Renewable Energy and Limits to Growth

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Introduction

Global commodity chains and capital accumulation present ways developing countries believe are solutions to their problems of poverty and stagnation. While the capitalist system accelerates economic growth through its short term gains, spurring development, the failure to critically examine the system’s over-dependence on fossil fuels would be an overestimation of the potential of capitalist-induced growth, especially for developing countries.

The Peak Oil theory, defined by M. King Hubbert in 1982 (Hubbert 1982), refers to the “point in time when the maximum rate of extraction of petroleum is reached, after which the rate of production is expected to enter terminal decline”. For the developing countries, the possible peaking of energy supply in conjunction with an alarming rise in energy demand brings much uncertainties regarding future economic growth. This paper argues that the limit to growth and development can be stretched by continuous technological innovation, alternative resource exploration and supporting policies, with energy security playing an ambivalent role in the extent of such an adjustment. This paper encompasses three sections: firstly, examining the limits to growth and development using Malthusian theory and capitalist system illustrated using the case of China and India; secondly, exploring ways developing countries try to raise the limit through efficiency improvements, energy substitutions and institutional policies; lastly, evaluating the ability of these countries to increase the upper limits to their growth and development.

1. There is a limit

The rise of capitalism in the world economy coincides with the increasing energy needs that is vital for growth and development. The inherent contradiction in capitalism where accumulation is achieved through exploiting natural resources and the need to rely on natural resources for future growth (Harvey, 2006; 2010). Economies are built upon finite resources, and with the end goal of capitalism being theoretical, there is certainly a limit to growth and development in a capitalist economy’s context.

Famously proposed by Thomas Malthus in 1798, his theory on population growth and the inability of resources to keep up with population results in a lack of resources to sustain the level of  human population, or in other words, the level of growth and development (Poston, et al., 2009). More recently, the Club of Rome’s 1972 study, “limits to growth”, predicts on various models how resources like raw materials and energy will be depleted in the ever increasing rate of human consumption (Meadows, et al., 1972).