By Shahab Sabahi
Energy and Environment - Policy analysis research group
Do economic, social and political systems have potential to function as sustainable systems? Imagine an economic system involves non-renewable stocks or resources. The system is going to run out of the stocks soon. Moreover assume the social system who runs the economic system does not intend to compromise its consumption level. It is also true for the case, when the size of the social system (population) grows quicker than the economic size.
To keep up with two constraints on the ground, the stocks depletion and unchanged consumption level, the economic system may initially improve its efficiency to get more outputs while the amounts of inputs are reduced. In longer term it goes for innovation and adaptation and it diversifies its outputs and inputs in ways to manage the negative impact of the constraints.
When efficiency reaches its maximum, the fluctuation between efficiency and adaptability converges to its minimum level. At this point, the systems are volatile; however they may be at steady states. It is a time to make crucial decision either path below
1. The systems are fundamentally rearranged
2. Refine the patterns through which the systems work and reduce the complexity of them
The economy of developed countries has already arrived at this point. They wish and insist to keep their growth pace high, while budget cuts and cap on their borrowing make priorities on their agendas. It is just an illusion. Policy experts are still confident that they work out policy options (miracle!!) to make both reachable. They simply forget that their economic systems grow big, complex and solid and efficiency improvement, innovation and adaptation will not work. It seems that the policy makers become conservative and close their eyes to reality. They are as rigid as their economic systems.
Time is up and a fundamental reform in economic structure and institution is essential.
Energy and Environment - Policy analysis research group
Do economic, social and political systems have potential to function as sustainable systems? Imagine an economic system involves non-renewable stocks or resources. The system is going to run out of the stocks soon. Moreover assume the social system who runs the economic system does not intend to compromise its consumption level. It is also true for the case, when the size of the social system (population) grows quicker than the economic size.
To keep up with two constraints on the ground, the stocks depletion and unchanged consumption level, the economic system may initially improve its efficiency to get more outputs while the amounts of inputs are reduced. In longer term it goes for innovation and adaptation and it diversifies its outputs and inputs in ways to manage the negative impact of the constraints.
When efficiency reaches its maximum, the fluctuation between efficiency and adaptability converges to its minimum level. At this point, the systems are volatile; however they may be at steady states. It is a time to make crucial decision either path below
1. The systems are fundamentally rearranged
2. Refine the patterns through which the systems work and reduce the complexity of them
The economy of developed countries has already arrived at this point. They wish and insist to keep their growth pace high, while budget cuts and cap on their borrowing make priorities on their agendas. It is just an illusion. Policy experts are still confident that they work out policy options (miracle!!) to make both reachable. They simply forget that their economic systems grow big, complex and solid and efficiency improvement, innovation and adaptation will not work. It seems that the policy makers become conservative and close their eyes to reality. They are as rigid as their economic systems.
Time is up and a fundamental reform in economic structure and institution is essential.
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