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April 21, 2008

Sustainable Technology Choices

We now have a global population of well over 6 billion. Per capita consumption of many precious resources is rapidly increasing. Multiply those two factors together and the outcome is BAD.

Put it this way. We have a room with a pie in it. There are four pie lovers in the room and they can split the pie into four pieces and get their fill. Now put twelve pie lovers in the same room with the same pie and the slices can get smaller or things can start to get ugly. Replace the pie with any commodity and replace the people with countries. It’s clear everyone needs to consume a lot less.

I’m not saying anything new. But it’s important to reiterate these points. There’s not much that’s being done to curb population growth. Seems to be politically unpopular to suggest that when the typical ways it occurs is through war, disease, famine, or other natural disasters. Or industrialization, where people just end up not having as many kids.

But that won’t help either because the paradox is that a lower birthrate does not necessarily equal less consumption per capita. So total consumption might not decrease with lower population growth. The USA is the poster child for that.

So going forward we can expect volatile commodity prices with upward trends. Oil is the first thing that comes to mind at this point. Energy, precious metals, other metals that are becoming more precious (steel, aluminum, copper, etc), staple crops, drinking water are a few others that come to mind. Where will it end?

We continue to operate on smaller margins of error. Why? Commodity supplies can be assumed to be fixed. There’s only so much dirt, water, and air to go around. As the population is projected to reach nine billion people, the per capita availability of resources goes down. Thus prices must spike and trend upward over time. At a world population of 2 billion there is a threefold margin of demand as there is at population of 6 billion.

The ideal solution to this problem is:

Population growth slows.
Per capita consumption decreases dramatically.
Massive and efficient recycling infrastructure are in place. To be sustainable, commodity prices have to be high enough to make it work, whether through market forces or government intervention.
As far as transportation goes, technologies must be developed to account for the risk of supplies going low, even if it’s good technology. The risk factors affecting supply must receive more scrutiny than in the past.

The only competitive advantage then is to use less of everything in any solution to arrive at the desired outcome. The world needs to become dramatically more efficient in order to maintain some semblance of the lives we’ve become accustomed to and demand.

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