Jørgen Randers: 2052: A Global Forecast for the Next Forty Years

Attention conservation notice: a summary of the book, which is worth reading. Or at least, the better summary linked below is worth reading.

Website: 2052.info. Has link to a spreadsheet with the model, which spreadsheet seems to be password protected. The password isn't in the Kindle ebook version of the book.

A useful summary: cpsl.cam.ac.uk/Resources/SoSL/SoSL_2012 (PDF)

The 2052 Model

The model is based on population. Population trends partly determine economic trends and those in turn determine energy use trends. Randers believes that some of the large trends operating today will continue. He puts them together and examines the consequences.  In summary:

• In advanced and developing countries, the birth rate will continue to decline, falling below the death rate around 2040. Total fertility falls well below replacement before 2030.  Therefore the population of these countries peaks around 6 billion.  The working-age population peaks in the 2030s. (These predictions are slightly below the UN's 2010 medium estimates.) Urbanization continues.
• The least developed countries (mainly in Africa) will not develop significantly, because they lack appropriate governance. (In this view, he matches Acemoglu and Robinson's view expressed in Why Nations Fail--and my own view.) Citizens of these nations won't be relevant economically but will be victims, especially of closed borders. And they will devastate the ecosystems around them. Total world population will peak at around 8 billion.
• The key assumption: Short-termism will continue to dominate politics in the West, as it's built into both capitalism and democracy. (Neither does anything about problems until they're already hurting.) As a result of using these institutions, we'll be unable to act in time to prevent serious harm.
• Thanks to short-termism, we'll continue to use fossil fuels until climatic instability gets really bad, which will mainly be after 2502. Since gas-powered power stations are cheapest and quickest to build, we'll mainly use gas to produce new electricity, because we'll just react to brown-outs.
  
  Renewables will continue to rise, contributing 40% of total energy by 2052 - the largest "single" contribution; nuclear will continue to decline in relative terms. CO2 emissions will peak in 2030.
• Energy efficiency will continue to improve at recent rates, so we'll need about twice as much electricity in 2052 as we do now (allowing for limited GDP growth and some movement from other forms of energy to electricity).
• The workforce will continue to grow till about 2035, but employment will continue to move into low-productivity-growth services such as elder care and community care in general. So GDP growth will be slow.
• As the bulk of GDP growth will take place in developing countries, incomes in western countries will feel static at best. As well, holiday spots will be crowded with the new middle class from the newly developed countries.  However, something (minimal) will be done about increasing inequality, eventually.
• Investment: Climate change will cause increasing damage to structures and infrastructure, and require extensive new infrastructure (e.g. massive irrigation schemes).  This implies that an increasing proportion of GDP will have to be used to fix things and supply services that used to be free.
  
  In addition, it will cost more (take more materials and work) to get the raw materials we need (fossil fuels, minerals).
  
  As an increasing fraction of GDP has to be set aside for investment, less will be available for consumption. Household disposable incomes will stagnate; in the west, they will decline in real terms (especially when including disamenity from worse food, expensive water, bad weather (storms and heat waves), and crowded holiday spots).
• Climate change: the effects will be increasingly felt, and repairs and strengthening costs will absorb an increasing fraction of GDP. Cities will be buttressed, and eventually they may be moved as well, when buttressing fails. But the full effects of climate change won't be felt until the second half of the century, when he expects them to overwhelm remedial investment.
• Technology: Randers expects AI by 2052, but doesn't think that it will have a significant impact on people's lives. Some new services may be developed, and some old ones may be improved or made cheaper.  As above, the main effect of technology will be to continue pushing people into low-productivity industries, ironically reducing economic growth. (This is where he may go the wrongest. But it's not very wrong.)
• Food will be expensive but there won't be famines, except in the least developed countries, which already have famines thanks to their poor governance. To westerners, the diet will seem to get worse: less red meat and more vegetables. To Asians, the reverse.
• Medical technology will be more advanced, but much of the new stuff will be outside the price range of most people. Lifespans are unlikely to increase much, but people may be working for longer, since work is increasingly less hard on the body.
• Water will be priced, and people will discover that agriculture can use water much more efficiently than it does today.
• In international politics, there will be a race to be the last to lose, i.e. competition for resources, especially arable land in least-developed countries.
  
  China's development (if it doesn't run out of steam about now) will be seen by other Asian countries as a model, i.e. the idea that democracy is necessary for development will be discarded. (Would-be copycats won't be as successful as China, IMO: they mostly lack China's cultural legacy of bureaucratic service to the state.)  The USA will lose its status as undisputed leader and policeman of the world.
• Natural ecosystems will be all gone. Such "wildlife" and "wild" ecosystems as remain will be carefully managed.
• The zeitgeist: life in 2052 will be lived by grannies in cities who are afraid of the sky, live on soy and lentils, and watch historical nature documentaries on TV, reminiscing about the good old days. For once, the reminiscences won't be entirely wrong about the "good" bit.

My Thoughts

Broadly in agreement, with a few quibbles.

As he usually does, Randers ignores the possibility of catastrophes: global epidemics, continental-scale wars, famines, drawn-out international disputes and closing of borders, etc. So growth could be even lower than his already pessimistic forecast. It definitely will be if the effects of climate change come on sooner than he estimates.

Randers seems to think that expectations won't play too much of a role in productivity growth. IMO, investment in the past has been bolstered by underlying population growth: with 2% per year population growth, a business can expect to double in size in 35 years, if it lasts that long. So the end of population growth will add a risk premium to the required rate of return on investments in enterprises and innovations.  Declining disposable income may exacerbate this effect.

The dementia epidemic almost certainly will catch us by surprise. (At the age of 80, about 20% of people have dementia, and this figure rises by a few percent for every year of age thereafter, according to Charlie Stross. Update: a more accurate figures is about 8% at age 80; or: 1%  in the 65 - 69 age group, with the proportion doubling every 5.5 years: about 4% of 70 - 79 year olds, about 17% of over-80s. Source: UK Alzheimer's Society ) A world with lots of demented codgers is going to need a lot of nursing labour. Or a lot of fairly smart robots--my next point.

In terms of upside risks, he also may underestimate the (admittedly still potential) acceleration of automation that is in the offing, enabled by the machine learning-internet-cellphone-cheap sensors-robotics revolution. Autonomous water-pipe-laying and -repairing machines may bring water to millions of new urban residents, and analogous construction machines may make or repair the buildings they live in. Autonomous "waste mining" machines may make recycling more effective.  And so on, and on. This "revolution" will, of course, take time to play out, and it has downside risks of its own. (The British agricultural and steam revolutions caused massive unemployment, as did the internal combustion-electric motor revolution.) 

Of course the big growth sectors are education, health, and personal and community services. Some effects will be felt here, but education in particular is a tough nut to automate.