Sustainability

Ever wonder why the business world seems obsessed with growth? Open up the Wall Street Journal, Forbes, The Economist, or the business section of your local paper. Growth, increasing profits, and expanding markets – this is the objective. When businesses don’t grow at expected rates, stock prices plummet and CEO’s get canned.

From microeconomic perspective, the point of view of the individual, our society offers countless reasons to work for growth. A salesman who sells more makes more money in commissions. A mid-level manager drives his employees to perform at a higher level so that one day she can be promoted to corporate. A CEO might point to his legal duty to increase the company’s equity for stockholders. A self-employed contractor knows that without building more homes, he cannot afford to send his daughter to private school.

At just about every level, we are a society oriented toward infinite growth.

An unending growth economy is impossible in a finite world. An always-growing economy requires an ever increasing supply of expendable resources. Thanks to the laws of physics, we have little hope of creating an infinite world, so we best stick with creating a sustainable economy.

Over the coming weeks, I will examine various parts of our economic system and growth-oriented society. Once we’ve had a chance to explore our current system, we will be in a better place to forge a new, sustainable, economic paradigm.

Humanity is using resources necessary to civilization’s existence at a faster rate than they can be replenished by the environment.  Though the majority of people now live in cities, our existence still depends on food grown in soil,  trees cut from forests, and water taken from streams, lakes, and aquifers.  We will forever be dependent on the environment surrounding us.  Thus, it is important to be conscious of how human activity affects the environment.

I=PAT: Trying to Measure Impact

In the 1970’s, a debate about these issues between Barry Commoner, Paul R. Ehrlich and John Holdren resulted in an equation to express how much impact humans have on the earth:

I = P*A*T

I = Human impact on the environment
P = Population
A = Consumption per person
T = Environmental impact per unit of consumption

This equation neatly summarizes some of the issues involved in environmental degradation.  If there is an increase in population, a greater amount of consumption per person, or more resource intense production, the impact is greater.  Using this equation, we can identify several different places where environmental impact can be reduced.

While I=PAT is a good starting point, I think it is too incomplete for rigorous use.  First, not all types of environmental impacts are equal.  Using a gallon of water in Phoenix to water your grass has a much greater effect on the local environment (or the environment of wherever they pumped the water from) than using the same amount of water in the rainy northwest.  I=PAT treats this consumption as the same.