Ecological Economics: There is no Infinite Growth on a Finite Planet

The ecological economist, Herman Daly, proposed the concepts of "empty world" and "full

world" to describe two different stages of human economic development in relation to the environment.

🌑 In an "empty world," resources and natural spaces are abundant, while human population and economic activity are small. In this context, human actions have limited impact on the environment, and economic growth can proceed without causing major ecological harm.

🌕 In contrast, a "full world" is one where human population and economic activity have grown so much that they start to strain Earth's resources and ecosystems. There, traditional economic growth has negative consequences (e.g. pollution, resource depletion, loss of biodiversity).

💡 Daly famously used simple drawings made of circles and squares to illustrate something obvious, but often forgotten: the economy (drawn as a square 🟦) is a **subset of the environment** (a circle 🟢).

Not. the. other. way. around.

In fact, the economy relies on natural inputs to function: materials extracted to manufacture goods and services, etc. (Even a "thinker consultant" needs to eat and drink 😉).

However, our ecosystems do not need the economy to function. They’ve functioned very well, without, for billions of years.

In an empty world, the square is small compared to the circle, showing that the economy is a small subset of the environment.

In a full world, the 🟦 has grown so large that it nearly fills the 🟢, indicating that the economy is now a dominant force shaping the environment. In other words, the “economy bumps against the environment’s edges and can’t grow bigger”.

🤷 There are finite resources on this planet, e.g. finite reserves of oil, finite reserves of rare earth etc. So, if growth is driven by extraction of raw materials and planetary resources, well…, at some point there will be nothing left to extract and thus no more growth.

The physical limits of Earth's resources, do not allow for infinite growth.

Instead, of extracting resources to throw them away, we should value what we already have and embrace circularity.

A world where value is kept and amplified, wastes are minimized, and where robust goods circulate to generate healthy, **long-lived cash flows**.

Buy a high quality drill (-£250), rent it 50 times for +£10, repair it (-£50), rent it 50 times, sell it to Bob (+£70),…, sell it for +£5 to a recycler, etc.

🔌 Surely, energy is produced and used along the way, but it all starts by stopping the extraction of resources used to produce useless, poor quality goods.

Finite resources.

Goods with longer life spans.

Clean energy to recycle (*when needed*).

Healthy cash flows. 💸

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Read more on ecological economics: https://greattransition.org/publication/economics-for-a-full-world