chapter  4
31 Pages

Why so wasteful?

This chapter describes the journey into the world of economic growth theories. It examines the deeper economics underlying this rhetorical jousting. The chapter focuses on the choice between present consumption and investment, which helps to set the timescales implied. It explains that the dark matter of economic growth comprises numerous forces, often but loosely termed 'innovation', which in fact encompass factors as diverse as efficient regulation, institutional and technical change, education and infrastructure as well as potentially more nebulous factors still, associated with culture. One typical example is the almost one hundred year process of incremental innovations in the automobile industry initiated by the 'five dollar workday' decreed by Henry Ford in 1914 to which we will return later, after first looking explicitly at the energy dimension of economic growth. We return to the problems of debt and recession and their relevance to energy and climate policy.