistical un- certainty on its parameters. If fact, World3 is a Introduction viable and effective method to reveal the implica- tions of the primary assumptions about the nature "Beyond the Limits," the 20-year sequel to of the world that went into it. That is all that can "Limits to Growth" (Meadows et al. 1972) has be claimed for any model. These assumptions, or sparked renewed debate over issues that are ab- "pre-analytic visions" (Schumpeter 1954) need to solutely fundamental to the continued well-being be made clear and placed in direct comparison with of our linked economic and ecological systems. The the corresponding assumptions of the alternatives, issue of economic growth--its meaning, its desir- in this case the "unlimited growth model." The ability, and its sustainability--is a key one. In the essential difference in the pre-analytic visions is the last century, the concept of economic growth has existence and role of limits: thermodynamic limits, become so imbedded as a primary and sacrosanct natural resource limits, pollution absorption limits, goal of policy making at local, regional, and global population carrying-capacity limits, and most im- levels that any questioning of it is immediately sus- portantly, the limits of our understanding about pect. Even the Bruntland Commission, in the path- where these limits are and how they influence the breaking report that made "sustainable develop- system. ment" almost a household phrase, suggested that The unlimited growth model assumes there are no economic growth was the only viable way to achieve limits that cannot be overcome by continued tech- global sustainability (WCED 1987, MacNeil 1990). nological progress, while the limited growth model But on a finite planet, physical growth (defined as based on thermodynamic an increase of size or mass) of the economic sub- assumes that there are limits first principles and observations of natural ecosys- system is not sustainable indefinitely by definition tems. Ultimately, we do not know which pre-analytic (Daly and Cobb 1989; Costanza 1991). If we are vision is correct (they are, after all, assumptions), so to achieve sustainability (a goal that appears to be we have to consider the relative costs of being wrong achieving a broader consensus every day) then mere in each case. physical growth in production and consumption must be abandoned as the ultimate goal. What we are after are ways to improve the health and well- Technological Optimism vs. being of the globe's linked ecological and economic Prudent Skepticism systems without additional consumption of natural Current economic paradigms (capitalist, social- capital (Costanza and Daly 1992). This process has ist, and the various mixtures) are all based on the been called sustainable development (Daly and Cobb underlying assumption of continuing and unlim- 1989; Costanza and Daly 1992), but unfortunately ited economic growth. This assumption allows the term "development" is often linked with growth problems of intergenerational, intragenerational, in casual usage. It also has connotations of massive and interspecies equity and sustainability to be ig- destruction of natural capital as baggage from the nored (or at least postponed), since they are seen many ill-conceived "development" projects that to be most easily solved by additional growth have been inflicted on "developing" countries. We (WCED 1987). Indeed, most conventional econo- may need a new term, perhaps sustainable elabo- mists define "health" in an economy as a stable and ration, to describe the gradual improvement of the high rate of growth. Energy and resource limits to structure of the linkages within the ecological eco- growth, according to these paradigms, will be elim- nomic system that is now needed. inated as they arise by clever development and de- 1993 Estuarine Research Federation 919 01608347/9310400919-04501.50/0 920 R. Costanza Real State of the World This debate has gone on for several decades now. It began with Barnett and Morse's (1963) "Scarcity Optimists Skeptics and Growth" and really got into high gear with Right Right r the publication of the original "Limits to Growth" Technological High Disaster by Meadows et al. (1972) and the Arab oil embargo e~ OptimistPolicies in 1973. There have been thousands of studies over the last 15 years on various aspects of our energy Technological Skeptic Policies Moderate Sustainable and resource future, and different points of view have waxed and waned. "Beyond the Limits" has rekindled the debate at a time when "sustainable Fig. !. Payoff matrix for technological optimism vs. skep- ticism. development" as a long-term policy goal is begin- ning to erode the dominance of "unlimited growth." But the debate has again focused on who ployment of new technology. This line of thinking is "right," and which side one is on. "Beyond the is often called "technological optimism." Limits" gives only lip service to this aspect of the An opposing line of thought (I'll call it "tech- problem by acknowledging that if one changes the nological skepticism") assumes that technology will underlying assumptions in their model to "no lim- not be able to circumvent fundamental energy and its" then unlimited growth would result. In order resource constraints and that eventually economic to make progress we need to shift the focus away growth (as opposed to development or elaboration) from who is right (which is unknowable before the will stop. It has usually been ecologists or other life fact) to the relative consequences of alternative scientists who take this point of" view (a notable assumptions, and the proper way to deal with this exception among economists is Daly 1977), largely uncertainty. because they study natural systems that invariably The bottom line is that there is still an enormous do stop growing when they reach fundamental re- amount of uncertainty about the impacts of energy source constraints. A healthy ecosystem is one that and resource constraints. In the next 20-30 years maintains a relatively stable level. Unlimited growth we may begin to hit real fossil fuel supply limits. is cancerous, not healthy, under this view. Will fusion energy or solar energy or conservation Measures of overall economic performance like or some as yet unthought of energy source step in GNP include some elements of both growth and to save the day and keep economies growing? Will development, but are mainly measures of material we be able to solve our mounting pollution prob- production and consumption. GNP growth thus lems without major shifts in the way we do things? largely translates to increase in size or mass or The technological optimists say yes and the tech- throughput of the economy. Alternative measures nological skeptics say no. Ultimately, no one knows. (like Daly and Cobb's (1989) Index of Sustainable Both sides argue as if they were certain, but the Economic Welfare (ISEW)) attempt to quantify de- most dangerous form of ignorance is misplaced velopment, or what I would like to call elaboration, certainty. as distinct from growth. There are vast differences in the specific eco- The technological optimists argue that human nomic and environmental policies we should pur- systems are fundamentally different from other sue today, depending on whether the technological natural systems because of human intelligence. optimists or skeptics are right. Given this funda- History has shown that resource constraints can be mental uncertainty about such a fundamentally im- circumvented by new ideas. Technological opti- portant piece of information, what should we do? mists claim that Malthus' dire predictions about The optimists argue that unless we believe that population pressures have not come to pass and the optimistic future is possible and behave ac- the "energy crisis" of the late 70's is behind us. cordingly it will never come to pass. The skeptics The technological skeptics argue that many nat- argue that the optimists will bring on the inevitable ural systems also have "intelligence" in that they overshoot and decline sooner by consuming re- can evolve new behaviors and organisms (including sources faster and that to sustain our system we humans themselves). Humans are therefore a part should begin to conserve resources immediately. of nature not apart from it. Just because we have We can cast this optimist/skeptic choice in a clas- circumvented local and artificial resource con- sic (and admittedly oversimplified) game theoretic straints in the past does not mean we can circum- format using the "payoff matrix" shown in Fig. 1. vent the fundamental ones that we will eventually Here the alternative policies that we can pursue face. Malthus' predictions have not come to pass today (technologically optimistic or skeptic) are yet for the entire world, the skeptics would argue, listed on the left and the real states of the world but many parts of the world are in a Malthusian are listed on the top. The intersections are labeled trap now, and other parts may well fall into it. with the results of the combinations of policies and Dealing With an Uncertain Future 921 states of the world.