Advance Praise for The End of Growth Heinberg draws in the big three drivers of inevitable crisis—resource constraints, environmental impacts, and financial system overload—and explains why they are not individual challenges but one integrated system- ic problem. By time you finish this book, you will have come to two conclusions. First, we are not facing a re- cession—this is the end of economic growth. Second, this is not our children’s problem—it is ours. It’s time to get ready, and reading this book is the place to start. — PAUL GILDING, author, The Great Disruption, Former head of Greenpeace International Richard has rung the bell on the limits to growth. This is real. The consequences for economics, finance, and our way of life in the decades ahead will be greater than the consequences of the industrial revolution were for our recent ancestors. Our coming shift from quantity of con- sumption to quality of life is the great challenge of our generation—frightening at times, but ultimately freeing. — JOHN FULLERTON, President and Founder, Capital Institute Why have mainstream economists ignored environ- mental limits for so long? If Heinberg is right, they will 3/567 have a lot of explaining to do. The end of conventional economic growth would be a shattering turn of events—but the book makes a persuasive case that this is indeed what we are seeing. — LESTER BROWN, Founder, Earth Policy Institute and author, World on the Edge Heinberg shows how peak oil, peak water, peak food, etc. lead not only to the end of growth, and also to the beginning of a new era of progress without growth. — HERMAN E. DALY, Professor Emeritus, School of Public Policy, University of Maryland The End of Growth offers a comprehensive, timely and persuasive analysis of the reality of ecological limits as they relate to economic growth. Filled with facts and fig- ures and very readable, the book makes a rational case while paying attention to nuance and counterargu- ments. A must-read for anyone who depends upon eco- nomic growth, which means all of us. — LESLIE E. CHRISTIAN, CFA, President and CEO Portfo- lio 21 Investments Heinberg has masterfully summarized and updated the case against economics, and its fraudulent 4/567 scorecard—GDP. He explains why conventional eco- nomic growth is ending now, and why growth of human populations and material consumption will follow suit. Yet we all can still grow in wisdom and continue ex- panding the knowledge of our universe, while growing greener technologies capturing the sun’s daily free photon flow as we transition to the Solar Age. — HAZEL HENDERSON, author, The Politics of the Solar Age (1981) and other books, President of Ethical Markets Media (USA and Brazil) and its Green Transition Scoreboard® Dig into this book! It is crammed full of ideas, informa- tion and perspective on where our troubled world is headed—a Baedeker for the perplexed, and that’s most of us. — JAMES GUSTAVE SPETH, author of The Bridge at the Edge of the World: Capitalism, the Environment and Crossing from Crisis to Sustainability Read this book and have the light switched on. — CAROLINE LUCAS, Member of Parliament (UK) 5/567 Richard Heinberg is not one to shy away from difficult topics and The End of Growth is no exception. Heinberg explains today’s environmental and economic realit- ies—which are scary to face. But believe me, not facing them is a whole lot scarier. And as Heinberg explains, the sooner we have this critically needed conversation about how to live in a healthy, fair, and meaningful way on this one planet we have, the better it will be for all of us. —ANNIE LEONARD, author, The Story of Stuff A vitally important book—it helps clear away many of the mistaken assumptions that clutter our heads when we think about ‘obvious’ and ‘natural’ facts of our eco- nomic life. You really need to read it if you want to un- derstand the next few crucial years. — BILL MCKIBBEN, author of Deep Economy and Eaarth From all my research, I’m come to appreciate how much the expectation of unending growth dominates public policy — and how ephemeral that goal is likely to prove. Until now, however, no one has had the foresight to ad- dress this critical topic. Congratulations to Richard Heinberg for providing such a lucid account of the nat- ural limits to growth and the urgent need for a new eco- nomic model. 6/567 — MICHAEL KLARE, author, Rising Powers, Shrinking Planet THE END of GROWTH post carbon institute The End of Growth is a “living book.” Additional materials are being posted and updated regularly at endofgrowth.com. Also, you can join the conversation about EOG at facebook.com/richardheinberg facebook.com/postcarbon THE END of GROWTH Adapting to Our New Econom- ic Reality RICHARD HEINBERG 10/567 Copyright © 2011 by Richard Heinberg. All rights reserved. Cover design by Diane McIntosh. Balloon: iStock © kutay tanir. Pin: iStock © Keith Webber Jr. Background texture: iStock © toto8888 Printed in Canada. First printing May 2011. Paperback ISBN: 978-0-86571-695-7 eISBN: 978-1-55092-483-1 Inquiries regarding requests to reprint all or part of The End of Growth should be addressed to New Society Publishers at the address below. To order directly from the publishers, please call toll-free (North America) 1-800-567-6772, or order online at www.newsociety.com Any other inquiries can be directed by mail to: New Society Publishers P.O. Box 189, Gabriola Island, BC V0R 1X0, Canada (250) 247-9737 New Society Publishers’ mission is to publish books that con- tribute in fundamental ways to building an ecologically sus- tainable and just society, and to do so with the least possible impact on the environment, in a manner that models this vis- ion. We are committed to doing this not just through educa- tion, but through action. Our printed, bound books are printed on Forest Stewardship Council-certified acid-free paper that is 100% post-consumer recycled (100% old growth forest- 12/567 free), processed chlorine free, and printed with vegetable- based, low-VOC inks, with covers produced using FSC-certi- fied stock. New Society also works to reduce its carbon foot- print, and purchases carbon offsets based on an annual audit to ensure a carbon neutral footprint. For further information, or to browse our full list of books and purchase securely, visit our website at: www.newsociety.com Library and Archives Canada Cataloguing in Publication Heinberg, Richard The end of growth : adapting to our new economic reality / Richard Heinberg. ISBN 978-0-86571-695-7 1. Economic indicators. 2. Economic forecasting. 3. Economic development. 4. Natural resources. I. Title. HC59.3.H45 2011 330.9’05 C2011-902953-7 www.newsociety.com DEDICATION To P. J., whose generosity makes my work possible — and who keeps going even with the knowledge that time and means work against us. Contents Acknowledgments Introduction: The New Normal 1. The Great Balloon Race 2. The Sound of Air Escaping 3. Earth’s Limits: Why Growth Won’t Return 4. Won’t Innovation, Substitution, and Effi- ciency Keep Us Growing? 5. Shrinking Pie: Competition and Relative Growth in a Finite World 6. Managing Contraction, Redefining Progress 7. Life After Growth Notes About the Author Acknowledgments This book has benefited from the contributions of many people whose help deserves recognition. I will start with the staff of Post Carbon Institute, the organization for which I am happy and proud to work. Asher Miller, Daniel Lerch, Ken White, and Tod Bril- liant read the manuscript in various stages and offered key editorial suggestions. This team has also collabor- ated with me on related projects — including short YouTube videos such as the award-winning“300 Years of Fossil Fuels in 300 Seconds” and “Who Killed Growth?” Crystal Santorineos transcribed interviews and Simone Osborne published excerpts from the book on PostCarbon.org and EnergyBulletin.net (readers of those excerpts in turn sent in valuable suggestions for the manuscript). New Society Publishers also deserve thanks — espe- cially Ingrid Witvoet, who edited the manuscript; Chris and Judith Plant, who responded enthusiastically to The End of Growth when it was no more than an idea; Sue Custance who helped shepherd the project along; and E. J. Hurst, who masterminded promotional efforts. 16/567 Jared Finnegan put his recent studies at the London School of Economics to use in offering informed editori- al suggestions for the manuscript, and also in preparing the graphs and their captions — a task that involved gathering dozens of data sets from a variety of sources. Jared’s editorial input was especially crucial to the sec- tion “The End of ‘Development’” in Chapter 5. Suzanne Doyle contributed many hours to compiling the Notes, finding sources and keeping track of hun- dreds of references. My research for The End of Growth entailed inter- views and conversations with many brilliant thinkers, each of whom deserves an introduction as well as my great thanks. A conversation with Gus Speth — one of the giants of the environmental movement, who taught for many years at Yale (and now at Vermont Law School), and au- thor of A Bridge at the Edge of the World: Capitalism, the Environment, and Crossing from Crisis to Sustain- ability — brought me up to speed with recent develop- ments in the world of alternative economics. Another conversation, this one with John Fullerton, formerly Managing Director of JPMorgan and more recently the founder of the Capital Institute, helped me understand the culture of Wall Street and how it evolved during the past quarter century.