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Hundreds of people participated on Friday for Future Global Climate Strike at Battery Park in downtown Manhattan on September 24, 2021. (Photo: Lev Radin/Pacific Press/LightRocket via Getty Images)

The End of Growth: Ten Years After

Leaders of government, finance, and industry seem to have borrowed their way to another decade of economic growth—which was mostly squandered in profit-taking rather than being spent preparing for the societal challenges that the inevitable and fast-approaching termination of growth will entail.

Richard Heinberg

Fifty years ago the authors of the groundbreaking book The Limits to Growth showed that, in any of a series of computer-generated scenarios, world economic growth would end sometime during the 21st century. Using simple math and logic, they pointed out that growth in any material input or output cannot continue indefinitely within a finite system.

Since the Earth is a finite system, the effort to perpetually grow human economies (which, by their very nature, extract resources and produce wastes) is doomed to eventual failure, leading to significant declines in resources, industrial output, food production, and population. Despite the fact that the book was a bestseller and its conclusions were well supported, world political and business leaders ignored it and persevered in their efforts to expand resource extraction, agriculture, and manufacturing.

"The people who enjoy the most social power have shown their inability or unwillingness to make the post-growth downslope more survivable, despite a half-century of warnings."

Around the year 2010, it appeared to me that signs of growth's slowing and approaching reversal were accumulating to the point that a new book on the subject might be timely and helpful. The End of Growth was published in 2011, and attracted healthy sales but few reviews.

Today, indications of impending economic stagnation and retrenchment are arguably stronger still. There will be many articles this semicentennial anniversary year discussing the 1972 Limits to Growth study; I thought it might also be informative to look back at my book, reflecting on whether its message is useful today.

In the book, I argued that modern economic growth is largely attributable to fossil fuels. Energy is essential to all activity, and the availability of vast amounts of energy from tens of millions of years' worth of ancient sunlight, captured and transformed by natural processes into portable and storable fuels, has made it possible to speed up and expand nearly every human enterprise. Prior to the widespread use of coal, oil, and natural gas, agrarian societies saw cyclical periods of rise and fall.

But the scale of expansion since the dawn of the fossil-fueled industrial revolution, beginning roughly at the start of the 19th century, has been unprecedented. Energy usage per capita has grown 800 percent, as has population. Meanwhile, the contours of society have been transformed: for the first time in human history, most people now live in cities. We have become accustomed to the constant use of powered machinery at work and at home. Growth has become routinized, studied, measured, and institutionalized. Economists now regard it as normal, beneficial, and even essential.

However, the growth of modern fuel-guzzling industrial societies produces two trends that are likely to limit continued expansion: resource depletion (including the depletion of fossil fuels) and pollution (including carbon emissions-driven climate change). It was clear in 2011 that depletion and pollution were imposing costs on society, and that these costs were growing exponentially.

A third limiting factor discussed in my book was the proliferation of unrepayable debt. During industrial expansion, debt seemed to play an advantageous role by enabling companies, governments, and households to consume now and pay later. Debt and credit helped create jobs while increasing corporate profits, returns on investment, and government tax revenues. However, just as debt made the upslope of world economic growth steeper than it otherwise would have been, the existence of enormous pools of debt that will at some point suddenly be revealed as unrepayable could make the end of growth more of a cliff than a gentle downslope.

There are certainly other possible limits on growth—including increasing economic inequality, pandemics, and war—but the three trends I focused on in the book seemed to me, at the time, the ones most likely to tip the scales toward societal decline or collapse.

In 2011, the world was still reeling in the aftermath of the Great Recession of 2008. Central banks and governments were piling on debt at unprecedented rates and keeping interest rates at historically low levels in order to spur more borrowing and more investment, thereby preventing an unraveling of the global industrial and financial systems. Over the short run, the automobile industry was bailed out. In following years, "easy money" policies helped capitalize the fracking boom in the US, which was then just igniting. As a result of the latter, relatively small drilling companies produced enormous amounts of petroleum and gas during the past decade, easing fears of "peak oil."

Clearly, growth did not end in 2011. China's GDP clocked in at about 6 trillion US dollars in 2010; today it's well over twice that size, at 17T$. A decade ago, US GDP stood at 15T$; today it has risen to nearly 23T$. During the same period, world GDP increased from roughly 66T$ to 85T$. In 2010, the world's annual energy usage stood at about 550 quadrillion BTUs ("quads"); by 2019 (prior to the pandemic—more about that below), that amount had risen to roughly 625 quads.

So, is there more smooth sailing ahead? Let's look at some important current trends that might make further economic expansion likely or unlikely, easy or difficult.

Fossil fuel supply: During the past decade, 90 percent of world growth in petroleum supply came from US tight oil, the extraction of which is so drilling-intensive that most companies specializing in this resource have relied heavily on debt, with many losing money on each barrel produced. Natural gas, now regarded as a "bridge fuel" to a hypothesized all-renewable energy future, grew both in production levels and as a share of total energy; but an increasing proportion of gas (especially in the US) was produced from drilling-intensive shale reservoirs. Coal usage declined in the US, but saw massive increases in China and India; indeed, a large portion of world GDP growth during the past decade can be attributed to expanded Chinese coal consumption. China used so much of the fuel that the inevitable peak of global coal production was probably hastened by a few years. This winter, high coal, oil, and natural gas prices suggest the world may be starting to nudge against supply limits. In general, prices are too high to be affordable to consumers, but too low to be profitable for producers, due to the depletion of cheaply produced fuels. Expect more energy price volatility ahead.

Other resource depletion: The scarcity of any particular resource has yet to choke off overall world economic expansion—though concerns are increasingly being raised about agricultural phosphorus. However, one set of depletion issues is especially worth noting. The proposed build-out of solar and wind energy technologies to replace fossil fuels is raising concerns about the supplies of resources needed for making panels, turbines, and batteries. Lithium and copper prices are currently at record highs. While some studies estimate that there are sufficient resources in the ground to enable the construction of the first generation of renewable energy infrastructure at scale, much of that infrastructure will require replacement roughly every 25 years thereafter. Recycling would help avert supply issues, but would not entirely solve the problem. Expect severe scarcity later this century of copper, high-grade silica sand, lithium, and a range of other ores and minerals.

Climate change: During the past decade, concern about global warming among scientists, policy makers, and the general public has exploded. Nine of the ten hottest years on record occurred between 2010 and 2020. The costs of severe weather, drought, wildfires, and rising sea levels have soared to an annual level of over $200 billion as of 2020. Estimates of future costs have escalated sharply. However, political leaders appear incapable of addressing the crisis in an effective  way, as doing so would require deliberately reining in economic growth—and virtually none of our leaders are prepared to entertain that prospect. According to a recent poll of young people in 10 countries, over half believe that, largely due to climate change, humanity is doomed.

Other pollution: While most news about pollution during the past decade has focused on the great Pacific Ocean garbage patch and on increasingly pervasive plastic particles, an even more frightening trend has to do with the environmental spread of hormone-mimicking chemicals. As a result of these, male sperm counts are plummeting at a rate such that they may reach zero, on average, before 2050. The effect is being seen in both humans and animals. Its implications are truly and deeply shocking. This trend simply wasn't on my radar in 2011.

Status of wild nature: Recent assessments show that wildlife abundance has fallen by roughly 70 percent in the past 50 years. The trend holds with all major classes of animals, including mammals, birds, reptiles, amphibians, fish, insects, and other invertebrates. Unless something is done soon, humanity will preside over a biological catastrophe that will have repercussions for all of life, and for millions of years to come. The impact on economic growth? You can't maintain a healthy economy on a dead planet.

Pandemic: The possibility of a global pandemic was not mentioned in The End of Growth. However, as we all know, COVID-19 has had an enormous short-term impact on the global economy and on the lives of billions of people. Its long-term implications are the subject of much speculation. One set of impacts has to do with a reordering of national prospects: countries enjoying high levels of social cohesion got through the pandemic relatively unscathed and are, in many cases, on a more stable path economically and politically; while those (like the US) with already eroding levels of social trust saw cohesion deteriorate still further. Thus, COVID-19 has probably hastened the process of America's decline as the world's economic and geopolitical superpower, which was already under way.

Debt: Today, global debt levels are higher than they were just prior to the 2008 financial crash. Our current financial environment has been called the "everything bubble." The global debt-to-GDP ratio has grown to about 360 percent, a level economists in the past have called "untenable," with debt ballooning especially in Japan, the US, and China. Countries have used debt to maintain adequate fossil fuel supplies and to prevent the collapse of their financial systems. But the productivity of new debt (i.e., the increase in GDP resulting from each new dollar of debt) is declining, which suggests that the effort to maintain economic growth by purely financial means is subject to the law of diminishing returns.

In short, leaders of government, finance, and industry seem to have borrowed their way to another decade of economic growth—which was mostly squandered in profit-taking rather than being spent preparing for the societal challenges that the inevitable and fast-approaching termination of growth will entail. It's now widely acknowledged that the bailouts and debt sprees of the past decade overwhelmingly buoyed up billionaires, while, in terms of wealth and income, nearly everyone else was either treading water or sinking. More recently, a wild card (the pandemic) has thrown the global economy further into disarray, with billionaires again benefitting disproportionately.

Are we at growth's inflection point yet? I'd prefer not to make a definitive call. It's astonishing how fast those who benefit most from growth can pass policies and take drastic actions to keep the system going. But it's fair to say that, as society approaches the crest of the curve, we are experiencing increasing turbulence. Pinpointing the exact moment of peak in world oil production, or economic growth, or population, will be best done in retrospect. The important thing is to understand our overall trajectory.

My 2011 book concisely explained how society got hooked on growth and why expansion will prove temporary. It contained sections on economic history, including a short survey of how the discipline of economics evolved to perpetuate prominent theoretical errors. All of that material is still useful, even if a few other sections—ones focusing on the 2008 crisis and its immediate aftermath—seem a bit dated.

Some of the most helpful parts of the book discuss what we might do to prepare for the end of growth. Advice to individuals included learning to live with less while focusing on building community resilience. For policy makers, suggestions included adopting new economic indicators that track quality of life and environmental integrity rather than GDP.

These and similar suggestions are now more widely discussed. A "degrowth" movement has emerged, mostly in Europe. Kate Raworth's "doughnut economics" has been featured on National Public Radio. Other heterodox economic ideas that could be useful in adapting to the end of growth, including public banking, modern monetary theory (MMT), and universal basic income (UBI), are debated in universities and occasionally in Congress. Ilhan Omar and others recently proposed the Genuine Progress Indicator Act of 2021 (which the Wall Street Journal immediately and unceremoniously poo-pooed). All such ideas are still at the fringes of mainstream economic discourse. 

If the end of growth was within sight a decade ago, it's staring us in the face today. The people who enjoy the most social power have shown their inability or unwillingness to make the post-growth downslope more survivable, despite a half-century of warnings. This should come as no surprise: as I reported in my recent book Power: Limits and Prospects for Human Survival, elites tend to benefit from the status quo, and social power tends to reduce empathy and perception of risk. As a result, it's mostly going to be up to the rest of us to prepare for the big shift and to navigate our way toward safety. The end of growth will undoubtedly come with bumps and bruises, but an ending always implies the beginning of something else. In starting to build an economy that prioritizes sustainability and justice, there will be uncountable opportunities to contribute, share, and reconfigure how we go about daily living—and some of those opportunities just might turn out to be deeply fulfilling compared to the rat race of continuous growth.


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