From a Vicious Cycle to a Virtuous Cycle

By: Chandu Visweswariah

The 21st century will witness a series of profound macro-economic decoupling forces.

Traditional wisdom has it that the more advanced and prosperous an economy, the more energy that economy uses. There is strong historical data for over a century to support this tight coupling. Unfortunately, this sets up a vicious cycle. We optimize our economic policies to maximize wealth, which means higher consumption, and a larger Gross Domestic Product (GDP), which by definition means more goods and services. More goods and services imply more energy use – more manufacturing, more miles driven, more gasoline consumed, more electricity, more natural gas, etc. Unfortunately, in the fossil fuel economy of the last century, this has led to unbridled emissions, leading us to the uncomfortable conclusion that increased wealth can only be achieved with higher emissions, or at least that there is a strong correlation between increased wealth and increased emissions. This vicious cycle has led us to the brink of environmental catastrophe with its concomitant health, extreme weather and climate instability problems.

Our policies and consumption behaviors must evolve to convert this vicious cycle to a virtuous cycle. While the old cycle was green because it was driven by money, the new one will also be green because of the twin goals of economic development and environmental protection. We must ask ourselves if we are optimizing the right metrics.

Is unbridled pursuit of wealth without regard to environmental impacts the right goal? Is increased consumption always good? Do more goods and services always need more energy? Does more energy always mean more emissions?

Every nexus depicted in the “Vicious Cycle” must be systematically decoupled!

Let us for a moment replace “Wealth” by “Quality of Life.” Isn’t this the right metric that better represents inherent trade-offs? Optimizing quality of life doesn’t mean limitless consumption, but rather sustainable consumption, evoking notions of a truly circular economy in which every material gets re-used or recycled and nothing wasted.

Ideally, we will spiral our GDP upwards while optimizing its circularity! When it comes to energy use, we must do more with less (consider that LEDs are 6 times more efficient than incandescent bulbs, Electric Vehicles up to 5x more efficient than gas vehicles, heat pumps 4 times more efficient than furnaces). The requisite energy must be produced with zero emissions from essentially limitless renewable sources. The latter is achievable, as noted in numerous articles elsewhere, by a combination of solar, wind, battery storage and beneficial electrification. We have the technology to do this rapidly, but do we have the will to redefine the metrics that we will optimize?

The virtuous cycle provides the positive feedback that will ensure a higher quality of life while protecting the environment to give all humans the clean air, clean water and stable climate they deserve. There are multiple virtuous sub-cycles within the bigger virtuous cycle. One example is that as we move to plant-based diets, emissions will reduce while human health improves. Another example is that heat pumps will improve indoor air quality with attendant health benefits. Yet another example is that as we move away from burning fossil fuels, there will be fewer particulate emissions in the air, vastly reducing asthma, emphysema, lung cancer and cardiovascular disease. The circular economy will reduce landfills, eliminate incineration of waste, and prevent uncontrolled amounts of garbage and plastic ending up in our rivers and oceans.

The trick will be to make these virtues as measurable and evident as money is in today’s vicious cycle. Today’s economy considers these quality of life issues mere “externalities” – they need to be front and center as first-order metrics in the virtuous cycle.

By his or her consumption choices and behaviors, every human on the planet has a part to play in this transformation. Policy makers, regulators and legislators at all levels in all countries bear a high responsibility to move us quickly from a vicious cycle to a virtuous cycle before it is too late.

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