Some people propose that we can keep our economy growing, without encountering the limit of resource availability, by advancing technology so that we use less and less resources in our economic activity to offset the continual growth of our economy.

Advances in technology, including advances in production methods, may allow us to reduce the amount of resources that we need to make the products of our economy. Technology may allow us to use less material in those products, or it may allow us to use material more efficiently as they are produced, so that less material is used and less waste is produced.

For example, better design allows a car engine to be smaller for the same amount of power produced. Because the engine is smaller the space it takes up in the car doesn't need to be as big, so the car doesn't need to be as big. Improved metallurgy allows the use of lighter metal alloys in car engines. Not only does this make the engine lighter, but the parts of the car body that support it don't need to be as strong, so they can be smaller and lighter too. These technological advances allow cars to be made smaller and lighter for the same functionality, so less material is used in their manufacture. Because cars are smaller and lighter, they also use less of another resource, fuel.

Because each car is made with less material we can make more cars without increasing the overall rate at which we use the resources that go into making these materials. This principal holds for all of the products of our economy. As long as our technological advances enable us to continuously reduce the amount of material that we use to make each product item, we can continue to make more of those items without increasing the rate at which we use resources, and our economy can continue to grow within the limits of resource availability.

However, for our economy to be able to grow continually and endlessly into the future, without exceeding the limits of resources availability, technological advances will have to continually reduce the amount of resources needed to make the products of our economy forever. This is unlikely to be possible.

For example, consider our use of the resources (coal, gas, oil, uranium) that provide us with the energy that we use in our home. We can do many things to reduce the energy that we use in a house. We could replace an electric hot water system with a solar hot water system; this would reduce our energy use a lot. We could insulate the house and greatly reduce the energy required for air-conditioning and heating. We could replace incandescent light bulbs with LED lights and reduce the energy use further.

These are the obvious, easy, and effective things that we can do to reduce energy use in our home. However, once we have done these things, it becomes much harder to find other things that we can do that will make a significant difference, so it become difficult to continue to reduce energy use in our home.

This is true for all of the resources that we use to make the products of our economy: as we use technology to reduce the use of resources we will do relatively easy and effective things first, and then more difficult and less effective thing afterwards. As time goes by we will be able to achieve less and less only with more and more effort; eventually there will be nothing more that we can do to reduce our use of resources. When we reach that point, technology will have reached its limit in reducing resource use, and our use of resource must continue to grow as our economy grows.

Another mechanism also often limits the ability of technological advancement to reduce the use of resources. When technological advances achieve reductions in the amount of resources used to make each item of production, the outcome is commonly an increase in the overall use of resources. This situation occurs when the limiting factor of consumption of those products is a resource other than the particular resource that technology has reduced the use of.

For example, until the 1990's the rising cost of fuel had pushed the size of cars down, particularly in the USA. One response to the rising price of fuel was the development of more efficient engines. Instead of these improved engines resulting in less use of fuel, they resulted in larger vehicles being produced because people could afford to run them. These vehicles were mostly in the form of recreational four-wheel-drive vehicles ('SUVs' in the USA).

Not only did more fuel efficient engines result in larger vehicles that used more of a wide range of resources in their manufacture, but they also mean that more people could afford to run these larger vehicle so more were sold. The reduced cost of running all types of vehicles with the more efficient engines meant that greater distances were travelled in all of them. These two factors, which resulted from the technological advancements in engines, brought about a large increase in the use of resources, including the previously limiting factor, fuel.

For some finite resources the reserves are so huge that is seems that, even with technology's limited ability to reduce resource use, we could relieve the limitations of finite resource use and allow economic growth to continue far beyond the foreseeable future. However, this is not possible because our use of these finite resources must always grow as our economy grows, and, as our economy grows exponentially, our use of those resources must grow exponentially and will, therefore, always grow to be much greater than we expect, and much greater than what technological advances can counter.

Our economy grows exponentially as time passes, but the ability of technology to reduce the amount of resources used reduces (decays) exponentially as time passes. This interaction negates any effect that technology has in reducing resource use.

This page is linked from:

decoupling the economy from resource use

exponential economic growth and resource-use decay

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