September 23rd this year has the dubious distinction of being Earth Over-Shoot Day. The idea of Earth Over-Shoot is a bit complicated, but one worth getting to grips with. The basic idea is that there are finite resources on the planet. Our rate of consumption is then measured against our ability to replenish those resources, to come up with a figure of how many planets we are presently consuming. At present, we are consuming 1.4 planet Earths each year. At our present consumption rates, we are currently using 140% of the resources the Earth can generate in a year, which means that our lifestyles become unsustainable on September 24th this year. What might this mean in the longer term?
We need to recognise that Earth Over-Shoot Day is getting earlier each year and at a faster rate (see web site). In 1986, Earth Over-Shoot Day was December 31st. By 1995 it had moved to November 21st; and by 2005 it had moved to October 2nd. Over-Shoot is also unevenly distributed. According to the National Footprint Accounts, the US currently consumes 5.4 Earths, the UK 3.1 Earths, Germany 2.5 Earths, and India 0.4 Earths. The big uncertainty facing the world is the sustainability of the RIPE (Rapidly Industrialising Poor Economy) nations.
For example, if India were to want to enjoy a standard of living comparable with that of, say, Argentina – which is currently consuming 1.2 Earths – then the resource footprint of India would have to increase by a factor of three. One can question whether the finite resources on the planet contain this amount of reserves. Alternatively, suppose that the middle class in China grows in numbers more or less as forecast. We calculate that, if the Chinese middle class in 2020 wants to enjoy the living standards that are currently enjoyed in Europe and North America, then we need to find nine more planets to supply the resources to provide that lifestyle.
In conjuring up this fantasy we need to keep our feet on the ground. It is only a fantasy. Well before the fantasy could take hold, mechanisms within the system of the global economy will move into action to limit the degree of the scarcity faced. We have seen an example of the mechanism at work this year in the energy markets. In an excellent lecture on Sustainable Economics at Gresham College, Professor Michael Mainelli informed us that the price of petrol (gas) in the US had risen by 32% between 2007 and 2008, and that there has been a consequent reduction in miles driven of 4.7% (see lecture). Our own research has shown that, in the same period, usage of light rail transportation in the US increased by 10.3%, commuter rail by 5.7%, long distance rail by 4.4%, and bus usage by 2.2%. People have been getting out of the car and onto the train.
In many ways, this provides a glimpse of how we can see our economic future unfolding over the next two or three decades. Faced with acute shortages, global markets are likely to respond with relatively high price rises, which, in turn, has two effects. On the demand side, there is a substitution from individual consumption to collective consumption in order to enjoy increasing marginal returns of scale. And on the supply side, there is a financial incentive to invest in technologies that allow us to derive more from less. It is quite possible that resource efficiency may become the next hot technology wave.
As Willian Gibson is alleged to have said, ‘the future is here already, it’s just unevenly distributed’.
© The European Futures Observatory 2008