Growth within Planetary Boundaries I

The nine planetary boundaries


Stratospheric ozone depletion

The stratospheric ozone layer in the atmosphere filters out ultraviolet (UV) radiation from the sun. If this layer decreases, increasing amounts of UV radiation will reach ground level. This can cause a higher incidence of skin cancer in humans as well as damage to terrestrial and marine biological systems. The appearance of the Antarctic ozone hole was proof that increased concentrations of anthropogenic ozone-depleting chemical substances, interacting with polar stratospheric clouds, had passed a threshold and moved the Antarctic stratosphere into a new regime. Fortunately, because of the actions taken as a result of the Montreal Protocol, we appear to be on the path that will allow us to stay within this boundary.

Loss of biosphere integrity (biodiversity loss and extinctions)

The Millennium Ecosystem Assessment of 2005 concluded that changes to ecosystems due to human activities were more rapid in the past 50 years than at any time in human history, increasing the risks of abrupt and irreversible changes. The main drivers of change are the demand for food, water, and natural resources, causing severe biodiversity loss and leading to changes in ecosystem services. These drivers are either steady, showing no evidence of declining over time, or are increasing in intensity. The current high rates of ecosystem damage and extinction can be slowed by efforts to protect the integrity of living systems (the biosphere), enhancing habitat, and improving connectivity between ecosystems while maintaining the high agricultural productivity that humanity needs. Further research is underway to improve the availability of reliable data for use as the ‘control variables’ for this boundary.

Chemical pollution and the release of novel entities

Emissions of toxic and long-lived substances such as synthetic organic pollutants, heavy metal compounds and radioactive materials represent some of the key human-driven changes to the planetary environment. These compounds can have potentially irreversible effects on living organisms and on the physical environment (by affecting atmospheric processes and climate). Even when the uptake and bioaccumulation of chemical pollution is at sub-lethal levels for organisms, the effects of reduced fertility and the potential of permanent genetic damage can have severe effects on ecosystems far removed from the source of the pollution. For example, persistent organic compounds have caused dramatic reductions in bird populations and impaired reproduction and development in marine mammals. There are many examples of additive and synergic effects from these compounds, but these are still poorly understood scientifically.  At present, we are unable to quantify a single chemical pollution boundary, although the risk of crossing Earth system thresholds is considered sufficiently well-defined for it to be included in the list as a priority for precautionary action and for further research.

Climate Change

Recent evidence suggests that the Earth, now passing 390 ppmv CO2 in the atmosphere, has already transgressed the planetary boundary and is approaching several Earth system thresholds. We have reached a point at which the loss of summer polar sea-ice is almost certainly irreversible. This is one example of a well-defined threshold above which rapid physical feedback mechanisms can drive the Earth system into a much warmer state with sea levels metres higher than present. The weakening or reversal of terrestrial carbon sinks, for example through the on-going destruction of the world’s rainforests, is another potential tipping point, where climate-carbon cycle feedbacks accelerate Earth’s warming and intensify the climate impacts. A major question is how long we can remain over this boundary before large, irreversible changes become unavoidable.

Ocean acidification

Around a quarter of the CO2 that humanity emits into the atmosphere is ultimately dissolved in the oceans. Here it forms carbonic acid, altering ocean chemistry and decreasing the pH of the surface water. This increased acidity reduces the amount of available carbonate ions, an essential ‘building block’ used by many marine species for shell and skeleton formation. Beyond a threshold concentration, this rising acidity makes it hard for organisms such as corals and some shellfish and plankton species to grow and survive. Losses of these species would change the structure and dynamics of ocean ecosystems and could potentially lead to drastic reductions in fish stocks. Compared to pre-industrial times, surface ocean acidity has already increased by 30 percent.  Unlike most other human impacts on the marine environment, which are often local in scale, the ocean acidification boundary has ramifications for the whole planet. It is also an example of how tightly interconnected the boundaries are, since atmospheric CO2 concentration is the underlying controlling variable for both the climate and the ocean acidification boundaries, although they are defined in terms of different Earth system thresholds.

Freshwater consumption and the global hydrological cycle

The freshwater cycle is strongly affected by climate change and its boundary is closely linked to the climate boundary, yet human pressure is now the dominant driving force determining the functioning and distribution of global freshwater systems. The consequences of human modification of water bodies include both global-scale river flow changes and shifts in vapour flows arising from land use change. These shifts in the hydrological system can be abrupt and irreversible. Water is becoming increasingly scarce – by 2050 about half a billion people are likely to be subject to water-stress, increasing the pressure to intervene in water systems.  A water boundary related to consumptive freshwater use and environmental flow requirements has been proposed to maintain the overall resilience of the Earth system and to avoid the risk of ‘cascading’ local and regional thresholds.

Land system change

Land is converted to human use all over the planet. Forests, grasslands, wetlands and other vegetation types have primarily been converted to agricultural land. This land-use change is one driving force behind the serious reductions in biodiversity, and it has impacts on water flows and on the biogeochemical cycling of carbon, nitrogen and phosphorus and other important elements. While each incident of land cover change occurs on a local scale, the aggregated impacts can have consequences for Earth system processes on a global scale. A boundary for human changes to land systems needs to reflect not just the absolute quantity of land, but also its function, quality and spatial distribution. Forests play a particularly important role in controlling the linked dynamics of land use and climate, and is the focus of the boundary for land system change.

Nitrogen and phosphorus flows to the biosphere and oceans

The biogeochemical cycles of nitrogen and phosphorus have been radically changed by humans as a result of many industrial and agricultural processes. Nitrogen and phosphorus are both essential elements for plant growth, so fertilizer production and application is the main concern. Human activities now convert more atmospheric nitrogen into reactive forms than all of the Earth’s terrestrial processes combined. Much of this new reactive nitrogen is emitted to the atmosphere in various forms rather than taken up by crops. When it is rained out, it pollutes waterways and coastal zones or accumulates in the terrestrial biosphere. Similarly, a relatively small proportion of phosphorus fertilizers applied to food production systems is taken up by plants; much of the phosphorus mobilized by humans also ends up in aquatic systems. These can become oxygen-starved as bacteria consume the blooms of algae that grow in response to the high nutrient supply. A significant fraction of the applied nitrogen and phosphorus makes its way to the sea, and can push marine and aquatic systems across ecological thresholds of their own. One regional-scale example of this effect is the decline in the shrimp catch in the Gulf of Mexico’s ‘dead zone’ caused by fertilizer transported in rivers from the US Midwest.

Atmospheric aerosol loading

An atmospheric aerosol planetary boundary was proposed primarily because of the influence of aerosols on Earth’s climate system. Through their interaction with water vapour, aerosols play a critically important role in the hydrological cycle affecting cloud formation and global-scale and regional patterns of atmospheric circulation, such as the monsoon systems in tropical regions. They also have a direct effect on climate, by changing how much solar radiation is reflected or absorbed in the atmosphere. Humans change the aerosol loading by emitting atmospheric pollution (many pollutant gases condense into droplets and particles), and also through land-use change that increases the release of dust and smoke into the air. Shifts in climate regimes and monsoon systems have already been seen in highly polluted environments, giving a quantifiable regional measure for an aerosol boundary. A further reason for an aerosol boundary is that aerosols have adverse effects on many living organisms. Inhaling highly polluted air causes roughly 800,000 people to die prematurely each year. The toxicological and ecological effects of aerosols may thus relate to other Earth system thresholds. However, the behaviour of aerosols in the atmosphere is extremely complex, depending on their chemical composition and their geographical location and height in the atmosphere. While many relationships between aerosols, climate and ecosystems are well established, many causal links are yet to be determined.


Growth within Planetary Boundaries V

The Case of Population

We’re in search of a sustainable development trajectory for the planet. We want to help countries grow, especially the poorest countries, to break free of the poverty trap. We need to respect planetary boundaries, and we want growth to be fair, widely shared with a broad inclusive prosperity. We’ve seen how hard this is going to be, whether it’s the energy system, or the food production technologies that are going to have to change markedly. But a big part of the challenge, the extent of the challenge, the ability to meet sustainable development will depend on the future of population dynamics.

The more people there are on the planet, the more mouths to feed, the more challenges there will be to reconcile the economic objectives of rising living standards per person, multiplied by a larger number of people, and respecting the planetary boundaries. And so, facing the question of population is key. We also know it’s key for inclusiveness and breaking free of poverty. Because when poor families have large numbers of children, they are not able to provide the kind of investment in the human capital, as we call it. Meaning the health, the nutrition, the education, the skills of their own children. In order to ensure that they are productive and meet their their potential is, as adults. And so, reducing the fertility rates, voluntarily, respecting human rights and family desires to levels that are low enough to foresee a stabilization, even a gradual decline of today’s large population, or the one that we will have on the planet in the future, will make it easier to achieve the other aspects of sustainable development as well. Social inclusion, ending extreme poverty. And of course as I’m emphasizing, respecting the planetary boundaries. So where do we stand?

Well, if we go back to Thomas Robert Malthus in 1798, a world of 8 to 900 million people. And he warned us, be careful, populations will grow. They have grown maybe by a factor of nine or ten, since Malthus gave us that famous warning, to 7.2 billion today. And that 7.2 billion today is up from around 2.5 billion people in the middle of the 20th century. You’re looking at a very pertinent set of scenarios, four of them shown here, produced by the United Nations Population Division. Notice that the solid line shows the actual change in population from 2.5 billion to 7.2 billion between 1950 and 2010. And then the four lines diverge, depending essentially on alternative assumptions about fertility rates, out to the end of the 21st century, to the year 2100. What are these four scenarios? The medium scenario shown here, it’s the one that is third from the top on the right hand side, reaching about 10.8 billion people in the year 2100. It’s called the medium fertility scenario of the UN Population Division. It’s the one we tend to look to as something like a continuation of current trends. That scenario shows us having an increase of another 3.6 billion people between now and the end of the century. What an enormous increase. That’s the middle scenario. Now at the top is something unthinkable, unimaginable, but very interesting for us. Suppose fertility rates do not come down at all, and for each age and each country in the world, the age specific child bearing tendencies continue into the future without reduction. Well, simply running the clock forward, based on the current fertility rates, the world population would soar well past 20 billion, 25 billion. In fact, by 2100, it would be 28.6 billion, four times higher than now. Impossible.


The Earth couldn’t manage it, but it does tell us something. It tells us that the medium scenario of the United Nations isn’t exactly business as usual in a mere continuation of current trends. It builds in the assumption already of a significant decline of fertility rates in future years. Take that into account. Because if those fertility rates do not come down, then 10.8 billion is going to look awfully optimistic in terms of where the population would settle, where I’m using the term optimism to mean keeping it on the lower side, so that we can envision realistically sustainable development. A constant fertility rate continuing exactly what’s happening right now, 28 billion people.

The next line down is what’s called the high fertility rate. It’s a little bit more plausible, pretty frightening. It says, if, instead of that medium scenario, women were to have just, on average, one half child more. So that each woman, instead of having two children, would have two and a half children or, or to put it another way, every ten women would be having 25 children rather than 20 children. Would mean billions and billions of people more on the planet. That’s how sensitive the population forecasts are to the future dynamics of fertility. We could reach 16.6 billion that is more than 5 billion in addition to the forecast of 10.8 billion, obviously. Now if rather than the medium fertility forecast, which has a built in estimated decline of fertility gradually over time, the decline of fertility were a bit faster. So that women were having on average a half child fewer than in the medium forecast, or every ten women having five children fewer than in the medium forecast. Then the world population would actually peak around mid century, and gradually decline to about 6.8 billion at the end of the century. From my point of view, that’s most attractive if we aim for sustainable development, which we presumably are aiming for. Because if we can have a peak of the world population, then a gradual decline, it’s going to be much easier to meet the inclusiveness goals, the fairness. It’s going to be much easier to meet the environmental objectives and needs as well. What this shows is that small changes of fertility rates will have big changes of outcomes. And it suggests that if steps are taken to help facilitate a faster reduction of fertility by, for example, keeping young girls in school rather than having them married, as in traditional societies at the age of 14 or sometimes even younger. This could make a very big difference.


Now, the next graph shows the annual rate of change of population in the medium scenario, but for different groups of countries. This is also important. The solid line third from the top, is the world average. What you see is that the population growth of the world peaked at about 2%, around 1970. At that time, the world population was on the order of about 4 billion people, which means that at a 2% growth rate, the world was adding about 80 million people per year.

Now if you fast forward to the year 2010, the growth rate is a little over 1% per year, 1.1 to 1.2% per year. But now, the base on which that percentage growth is occurring is twice as large as back in 1970. It’s now 7.2 billion people, multiply 1.1% by 7.2 billion people, or 1.2% by 7.2 billion people. Lo and behold, you’re getting about the same 80 million increase as of 40 years ago. This says that the proportionate growth rate of population has slowed. But the absolute numbers, the arithmetic increase year by year remains around 75 to 80 million people added to the world’s population each year. In the medium scenario, that growth rate tends to decline. It declines to almost zero by the end of the century, because fertility rates basically come down to replacement. Replacement fertility rate means that each mother has two children, one is a daughter, one is a son. Each mother is replacing herself with a daughter who will become the mother of the next generation. And keeping the numbers, therefore, in the long-term stable.

So since the fertility rate is assumed by the United Nations to trend towards the replacement rate of around two, the population growth rate also tends to converge to around zero. But what you see on this graph is that the least developed countries ironically, but not unexpectedly, have the highest population growth rate. Those are the places where family planning is not used. Those are the places where girls drop out of school early. Those are the places where women face massive discrimination. They’re not in the labor market, and so the opportunity cost of their time is low. They’re supposed to be home having children, according to the prevailing social norms, or maybe the desires of their husbands. Maybe not their own desires in many places, but traditional societies impose, through cultural and other means, that kind of pressure for large numbers of children.

Well, to see where fertility rates are right now, we can look at the next graph, which measures the actual fertility rates up to the year 2010.


And then shows the projections of the United Nations in this medium fertility projection for different groups of countries out to the year 2100. What you see is that, as of 2010, the countries at the bottom of this curve, which are the more developed, or the developed regions of the world, are already below replacement rate. If they continue with that fertility rate for another couple of generations, the population size will begin to decline in the high income world. The highest fertility rates in the curve at the very top of this picture are the least developed countries. Whereas, in 2010, still the total fertility rate is above four. Each mother, on average, is having two daughters. That means the population is tending to double, generation by generation. because each mother is replacing herself statistically with two daughters, who will grow up to be two mothers of the next generation. That’s why the population growth remains so high. And one can see in this graph, is that for the less developed regions as a whole and for the world on average, the fertility rates are a bit above replacement, but not as high as in the least developed countries. And therefore, on average, the population growth rate is less than it is in the poorest countries, but higher than it is in the high income countries.

Well, what could lead to a faster transition to a stable population, and to a replacement fertility rate? We know through observation and careful study that there are many key determinants of the fertility rate, of the fertility choice. Let me mention some of them.

First, age of marriage. In traditional societies, girls are often not schooled at all, or pushed out of school early. And married very early, maybe by the command of their father, who marries the girl for economic reasons within the community, or traditional reasons at the age of 12 or 14. And then childbearing starts very soon thereafter. And these young girls, who remain illiterate throughout their lives without economic, political, or social empowerment, often end up with seven or eight or nine children. So that is one determinant.

A second, obviously, is access to contraceptions and family planning. Places where contraceptives are widely available, where clinical services work, where there is good culturally sensitive advising where women can discreetly gain access to their contraceptive desires, tend to have lower fertility rates. And family planning programs that are, again, culturally sensitive and aware, and operating effectively in low income countries, can dramatically lower, on a voluntary basis, the total fertility rates in those countries.

A third determinant is the woman’s role in the labor force. In some countries, women aren’t allowed to work, or they’re not allowed to work outside the home, or they’re not allowed to work in many occupations. They face massive legal and social discrimination, or cultural practices that basically keep them at home. Now, raising children takes a lot of time. And therefore, if a woman is earning a living in the labor market, the cost of raising children, in terms of the lost wage income, can be very, very high. That means women that are in the labor force and are working and have that opportunity tend to want to have fewer children, because the opportunity cost of raising children is really quite high in terms of lost income. Women who face massive discrimination and aren’t allowed in the labor force may end up with more children, in part because of the market value of their time is so low. Not because it couldn’t command a higher income, but it’s not allowed to because of gender discrimination.

Another major factor is the urban versus rural location of families. Children are often farm assets. They do work, they do chores, they milk the cows, they carry fuel wood, they carry water. They therefore are not seen as a high cost, but actually as part of the farm labor for a family farm. In the urban areas, the child, much more likely, is going to school, but not working in a formal way. Typically, not always. There are painful exceptions. But this means that, on average, families in rural areas see the cost of raising children to be lower, because they see even young children being economic inputs to the household production. Whereas that’s not the case in urban areas. When families move to urban areas, their fertility rates come down.

Child survival is another key determinant. If it’s with the good reliability that the children will survive, families choose to have fewer children. If there’s worry about whether children are going to survive, many risk-averse households will have many, many children to compensate for the expectation that some of the children will die. So one of the keys to a quick voluntary reduction of fertility is to help keep children alive. Good public health, good health facilities in the local community.

The legality of abortion also plays an evident, a quite significant role statistically, different societies have different views. But those that have legalized abortion tend to have lower observed fertility rates than those where abortion is illegal. Still often undertaken, sometimes in very, very dangerous conditions. But where abortion is legalized, fertility rates tend to be lower.

The public leadership plays a big difference, because these are culturally determined phenomenon. Some places in traditional societies when families were on the farm, when children were dying in large numbers, the cultural norms were, have as many children as possible. But when conditions change, children are surviving, families are in urban areas, children need to be educated. Farm sizes have already shrunk, ecological burdens are high.  And you want a lower fertility rate as a result by giving the options and awareness to households. Then the political leadership’s saying, you know, for your good, your farm size has shrunk. You’re trying to help raise children with good education, have fewer children. The political leadership and the public awareness can play a huge role. As, of course, do the role models that people see. One of the things sociologists have found is that when television sets come into a poor rural area, fertility dmnaterates tend to come down. The hypothesis, at least, is that people are observing on their television shows, in their sitcoms and and in, in their soap operas, families with fewer children. And in the rural areas, that’s giving the idea that there’s only one son or daughter, maybe two children, not six or eight. And that changes the social norms as well. This is a big deal for us.

The dynamics of the world will look very different if the world population reaches 11 billion at the end of the century versus stabilizing, and even falling gradually below 7 billion. The latter would be much easier from the point of view of quality of life, income per capita, and environmental sustainability. And there’s good reason to believe it would be the preferred choice of households if they have access to family planning, education for their girls, child survival, jobs, and an absence of discrimination for women. Provide those conditions, most likely households will absolutely take the opportunity on a voluntary basis for a sharp reduction of fertility rates, helping to move the world more quickly to a peaking and stabilization, and then gradual decline of the world population thereafter.

Growth within Planetary Boundaries IV

The Case of Food

You would think, I think intuitively that energy would be the dominant way that humanity is impacting the planet. We’ve just seen how massive energy use translates into rising carbon dioxide and climate change. And energy, of course, is everywhere in our transport systems, our power supplies, our industrial processes, our home use. But it’s quite arguable I would say it is right to say, that the agriculture sector has an even larger impact on the physical planet and the various earth systems than energy. Energy is causing climate change. Agricultural use and agricultural patterns not only have a huge impact on climate but have a huge impact on every aspect of the Earth’s systems and the planetary boundaries.

We’ll see soon that the food production contributes massively to greenhouse gas emissions, therefore to climate change. But we’ll see also that the energy system as we go around the the circle is in a way dwarfed by the food production system in its impacts on each of the other areas of the, the planetary boundaries. The nitrogen and phosphorous cycles, where we get the pollution from the runoff of nitrogen and phosphorus-based fertilizers. The fresh water use, which is about 70% used in the agricultural sector. The change of land use overwhelmingly a reflection of agriculture. The loss of biodiversity  coming from the way that farmlands and  pasture lands and and tree crop plantations absolutely threaten habitats of other species unless uh,agriculture is done in an agro-ecologically friendly manner. Chemical pollution with the heavy application of chemicals such as herbicides and pesticides used in agriculture. There’s a tremendous amount of chemical impact from the farm system. So it is quite arguable that farming dominates the all of the human activities in terms of the anthropogenic effects. Anthropo, human. Genic, caused by. That is the various human-caused impacts on the planet.

Now this is in a way ironic because it takes us right back to the beginning of the modern economic era and to the very beginning of economic studies just like Adam Smith does and just like Adam Smith’s wisdom is still useful today, so too is that of another great thinker Thomas Robert Malthus who wrote famous text in 1798 called Principles of Population. Malthus was afraid. He was also afraid of planetary boundaries, but for a slightly different reason. Malthus said that the human population has a tendency to rise at a geometric rate. And so if left on its own with the basic needs met the human population would continue to expand rapidly. He was right in that when he wrote the Principles of Population in 1798. The total population may have been 800 million, maybe 900 million. Roughly one tenth of the level that it is today. So Malthus was right that human population tends to increase markedly, at a geometric rate he said. Now, he feared that the ability to grow food would only increase at an arithmetic rate. That is adding a certain number of tons of feed grain or food grain per year to the world’s capacity to grow food. And Malthus said, look, any geometric growth will always overtake any arithmetic growth. So the growth of the human population is always going to overtake the ability to grow food, he said. And at some point there will be so many people that hunger will ensue. And when hunger ensues there will be various kinds of devastating feedbacks whether it’s war, whether it’s famine, whether it’s disease or other scourges that will push population back down. But will mean that humanity won’t break free of the physical constraint on the ability to grow food.

Now Malthus did not anticipate the scientific advances of the Green Revolution, for example. He didn’t anticipate modern seed breeding of course even Mendel who invented the modern science of genetics would come basically about three quarters of a century after Malthus. Malthus also didn’t anticipate the breakthroughs in the science of soil nutrients and the use of chemical fertilizers to replenish soil nutrients and to boost food yields. Nor did he anticipate at least the potential for the human potential to stabilize by means of modern contraception, family planning, and choices that households make. So Malthus, couldn’t see the full dynamic ahead, but he worried that the human population would outstrip the carrying capacity of the planet itself. For a long time, economists and others laughed at Malthus. They said, you’ve got it all wrong. You see modern science allows us to grow enough food for a geometric rise of the population. We know how to add fertilizer, we know how to have high yield seed varieties. But, you know, Malthus’ a pretty clever guy and he had a real insight and we’re not done with his story yet because his warning rings true today.While it is the case that increases of food production technology in agronomy and food processing, storage, transport and the ike has made it possible to feed 7.2 billion people though not all of them by any means fed well or nutritiously. It is also the case that the food production system is so destructive of the environment that Malthus is still there, waving his finger saying not so fast. You haven’t proven that you can grow this amount of food sustainably.

What’s going to happen when the water runs out? What’s going to happen when the nitrogen and phosphorus loadings become so large and so forth. So I would say we’re not at the end of the Malthusian story yet. Sustainable development calls for a renovation, a reform, an upgrading of the technological systems to grow food. It calls for us to eat more wisely as well. Eating the kinds of food products that don’t threaten the natural environment. For example, not eating endangered fish species or endangered species of land mammals. Unfortunately some of which are in huge supply as delicacies, even to the point of illegal hunting and poaching and threatening the very survival of these species. So, changing farm systems and changing human behavior, in terms of our diet and use of agricultural products, is possible. But in order to meet Malthus’s challenge, we still have to prove that it’s possible to grow food in a sustainable manner

For all of the people properly nourished on the planet, and with the food system recognizing and respecting the planetary boundaries. Boy, are we far from this today. Let’s think about some of the ways that the food system is impinging on the planetary boundaries.

First, the food system is an enormous source of greenhouse gases. Of course agriculture uses a lot of energy. For planting, for harvesting, for storing, transforming and transporting food and other agricultural commodities. There’s a lot of energy stored in chemical fertilizers, because to make urea, or other nitrogen based fertilizers, one requires a lot of energy to create the chemical compounds in those fertilizers. But what’s interesting and important for us to note, is that agriculture emits greenhouse gases in other ways as well. Remember, the two other major greenhouse gases, anthropogenically caused, that is, caused by human beings in addition to CO2 are methane and nitrous oxide. Now methane or CH4 is emitted in a variety of ways. It’s emitted by anaerobic processes in flooded or paddy field rice for example. Where the metabolic processes of the bacteria release methane into the atmosphere. It’s also released from the gut of ruminant livestock. When cows chew their cud, and digest their food they are also emitters of methane on, on a large scale. Nitrous oxide is emitted partly through industrial processes and electricity production at coal fired power plants. But it’s also emitted by the chemical decomposition of nitrogen based fertilizers. So fertilizers are a source of nitrous oxide in the air.

But they’re also a source of water pollution in the sea. In both cases, the nitrogen is supplied on the farms, but it’s not taken up by the plants themselves. It either volatilizes into the atmosphere or it runs off into the water and then, on the way through the rivers and ground water to the ocean. So greenhouse gases is one major way that that the agriculture system impinges causing climate change. Land use change and habitat loss is another obvious way. Humans use land primarily, not for our cities, not for our highways, but for our farms and our pasture land and our timber land. And we have already taken hold of so much land, so much photosynthetic potential, to feed us, that we’re depriving other species, not only of their natural habitats, but of the food that they need to stay alive. And that’s why we’re driving numbers of other species down sharply. Agriculture, as I mentioned earlier, is a major source of chemical pollutants often very long lasting and very toxic chemicals that are used as pesticides and as herbicides and as other parts of the food production chain.

Agriculture has another perverse threat which is called invasive species. Invasive species means that humanity advertently, or inadvertently, but generally unwisely takes a species from one part of the world, puts it into another environment, perhaps where there’s no competition with that species. If it’s an animal, it can run wild. If it’s a plant or a weed, it can take over a a land area, or a lake for example, dominating the local biodiversity. Invasive species means that we are rearranging the biogeography. The places on the planet where various species exist. And we’re putting lots of species at risk by invading ecosystems where they don’t belong, where they are not native. Perhaps where they have no predators, or where they can invade and take over a lot of the resources of that ecosystem.

Nitrogen and phosphorus runoff, I’ve already mentioned. And look at this picture. The shocking picture off the coast of China there is so much fertilizer being used by Chinese farmers because it’s heavily subsidized, and because of bad farm practices that that fertilizer runs off the farms into the rivers and ground water. It accumulates in the estuaries and off the coast, and it creates this kind of algal bloom. And algal bloom means that there’s such a sudden massive loading of nutrients, nitrogen and phosphorus in particular that the algae which either naturally grows in a particular place or has been introduced say by fisheries practices, suddenly has this massive feast of nitrogen and phosphorous. And there’s an explosion of the amount of algae. This algae will die. Then it will be decomposed by bacteria. As those bacteria feast on the algae, the dead algae, they will be respirating, and they’ll be using a lot of the oxygen in the water. They will deplete the oxygen as part of the respiration process and by depleting the oxygen they will create an oxygen depleted zone of coastal waters. That’s called a hypoxic zone, low oxygen hypo oxia. And low oxygen kills the fish, kills the other species. Suddenly you have what ecologists and marine biologists call a dead zone. There are dead zones all over the coastal world now, especially in the estuaries.

Estuaries where the freshwater of rivers meets the saltwater of the oceans are wondrous ecosystems. Our shellfish and many other species are often indigenous to those locations, and they’re being threatened by this nutrient loading. By the utrification and then by the hypoxia that results. Creating dead zones and hypoxic regions in more than 130 estuaries around the world. The food system also gives rise to new pathogens. When we have the industrial breeding of poultry, for example, all crowded together, we have learned that there is recombination of genes of bacteria and viruses. When livestock and poultry out in the open mixed with the wild with the wild species of geese and other species, you get further recombinations. And this has given rise to many  emerging infectious diseases, some of which are very, very  frightening, like SARS. Was and remains very, very frightening. And so we have new and emerging diseases coming from industrial agricultural practices. Of course we have massive overharvesting, overhunting, overgrazing,over abstraction and cutting down logging of trees and forests. Most of the world’s major fisheries have been massively over fished.

In the Northeast of the United States where I live there was a collapse of the cod fisheries because of the massive amount of fish that was being hauled up using modern technologies trawlers and other high tech ways to fish a massive amounts of fish under the ocean.

And of course with all this food production we are using up water supplies through ground water depletion, through the diversion of rivers which no longer make it all the way to the sea. And the growing water crisis is extraordinarily frightening.

We see water scarcity as a major threat to well being, to human health, to economic development in many, many parts of the world adding climate change on one side, overuse of water coming from agriculture it’s quite a dangerous brew. So just as we are going to need to find a new pathway for energy basedon energy efficiency and low carbon energy supplies. We are going to need to find a new farm system, or I should say farm systems. Because there are farm systems distinctive all over the world depending on the local climates, local cultures, local soils, local ecological conditions. But what is nearly common to all of the major regions is that our farm systems are not yet sustainable.

We still have to prove Malthus wrong, we still have to take a tip from Malthus that the challenges of food supply are a major and continuing challenge facing humanity, and a core part of any agenda of achieving sustainable development.

Growth within Planetary Boundaries III

The Case of Energy

Of all of the problems of reconciling growth with planetary boundaries probably none is more urgent and none is more complicated than the challenge of energy. Remember that the whole world economy grew up, starting with the steam engine, then the internal combustion engine, the gas turbine as a fossil fuel built world economy. Fossil fuels, coal, oil, gas, have been our friend. They have been the basis on which the modern world has been built. And indeed until James Watt in 1776 came along with his steam engine, there was no way to even think about sustained economic progress. Where would the energy for industry come from? Every time industry would start to develop in the pre-steam engine age, so many trees would be chopped down to feed the boilers that the limits of industrialization were very quickly reached. It was fossil fuels that allowed the breakthrough to the era of modern economic growth. I emphasize this because that history reminds us of how deep the challenge is. Right now fossil fuels are not our friend because when coal, oil, or gas is burned the carbon that is the basis of those fossil fuels combines with oxygen and produces CO2, carbon dioxide, which is emitted into the air, which is the main greenhouse gas warming the planet, changing the climate, and endangering humanity and other species. And so what has been the key at the very core of the world economic growth is now at the core of our major problem. Well, you might say use less energy, but it’s not so simple.

Because as a physicist will remind us, what is energy? Quality energy is the ability to, to work. Any useful work in, in economy depends on energy. Sure, we waste a lot of energy in the form of release of heat or friction or driving cars much larger than they need to be or poorly insulated buildings. So energy efficiency is clearly part of any solution for sustainable development. But the world needs energy resources, will use energy resources, and the use of energy, even with a substantial gain of efficiency, is likely to increase in the aggregate as the world economy expands by factor three or by factor four as we have just seen. And so we have a problem. More energy is needed. The traditional forms of energy, the fossil fuels of coal, oil, and gas, can’t do it for us because that would create a massive intensification of the climate change problem. How big of an intensification?


That’s what I’d like to discuss, so that we get some parameters of where we are and where we’re going. This graph shows again on a logarithmic scale on the horizontal axis and on the vertical axis the income of different countries and the primary energy use of those countries, the energy consumption. Total energy use by country would include the fossil fuels, it might include wood burning, hydroelectric power, geothermal energy, wind and solar power, nuclear power or some other forms for instance biofuels. And what is done in this graph is for every country in the world to measure first the total output measured as the gross domestic product, and then to compare that with the total primary energy use. Which can be expressed in a number of ways, in units of kilowatts, or kilowatt hours, it can be expressed in tons of oil equivalent energy where, you take the amount of energy in one ton of oil, and then for all the other kinds of energy, whether it’s coal or gas or hydro and so forth, you look at the amounts of, of energy available from that resource and convert it as if it were tons of oil that had that much energy potential. And then express all the different energy sources with these conversion factors as a tons of energy equivalent amount of primary energy use. What you see when you graph the total output of an economy versus its energy consumption is essentially a straight line, though of course the countries don’t fall exactly on this upward sloping line. What this line signifies is that a doubling of the size of an economy tends to be associated with a doubling of primary energy use. Energy use scales alongside in proportion and in relatively constant ratio with total size of the economy. So, as the economy grows the energy use will tend to grow along side it. Save for break those in technology that allow for greater energy efficiency.

Lets look quantitatively at how much energy we use and what that implies for how much carbon dioxide we therefore emit into the atmosphere and what that implies for how much climate change we’re causing.

If you look at the amount of energy use by country you find that, roughly speaking, this is on average because countries differ, but they don’t differ all that widely. For every $1,000 of total production in the economy, the total energy use expressed in tons of oil equivalent tends to rise by about 0.19 tons of oil. What is 0.19 tons of oil? These are metric tons. So, a metric ton is 1,000 kilograms. So, 0.19 of a metric ton is 190 kilograms. So let me put it again this way. $1,000 of production, on average, expressed in, $2,005, let me add one more, parentheses, is associated with about 190 kilograms of oil use, or an equivalent amount of energy contained in coal or natural gas or one of the other non fossil fuel forms of energy. That gives us the scale of how much energy we use for each $1,000 of production. Now, if you look at the mix of, the energy sources in the world, mostly fossil fuels, but also some nuclear power, some wind, some solar, some some charcoal from trees some biofuel say from sugar cane converted to ethanol for automobile use as in Brazil. On average, every ton of oil equivalent energy is equivalent to about 2.4 tons of carbon dioxide emissions. In other words burn a ton equivalent of energy, and you put up more than two tons of CO2 into the atmosphere.

How much CO2? That depends on exactly which energy source you’re using. If it’s nuclear power, zero, because nuclear power is not a fossil fuel, and therefore nuclear power does not by itself create carbon dioxide emissions. If it’s coal, it’s higher than that average because coal, being almost all carbon with some impurities, when it burns, creates CO2 with little other energy created by the coal. And so coal creates the most carbon dioxide emissions per unit of energy of any fuel. Gas, and natural gas and oil emit less. So coal for a ton of coal burned, you get about four tons of carbon dioxide emitted into the air. For a ton of I should say not for a ton coal but for a, an amount of coal equal in energy to one ton of oil. That’s the right way to say it. You get about four tons of CO2 emission. For one ton of oil, you get about 3.1 tons of CO2 emission. For the amount of natural gas equivalent to a ton of oil in it’s energy content, you get about 2.4 tons of CO2. And for hydroelectric power, for solar power, for wind, zero.

632So, you can see why those energy sources are highly desirable from the point of heading off climate change. Let’s summarize again.Each $1000 of production requires a 190 kilograms, or 0.19 tons of oil equivalent of energy. And each one ton of oil equivalent on average is associated with 2.4 tons of CO2 emissions. So let’s do the arithmetic. Expressed in $2,005 used for this illustration, the world economy at 2010 was at about $68 trillion. $68 times 0.19 tons of oil equivalent per $1,000 times 2.4 tons of carbon dioxide per ton of oil equivalent energy turns out to be 31 billion tons of CO2 emission, and viola, that’s what the world released into the atmosphere in 2010 by virtue of its fossil fuel use.

So you see we can measure the size of the economy times the energy use per unit of economy, per $1,000, times the amount of CO2 released per unit of energy. And the result is a very big number, 31 billion tons of carbon dioxide released. We also put CO2 into the atmosphere as humans in other ways. We chop down trees. And when we chop down trees, the carbon that was stored in those trees is released into the atmosphere if the trees are burned or, or decay. And so carbon that was sequestered biologically is released into the atmosphere as well. That adds a few billion tons of carbon dioxide emissions in addition to those caused by fossils fuel use. Little more arithmetic. For every ton of CO2 put into the air, just a bit less than half of that stays in the air, because some of the CO2 dissolves in the ocean, some of it gets sequestered in plants and trees back on Earth. And so, of the one ton that’s put into the air, approximately 0.46 of that or 46% of what’s admitted into the air, stays in the air. And the other 54% typically is stored in what are called natural sinks, the oceans or the land.

Now, that means that if we put 31 billion tons into the air, a little over 14 billion of those tons stayed in the air. Is that a lot, 14 billion tons, for our big atmosphere? Well we can make that calculation.

We can look at the total volume of the atmosphere, how many molecules are there. How many molecules of CO2 have been put up in those tons? You have to get out your chemistry text to do that. And what you find when you do that is that for every 7.8 billion tons of carbon dioxide put into the atmosphere, the concentration of carbon dioxide in the atmosphere rises by one part per million. So that’s the translation factor. To raise the CO2 concentration in the atmosphere, which is filled with nitrogen and oxygen, and many other mole-, types of molecules. To raise the CO2 by one molecule per each million molecules of all kinds in the atmosphere, you have to put into the atmosphere 7.8 billion tons.

So this gives us now a quantitative sense of what we’re doing. If we have put 14.2 billion tons staying in the air, and 7.8 billion tons raises the carbon dioxide concentration by one part per million. Then the amount that we emitted into the atmosphere in 2010 from fossil fuel use, raised the, carbon dioxide concentration by about 1.8 parts per million or, nearly two molecules for every million in the atmosphere were now CO2 it raised in CO2 concentrations.

Is that a lot? Yes.

Is it frightening? Yes.

Let me show you why. We look again, at a graph of the concentration of CO2 in the atmosphere on the planet Earth, over hundreds of thousands of years. And the concentration of CO2 fluctuates for normal process, even putting humanity out of the story, over geologic time these levels of CO2 rise and then fall and then rise and fall as part of the long run carbon dioxide cycle. And that cycle is driven in important part by systematic changes of the earth’s orbit. And if you look at this reconstruction of the carbon dioxide concentration of the atmosphere over the last 800,000 years starting all the way to the left-hand side of the graph, the first peak you see is the carbon dioxide rose to a little bit over 250 parts per million. Then it fell to under 200 parts per million. Then around 700,000 years ago it rose again to nearly 250 parts per million and then it fell again, then it had another peak at 600,000 years ago, and so forth. So you go up and down, up and down, driven by natural changes of the Earth’s orbital cycle, but then as you move to the right that means coming closer and closer to the present on this graph. Suddenly, something really weird happens. Instead of going up down up down up down, it suddenly goes up, up, up, up, up, up, up. Shoot straight up. Just in the last 100 years of this 800,000 year graph. That’s humanity burning fossil fuel. Thank you, James Watt. Great invention. Great idea.

You made possible the world economy, but now look at the situation. CO2 soaring. How high does it go? Far higher than anything we’ve seen on this planet for 800,000 years, indeed for 3 million years. In 2013 it reached 400 parts per million. A CO2 concentration the likes of which we have not seen on the planet Earth for millions and millions of years. What the climate scientists tell us is, that this kind of change is consistent with a significant rise of temperatures on the planet. Indeed if we reach, say 450 parts per million of CO2, we are very likely to be living on a planet that on average is two degrees centigrade warmer than before the industrial revolution. Now two degrees centigrade might not sound like much, but it implies even larger increases of temperature in the higher latitudes and it implies massive changes of the Earth’s climate, of rainfall, of droughts, of floods, of sea level increase. So we’re talking about changes in CO2 concentrations that when translated into global warming, and into climate change more generally, are extremely large and extremely dangerous and happening now.

How fast are they happening? If we’re at 400 parts per million today, and that’s rising by about two parts per million each year, you can see that to reach 450 is just 25 years from now. My word. We can’t even change it at world energy system at, at that rate. So we’re on a trajectory that is very fast, and very troubling. And, add in to the fact that that’s assuming we stay where we are. Now think about tripling the world economy and tripling the amount of energy used, and if we do it using the same energy mix that we have right now, we’d be increasing CO2 not two parts per million, but five or six parts per million within a few decades. In other words, if we don’t change course we are on a path of extraordinary peril.

Where because of our fossil fuel reliance, we would be seeing mega-droughts, we would be seeing mega-floods, more extreme storms, more species extinction, more crop failures. A massive sea level rise over time, and a massive acidification of the ocean as that CO2 dissolves into the ocean, produces carbonic acid, and reduces the pH of the ocean. We have to change course, and we have to change course quickly. More quickly than the politicians are telling us, by far.

But there’s good news, let me not leave us in despair. We have powerful technologies at sharply falling prices for solar power, for wind power, for energy efficiency, for smarter systems that can economize tremendously on energy and shift us to low carbon means. We’re going to revisit some of those methods very shortly.

Growth within Planetary Boundaries II

Growth Dynamics

Now that we’ve emphasized the planetary boundaries, let’s see how hard the challenge is from the point of view of the economic growth.

We have a world now of 80 to 90 trillion dollars a year, 7.2 billion people. Approximately $12,000 per person per year on average around the planet. But the rich countries are roughly three times that average level, say $36,000 per person per year. Suppose that the poor countries, the developing world, successfully caught up with the rich world, closed the gap. That by itself would imply a three time increase of the world output, just the catching up process. Even putting aside the fact that the rich countries are still hoping to achieve some more economic growth of their own. Taking into account that in addition to the increase of total output that would come from catching up, the world population itself is also rising, from 7.2 billion people now to more than 9 billion by mid-century. To almost 11 billion at the end of the century according to the medium fertility forecast of the United Nations.


Well that means that the three time increase at our given population might amount to a four time increase taking into account the population increase as well. So imagine our situation. Our situation is one in which humanity is already causing big dislocations on the planet. But here’s a world where six-sevenths of humanity lives in developing countries. They’re looking at the high income world, they’re saying we want to live like that. In fact, they’ve deciphered a lot of the key to that, how to mobilize technology, markets, education in order to be able to have that catching up growth. And that would imply a four time increase of world output. How could it be? Could we withstand four times the human impact on the planet? Of course not. We can not even withstand what we’re doing right now. So the key, the central point of sustainable development is, that in order to reconcile economic growth and planetary boundaries we have to grow in a different way. We have to have different approaches to using energy, different approaches to transportation, different approaches to growing food in a safer and ecologically more sustainable manner.

Right now I want to look at that total increase though a little bit more carefully. A little bit more analytically. To ask, what could we expect? If we are able to solve the problem of the environmental crisis, what could catching up growth deliver in terms of aggregate output in the world in the coming decades? To do that we start with the concept of convergence.

Remember that economic convergence means that poor countries have a tendency to grow faster in output per capita, or gross domestic product per capita than do the rich countries. The reason poor countries have that chance to grow faster is not that they’re better, but because we all share similar technologies, access, knowledge and so forth. The reason they’re able to grow faster is that they have a gap to catch up. They are not yet fully using the technologies and the know-how that are already more deployed in the high income world. So a poor country has a kind of backlog that it can quickly take on of more advanced technologies to narrow the gap with the countries in the lead that we say are at the technology frontier. To understand this is, sometimes economists draw a downward sloping curve of the kind shown in this picture. You see that on the horizontal axis is a country’s level of development as a fraction of the US, the frontier country, the country at the high end of the income curve. And on the vertical axis is the growth rate of the country.


Now what’s graphed here in the solid line is the theoretical curve that says that for countries that start poor at the left hand side of the graph, their potential growth is high. And countries all the way on the right-hand side, where their income is close to the U.S. level per person, are at a lower point on that downward-sloping curve, meaning that their potential growth is lower because they have less catching-up space. And then what’s shown on this graph is the actual growth rates of a number of selected countries between the years 1990 and 2005. Lo and behold, the actual experience of countries, for instance the rapid growth of China which started quite poor, and the slow growth of Finland which started quite rich, basically fits this downward sloping line. So convergence is not only an idea, it is a practical implication of growth that we observe in, in recent years. Now, based on the experience and based on statistical analyses that have been done of this tendency towards convergence, again meaning faster growth in the poorer countries, there’s a kind of rule of thumb. The rule of thumb goes something like this. A country that is at half the income level of the country in the lead can grow about 1.4 percentage points per year faster than the leading country.

Let me give me an example. Say the United States is at $50,000 per person per year. A country at $25,000 dollars per person per year having some head room for fast growth would grow about 1.4 percentage points per year faster in GNP per capita, GDP per capita than the United States. So if the US has a growth rate per person of 1%, then the country at $25,000 would have a growth rate of 2.4% per year. Now consider a country half of that level. $12,500, so that’s one fourth of the US. Add another 1.4% per year, so that makes 2.8 percentage points per year faster than the US. So if the US is growing at 1% per annum in per person terms, a country that starts out at $12,500 per capita would be growing at 3.8% per year, 2.8 percentage points faster than the US growth rate. Well each time you cut by half the starting point of income. You raise the expected growth rate, or the average convergent growth rate by another 1.4 percentage points per year. So that a country that is 132nd say, of the United States that would be a country at about $1,562 per year just dividing 50,000 by 32. Country at 1,500, pretty poor country, maybe a country in Sub-Saharan Africa would have so much headroom that it could grow seven percentage points faster than the United States. So if the US is growing 1% per year per capita, that very poor country could be growing at 8% per capita. You get the idea. The idea is the poorer the starting point, assuming no poverty trap or other fundamental barriers to the growth of that country The headroom for rapid catching up is bigger, and one can calculate based on the statistical evidence the extent to which the growth rate will tend to be faster than the high-income country.

Now what happens over time? The poor country narrows the gap with the richer country by growing faster if it started 132nd of the income of the US, maybe some decades later it would be at a quarter of the income of the US. Then, later still, half of the income of the US. As the gap narrows, so too does the growth of that lagging country slow down. So there’s a convergence of living standards gradually over several decades, and also a convergence of growth rates. The poor country starts out very fast growing and then as it becomes richer and richer and richer, and closer and closer to the technological leader, its growth rate too therefore slows down and eventually, gradually converges with that of the technological leader. And I keep using the United States as the example of that. Let’s take a practical example of this quantitative rule. In the year 2000 the high income world had an estimated GDP per person, or gross world product per person, I can say averaging over the whole world, of about $35,000. And the developing countries had a GDP per capita on average of about 6,900 ,or let’s say $7,000 per capita. In this example if the high income countries grow at 1% per year in per capita terms, then we can calculate that given that initial gap from 35,000 down to 7,000, rounding these numbers, the poorer region should be able to grow about 3.2 percentage points per year faster than the richer region. So the convergence ideas predict that developing countries on a whole would grow at about 4.2% per year, developed countries would grow at about 1% per year. Add in a population growth rate of say, 1% for each, just being very rough. That says that the developing countries would be growing at a little over 5% per year, the developed countries at around 2% per year, because population growth is even faster in the developing countries. Maybe that would push the growth rate up closer to 6% per year compared to 2% per year for the high income countries. That’s more or less what we have been observing in recent years.

The convergence theory helps us to understand why the developing countries are achieving, enjoying faster economic growth than the high income countries. Now, if we trace this out for the next 40 years after 2010 to mid-century, and assume, that’s just an assumption, that the high income world averages 1% per year. And that the poorer regions catch up gradually with the high income region along the lines of that convergence formula that I just described. You get a kind of a graph shown here, and it’s shown with a logarithmic scale for the vertical axis. The countries start out quite far apart basically a 5-time advantage of the high income countries. But they narrow to the point where the high income countries are only 2-times, not 5-times, larger than the developing world by the middle of the century. Well what does this imply for total world production? Because remember we want to understand this to see what kind of pressures are being implied by this kind of total world growth.


To do that we now have to add back in population dynamics. And for that, we can use the United Nations forecasts of the world population. And the UN taking note of our starting point and fertility patterns, estimates that from 7.2 billion today we will reach 8 billion people sometime early in the 2020s. And we’ll reach 9 billion people somewhere around 2040. And we will exceed 10 billion people in the second half of the 21st century, and by the end of the 21st century in the medium fertility scenario of the United Nations the world will reach about 10.8, almost 11 billion people. That’s shown in this graph here. Again, it’s shown with a logarithmic scale for the vertical axis. Why? Because with that scale the slope of this curve tells us the proportionate rate of growth of the population, so that when we see the curve leveling off by the end of the century it also means that the growth rate of the world population is slowing to a low number. Today the world is growing at about 1.1%. For 7.2 billion people, 1.1% means an additional 75 million people or so added to the world population each year. By the end of the century the growth is much closer to zero to stabilizing the world population, and that’s what’s signified by this flattening of this curve in this logarithmic scale for the vertical axis.

Well we can use the population forecast combined with the convergence idea to give us a sense of what the size of the world economy might be by mid-century. If things go smoothly without disasters, and heaven knows how many disasters are possible and how many we need to fight to avoid. But assuming we don’t have the disasters and assuming that the scale of the planetary boundary challenge can be met so that this kind of convergent growth can continue, then the world economy would rise from around 82 trillion dollars in 2010, rounding a bit because these are all approximations, to around 272 trillion dollars by the middle of the century. In other words, more than a three time increase by the middle of the century. Now that’s a reasonable measure of the huge magnitude of our challenge.

We start with the world already bursting at the seams, with humanity pushing against planetary boundaries. Then we take into account the powers of economic convergence and the desires of poor countries to narrow and eventually close the income gap with the rich world. And that implies a more than threefold increase of world output by the middle of the century.

That’s why we have to think very, very hard about how our economies function because we know there is no way that on a business as usual path we could achieve sustainable development. Business as usual will burst through the planetary boundaries, will create havoc with the climate system, havoc with the water supplies, havoc with the ocean acidity, havoc with the survival of other species. In order to reconcile the growth that we want with the ecological realities, we are going to need our economies to take a fundamentally different course. That’s what we’re going to look at next.

Growth within Planetary Boundaries I

The Planetary Boundaries 

We’ve been talking about economic growth, how it started, how it diffuses, what the big problems are, how countries still trapped in poverty can spring free of the poverty trap. But the problem, we know, is more complicated than that. What if the world achieves economic growth? What if the poor countries, as they hope and rightly deserve, catch up with the high income countries? What then for the planetary boundaries? What then for an environment already under tremendous stress? Remember that sustainable development makes a key point, that economic, social and environmental systems are interlinked.

So, I want to focus now more deeply on how we might even conceive of bridging this terrible problem of global economic growth, the good that we want, the progress for poor countries, with a worsening environmental crisis. We have to understand the environmental systems and how humanity is effecting them. Then we have to look for practical approaches. How we can reduce the pressures that humanity is placing on the climate, on the oceans, on the land, or other species. So that we can reconcile these two objectives and indeed, make it possible to achieve all three of the basic goals of sustainable development. Economic growth, fairness and social inclusion and environmental sustainability.

Remember the concept of planetary boundaries or the fact that we’re living in as new geologic era, the anthropocene. Both these concepts, planetary boundaries and anthropocene, signify that humanity has become so numerous, our 7.2 billion people and rising, and so effective one could say, so productive in the capacity to mine and extract resources. To transform resources for production in industry, to consume, that we have suddenly, unprecedentedly as a species, hit these planetary risks and even dead ends if we’re not careful. The concept of planetary boundaries, I think it’s an extremely useful one, because when world leading ecologist Johan Rockström and many, many other leading ecologists got together, they asked the question in specificity. What are the major challenges coming from humanity’s impact on the physical environment? Can we identify those challenges? Can we quantify them? Can we identify what would be safe limits for human activity so that we can begin rather urgently because we’re late to this.

611To redesign our technologies and our economic growth dynamics so that we can have economic improvement while staying within the planetary boundaries. You’ll recall the picture that we looked at of the planetary boundaries around this circle. And I want to say a few words about each of these so that we can begin to look deeply at the question of how to reconcile growth and these various environmental threats. The first of the challenges and the biggest is climate change.


This is being caused by humanity’s use of particular technologies. Especially fossil fuels and the way we use land and grow animals and food that produces atmospheric change in the form of rising concentrations of a few particular gasses. Carbon dioxide is the most important of these. Nitrous oxide, methane and a few more industrial chemicals are the greenhouse gasses that have the property that they allow the sunlight in as ultraviolet radiation. But then, when the earth would re-radiate its heat to space, they trap energy in the form of the outgoing infrared radiation and thereby warm the planet. So these greenhouse gases are very particular molecules that have the property that they absorb infrared radiation.


And so when their concentration in the atmosphere increases, that warms the planet. It’s because of these greenhouse gases that life is possible in the way we know it, because that envelope of the atmosphere has made the earth warmer than say, the moon, which lacks an atmosphere. And is very, very cold as a result. But at the same time, if we perturb the greenhouse gas concentrations, raise them by raising the CO2 or the methane or the nitrous oxide in the atmosphere, then we endanger ourselves and other species. The second of the planetary boundaries is related, ocean acidification. This also comes from carbon dioxide in the atmosphere which is increasing because of human use of coal, oil, and gas. The oceans are being acidified, made more acid, by the fact that the carbon dioxide in the atmosphere dissolves in the ocean producing carbonic acid. And because of this acidity, various kinds of animal life, corals and shellfish and lobsters and very small plankton that also have these external shells made of calcium are threatened by the increasing acidity which makes it hard for the species to make their protective shells. Now, the pH of the ocean has already decreased by 0.1 unit on the pH scale from zero all the way to 14, the least acidic or basic end of the pH spectrum. A change of 0.1 in the pH oceans doesn’t seem like all that much. But this is a logarithmic scale. So, what a decline of 0.1 signifies is an increase of protons in the ocean of 10 to the 0.1. Or about 0.3, 30% increase of acidity in the ocean already with a lot more to come. If you look at this map of the ocean, you can see the changes that are already being noticed on average in different parts of the world.The oceans are not uniformly becoming more acidic. That depends on ocean dynamics. But the shading of this colored map shows that we’re already in an environment on a trajectory of dangerously rising ocean acidity. The third of these planetary boundaries is ozone depletion.

We learned a while ago accidentally, but thank God, we learned it, that certain industrial chemicals, those that were used at the time for refrigeration, mainly. Chlorofluorocarbons, or CFCs, when put into the air, would rise into the upper atmosphere, dissociate, and the chlorine in those CFCs would then cause the ozone layer in the upper atmosphere to dissociate. And a famous, horrifying finding was that there developed a big hole in the ozone over Antarctica. And when that was discovered by satellite of course people were rightly terrified. Because the ozone layer in the upper atmosphere protects us from too much ultraviolet radiation, saves us from skin cancer and many other harms. And humanity realized that this planetary boundary was already being crossed, the ozone was already being depleted unwittingly by us. This is what’s so frightening, we didn’t even know it until some brilliant atmospheric chemists unveiled the mechanisms by which these chlorofluorocarbons deranged and destroyed the ozone level.

614The next of the planetary boundaries is the heavy human caused loading of nitrogen and phosphorus. When farmers grow more food, you’ll recall that they put soil nutrients into the soil as organic fertilizers and as chemical fertilizers. Either way, incidentally, the nitrogen goes into the soil, some of it gets taken up by the crops. But a lot of it runs off the farm into the water, into the groundwater, and it collects in the rivers, and especially collects in the estuaries, the point where rivers meet the ocean. And that heavy pollution of nitrogen and phosphorus coming mainly from fertilizer use is creating a tremendous amount of ecological destruction.

We’ll have a look at that shortly. The next big challenge of planetary boundaries comes from our overuse of fresh water resources. We need fresh water every day to stay alive. Our crops need fresh water.


Of the total amount of fresh water that humanity uses, about 70% is used for agriculture, to grow our food. About 20% is for industry. And about 10% only, interesting enough, is for our household use, for hygiene and sewerage and, and and the rest. We use so much water, especially for our food production, that we are depleting very, very important sources of fresh water. For example, in the United States, in India, in China and in other parts of the world, we’re drilling for water in, in ground water aquifers, we are taking the water out, using it for irrigation. But taking the water out at a much faster rate than the water is being replenished by rainfall, and then by the water percolating back into the groundwater.

We’re depleting the groundwater. When it runs out, disaster. And that’s happening in many places in the world and will happen in many other places in the coming decades unless we are much more efficient in our water use. To grow food to feed our animals of course, humanity uses a massive amount of land. We also use land for our cities, for our parking lots, for our streets. But actually the urban areas, even though they seem to dominate, are only a few percent of the total land area on the planet. The farmland and the pastureland and the timberland that we use for forest products is a much, much larger proportion of the total land area. And humanity has been grasping over history for more and more land, more and more pasture land, more and more crop land. After all, the human population as we know has increased roughly ten times since the Industrial Revolution. That requires a lot more farmland to feed the 7.2 billion of us. The problem with that is that we share this planet with other species and as we grasp this land for our farmland, for our pasture land, for our timber land for our palm oil plantations and many many other uses.


We are literally chasing the other species away and off the planet into extinction in many cases. Our land use is having devastating consequences on biodiversity. The next category identified is aerosol loading. Small particles put up into the air because of industrial processes, or households that are burning coal into keep warm. And creating tremendous amount of air pollution, very damaging for the lungs. Claiming many, many lives per year. And with a heavy impact also on changing climate dynamics. Then there’s a very broad category of chemical pollution. Our petrol chemical industries, our steel industries, mining industries, not only demand a tremendous amount of land and water for their processing, but they add a tremendous amount of pollutants back into the environment. Many of these pollutants are persistent, they, they last in the environment, they accumulate, they can be very deadly for humans, for other species. And the range of chemical pollutants is so vast and the human and animal and plant health consequence is so large that it’s absolutely impossible to summarize, except to say that the problems are horrific in many places. China, the world champion of economic growth over the past 30 years, has also become the champion of polluted waterways of major cities, because of the extent of the heavy industrial processing.

And this all sums up to a final category of biodiversity loss. The death, the extinction of other species. We’re killing more animals and plants than we even know, than we’ve even met and catalogued scientifically, because we’re chopping down rain forest, poisoning environments, acidifying the oceans. Creating so much pollution and poisoning. That species are disappearing even before we’re able to identify and catalogue the millions of other species that share the planet with us and that we share with them. We are not stewards of global biodiversity right now. We are posing absolutely profound challenges. And when it comes to biodiversity loss, one could say that all of these planetary boundary threats, the acidification, the climate change, the land use patterns, the pollution, they’re all contributing to the loss of species, probably by the millions. It’s actually hypothesized, shocking as it may seem, that humanity is now causing the sixth great extinction wave of the planet earth. The other five, the first, for example, 440 million years ago. The next one, the second, 365 million years ago and so forth, weren’t caused by any species, weren’t caused by human beings, since we weren’t there. These were natural dynamics, whether it was, asteroid hits or whether it was the internal dynamics of the earth itself. These were natural processes. This sixth mega-extinction is not natural. It is the result of one species, that would be us, causing so much damage on the planet that we are putting millions and millions of other species at risk. And, since we depend on those other species, of course we are putting ourselves at profound risk. We are also creating a hugely unstable environment.


My colleague, professor James Hanson, recorded the extreme heat events on the planet from the 1950s till now shown in this series of maps. If you look at the map for 1955 and look at the dark red areas, you see a few places on the planet where there were heat waves in the June, July, August months of the year. And when you see those, you see that they were very particular places such as in, in Canada. Because of climate change, the number of those red splotches on the map which signify extreme heat, in that location, unusual to a massive extent for that locale, has been increasing in frequency very dramatically. You look at the map of 1955, just a couple of red regions. Have a look at the map of 1975, 20 years later, now there are a few more dark red regions of the map signifying places where extreme heat waves gripped those places. But, now jump ahead another 30 years or so to 2006 or 2007, suddenly the map is all red, it seems. The planet has been in engulfed by what was an extraordinary shock 30 years ago becoming common place now. We all know it, we’re feeling our own heat waves wherever we are. And being amazed year after year as new and very uncomfortable and often very dangerous records are set in very high temperatures gripping different parts of the planet each year. But what these maps are showing is that the frequency of these extreme events is absolutely shocking. Well, these are the planetary boundaries that have been identified. We know that we are already pushing against the limits. A

nd our question, in the coming analysis, is how can we think that that growth that we’ve been trying to decipher and promote can be reconciled with environmental sustainability and staying within these planetary boundaries when we already have so much challenge. That is our question, as we now delve more deeply into the intersection of economic growth and planetary boundaries.

A Short History of Economic Development II

The Industrial Revolution Starts in England

Modern economic growth began in England. It’s strange. We know it. We can watch it. This unique phenomenon in human history after millennia where living standards did not change very much. When suddenly population and output per person began to soar. Started in a particular place on the planet. It didn’t start in five places, it didn’t start in eight places. It wasn’t separate discoveries. It started in England. We can watch it. And therefore we can understand how this came about. I sometimes feel it’s a little bit like a biologist being able to watch the start of life. The first bit of life that emerges that gives rise to all the rest. What’s so interesting about life and one of the reasons why I view it as an analogy for an economy is that we know that every kind of life on this planet shares some basic metabolism and DNA structure. And so the biologists have said life appeared once and from there it has evolved and it has created a biosphere, a world of millions and millions of species. It all started, presumably, from a cell. Modern economic growth also has a kind of DNA. It also came together from a number of different materials and viola, something took off. Also, in a way, a living property because a growing economy gave rise to forces that continued the economic growth once it took off. If it were so easy to create economic life, it would’ve happened many places. We would have records of long economic growth in China, long economic growth in different parts of the world. But as John Maynard Keynes rightly pointed out, we did not see that in human history. So what happened in the Industrial Revolution as we call it, in the middle of the 18th century in England, in my view was a unique coming together of various forces, that allowed life in the economic sense to take off. That first cell of a modern economy that became replicating and that eventually spread to the entire world economy took off. Well what is it about the Industrial Revolution? I think let’s take a hint from the word, industry itself. For the first time a society moved beyond agriculture as the base, to one in which industry was the base. This required a fundamental change of know-how, of technology, of technical advance. But just like life itself requires a lot of interaction of the components of the cell, so too the life of an economy requires many things to come together. Technology is certainly a core part but connecting the different parts of the economy, the rural area where people are growing food, the factory towns where workers are working in factories producing textile goods, steel new output, those interconnections are needed as well. The food has to get to the city. The manufactured goods, the shirts and clothing are sold back to the farmers. That requires transport, that requires a market, that requires exchange. And so for the Industrial Revolution to come together in England in the 18th century many things had to be present. First agricultural productivity starts to rise. I wouldn’t call it yet scientific farming, but I would call it very systematic and evidence-based farming. Farmers learning, better rotations for crops, how to replenish the soil nutrients. There was more urbanization, more trade, a market economy taking hold, property rights, rule of law beginning to take hold. Of course, there was the wonder of the scientific revolution. Isaac Newton had shown that our world in physical terms is governed by natural laws. This opened up a completely new way of understanding things and it opened up new avenues of practical exploration as well. One of the great breakthroughs came from 1712, even before the Industrial Revolution but maybe you can say it was the start of it. The invention of a steam engine by Thomas Newcomen. The first steam engine, burning coal to create motive force, was used to pump water out of the shafts of mines. It was the beginning of the revolution of steam engines and of, of technology. And then came a, wonderfully creative targeted genius who working in a university lab in Glasgow in, in Scotland realized that Newcomen had made a couple of design mistakes even though it was a great breakthrough. James Watt looking for profit as well as for glory, said, I can improve on that steam engine and the Watt steam engine in 1776 came to life. I think it’s fair to say this was the breakthrough from a technological point of view of the industrial era. And in a way, it was the technological trigger of all that followed. Because now it was possible to harness massive amounts of energy efficiently, economically, effectively, to make profits. These are the components that come together in England uniquely. But of course, we have to understand always that without nature playing its helpful role, it would have been impossible for all of the genius of Newcomen and, and Watt if there were no coal in England. And there never would have been a steam engine or Industrial Revolution. Coal, iron ore deposits that could be turned into a modern iron and steel industry. Wonderful transport conditions on rivers on flat land the proximity of the coal fields to London. The ability to build canals to connect the coal fields with the, the new factory towns and allow for low-cost barge traffic. All of this is an example of the very special conditions in which nature and nurture, you could say, the human ingenuity, the spur of profits, the patent law, the rule of law, the market economy came together to make possible this industrial revolution. Have a look at the first individual who gave a modern description of this even though he did not mention industry itself all that much especially not the steam engine because it was occurring exactly the same year he published his wonderful work. You’re looking at Adam Smith, the author of The Wealth of Nations. I think rightly called the father of modern economics. Think James Watt produces the modern steam engine in 1776. Adam Smith publishes The Wealth of Nations in 1776. The American colonies declare their independence and the inalienable right to life, liberty, and the pursuit of happiness in 1776. Quite a year for a takeoff. Putting together the concepts of a modern economy governed by market institutions, technological advance, the availability of crucial natural resources, making possible the birth of a new kind of economic life. Adam Smith explained the workings of a modern economy. He gave us the idea of the invisible hand of market forces helping to spur inventors, manufacturers, farmers so that working together, not through literal cooperation but by trading in the market place, could bring about a modern market economy. And one of Adam Smith’s wonderful lines from The Wealth of Nations explains, and I quote, it is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves not to their humanity, but to their self-love. And never talk to them of our necessities but of their advantages. In other words we buy from the baker, the brewer, the butcher. It is through market transactions that have them producing their products, buying from the farmers. It is from the manufacturers selling their goods,earning and looking for profits that make the modern world economy work. And we know the images of that early modern era. James Watts, steam engine. The new factory towns with the coal burning and, and the smoke coming out of the high chimneys. The new modern form of transport in the early 19th century, the steam engine pulling railroads and transforming transportation around the world. The steam ship and the new factories that are now powered by not human or animal traction as was before people pulling and pushing machines or animals pulling plows, but now steam providing a massive, unprecedented amount of energy. To drive the new industry to make possible an unprecedented rise of a modern world economy combining the natural resource base, the technological knowhow and a spreading market economy. Now one of the stunned observers of this, one of the critics of of some of the harshness of early industrialization of course was none other than Karl Marx. And Marx and his co-author Friedrich Engels wrote in the Communist Manifesto in 1848 a kind of ironic tribute to the power of this new, modern economy driven by these breakthroughs in technology, changing the world in a unique way. They caught that mood, even if they didn’t like it or fully understand of course what would evolve. And even if they rightly pointed out some of the harsh downsides, especially in that era, it’s worth listening to Marx and Engels, how they describe this new world in 1848. And I quote. Modern industry has established the world market, for which the discovery of America paved the way. This market has given an immense development to commerce, to navigation, to communication by land. This development has in its turn reacted on the extension of industry and in proportion as industry, commerce, navigation, railways extended in the same proportion, the bourgeoisie, the new capitalist class developed, increased its capital and pushed into the background every class handed down from the Middle Ages. A new world indeed had arrived. The Industrial Revolution had brought form, forth a new kind of economic life indeed. A unique form that created the modern era of economic growth.

A Short History of Economic Development I

Economic Development is New, Starting Around 1750

The world we’ve seen is divided, is startlingly so, between some very rich countries and some very, very poor countries. A billion people roughly live in the high income world. Another billion, roughly, that live in the poor countries, the low income world. And then another 5 billion, 5 7ths of humanity are in between, in the middle income countries. How did this vast difference unfold? How is it that we have countries like the United States, or some even richer at $50,000.00 per person, per year of income or higher? And some countries like Mali, or Malawi, or Niger at under $500.00 per person per year, less than 100th the income levels of the high income countries? We certainly didn’t start this way a couple of centuries ago. If you look back to the period just before the great take off of modern economic growth, just before what we call the industrial revolution, the world was fairly equal. Equal in poverty. Just about every part of the world was rural. Just about every part of the world had its population and its workforce engage in trying to stay alive as peasant farmers. Small herd of farmers eking out a survival. When it was a bad season, bad rains, heat wave, drought people not only suffered, they died. And that kind of extreme poverty was pervasive. It was everywhere in the world. It was in Europe, as well as in Africa. The world was in a condition of not complete but nearly complete equality but equality of poverty. The story of today’s inequality therefore is also the story of modern economic development what has been called the era of modern economic growth. That’s the period since the start of the Industrial Revolution when some parts of the world were able to experience sustained increases of gross domestic product per person. So much so that they transformed themselves from rural to urban, from peasant agriculture to modern industry and, increasingly these days, to a modern, high tech, knowledge intensive, information and communications technology intensive, service economy. How did this happen? And why did it happen in some places in the world, but obviously not in all parts of the world? In such a way that by now, we have these vast inequalities. What it means is not that, today’s poor countries got poorer over time. From two centuries ago they started poor and by and large, they remained poor. Other parts of the world started poor and by today are very rich. We need to understand the nature of that economic growth. And of course why it has varied so much across the world. And what can be done to unlock that economic growth in today’s low income and especially today’s least developed countries. All this takeoff of modern economic growth, the Industrial Revolution and all that followed, is a new event from the point of view of human history. Humanity, our species, best guess, we’re 150,000 years as Homo sapiens. We are about 10,000 years as civilized Homo sapiens, meaning living in communities dependent on sedentary agriculture rather than as nomads hunting and gathering. So the neolithic revolution which brought us agriculture is about 10,000 years ago. But for a very long time, from the advent of agriculture into the Industrial Revolution itself, progress was very, very gradual, almost imperceptible. We see that very starkly in the depiction, as best it can be estimated, of the growth of the world economy. Have a look at this graph. The line of the world output is essentially flat, nearly at zero, for thousands of years. We show it from 1 AD. Until a take off and when you look at that graph you see the takeoff turn up just begins around 1750. And then it shoots up if we are looking at the total production for the world til today. And that vertical line continues because world economy continues to grow very, very strongly today even if as we have come to expect at different rates in different parts of the world. When you think about the total output of the world, which is the sum of the gross domestic product in each country, we can think of that as having two parts. One is the output per person in the world times the number of people in the world. And so when we ask the question, why did the world economy take off around 1750? Was it due to rising output per person, or was it due to a rise in the number of people? We can say yes. What do I mean by yes? I mean both. Both factors have played a huge role, and strangely enough, nearly simultaneously. The world population went up and down by small amounts for 2,000 years, roughly half a billion people, on the planet. In bad periods like The Black Death the numbers would come down. In good periods the population would increase. But it was very stable, fluctuating around a narrow range. Starting in the middle of the 18th century just like the picture for the total world output when we’d look at the picture for the world population, it just turns steeply upward. Well, it’s obviously related to the fact that because of changes in the economy, changes of know how, more people could be supported because more food could be grown. There was more output per person as well rising productivity. Economic growth in the sense of a rise of gross product per person. We see it again nearly flat imperceptible changes for century after century. Starting around the middle of the 18th century, just as with the population and with the size of the overall world economy, that graph shoots upward. Suddenly, the world shows a sustained and significant increase decade after decade in the output per person. Of course I have to caution, these are estimates, from various kinds of evidence, of what the world looked like before 1750. But it was not a world of economic growth. It was not a world of wealth and poverty. It was a world of poverty. It was a world that could produce great monuments beautiful treasures for human history. Like Notre Dame Cathedral and so many splendid architectural triumphs around the world. The Great Wall of China or Hagia Sophia in Constantinople today’s Istanbul. But it was a world in which most people lived difficult lives, scratching out an existence, trying to grow enough food to survive season by season. One of the greatest economists of a modern history one of the leading thinkers of the 20th century, John Maynard Keynes, wrote a quite remarkable description of this long, long period of near stasis. Near stability and unchanging technology from the time of the Roman Empire until the onset of the Industrial Revolution. And I’d like to quote from one of his great essays, Economic Possibilities for our Grandchildren, written in the great depression of the last century, saying how powerful technology can be to help humankind improve its lot. Keynes wrote, and I’m quoting, from the earliest times of which we have the record, back say to 2,000 years before Christ, down to the beginning of the 18th century there was no very great change in the standard of life of the average man living in the civilized centers of the earth. Ups and downs, certainly. Visitations of plagues, famine and war, golden intervals. But no progressive violent change. This slow rate of progress or lack of progress was due to two reasons, to the remarkable absence of important technical improvements and to the failure of capital to accumulate. The absence of important technical inventions between the pre-historic age and the comparatively modern times is truly remarkable. Almost everything which really matters and which the world possessed at the commencement of the modern age was already known to man at the dawn of history. Language, fire, the same domestic animals which we have today. Wheat, barley, the vine and the olive, the plow, the wheel, the oar, the sail, leather, linens and cloth, bricks and pots, gold and silver, copper, tin and lead, and iron was added to the list before 1000 BC. Banking, statecraft, mathematics, astronomy, and religion. Keynes’s point is technology is crucial. And for a very long period technology was relatively unchanging to the point that one could have taken a farmer from Roman times, and if possible through a time machine, put them down in England at the beginning of the 17th century. And they would have felt pretty much at home. [SOUND] Same techniques, similar living standards a world that would have looked quite the same over a span of 17 centuries. But then dramatically everything changes and that is our next subject. To understand the Industrial Revolution, how it began and how it changed human history and human destiny.


A Short History of Economic Development V

Economic Development Since World War II: The Making of Globalization

Modern economic growth took off in the middle of the 18th century, and like the ripples on a pond after a stone has fallen into the water, the ripples of economic growth spread to other parts of the world through the 19th century. The closer to the epicenter of the Industrial Revolution, the closer to England, the faster were countries to receive that ripple, to take off on their own, and escape from extreme poverty. The more that countries were proximate to ports the more that they could trade internationally, the better their climate, the more productive their agriculture. All of these were conducive to a faster takeoff into modern economic growth. And of course politics played an enormously important role. Independence and sovereignty was essential for modern economic growth in the 19th century. Those countries that were unfortunate to succumb to imperial rule did not have the basis for economic takeoff because the imperial powers, typically the European imperial powers, weren’t very much interested in educating the population, building the kind of infrastructure needed for their own industrial take off. Instead they were interested in seeing their colonies as places for primary commodities to build the home industry. And the result is that by the beginning of the 20th century, one could say the following. First, it was a miraculous age because waves of technological change had led to unprecedented breakthroughs in the ability of humankind to produce, to meet material needs, to extend life to, solve long-standing problems of public health, to make breakthroughs in transport, in quality of life in so many ways through electrification, modern transportation, mass industrial production. It was already an age of huge variation between the rich and powerful on the one side and the poor and vulnerable on the other side. Modern economic growth had come to Europe. It had come to the lands of new settlement, the United States and Canada, Australia, and New Zealand. It had spread to other places mainly in the temperate zones of the world like Argentina, Uruguay, Chili. It had not spread to Africa. It had not spread to much of Asia which was under the pressures of European imperial rule. None-the-less, it was a most remarkable age. And as you know, I’m such a fan of John Maynard Keynes because of the power of his economic and political vision in the 20th Century. But one of the things he wrote about this age is worth us recalling. At the end of World War One, he looked back to the period just before World War One, and described this unique global circumstance. He said, and I’m quoting from his famous work, The Economic Consequences of the Peace. What an extraordinary episode in the economic progress of man, that age was which came to an end in August 1914 with World War One. He writes, the inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole Earth in such quantity as he may see fit, and reasonably expect their early delivery upon his doorstep. He could at the same moment and by the same means adventure his wealth in the natural resources and new enterprises of any quarter of the world and share without exertion or even trouble, in their prospective fruits and advantages. But most important of all, writes Keynes, he regarded this state of affairs as normal, certain, and permanent, except in the direction of further improvement, and any deviation from it is aberrant, scandalous, and avoidable. Of course, Keynes was speaking as an Englishman, and a quite brilliant and privileged Englishman. He was the one sitting in bed, sipping his tea, and ordering commodities from all parts of the world. Those under colonial rule could not do so. But he was also expressing the uniqueness of an age where modern economic growth had broken out and had taken hold in many parts of the world and had created a global economy. But, of course, that economy came crashing apart tragically, unexpectedly, with the onslaught of World War One. Such a destructive war that historians still today, a hundred years later, are trying to figure out what could have caused that, because there were no deep motives for that war. That war was massively destructive. It unleashed chaos, deaths from violence of course, epidemic diseases such as the flu epidemic at the end of the World War One. It unleashed the Bolshevik Revolution that gave birth to Soviet era communism. It unleashed a tremendous economic forces that led to huge instability in the 1920s. And it played a key role, though complex role, in the onset of  the Great Depression in 1929. And of course, that depression gave rise to horrific political forces, none other than the rise of Adolf Hitler. In January, 1933, in the rise of fascism and thereby the birth of the second devastating world war that which broke out in Europe in 1939 and in Asia, lead by Japan the industrial power of Asia around the same time to create a truly world war. By 1945, technology had continued to advance, but many of the technological leaders were in ruins, though they would quickly rebuild. One technological leader, the world’s technological leader was not in ruins, because other than one attack on Pearl Harbor it was not directly touched in its own territory by the war. That of course, was the United States which far and away by the end of World War Two was the world’s leading economy, the most powerful, the technology leader. And the one that would have the greatest influence on the world economy basically until now. But in very powerful ways, throughout the second half of the 20th century. In technology, in forging markets, and in geopolitics. What’s important for us in understanding how the ripples of modern economic growth diffuse after World War Two, is to understand that by the end of World War Two, the world was divided in three parts. And those three parts gave rise to a kind of division of the world economy that would persist for some decades, and then finally, themselves, give way to a unified global economy. The first part was the US led part. It was the US, it was Europe, it was vanquished Japan which became and ally of the United States after World War Two. This part is sometimes called the first world. It was the richest part, especially after rebuilding. It was mainly a market economic system. It traded among each other and it was the leading engine of technological change through to the end of the 20th century. The second world, so-called, was the world of Soviet communism. This was the Soviet Union itself which had 15 republics  which, after 1991, became 15 independent  ountries. It was the world conquered by the Soviet Union in central and eastern Europe, Czechoslovakia at the time Hungary Bulgaria, Romania and, other countries of the region where the Red Armies sat and created Soviet style government and economies. It included the People’s Republic of China after 1949, which adopted a communist system. The one that soon enough would be very different from the Soviet style communism.  The third division of the world was the former colonial powers because one of the mega results of World War Two, was that the imperial European countries, themselves in ruins, were certainly in no shape to run empires. And the former colonies had had enough of it. They not only had the ideology, the sense, the awareness that independence was theirs to grab but they saw how destructive their imperial masters had been. The legitimacy of empire was over and the ability of the imperial powers to continue to maintain empire was gone as well, although many of them didn’t notice it because they continued to try to fight rear guard wars to defend imperial possessions. And so the period of decolonization which began around 1947 with the, India, and then with Indonesia, and it followed on throughout Africa, Asia, and other places. That stretched out over a course of decades. But, it created a kind of third world. Third world is a term we sometimes use to mean poor and middle income countries, but it meant something more literal back when the phrase was invented. It meant not the first world of the United States, not the second world of the communist era, but the post-colonial world. Sometimes also a grouping called the non-aligned countries. They said we don’t want US domination, we don’t want Soviet domination, we want to be on our own. And a little bit less formally, a fourth world was sometimes also brought into the mix. That’s the group of countries, basically, that we call the least developed countries today, the countries in absolute abject poverty. Well these were quite the sharp divisions and the world economy evolved under these geopolitical divides for several decades. The first world recovered from the damage of World War Two remarkably quickly by the 1950s. And endogenous technology driven economic growth took hold and the process of modern economic growth and rising living standards took hold in the first world very, very powerfully. In the second world, the communist world, there was industrialization and it seemed pretty dynamic for awhile, but already by the 1960s it was coming into crisis. And by the 1970s, economic development under a non-market communist system was basically screeching to a halt. Countries began to reform. China was the first great reformer in the communist group in 1978 when Deng Xiaoping came to power and said we need to market economy. We need to open China to trade. And that unleashed China’s own catching up growth with remarkable success to the point where China became by far the fastest growing major economy in the world in, in history. Now other parts of the communist world took longer to break free, because the Soviet Union wasn’t having it for a very long time. And it was only when Mikhail Gorbachev came to power in the middle of the 1980s and began his own market reforms and then came the revolutions of Eastern Europe in 1989. And then the end of the Soviet Union itself at the end of 1991 did the second world, basically stop being its own self-contained economic unit, and become part of the world economy. The third world, and the fourth world, included dozens, and dozens of countries, and each had their own economic history, and their own strategies. A very few of the countries early on said, we like that first world model. We’re pretty much interested in integrating with the first world economies. And they figured out something that most of the rest of the developing countries did not figure out until later, and that was that diffusion, the arriving of those ripples, could lift them into a very special kind of industrialization. Mainly where new industries in their own countries, many foreign owned, would become part of global production systems so that a company in Korea or in Taiwan would begin to produce the electronics goods, or the shirts and, and, pants on the racks of, of retailers in the United States and Europe. According to the technology designs and the in, intellectual property of the so-called first world companies. The early developers of that new strategy for catching up were called the Asian Tigers, Korea, Taiwan China, Hong Kong, Singapore. The four of them already by the 1960s and then by the 1970s were growing extremely rapidly by integrating their new young industrial base with the high tech industries of the first world. And as that happened other developing countries watched and said, wait a minute, that’s pretty interesting. Maybe we shouldn’t stay quite so non-aligned, politically yes, but economically maybe we should open our own doors to trade and to foreign investment and try to attract those new multinational companies that could use our country, and our labor force, and our natural resources as a base for their global production systems. This is how globalization came into being. Globalization came into being as this diffusion process created a new kind of catching up after World War Two. Especially starting in countries that opened their trade and opened their borders to foreign investment, so that new global industry centered around multinational companies, could use those countries as basis for global production systems. And that process backed by big breakthroughs in technology, better transport, intermodal transport, so called, from ships to the to the backs of trucks in a very smooth process, containerization of trade through the standard 20 foot containers. And of course the advent of modern computer-assisted design and manufacturing. And the enormous breakthroughs made possible by the internet and by mobile telephony revolutionized the ability of companies to engage in global production systems. And thereby create globally integrated companies, often with hundreds of thousands of employees, operating in more than one hundred countries. And the world’s multinational companies thereby became the main agents for the continuing transmission of those ripples around the world and the continuing diffusion of modern economic growth. Japan was a leader in its own region in this. And they developed a,a wonderful, visual metaphor for this called the flying geese model. Have a look at these geese in formation. You have a goose flying in front and then yeah, in back are others following the lead. And this is how economic development in Asia started as well with the industrialization first of Japan, and then flying in formation just behind came Korea and Taiwan, Hong Kong and Singapore. Behind them, Indonesia, Malaysia, Thailand. Behind them, China, Vietnam. Behind them, Cambodia, Laos. But, as the leading country moves from textiles to electronics, then from electronics to automobiles, then from automobiles to advanced information technology, the country just behind it moves from agriculture, to apparel and textiles, from apparel and textiles to electronics, from electronics onto its own technology innovation of information technology, and one goose after another, to use Japan’s metaphor follows along the way. This map that you’re looking at now shows where the textile firms located. And every red dot is essentially a node of multinational production, where often low wage labor is hired to produce in a global production network of textiles and apparel. You’ll see virtually that every dot in Asia is on the coast just like Adam Smith said in 1776 before he could know anything about such global production chains. You’re looking at a map here of China attracting foreign direct investment. Again China’s great breakthrough after 1978 when Deng Xiaoping opened China to the world was to attract foreign investment that made China an export base for world manufacturing production. And, you can see, also, that the wave goes from darker provinces where its foreign direct investment is the highest, into the interior. Moving from coast to the interior just as Adam Smith had told us. And, the result is by the end of the 20th century and into the early years of the 21st century, what had started as the preserve of England, and then had spread across the English Channel and the North Sea into Western Europe, that had spread to the lands of new settlement first, that had then spread to other temperate zones, then it spread to Central and Eastern Europe, that had been taken up by Japan in late 19th century industrialization, that in the 20th century after World War Two could now spread to the former colonized parts of the world and as they gained their independence was a process of global economic development that had reached almost all the world. There are still places where this is not true til today. Often the most land-locked interior places with difficult climate, with lack of natural resources, and so forth that have all of the burdens and few of the benefits should take hold. But for most of the world, the breakthrough by now has taken place. Of course, those who made the breakthrough early on are today’s rich world. They’re the high income countries. Those who have come late to this by virtue of their history, their politics, their resource base, their geography are today’s middle income or low income countries. Those still waiting to take off are today’s least developed countries. We’re going to turn our attention carefully and in detail to how those least developed countries can make the breakthrough now in the 21st century.

A Short History of Economic Development IV

The Diffusion of Economic Growth

We’ve seen how modern economic growth burst forward in England in the middle of the 18th century. We’ve seen how subsequent waves of technological change, starting first with the steam engine and reaching us today with the information and communications technology revolution, have kept that process of endogenous economic growth continuing now for well over two centuries. But we’ve also noted that economic growth has another crucial dimension. For most of the world not at the technological forefront, and not really contributing in a major way to technological advances, economic growth is heavily about catching up. It is about how a country that sees others in the lead can say I want to use that technology too. We need information technology in our society. We need to use the mask of modern transport technology and the like. This is a process of catching up growth. It might be called, a, a process of diffusion, if looked at from the outside. Because diffusion means that something spreads from one place to the next. I like to think of it as starting with a still pond or a quiet lake. You throw the the rock into the middle of the lake, and then you watch the ripples rippling away from that center. And if the center is where the endogenous, technological leadership growth is taking place. Those ripples signify the spread of those technologies and the modern economic growth that goes along with them to more and more of the world. How does that ripple effect work? What makes the ripples move forward? Why is it that some places in the world seem to be very well poised to follow a, a technology leader pretty close at hand? Whereas other parts of the world seemingly have not been able to take advantage of technologies that are already more than a century old. It’s striking to me, very troubling. Perhaps, one billion people, some estimates have it at even twice that level, do not have access to electricity in the 21st century where this is a technology developed by Edison and Westinghouse already at the end of the 19th century. What stopped the ripples from reaching those places that still today don’t have electricity bringing them the benefits of modern technology and modern life? That really is our question and it is one that great economists have been thinking about for a long time. Adam Smith, way back in The Wealth of Nations in that magnificent work about the modern economy, talked about the fact that diffusion, the spread of technology, would take time. And that it would start at the coast typically and move to the interior. Why at the coast? Because conditions for trade, for market activity, are easier. Why a long time to move to the interior? Because it’s very difficult to engage in trade in the interior of a country or in the interior of a continent in a landlocked country. Let me quote from book one of The Wealth of Nations, 1776, because it’s insights continue to inform and inspire us til today. So Adam Smith says, since such therefore are the advantages of water carriage it is natural that the first improvements of art and industry should be made where this conveniency opens the whole world for a market to the produce of every sort of labor and that they should always be much later in extending themselves into the inland parts of the country. So Smith already says in 1776 economic development is going to start at the coast. It’s going to spread into the interior. We know today, more than 200 years later, that landlocked countries of the world, countries like Bolivia in South America Chad in Niger in Africa, Nepal in Asia are necessarily facing disadvantages in trade, transport and technological advance, by virtue of them being far from the ports and facing very, very high costs of trade. Well, we can go beyond that insight to a general set of insights of factors that are conducive to the move of those ripples from the center of the Industrial Revolution out to the rest of the world. I would start again with proximity to markets. The coast is one part because if you have a port you are, in a way, proximate, or close to, in economic terms, other ports around the world. Clearly, if you are close to a rich country, that also means that there’s a big market for you. Mexico has a big market to sell to, in its next door neighbor, the United States. And in 19th century, countries that were closed to Great Britain had an advantage for their own economic development of a booming economy that would provide a market for their own goods. So proximity to markets, that’s one condition. Good agriculture, definitely an important fact because, after all, most of the modern economy grows in cities, in industry, and in services. So you say why do I emphasize agriculture? Because if agriculture is miserable, you may not have cities to speak of because there may be no food surplus. Countries with very weak agriculture are often exactly those places where most of the population is in farming, ekeing out a living, because they can’t produce enough surplus even for themselves and their families, much less to feed big urban areas. As agriculture improves, a diminishing share of the population can feed the rest of the country and therefore support larger cities which can then be hubs for technological advance and catching up. So good agriculture is important for vibrant cities, and therefore, places with good agricultural potential have tended to have those ripples arrive there faster than places in very dry conditions or poor soils, or other impediments to agriculture. Third obvious point is places that have their own energy resources, be it coal, oil and gas, other resources, hydroelectric power and so forth, have an advantage. It’s always possible to export goods and import your primary energy needs But how are you going to export if you don’t have energy to produce those export goods? So there’s often a problem of even getting started in economic development. Regions that have their home-based primary energy resources, whether it’s the fossil fuels of coal, oil, and gas, or whether it is resources like wind energy or geothermal energy or solar energy. This is very important as a base for domestic production. It makes it possible for those ripples not just to hit a hard wall but to actually continue and general economic change. And so the domestic energy base is extremely important. A physical environment conducive to human health, also important. A disease-ridden environment filled with malaria, filled with worm infections, terrible conditions that afflict many places in the Tropics til today can be real barriers real impediments to the diffusion of economic growth. And finally is politics. If the politics are miserable if dictators or simply chaos and violence grip a society this makes it very hard to achieve economic growth even if the ripples are coming one’s way there’s going to be no ability to harness those advantages in a political environment that is devastating. Well, we can now look very practically at how to apply those insights in understanding the actual ripples that have spread over the world economy since the Industrial Revolution. And I have found it interesting and worthwhile to ask the question, when does an economy first pass a certain threshold out of basic poverty? If we use a certain line roughly about $2000 per person, measured in purchasing power adjusted terms. In other words, adjusting for difference of price levels. Ask when is it that countries first escaped from extreme poverty by reaching that threshold or above. We can learn a lot. Which is the first country to do it? Well, it’s Great Britain, United Kingdom, the home of the Industrial Revolution. Then those ripples start to spread and by now, they’ve reached most of the world. If we look just within Western Europe it’s quite fascinating because it really looks like ripples spreading out from the home of the Industrial Revolution itself in England, out through the neighboring countries the Netherlands right across the sea from England, and then spreading into Belgium and France. Spreading next into Germany, spreading a bit farther into Scandinavia and Spain, a bit later into Central Europe, into what was then the Hapsburg Empire and now is the Czech Republic and Slovakia and Hungary, and, other parts of central Europe and then spreading after that into eastern Europe, Romania, Bulgaria, Russia and other countries further to the east. So what we see is within Europe itself in the 19th century that ripple effect very clear. It starts eh, where the stone hits first, where James Watt and his steam engine revolutionized the, the modern world. And then, you have a diffusion of modern economic growth that is well-dated to distance from England itself. The more proximate to England, the faster the diffusion of technologies, the faster is the uptake of modern economic growth, but since Europe itself is relatively compact by the end of the 19th century virtually all of Europe is on a path of industrial economic development. For the world, it’s obviously a much different story. Eh, the ripples have to travel much longer distances, face far more complex conditions and have hit barriers that have dissipated that energy and have frustrated the takeoff of modern economic growth often for decades and in some cases til now. And you have the take off in what some historians call the land of new settlements, the United States, Australia and New Zealand, Canada. They are early industrializers. They are early to cross the thresholds out of extreme poverty. The next group of countries are countries that share a favorable natural environment. Generally they are in the climate zones that we call temperate zones, like England: four seasons, good rains around the year. Argentina, Uruguay, Chile are examples of countries where the escape from poverty is already underway in the 19th century. In Asia, there’s only one case of industrial takeoff by the end of the 19th century and that’s Japan. Take a look at the map. The place of Japan on the map is fairly analogous to the location of Great Britain off the great Eurasian landmass. Of course, Great Britain on the west of the Eurasian landmass. And, Japan on the east of the landmass. Two island economies, two temperate zone climates, two places where the conditions of social life, literacy rates, freedom from invasion by sea enabled them to have takeoff conditions and Japan becomes the takeoff site for Asia with it’s burst forward into industrialization beginning in 1868, the so called Maji restoration. Much of the rest of the world, no such luck until the second half of the 20th century. Because what happened in a lot of the rest of the world, no independence, no soverinity, in fact, conquest. Europe becomes so powerful that European empires conquer large parts of the tropical world. By the end of the 19th century, virtually all of Africa is under European colonial rule. India has succumbed to British conquest. Much of Asia has succumbed to French and British conquest. And those countries do not pass the threshold out of extreme poverties. The ripples don’t reach them. The imperial powers want to maximize their own well-being at home, their own industrialization. They view their colonies, by and large is places for primary resources, for low-skilled labor, not as places for industrial development. And so a lot of the rest of the world does not see modern economic growth until after World War II, and the process of decolonization. This is a crucial historic period that we’re going to look at next.

A Short History of Economic Development III

The Great Waves of Technological Change

The Industrial Revolution had occurred. The new era of modern economic growth was underway. And, markets drove this process. Technological advance drove this process. First in a highly uneven way where just a few parts of the world were party to this new form of industrial economy and eventually to nearly the entire world. This is the period that the great economic historian and great conceptualizer of economic growth Simon Kuznets called the Era of Modern Growth. It is a unique period of human history. Now, we have defined economic growth as the sustained increase of gross domestic product per person. Or if we look at the whole world, we can call it the gross world product, which is the sum of the gross domestic products of all countries, divided by the world population. And in the era of modern economic growth, the period studied by Simon Kuznets, that world output per capita has increased on a sustained basis for more than 200 years now, in a very very uneven way, however. Some places have achieved marked economic growth for nearly two centuries.

Other places, not so much. Some remained poor, almost until the current day and some very particular places in the world, the world’s poorest of course, are places that have not yet achieved that takeoff of modern economic growth. We need to understand that process, and in order to do so we need to make a quite basic distinction of two kinds of economic growth. Each one is characterized by a sustained increase of output per person. But they really have a very different underlying dynamic to them.

One kind of growth, is the growth of the technological leaders in the world. In the early 19th century that was certainly England. This is where the Industrial Revolution occurred. In the middle of the 19th century and towards the end of the 19th century, Germany and the United States became the great technological leaders, even overtaking Great Britain in that role. In the 20th century, the United States was by far the most technologically dynamic part of the entire world. Though a number of other countries, certainly inventors in different parts of the world contributed to the worldwide stock of technological knowledge. But for those leaders there’s a very particular kind of economic growth, driven by technological advance. By new discoveries, innovations, new ways to do things thatthen spread and give an impulse of sustained growth to the economy. That’s what happened after James Watt invented his improved steam engine in 1776. It was taken up in factories, it was taken up in mines, in the locomotives of steam engines, in steamships and in many other technologies. And that gave a wave of economic growth of the technological leaders, those that invented those new breakthroughs. There’s a second kind of economic growth. That’s the economic growth of a country, that for whatever reason of history and geography. Perhaps resource based, perhaps just bad luck or bad policy. Stayed back, as those leaders charged ahead.

And so, a country like China, for example, did not industrialize in the 19th century, where England and the United States and Germany and other countries partook of the Industrial Revolution, and developed industrial economies. At some point, countries like China and we could say any of the emerging economies today. Looked out and saw examples of other countries far in front of them in technological lead, and with far higher income levels and typically as we know therefore much different conditions of life. Urban, generally longer life expectancy, generally healthier lives, generally more education, more public services, more opportunities and so forth. And those laggard countries had to solve a problem: how do we catch up? And that gave rise to a different kind of growth, and that is the kind of economic growth where a country that is lagging in technology and in income per capita, makes a tremendous advance quite rapidly, in narrowing the technological gap with the leader. These two different mechanisms of growth, the first one based on continuing innovation, and the second one based on closing a gap that has opened up by taking on the technologies of those advanced countries that have already been able to use them. Form the two major ways that economic growth proceeds in the world. The failure to understand these differences leads to all sorts of confusion in the discussion of economic development, because the kinds of institutions that countries need to innovate, for example, to have that first kind of growth. Endogenous growth, meaning growth from within the system itself where technological advance gives rise to more technological advance, those institutions are quite different from the catching up institutions. Those kinds of institutions, where the goal is to close the gap as fast as possible with the countries in the lead. For those institutions a stronger role of government, for example, can often be a major spur to a rapid, rapid push of economic growth. To close the gap that is already opened up. You don’t need so much innovation, but you do need widespread investments, development of infrastructure, the ability to bring in technology from abroad to close the gap. And so understanding the two kinds of growth, and therefore the two kinds of institutions that are needed to solve the growth problem is tremendously important. I want to focus first on endogenous growth, the growth of the technological leaders. It’s the kind of growth where one good thing leads to the next. Economists sometimes call this an increasing returns to scale process, and you get an ongoing process out of that that can be very dynamic. Clearly, in the case of modern technology, going back to the onset of the Industrial Revolution, there have been waves of technological breakthroughs. There have been many theorists of those waves: Kondratieff, the Russian technology historian was one of them with great influence in thinking from his writings until now. And one can think about the era of modern economic growth from the middle of the 18th century till now, having a series of waves, some people say three waves of Industrial Revolution. Others date them as four waves. But the notion is that these waves of technological change in the leading countries are the drivers of this process of endogenous economic growth. One classification says that there have been five waves until now. I think it’s a worth while idea for us to look at. The first of these Kondratieff waves in this particular classification, puts the stream engine at the core from 1780 to 1830 roughly from the time of James Watt’s invention to its wide spread application. The second of these waves is the great burst of railway and steel. And even if the technological roots of railways and steel come before 1830 the take off of those industries could be dated roughly to that time. The third of these waves is the age of electricity. Again, the discoveries of electricity date back to Benjamin Franklin, flying the kite and understanding electricity in the atmosphere, static electricity, to Michael Faraday and the discovery of induction and the beginning of the understanding of electromagnetism. In the first half of the 19th century, but then Edison and others applying the new knowledge of electricity to give us electric lighting, incandescent bulbs, city streets with electricity. And then of course, moving electricity into the homes and into the factories towards the end of the 19th century. After the Age of Electricity which is put 1880 to 1930 is a fourth wave led in this classification by automobiles and petrochemicals. Plastics and new polymers and new materials industries and much more. One could add, of course, the age of modern aviation. Again, the underlying technologies for the automobile date to the end of the 19th century, the internal  combustion engine which powers automobiles till today. But the economic, dramatic application began in the early years of the 20th century with the Model T. With Henry Ford’s inventions of modern production processes on the factory line. And with the mass production of automobiles which absolutely transformed the way we live, where we live, how we produce and of course, how we trade in the economy. The fifth wave in this classification dates to around 1970 but again with roots that go back much earlier. This is the knowledge economy, the age of computers, the great advent first of the huge mainframe computers in the 1930s and 1940s, much spurred by World War Two and the immediate aftermath of World War Two. And then the discovery of the transistor at the end of the 1940s and the invention of the integrated circuit which gave rise to the modern computing age, mobile phones and all the rest of industry that has been made possible by Moore’s Law. Moore’s Law you’ll recall is the fact that roughly every 18 to 24 months the number of transistors that can be put onto an integrated circuit has doubled. This means that the ability to process, to store, to transmit data has roughly doubled, or the cost of doing so has roughly fallen by half every 18 to 24 months. Well, you do that over a period of more than 50 years and you arrive at roughly a billion time improvement in the ability to process, store, and transmit information. And we know that is revolutionizing the world in this great fifth wave of the information and communications technology driven era. Will there be a sixth wave of technological change? The one we really need now, a wave of sustainable technologies. Ways to produce energy, ways to mobilize energy, ways to transport ourselves, and transport goods that take the massive pressures and the destructive forces off of our ecosystems. This is the great challenge. We’ve had now 250 years of modern economic growth. We’ve had waves of great technological change and we need to enter a new era. A new wave of technology, of sustainable development technologies in the way we live. The way we protect the planet. And at least we can take confidence from the past. And also grab on to some of the great scientific and technological insights that we have at hand. To give us hope and confidence, and determination to move forward to that next great wave of endogenous growth. This one based on protecting the planet and achieving sustainable development.