Why I Don’t Believe Randers’ Limits to Growth Forecast to 2052

Jorgen Randers published a book in 2012 called 2052: A Global Forecast for the Next 40 Years. A note on the front says, “A report to the Club of Rome, Commemorating the 40th Anniversary of The Limits to Growth.”

If we compare the new book to the book from 40 years ago, we see some surprising differences. In 1972, the analysis suggested that serious resource depletion issues would occur about now–the first part of the 21st century. In comparison, current indications look much better. According to Randers’ current analysis, world GDP growth will continue to rise through 2050, and energy consumption will continue to grow until 2040. While a decline in oil supply will take place, it will not occur until 2025. When it does happen, it will occur sufficiently slowly and incrementally that other fuels can replace its loss, apparently without disruption. Renewables will ramp up far more rapidly in the future than to date.

Figure 1. Comparison of oil and renewables forecast in 2052, based on spreadsheet from www.2052.info.

Figure 1. Comparison of oil and renewables forecast in 2052, based on spreadsheet from http://www.2052.info.

A person reading the front cover of 2052 might think that the model is quite close to the model used in the original The Limits to Growth analysis. My review indicates that the current model is fairly different. The book talks very little about the workings of the model, so doesn’t let us know what changes have been made.

It is possible to do some detective work regarding how the current model is constructed. Dolores “Doly” Garcia, who worked on the model, wrote three posts published on TheOilDrum.com explaining the model.  There is also a website (www.2052.info) provided by Randers giving the numerical output of the model in spreadsheet form.  Together, these point to a methodology which assumes that if world oil supply declines, the decline will be slow and will be quickly offset by a rise in the use of renewables, coal, and natural gas. Changes in the model, which I will describe further in another section, are the first reason I don’t believe Randers’ Limits to Growth forecast.

A second reason why I don’t believe Randers’ forecast has to do with limitations of the original forecast. These limitations did not make much difference back in 1972, when researchers were trying to estimate approximate impacts 40 or 50 years later, but they do now, when resources are becoming more depleted. One issue omitted from the model is a price mechanism. A related issue is that there is no true calculation of demand, based on what consumers can afford. The model also omits debt, and the role debt plays, both for investment purposes and in order for consumers to afford products made with oil and other energy products. Research regarding past collapses indicates they were financial in nature–the model should not overlook this important issue. Continue reading

Steep oil decline or slow oil decline?

Someone wrote asking the following question:

Dear Gail,

I have been reading quite a bit about peak oil recently. I get the impression (not based on data) that at some point there will be a quite steep decline in oil production/supply, and therefore we will see dramatic changes in how the world runs. However, when I look at oil depletion rates and oil production declines based on the Hubbert Curve, it seems to suggest a rather smooth decline.

How is that some people expect a serious energy crunch in about two or three years, then?

Many thanks!

Sam

Continue reading

How is an oil shortage like a missing cup of flour?

If I bake a batch of cookies and the recipe calls for two cups of flour, but I have only one, it is pretty clear that I can’t bake a full batch of cookies. All I can make is half a batch. I will end up with half of the sugar, and half of the eggs, and half of the shortening that I originally planned to use left over.

Liebig’s Law of the Minimum applies in situations like this. In agriculture, it says that growth is controlled not by total resources available, but by the one in scarcest supply. If a baker does not have enough of one necessary ingredient,  he will have to make a smaller batch. I wonder if it isn’t a little like this with oil and the economy. Continue reading