Here is a written version of the speech
I gave at the meeting held in Bucharest in occasion of the 20th
anniversary of the foundation of the Rumanian section of the Club of
Rome (ARCoR), on Oct 17, 2013. It was a somewhat formal
reunion, so my speech was a little more formal than usual. What
follows is not a transcription, but a text version written from
memory. Thanks to Mr. Liviu Tudor, secretary general of ARCoR, to Mr.
Mugur Isarescu, president, and to all the members of ARCoR for having
invited me in this occasion. (The image above is from last year's ARCoR meeting, but the one I am reporting about was held in the same room in Bucharest)
Ladies and gentlemen, it is a privilege
and a honor for me to represent the Club of Rome today. So, I can bring to
you the greetings and the congratulations of the co-presidents of the
Club, Mr. Anders Wijkman and Mr. Ernst Weizsacker; as well as those
of the Secretary General, Mr. Ian Johnson.
We are celebrating today the 20th
anniversary of the foundation of the Romanian association of the Club
of Rome, ARCoR, which is a remarkable achievement. It is just as
remarkable, I believe, the achievement of the Club as a global
association which has already been existing for more than 40 years
after it was founded by Mr. Aurelio Peccei in 1969.
What we are celebrating today, however,
is not the memory of past glories. What we are celebrating, instead, is
the growing realization of how important and how modern was the
vision that appeared in the first report to the Club, the very famous
book titled “The Limits to Growth”. Today, more than 40 years
later, I had the honor to sign as the main author the 33rd report to the Club; a book titled “Plundering the Planet.” With this book, we re-examined several of the scenarios and the concept of the
1972 report. We found how consistently the ideas of the
early report were on target and how closely the world's economy has
followed the scenario that was defined as “base case” and that
today we would define as “business as usual”. It is a scenario
that sees the growth of the world's economy maintained up to the
first decades of the 21st century, to be followed by a
stasis and then by rapid decline.
Please be careful: “The Limits to
Growth” was not a prophecy and never was supposed to be one. The
authors clearly stated in the book that they didn't want the future
to look like their “base case” scenario. Nobody would want the
world's economy to collapse, with all the consequences involved, of
course They said, correctly, that our future is something that we
create with our actions and our decisions and that if we wanted to
avoid decline, we had to make choices that would
avoid it. But that wasn't done and the base case scenario is becoming
more and more, unfortunately, like a prophecy.
However, independently of what will be the
evolution of the world's economy in the coming years, I think that
the main legacy of “The Limits to Growth” today, is to
remind to us how important material resources are for our livelihood
and for our prosperity. Wealth is not created by banks or other
financial institutions; it is created by what we call “natural
resources” that are produced, are processed by our industrial
system, and finally transformed into products: it is what we call
“the economy”. Without natural resources, there would be no
economy, and money would be worthless because there would be nothing
to buy. That should be obvious, but sometimes we are so worried –
I'd say obsessed – by the vagaries of the world's financial system!
We tend to forget something that my friend and colleague, professor
Giorgio Nebbia, used to tell me “Economics is the science of all
material things”
So, were do we stand on these “material
things” today? Well, for one thing it is clear that we are NOT
running out of anything: the production of most important minerals is not declining and no major mineral commodity is missing in the market, at least if you are willing to pay for it. It was sometimes
said that the message of “The Limits to Growth;” was that we
would soon run out of mineral resources. But that's not true. “The
Limits to Growth” never said anything like that. It was clear from
the calculations reported in the study that we wouldn't ever run out
of major mineral resources before the end of the 20th century. The point is quite a different one: much before of physically
running out of resources, we'll run out of cheap resources.
And that's exactly what's happening. We
are not running out of anything, but we must pay more for what we
need. As you surely know, oil prices have increased of about a factor
five over the past 5-6 years and the average price of mineral
resources has increased of a factor of about three over the same time
span. This is a robust trend and it is not painless for the economies importing countries.
Let me give you some data: in 2012, the
European Union countries imported about 500 billion euros worth of
fossil fuels (1), that is about 4% of the European GdP. Single
countries show slightly different values, for instance for Italy it
was about 66 billion euros of imports, corresponding to more than 4%;
of the Italian GdP. For Romania, the fraction is smaller, in part
because Romania produces a relatively large amount of fossil fuels in
comparison to the size of its economy.
Consider that these are just the costs of importing
fossil fuels; more has to be spent for importing other mineral
commodities which normally “embed” a lot of energy in the form of
fossil fuels used for their extraction, processing, and
transportation. But let's remain with fossil fuels. Let's ask
ourselves a question: is 4% is a lot or a little? Well, it is one of
these questions that must be answered with a classic “it
depends”. If the economy could grow, then
the increasing costs of fossil fuels wouldn't be much of a burden –
they would remain more or less the same fraction of the whole
economy. But that has not been the case. The European economy is growing, but growth has been far from robust in the past years and in several countries the economy not growing at
all. And these countries are seen their “energy
bill” growing up and becoming a heavy burden. A good example is
Italy; but the same kind of troubles are everywhere. As we speak of
percentage points of the European economy we are speaking of hundreds
of billions of euros which move from Europe – mostly an importer of
mineral commodities – to producers, which are mostly outside
Europe.
This gigantic transfer of wealth cannot
remain without consequences and I think that it is one of the major
reasons of the troubles we are experiencing today. As I said before,
the main legacy of “The Limits to Growth” is to remind us that
our prosperity is based on material resources and we shouldn't forget
that. I invite you to consider this element when you try to
understand what's happening.
But there is another element that we
can consider as the legacy of the Club of Rome today, and it goes
straight to the core of the matter. You see, the scenarios that are
at the basis of the study “The Limits to Growth” were created
using a technique called “system dynamics”. It has to do with
solving differential equations in a computer but, in reality, it is
nothing more than formalized common sense.
Let me explain: I would define “common
sense” in a very simple manner: it is just thinking of consequences
and, in particular, thinking of the long term consequences of what
you do. Using a computer means that you can project your common sense
further in the future and to consider more complicated systems than those
you deal with normally. But common sense - thinking of consequences - remains a quality of human
thinking that, unfortunately, at times we refuse to utilize.
Considering our present situations we
are facing choices that will have profound consequences for our
future. For instance, should we drill for more oil and gas? We can, of course,
choose to invest large amounts of our current resources in order to
exploit the so-called “non conventional” resources. But the
consequence will be that we'll become even more dependent on a
resource that is becoming more and more difficult and expensive to
obtain (to say nothing of the worsening of the climate problem). So,
everything has consequences and we should think about that before we
take these important decisions if we want to take them wisely.
To conclude, I'd like to cite a phrase
that's often attributed to Robert Luis Stevenson. It is, “Everyone
of us, sooner or later, sits down at a banquet of consequences”. What will be served at the
banquet will depend on the choices we are making now. In this sense,
the methods and the ideas developed by the Club of Rome already in
the 1970s can help us to make wise choices (if we want to). This is
the legacy of the Club of Rome
http://cleantechnica.com/2013/04/07/eu-2030-energy-green-paper-introduce-oil-import-reduction-targets/
