Today We Are Paying the Bill for Rapid Economic Growth
Rapid economic growth brings a lot of good things. If it also improves people's quality of life then we can talk solely about the benefits themselves. Except that something makes a difference. This rapid prosperity has to be paid for, sometimes long after the fact.
Today we are faced with a confluence of many adverse phenomena and events. The Covid-19 Pandemic and the war in Ukraine accelerated the crisis and in fact already in some countries recession and caused a multi-level spiral of consequences. Added to all this is the global climate crisis.
How did it start?
If we could measure daily consumption of energy per capita, one million years ago, a primitive man used 2.000 calories. Hunting man 100 000 years ago used 5.000 calories for food and for heating. Man in our time already consumes about 115 times as much, i.e. 230.000 calories, of which some energy is wasted (E. Cook, 1971, www.people.wou.edu.). When we add to this the fact that, according to A. Maddison (2011), 23 % of all goods and services produced since the 1st century AD were produced in the first decade of the 21st century alone, we begin to see the causes of the problem and feel the consequences.
When enormous amounts of energy are needed to generate economic growth, what are the negative consequences economically, socially and environmentally which are associated with this? As early as the 1980s, Dennis Meadows, in his book “Limits to Growth”, asked the question: is it too late to save the planet?
Too fast, too soon
Not necessarily in the right order, I will list examples of the causes/consequences of rapid economic growth: the evolution or perhaps already the scientific and technological revolution involving, among others, the 4th industrial revolution, including AI (Artificial Intelligence). There are undoubtedly many positive aspects, e.g. in the health or education sectors, or the digitalisation of the economy in general, but the key negative aspect is the ubiquitous robotization, the change in the types of work people perform and the increase in unemployment. Another issue worth highlighting is the demographic transition; we now have almost 8 billion people in the world, although back in 1811 it was a billion. We are facing a demographic disaster. We are an aging society, the average age is increasing, according to world data from 2020, women live longer than men, the longest in Hong Kong is 88 years, the shortest in Central Africa is almost 56 years. The World Fertility Rate is decreasing year on year. The current fertility rate for the World in 2022 is 2.428 births per woman (macrotrends.net), but many countries have fertility rates below 2 or even below 1.5, such as Portugal, Poland and Croatia. There is a huge migration of people from rural to urban areas, also social exclusion and inequality.
The boiling point
And, finally, another key issue is the environmental consequences. Among the most dangerous is the warming trend of the climate. But this is not the only problem – the increase in temperature is as dangerous as the increase in precipitation (records in July 2021 in England), droughts on the one hand and floods on the other, as well as the increase in extreme weather anomalies. The rising costs of accidents and natural catastrophes lie ahead. Today, it is forecast that an increase in temperatures of 1.5-2 degrees Celsius could translate into a fall in GDP of up to 6 % (S. Keen, 2020).
There are always two sides to the coin and there is a lot of work ahead of us to develop a sustainable growth model. This is not only a challenge for policymakers but, in terms of the environment, also for each and every one of us. Without a doubt, the key challenge today is to switch part of our energy to renewable energy sources so as not to create an environmental catastrophe.