Jorgen Randers: what the future will be

Ugo at Cassandra's Legacy has a post on a talk by the pessimistic Jorgen Randers (of "Limits To Growth fame) in Rome in April - Jorgen Randers: what the future will be.

Presenting his book, "2052", Jorgen Randers starts with a bold statement: "I will not tell you what the future could be, but what the future will be". You would think that this shows quite a bit of hubris but, if you follow Randers' reasoning, you'll see that he has a point.

Randers is one of the authors of the famous "The Limits to Growth" report to the Club of Rome. Published in 1972, the book caused quite a stir and was widely misinterpreted as a prophecy of doom. It wasn't so and, in his talk, Randers summarizes what he and the others did. They didn't make any prophecy but, rather, they created a 'fan' of 12 different scenarios for the future of the world up to 2100. Some of these scenarios involved decline and collapse of the economy, some involved stabilization and prosperity. Whether one or the other set of scenarios would unfold depended on whether humankind made the right or the wrong choices in dealing with pollution, resource exploitation, and population growth.

One problem with the "The Limits to Growth" was that the authors never specified by what mechanisms humankind could develop the consensus necessary to make the right choices, which all involved some sacrifices in the short term. After 40 years of work, Randers has arrived to a conclusion: there are no such mechanisms. The right choices were not made and never will be.

Today, Randers says, there is no more a fan of good and bad scenarios: there is only one; and it is not pleasant. It can only be the decline of our society, constrained by overpopulation, declining resource availability, and widespread damage caused by pollution and climate change. The start of the decline may come earlier or later; collapse may be faster or slower, but the shape of the future is determined.

Randers maintains that there is a simple way to describe the reasons that are taking us to this unpleasant future: people always make the choice that involves the least costs in the short term. The problem is all there: as long as we always choose the easiest road, we have no control on where we are going.

Imagine you are lost in a forest. Would you think that always choosing the easiest path in front of you could take you home? But this is what we are doing: even though we should know that this is not the way to go where we would like to be. We are unwilling, for instance, to invest in renewable energy as long as fossil fuels are even slightly less expensive and we can neglect their external costs in the form of pollution and climate change. But this choice is based on short term consideration and it will cause us terrible long term damage.

Why are we unable to do better? Here, Randers proposes that "short-termism" is deeply ingrained in people's minds and is reflected in our democratic decisional system. He has been accused to be against democracy, but he maintains that he has nothing against democracy: the problem is that democracy is the result of human short-termism. He makes the example of an enlightened politician who decides to introduce a carbon tax. Soon, voters discover that the carbon tax is making gasoline and electricity more expensive. As a consequence, that politician won't be re-elected. It is simple and it happens all the time.

Of course, you might object that if the public were to be educated about climate change, then people would accept a carbon tax - actually they would clamor for it. Maybe; but Randers is skeptical. He says that he has spent decades of his life training generations of decision-makers in sustainability and ecosystem science. And he has seen those trained generations taking exactly the same wrong decisions that the previous, untrained, generations were taking.

Human nature is difficult to overcome. Randers recounts how he and his colleagues had been discussing about the size of a natural disaster that would wake the public to the reality of ecosystem destruction. Then Hurricane Katrina came and, later on, Sandy. Both where disasters as big as they can be. But they fell flat as wake up calls: the public didn't react. Today, three Americans out of eight still think that global warming is a hoax.

Randers has seen the enemy and the enemy is us.

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Randers: What does the world look like in 2052?

While I've always argued "The Limits To Growth" was totally misunderstood by most of those who pass comment on it, Jorgen Randers' latest book does seem to have gone more down the path of mildly gloomy prediction than mere scenario planning - Randers: What does the world look like in 2052?.

What will the world look like in 40 years time. In 2052, will we have enough food and water? Will there be too many people? Will our standard of living be higher. Will we have taken decisive action on climate change.

To briefly summarise Jorgen Randers, the renowned Norwegian futurist, the broad answers to those are yes, yes, maybe, no and no. But it’s the way he reaches those conclusions that makes his latest book 2052: A global forecast for the next forty years, so compelling.

Randers made his name as the co-author of the book “The Limits to Growth”, which underpinned the Club of Rome’s work on resource depletion and helped spawn the sustainability movement. Not that he thinks the book and his work had that much impact. “I spent 40 years working on sustainability and failed. The world today is a much less sustainable world,” he lamented during a visit to Australia this week.

Now 67, Randers runs the centre for climate strategy at the Norwegian Business School. And having outlined 12 scenarios for the world running from 1970 to 2100 in his first book, he now feels there is enough information to make more concrete forecasts.

It is not a picture he finds particularly attractive, but one he sees as inevitable because of mankind’s inability to look beyond short-term solutions and the obsession with growth. “I’m not saying what should happen, but this is the sad future that humanity is going to create for itself.”

Here are the base numbers for his predictions. Unlike others that predict a world population of 9 billion in 2050, he sees it peaking at 8 billion in 2040 and then declining, because he says the rich world will choose jobs over children, and the poorer urban families will choose fewer children.

He expects the world economy to grow much slower than most, because it will be harder to increase productivity at the same rate as has occurred in the last four decades. The low hanging fruit in the agricultural, manufacturing and office sectors have been picked. And he does not believe the poor countries will “take off”. He says that by 2050, the world economy will be no more than 2.5 times bigger than it is today, rather than four times bigger as many assume.

The US has a bleak outlook because their average disposable incomes will not grow, because they have already gone further than most in productivity and have a huge debt to China. And, Randers says, because the US is not capable of making simple decisions, it will also be not capable of making difficult decisions. He puts the current debate around climate change, or the lack of it, as an example.

“China is the real winner and they will be 5 times as rich in 40 year time,” Randers says. That’s because of China’s ability to make quick decisions that are in favour of the majority. The rest of the world, he suggests, remains poor,

Still, while the economy and the population will not grow as fast as some predict, and there will be no huge shortage of food, water or energy, it will still grow fast enough to trigger a climate crisis, because the short termism of the political class and business means that greenhouse emissions will not be addressed. He expects emissions will peak between 2030 and 2040, and will have only returned to 2010 levels by 2050 – pushing the world beyond the 2°C scenario and locking in disastrous climate reactions in the second half of the century.

“We will spend more money repairing the damage of climate change after it has occurred instead of spending up front avoiding the climate damage,” he says. “We know what to do. The only reason we do not do it is because it is slightly more expensive than doing nothing, so we don’t do it. It is very frustrating.”

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Welcome to Dystopia: the dangerous food and energy crises

Renew Economy has an article on Jeremy Grantham's latest musing on resource constraints - Welcome to Dystopia: the dangerous food and energy crises.

Jeremy Grantham, the former chairman and chief investment strategist for the $100 billion funds manager GMO Capital is known as a contrarian. But his quarterly investment newsletters are eagerly awaited, because they usually give some fascinating insight into some of the big themes that affect investments.

His latest, distributed to his investors in July but only recently publicly released, is worth a read in full. It focuses on the impending food crisis, and also how the climate issues and the energy issues are interlinked.

It’s a long document, so here we are just going to excerpt some of the key points he makes about energy. Remember, Grantham has no particular interest in one energy source of another, nor does he belong to any think tank that has a particular ideological bent. He is just responsible for $100 billion of someone else’s money and wants to know the best place to put it. (The answer appears to be farming stocks and other resources, if only for the anticipated price spikes).

One of his key themes is that the shale gas boom may buy some time, mainly for the US, but “seems more likely to create complacency” and continued dependence on hydrocarbons. He says this will have a slip-back effect in the longer term, because it will lead to yet higher prices and shortages that will impact global growth and even the viability of modern, rather fragile, economies.

“On paper… the energy problem can be relatively easily addressed through very large investments in renewables and smart grids,” he writes. “Those countries that do this will, in several decades, eventually emerge with large advantages in lower marginal costs and in energy security. Most countries including the US will not muster the political will to overcome inertia, wishful thinking, and the enormous political power of the energy interests to embark on these expensive programs. They risk being left behind in competitiveness.”

That seems a pretty clear message, and maybe one that Australia’s politicians should absorb. But while the energy problem make seem simple to solve on paper, in reality it is a different prospect.

“All it takes is real leadership from our leaders; common sense from the general public; a willingness of hydrocarbon interests to back off from politics and propaganda and a herd of flying pigs! We need to build a very large, very smart grid, covering the whole of the US and one day perhaps including Canada. Among many tricks, it needs to be able to reach into smart homes and turn off the refrigerators and so on for a few minutes when needed.

“It is, in fact, all state-of-the-art already and in the 10 or 20 years it would take to build, the technology and engineering would no doubt greatly improve, given the great scale, helping to drive down the cost. Behind the grid we would need a truly massive investment in storage technologies and all renewables, especially solar and wind power. Solar costs have unexpectedly crashed in the last three years, down by over two-thirds, and finally today, in ideal conditions (even without coal carrying its full environmental costs), solar is competitive.’

Grantham says that, in a happy variant of Moore’s Law, this fall in solar costs will continue. So will the fall in wind power costs. But the costs of hydrocarbon energy of all kinds will rise. The cost of a new grid would be cheaper as a percentage of GDP than the Manhattan project, and even if it took 20-30 years to build, the marginal costs of operating and maintaining such a system would cross the rising costs of the current grid long before then.

“By 2050,” he says, “cheap hydrocarbon sources will be a distant memory. Electric grids based solely on hydrocarbons would by then, after desperate struggles and brownouts, likely have turned totally black and economies based on such grids would be under very severe stress. If I’m wrong in this assertion for some countries, simply add 10 or 20 years onto the timeframe.”

The danger of complacency driven by the new reserves of natural gas and extra oil from new drilling technology could allow Germany and others, possibly including China, to forge ahead with renewables until they dominate these new, relatively job-intensive industries and eventually end up with much lower marginal costs. “The major disadvantage of all of these extra (oil and gas) reserves, though, is that they will give us more rope with which to hang ourselves by frying the planet.”

He notes recent estimates by Cornell University, which he hopes are preliminary and mis-measured, of almost 8 per cent of fracking gas leaks from drill to stove burner. Anything more than 4 per cent (and it may be as little as 3 per cent) makes natural gas even more dangerous to a warming planet than coal. “Unlike other environmentalists, I worry less about other of the several negative effects of fracking: boiling the planet makes other negatives seem to me relatively inconsequential.”

He says China has been in a “class of its own” in taking seriously this topic of future availability of resources. “It has a long Confucian tradition of thinking very long term and its politicians do not have to worry about being re-elected or about voters and funders as much as ours do. My colleagues worry that the Chinese save and invest too much, approximately half of all their income, a level never before reached in history.

“But for undertaking a completely renewable energy system, what a set-up! If the Chinese feel they must maintain a 50 per cent capital spending ratio (or at least come down gracefully to avoid an outright depression), there are few projects big enough to both absorb the giant quantities of money available and have a good return on investment at the societal level in the long term. Building a renewable energy system achieves both aims.

“As a first mover they would quickly be able to build fewer coal utilities and, eventually, none. In 30 or 40 years they could phase out the last of them and stop slowly poisoning their urban residents while at the same time helping to stop slowly cooking the Earth.

The Chinese are already becoming leaders in wind and solar power construction and research. At much higher scale, their cost advantages would be hard to match, and if a renewable energy system were to be completed, their biggest long-term worry of all – energy security – would be gone. ...

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