17.07.2021 – 16:06
By Nafeez Ahmed
An extraordinary new study by a manager at one of the largest accounting companies in the world, has revealed that a famous warning a few decades ago from the Massachusetts Institute of Technology (MIT) on the risk of the collapse of industrial civilization, seems to be accurate based on new empirical data.
As the world awaits a response in terms of economic growth, following the devastation caused by the Covid-19 pandemic, the new study raises some urgent questions about the dangers of trying to return to the “normalcy” we had before the pandemic.
In 1972, a team of MIT scientists came together to study the dangers of the decline of our civilization. Their model of system dynamics, published by the Club of Rome, identified “near-growth” (LtG), which meant that industrial civilization was on track to collapse sometime within the 21st century, for due to over-exploitation of planetary resources.
MIT’s controversial analysis generated strong debate and at the time was widely ridiculed by experts who misrepresented its findings and methods. But that analysis has today gained an impressive justification from a study conducted by a director of the professional services company KPMG, one of the largest accounting companies in the world, part of the “Big Four”, measured by global revenue .
Growth limits and collapse risk
The study was published in the Yale Journal of Industrial Ecology in November 2020, and can be read on the KPMG website. He concludes that the current current usual trajectory of global civilization is heading towards the final decline of economic growth within the next decade, and at worst, could cause social collapse by 2040.
Its author, Gaja Herrington, is the head of System Sustainability and Dynamic Analysis at KPMG. The study was not conducted on behalf of the KPMG, and does not necessarily reflect the views of the KPMG.
Herrington conducted the research as an adjunct to her master’s thesis at Harvard University, in her capacity as a counselor at the Club of Rome. Herrington’s new analysis examines data in 10 key variables, namely population, fertility rates, mortality rates, industrial production, food production, services, non-renewable resources, persistent pollution, human well-being and ecological footprint.
She found that the latest data closely match two distinct scenarios, ‘BAU2’ (business as usual) and ‘CT’ (comprehensive technology). “The BAU2 and CT scenarios show a stagnation of growth within a decade or so from now. Both scenarios show that continuing the business as usual, ie pursuing continued economic growth, is no longer possible.
“Even when accompanied by an unprecedented technological development, business as usual modeled by LtG would inevitably lead to declining industrial capital, agricultural production and welfare levels within this century,” she said in the study.
Herrington points out, however, that in MIT’s World3 models, the collapse “does not mean that humanity will cease to exist”, but rather that economic and industrial growth will stop, then fall, which will impair food production and living standards. In terms of time, the BAU2 scenario shows a major decline expected to occur around 2040.
The end of economic growth?
In the all-encompassing technology (CT) scenario, the economic downturn that occurs around this date certainly brings a number of potential negative consequences, but it will not lead to a social collapse. Unfortunately, the scenario that fits least with the latest empirical data happens to be the most optimistic path known as the “SW” (stabilized world), in which civilization follows a stable path and experiences the smallest declines in economic growth. , based on a combination of technological innovation and widespread investment in public health and education.
Although both business scenarios as usual and inclusive technology show the next end of economic growth within about 10 years, only the BAU2 scenario “shows a clear pattern of collapse, while CT suggests the possibility of relatively smooth declines in the future, more at least for humanity in general. “
A decade time for the establishment of a new civilization
While the focus on pursuing continued economic growth will be futile, the study finds that technological progress and increased investment in public utilities can not only avoid the risk of collapse, but can lead to a new sustainable and civilized civilization. developed that operates safely within planetary boundaries.
But we really only have the next decade to change course. “At this point, the data are mostly in line with the CT and BAU2 scenarios which show a slowdown but also a possible growth stop within the next decade or so. “But World3 leaves open the question of whether the ensuing downturn will lead to a social collapse.”
In a presentation at the World Economic Forum in 2020, Herrington spoke of ‘agrowth’ – an agnostic approach to economic growth that focuses on other economic goals and priorities.
“Human activity can be regenerated, and our productive capacities can be transformed. In fact, we are already seeing examples of this, “she said, noting how the rapid development and production of Covid-19 vaccines proves that if we decide to act, we are able to respond quickly and constructively global challenges.