Resource Constraints - Institute and Faculty of Actuaries

Jan 17, 2013 - Gross Domestic product (GDP) refers to the market value of all officially ...... while in the past renewable forms of energy, such as timber, ...
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Research Report Resource constraints: sharing a finite world Implications of Limits to Growth for the Actuarial Profession The evidence and scenarios for the future

17 January 2013

Resource constraints The Evidence and Scenarios for the Future

Presented by the The Institute and Faculty of Actuaries Written by Dr Aled Jones, Irma Allen, Nick Silver, Catherine Cameron, Candice Howarth & Ben Caldecott

January 2013

The report authors would like to acknowledge additional support and input from the Resource and Environment Group (REG) of the Actuarial Profession and Trevor Maynard and Neil Smith of Lloyd’s of London. We would like to thank all authors who have given permission for their figures and data to be reproduced here. The following people provided very useful feedback during the drafting of the report: Jorgen Randers, Robin Gowers, Victor Anderson, Irene Monasterolo, Mike Wilkins, Nick Godfrey, James Leaton, Oliver Greenfield, Robert Evans and David Wasdell.

Table of contents 1. Introduction ...................................................................................................... - 4 1.1 Finance and resources ................................................................................. - 4 1.2 Growth and limits ........................................................................................ - 5 1.3 Report structure .......................................................................................... - 5 2. The economics of Limits to Growth ................................................................... - 6 2.1 Introduction................................................................................................. - 6 2.1.1 Growth definitions, measurement and evolution.................................. - 6 2.1.2 Some early warnings about the shortcomings of the GNP measure ...... - 7 2.2 Measurement of Growth ........................................................................... - 11 2.2.1 The shortcomings of the GDP measure ............................................... - 11 2.2.2 Proposals for and practice of additional or broader measures ............ - 14 2.2.3 Small numbers, big impacts ................................................................ - 19 2.3 Growth and Debt ....................................................................................... - 19 2.3.1 Importance of growth to a debt based system .................................... - 19 2.3.2 Different macroeconomic approaches to debt .................................... - 22 2.4 Growth and Limits – a shift in the narrative ............................................... - 23 2.4.1 The Steady or Stationary State ............................................................ - 23 2.4.2 Limits to Growth ................................................................................. - 23 2.5 The New Growth?...................................................................................... - 25 2.5.1 What is growth for? ............................................................................ - 25 2.5.2 Green growth or low carbon, climate resilient growth ........................ - 26 2.5.3 Technologically led innovations .......................................................... - 27 2.5.4 Socially led innovations ....................................................................... - 28 2.6 Conclusion ................................................................................................. - 28 3. Current discourse on Limits to Growth ............................................................ - 29 3.1 Growth is the solution ............................................................................... - 30 3.2 Green growth ............................................................................................ - 33 3.3 The end of growth ..................................................................................... - 39 3.4 Beyond the limits..........................................................