Investment Chart Kondratiev Wave

Investment Chart Kondratiev Wave

Wednesday 11 April 2012

Club of Rome after 30 years: disaster still coming


Lukas Daalder had yesterday a chart from Smithonian Magazine (http://www.smithsonianmag.com/science-nature/Looking-Back-on-the-Limits-of-Growth.html#ixzz1riJDM6WT) in which the prophecies for disaster of Meadows (club of Rome) wre tracked until 200 (by Graham turner). The conclusion was that the Club of Rome (The limits of growth) had done a pretty good job in forecasting the trends.
You cannot find a scale in the chart and how things are calculated/ measures is completely unclear. But let us believe what the chart says.
Most things have gone better than the Club of Rome predicted, but not so much better until 2000. Especially there is now much more food per head than thought, The service sector has grown faster (ICT Revolution) and industrial production slower. This has been favourable for pollution. The growth of the world population has been predicted very well.
What happened after 2000 until now is not completely clear to me. The exponential increase of the pollution did not happen in the West and the industrial production has risen less than the predicted trend. In the Emerging Market pollution has increased but also there they are doing a lot to limit pollution. There industrial production grew fast, but after the credit crisis also less fast.
The amount of non renewable energy did not decline as much as the Club of Rome indicated. The last years that is mainly caused by non conventional new energy from tar sands/ shale oil/ natural gas.
The next decades there will be new mehodes invented to produce more renewable energy. The prices of solar energy are plunging and the down trend will continue. Hopefully other renewable energy will get its breakthroughs.
The most important prediction that the world population will go down because of pollution looks unlikely. People live much longer. Exactly because of those higher life expectations the population growth is slowing almost everywhere, especially outside the OECD.
The structural downturn of production is reasonably in line with what Ter Veer and I predicted as the declining part of the current Kondratieff cycle.
The main conclusion of the Club of Rome that the world uses too many of its commodities resources and that this is untenable still holds very well. Global warming is now almost uncontested (except for born again Christians in the US Bible Belt). Still one can expect that pollution will not be an as grave problem as the Club of Rome indicated. It is possible that the world population will decline after 2030 because some bacterial diseases are harder and harder to battle, so who knows.

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