As the world grows more populous (6.6billion today) it also is growing more prosperous. The average person is consuming more food, water, metal and power. Growing numbers of China’s 1.3 billion people and India’s 1.1 billion are stepping up to the middle class, adopting the high-protein diets, petrol-fuelled transport and gadgets that developed nations enjoy.
The result is that demand for resources has soared. If supplies don’t keep pace, prices are likely to climb further, economic growth in rich and poor nations could suffer, and some fear violent conflicts could ensue.
Some of the resources now in great demand have no substitutes. In the 18th century, England responded to dwindling timber supplies by shifting to abundant coal. But there can be no such replacement for arable land and fresh water.
The need to curb global warming limits the usefulness of resources such as coal. Soaring food consumption puts stress on the existing stock of arable land and fresh water.
"We’re living in an era where the technologies that have empowered high living standards and 80-year life expectancies in the rich world are now for almost everybody," says economist Jeffrey Sachs, director of Columbia University’s Earth Institute.
"What this means is that not only do we have a very large amount of economic activity right now, but we have pent-up potential for vast increases (in economic activity) as well." The world cannot sustain that level of growth, he contends, without new technologies.
The West is already grappling with higher energy and food prices. There’s a growing consensus that this isn’t just a temporary surge in prices. Some experts foresee a long-term upward shift in prices for oil and other commodities.
Today’s dire predictions could prove just as misguided as yesteryear’s.
"Clearly we’ll have more and more problems, as more and more (people) are going to be richer and richer, using more and more stuff," says Bjorn Lomborg, a Danish statistician who argues that global warming is overblown. "But smartness will outweigh the extra resource use."
Some constraints might disappear with greater global co-operation. Where some countries face scarcity, others have bountiful supplies of resources. New seed varieties and better irrigation techniques could open up arid regions to cultivation; technological breakthroughs, such as cheaper desalination or efficient ways to transmit electricity from unpopulated areas rich with sunlight or wind, could brighten the outlook.
In the past, economic forces spurred solutions. Scarcity of resources led to higher prices, and higher prices eventually led to conservation and innovation. Whale oil was a popular source of lighting in the 19th century. Prices soared in the middle of the century, and people sought other ways to fuel lamps. By the end of the century, whale oil cost less than it did in 1831.
A similar pattern could unfold again. But economic forces alone may not be able to fix the problems this time around. Societies face political resistance to boosting water prices to encourage efficient use. When resources such as water are shared across borders, establishing a pricing framework can be thorny. And in many developing nations, food subsidy programs make it less likely that rising prices will spur change.
This troubles economists who used to be sceptical of the premise of The Limits to Growth. Thirty years ago, economist Joseph Stiglitz said: "There is not a persuasive case to be made that we face a problem from the exhaustion of our resources in the short or medium run."
Today, the Nobel laureate is concerned that oil is underpriced relative to the cost of carbon emissions, and that key resources such as water are often provided free.
"In the absence of market signals, there’s no way the market will solve these problems. How do we make people who have gotten something for free start paying for it? That’s really hard. If our patterns of living, our patterns of consumption are imitated, as others are striving to do, the world probably is not viable," Stiglitz says.
Dennis Meadows, one of the authors of The Limits to Growth, says the book was too optimistic in one respect. The authors assumed that if humans stopped harming the environment, it would recover slowly. Today, he says, some climate-change models suggest that once tipping points are passed, environmental catastrophe may be inevitable even "if you quit damaging the environment".
One danger is that governments, rather than searching for global solutions to resource constraints, will concentrate on grabbing their share.
China has been funding development in Africa, a move some see as a way to gain access to timber, oil and other resources. India, once a supporter of the democracy movement in Burma, has signed trade agreements with the resource-rich country. The US, EU, Russia and China are all vying for the favour of natural-gas-abundant countries in politically unstable Central Asia.
The rise of China and India already has changed the world economy in lasting ways, from the flows of global capital to the location of manufacturing. But they remain poor societies with growing appetites.
Nagpur in central India once was known as one of the greenest cities in the country. Over the past decade, Nagpur has grown to roughly 2.5 million from 1.7 million. Local roads have turned into a mess of honking cars, motorbikes and wandering livestock under a thick soup of foul air.
"Sometimes if I see something I like, I just buy it," says Sapan Gajbe, 32, a dentist shopping for an airconditioner at Nagpur’s bazaar. A month earlier, he bought his first car, a $10,000 Maruti Zen.
In 2005, China had 15 passenger cars for every 1000 people, close to the 13 cars per 1000 that Japan had in 1963. Today, Japan has 447 cars per 1000 residents, 57 million in all. If China ever reaches that point, it would have 572 million cars, 70 million shy of the number of cars in the entire world today.
China consumes 7.9 million barrels of oil a day. The US, with less than a quarter as many people, consumes 20.7 million barrels.
"Demand will be going up, but it will be constrained by supply," says ConocoPhillips chief executive James Mulva. "I don’t think we are going to see the supply going over 100 million barrels a day, and the reason is: where is all that going to come from?"
Harvard economist Jeffrey Frankel says: "The idea that we might have to move on to other sources of energy; you don’t have to buy into the Club of Rome agenda for that."
The world can adjust to dwindling oil production by becoming more energy efficient and by moving to nuclear, wind and solar power, Frankel says, although such transitions can be slow and costly.
There are no substitutes for water, no easy alternatives to simple conservation. Despite advances, desalination remains expensive and energy-intensive. Throughout the world, water is often priced too low. Farmers, the biggest users, pay less than others, if they pay at all.
In California, the subsidised rates for farmers have become a contentious political issue. Chinese farmers receive water at next to no cost, accounting for 65 per cent of all water used in the country.
In Pondhe, an Indian village of about 1000 on a barren plateau east of Mumbai, water wasn’t a problem until the 1970s, when farmers began using diesel-powered pumps to transport water farther and faster.
Local wells used to overflow during the monsoon season, recalls Vasantrao Wagle, who has farmed in the area for four decades. Today, they top off about 3m below the surface, and drop even lower during the dry season.
Parched northern China has been drawing on groundwater supplies. In Beijing, water tables have dropped by more than 100m.
China’s farmers need water because China needs food. Production of rice, wheat and corn topped out at 441 million tonnes in 1998 and hasn’t hit that level since. Sea water has leaked into depleted aquifers in the north, threatening to turn land barren. Illegal seizures of farmland by developers are widespread. The farmland squeeze is forcing difficult choices. After disastrous floods in 1998, China started paying some farmers to abandon marginal farmland and plant trees. That grain-to-green program was intended to reverse the deforestation and erosion that exacerbated the floods.
A growing taste for meat and other higher-protein food in the developing world is boosting demand and prices for feed grains. Hundreds of millions of people are making the shift to protein, introducing heavy competition for food worldwide.
It takes nearly 9kg of grain to produce 1kg of pork – the staple meat in China – and more than four times that to produce a kilo of beef, according to Canadian geographer Vaclav Smil. The number of kilojoules in the Chinese diet from meat and other animal products has more than doubled since 1990, according to the UN. But China still lags Taiwan when it comes to per-capita pork consumption. Matching Taiwan would increase China’s annual pork consumption by 5billion kilos, as much pork as Americans eat in six months.
The 1972 warnings by the Club of Rome struck a chord because they came as oil prices were rising sharply. Oil production in the continental US had peaked, sparking fears that energy demand had outstripped supply. Over time, America became more energy efficient, overseas oil production rose and prices fell.
The dynamic today appears to be different. So far, the oil industry has failed to find new sources of crude. Without new discoveries, prices are likely to keep rising, unless consumers cut back. Taxes are one way to curb appetites.
New technology could help ease the resource crunch. Advances in agriculture, desalination and the clean production of electricity, among other things, would help.
But Stiglitz contends that consumers eventually will have to change their behaviour even more than then did after the ’70s oil shock. He says the world’s traditional definitions and measures of economic progress – based on producing and consuming ever more – may have to be rethought.
The Wall Street Journal
Additional reporting by Patrick Barta and Andrew Batson.
