The Science of Sustainability
Limits to Growth
The limits to growth concept posits that unlimited economic growth is not possible-that at some point the world’s growing population will consume too great a quantity of natural resources (such as clean water and fossil fuels) for human society to exist.
Limits to Growth Example - Cattle
Click on the below buttons to view an illustrative example of the concept of limits to growth.
Assume that five acres of grassland is required to sustainably feed one cow annually. This means that five acres is able to regenerate itself and support the grazing of one cow and that this same cycle of growth and consumption can occur year after year. In other words, the carrying capacity of five acres of grassland is one cow. If you were a farmer with one hundred acres of grassland and you had one cow, there would be more than enough grass available to feed that one cow and have the grass regenerate itself for perpetuity. The farmer could add up to twenty cows on the one hundred acres and every year the grassland would produce enough grass to feed all twenty cows.
Now suppose the farmer wants to increase his annual profits, and he adds another ten cows to the one hundred acres. There probably is enough grass to feed those cows for that year, but now the overgrazing is compromising the ability of the grass to replenish itself. The resource base degrades because the demands on the grassland are greater than its capacity. Perhaps the next year only 90 percent of the grass grows back, and it is not as healthy as before. Continuous overgrazing further degrades the grassland until it is no longer capable of supporting any cattle.
What would happen instead if the farmer believing that he can push profits even further decided to increase the herd size each year by another ten cows? Then the degradation of grassland will proceed at an even faster rate. Even if the farmer does achieve some short-term profitability increase by exploiting the grassland, it is at the expense of productive grassland in the future. Once damaged, it may take years or decades for the grassland to recover or it may never return to its former productive capacity.
This example illustrates the basic concept of limits to growth-that at some point rising resource demand runs into some very hard resource limitations.
No Limits to Growth
It can be argued that throughout most of the nineteenth and twentieth centuries the dominating paradigm in the United States and Europe and most of the developed world has been that there were few limits to economic growth and that economic growth is always desired.
Underpinning “no limits” is the idea that resource scarcity-a major factor in “limits to growth” thinking-can be effectively addressed by economic laws of supply and demand. Laws of supply and demand do work; as resources become scarce, the market will reduce use by increasing the price of those resources.
The market and laws of supply and demand can serve to reduce demand for scarce resources and guide resource allocation to technology and innovation investments that can help address scarce resource concerns. Technology can help reduce resource demand through more efficient use of those resources.
A programmable thermostat can more efficiently heat and cool homes than a traditional thermostat. Increased prices will also favor substitution where another resource may be used in place of the scarce resource. An example of this would be building materials or furniture that no longer are produced using 100 percent real wood, as wood has become more scarce and expensive, but instead use wood-laminate and alternative composite materials.
Julian Simon (1932-98), a professor of business administration at the University of Maryland, is often cited in relation the cornucopia theory-that there are no physical limitations on economic growth or human population.
In Simon’s book The Ultimate Resource (published in 1983), he states, “The supply of natural resources is infinite. Almost all trends in environmental quality are positive…There is only one scarcity: Human brain power ‘the Ultimate Resource.’” 
He argued that human ingenuity combined with the correct market signals (pricing) would allow for humans to continually grow economically and the overall human condition would continue to improve, not worsen. He believed that increased consumption would heighten scarcity, which would translate into higher prices, in the short term. This would in turn stimulate entrepreneurship to seek new ways to satisfy shortages. Society eventually ends up better off than if the original shortage had not occurred.
Neoliberalism is a view of the global economic system that holds to the overall tenets of no limits to growth and cornucopian theory. In this view, the private sector, not government, should determine economic and policy priorities. Consistent with a cornucopian viewpoint, neoliberalism views business entrepreneurship (unfettered from government regulations and trade restrictions) as being able to make society better off by letting the marketplace determine the use of resources.
Related to this view of unlimited economic growth are consumerism and the underlying assumption that more consumption is always better for the economy. Consumerism is the belief that our economic systems should favor consumption and that the consumption should be for goods and services that are in excess of basic material needs for survival. Consumerism not only attempts to meet material needs and wants but allows for continuous economic growth.
A focus on consumption puts tremendous demand on natural resource systems. Natural resources are required to extract, produce, and transport the goods that we purchase, and the extraction, production, and transportation of these goods often release pollution and toxic chemicals in the process.
Reconciling Limits and No Limits to Growth
The two views of limits to growth are both important for the business context of sustainability. Both views, at a fundamental level, influence sustainability discussions at a personal, business, and societal level. The earth does have limited resources and human activity can negatively impact the environment. Market forces are often effective in providing signals to society of resource scarcity and the need to change, innovate, and adapt. But even with the overall efficacy of markets, there are limits to the efficacy of the market perspective. Markets often fail to properly price natural resources that are treated as free goods, and this makes limits to growth a reality. Both arguments make important points that frame discussions of sustainability.
Tragedy of the Commons
An important concept relevant for sustainability is the “tragedy of the commons.” This phrase was coined by the ecologist Garrett Hardin in a 1968 article in Science. The tragedy of the commons describes a situation where different parties share a common good (such as open public land), and acting independently in their own self-interest, they will ultimately overexploit and deplete or destroy the shared resource. The tragedy is that the individuals acting in a way that they believe is in their own best interest end up acting in a way that is detrimental to their collective and individual long-term best interests.
There are numerous examples of tragedy of the commons in modern life and the environment, including polluting the atmosphere, overharvesting fish stocks, and polluting waterways.
Tragedy of the Commons – Cattle Example
Related to the cattle example in the limits to growth discussion mentioned previously, tragedy of the commons can be illustrated in a simplified example involving cattle. Click the buttons below to view.
Potential of Tragedy of Commons Occurring
If several cattle herders share a common (publicly shared) area of land and all herders are entitled to let their cattle graze on that land without restriction, there is the potential for tragedy of the commons to occur.
For each individual herder, it is in their self-interest to maximize their profitability by placing as many cattle as possible on the land. There is no direct incremental resource cost to the herder for each cow they add to the shared land, and the herder has increased revenue through greater cattle sales. If each herder acted in this manner, the quality of the common resource can be either temporarily or permanently damaged as a result of overgrazing if the total cattle population exceeds the carrying capacity of the shared land. Once carrying capacity is exceeded, all are negatively impacted, including, ironically, the herders who added to their cattle stock.
 Julian Simon, The Ultimate Resource (Princeton University Press, 1983).
 Garrett Hardin, “The Tragedy of the Commons,” Science 162, no. 3859 (1968): 1243-48.
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