20 June 2013
Supply and Demand
The best projections I’ve seen  suggest that the world’s population will continue to increase from its current seven billion, pass eight billion around 2025 and reach nine billion about 2050. The birth rate among humans has been decreasing for some time. It is expected to continue to decrease through the first half of this century, such that the number of humans on this planet may remain roughly constant thereafter.
At the same time, the global economy is projected to continue to expand at a significantly faster rate than the population. Humanity, per capita, is getting richer, and likely will continue to do so. The Economist  reports that over a billion human beings have been released from abject poverty over the 20 year period 1990 – 2010. Most of the decrease was in China. China’s success at reducing population growth while greatly expanding the Chinese economy over recent decades provides a model that other developing countries are anxious to emulate.
If these two trends continue even roughly as projected, the global economy will more than double, as measured in constant dollars over the next 35 or 40 years. Most of that growth will be in the developing world. As poor people become richer, their preference is more likely to be to purchase goods than services, compared to richer people who become richer still. If all of this happens, we can expect the global output of goods to at least double, in constant dollars, compared to today.
Constraints: Sources and Sinks
Doubling the global market for goods, as measured in constant dollars, is good news for manufacturers. However, there are constraints on access to raw materials and on how to dispose of goods at the end of their useful life. China, for example, has been scouring the globe to secure access to raw materials and energy to fuel China’s future growth. Other countries will need do likewise. Global competition for access to resources will continue to intensify, while resource – rich nations will increasingly act to preserve their resources for their own use.
Former Saudi oil minister Sheikh Zaki Yamani rather famously declared that “The Stone Age did not end for lack of stone, and the Oil Age will end long before the world runs out of oil.”  Quantities of natural resources such as petroleum are obviously limited. However, it’s not pumping the last barrel that really matters: diminishing returns (with the implications for cost and availability that diminishing returns entail) will predominate, leading to alternatives long before petroleum — and similar natural resources — become extinct.
Moreover, available resources are only part of the problem. Sinks — places for the disposal of scraps, trash, end of product life items and other wastes — are another part. Environmental concerns focus largely on sinks — emissions to the atmosphere, to waterways and the sea, as well as waste disposal on land, buried or otherwise. Interestingly, the United States Business Council for Sustainable Development’s Vision 2050 document  calls for the elimination of landfills by 2020 (that is, seven years from now) . “Away” is being abolished. It will continue to become more and more difficult to throw anything away.
As the per capita wealth of humanity rises, expect tolerance for use of common properties (the air, waterways, etc.) as sinks to diminish rapidly. A century ago, belching factory smokestacks were a symbol of prosperity. More recently, the Cuyahoga River in Cleveland caught on fire, the smog in Los Angeles spawned jokes and Rachel Carson warned the world about pesticides upon the land and the prospect of a Silent Spring. Going forward, look for ever less public patience with smoke, odors, noise, toxicity, eyesores or hazardous conditions of any sort.
Eliyahu Goldratt’s The Goal  introduced a generation of manufacturers to the concept of a constraint: the factor that limits a manufacturer’s marginal throughput rate. Manufacturers should be constantly aware that availability of resources, especially through global supply chains, and the availability of sinks are increasingly constraints to entire industries.
Decreasing availability of both sources and sinks leads logically to increasing emphasis on closed loop manufacturing. Materials recycling needs to become a primary product and process design criterion . Recognizing this in advance allows latitude for proactive actions.
Thoughtful comments and experience reports are always appreciated.
… Chuck Harrington (Chuck@JeraSustainableDevelopment.com)
P.S: Contact me when your organization is serious about pursuing Sustainability … CH
This blog and associated website (www.JeraSustainableDevelopment.com) are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome. New blog posts are published on Wednesday evenings.
Photos: Oil wells and Landfill images: www.dreamstime.com
 The Economist, 1 June 2013, page 22f
 Learn about Vision 2050 at the WBCSD website, www.wbcsd.org. The entire Vision 2050 document and/or a summary are available for free download in about 10 languages. There are also PowerPoint presentations and visual aids available.
 For more on the future of landfill, see Down in the Dumps, this blog: http://blog.jerasustainabledevelopment.com/2013/01/16/down-in-the-dumps.aspx
 Goldratt, Eliyahu, The Goal, North River Press, Great Barrington, Mass. Third Edition (2012)
 For more on closed loop manufacturing, see The Upcycle, this blog, http://blog.jerasustainabledevelopment.com/2013/05/22/the-upcycle.aspx