Ed. Note: We are happy to share this reader response, which is part of a series submitted by undergraduate students at Loyola University Chicago from a course called ENVS 363: Sustainable Business Management.
As the human population continues to grow, our planet’s physical limits become more apparent. Scientists are now debating what those limits are, our projected timetable for reaching them, and the consequences of crossing them. Integrating these limits into society will be paramount to keeping Earth stable and habitable. One of the main inhibitors to integration is the current economic system. The economy is rooted in the idea that any field can grow, without natural impediment, ad infinitum. On a physically limited planet nothing has the potential to grow forever and this needs to be reconciled in the economic system.
Every species has a carrying capacity, which is the population that the environment is able to support. So far humans have been able to avoid their carrying capacity through technology. By technology I do not mean a cell phone or television, but rather agriculture, which allows us to feed a greater population than hunting or gathering. Clothing is also an adaptive technology that helps us endure colder months. And of course medicine is one of the most important technologies that we have developed, which is able to lengthen the human lifespan. But we are coming across firmer limits that will be much harder, or possibly impossible to evade.
Economic theory suggests that when a resource becomes scarce, it increases in value at a proportional rate. This increase in value is what, in theory, keeps it from ever being completely exhausted. For example, if all but one gold mine in the world were depleted, the price of gold would skyrocket to a point where few people would be able to afford gold. And if no one was able to buy gold, it would be worthless to extract it from the mine, and gold would continue to exist indefinitely. However, this theory does not explain what would happen in the event that the resource was one that humans need to survive. This model, using the example with gold, makes sense, but it no longer would if gold were substituted with water or food. If human population growth were to outpace our supply of potable water, the result would not be that few reserves of water were kept untouched. Instead millions or even billions of people would die of dehydration as the resource was completely used.
So how then do we recognize physical limits in an economy that is dependent on constant growth?
What is known with a great deal of certainty that greater efficiency, which is the use of resources in a less wasteful manner, is linked with economic gains because it is a reduction of cost. Efficiency is one sustainability measure that falls within the market and is rewarded for its use. Recycling another sustainability measure, which extends the life of resources and products. But these measures do not address consumption patterns of our economy.
Moving forward there needs to be a greater market rewards for sustainability methods. One obvious way to accomplish this is to move away from Gross Domestic Product (GDP) as an indication of success. GDP is a direct measurement of the monetary value of goods and services produced in the economy during a certain time frame. If we as a society wanted to reward temperance as a sustainability measure to keep our resource use within limits we would not be able to do so within a GDP system.
There are many ways to accomplish this but one of the most prevalent solutions is transitioning from a linear economy to a circular economy. This system and creates an economic incentive for reuse and durability. The circular economy reduces waste, and maximizes the life cycle of products. Focusing on technological and biologic cycles, finding multiple opportunities to keep products in use. Ultimately closing the energy loop. It focuses on creating economic incentives for sustainability that does not require constant growth and recognizes the limits of our planet.