CHAPTER 2 Major Global Modeling Studies

CHAPTER 2

Major Global Modeling Studies

Contents.

PageIntroduction . . . . . . . . . . . . . . . .. ..... 11Forecasts and Forecasting. . . . . . . . . . . . . . . . . . . . . . 11Models and Modeling . . . . . . . . . . . . . . . . . . . . . . . . . 11

The Trend Away From TechnologicalOptimism . . . . . . . . . . . .. .. ... ... .. 13

World 3—The Limits to Growth. . . . . . . . . . . . 15Origin and Purpose. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15Structure and Assumptions. . . . . . . . . . . . . . . . . . . . . 15Findings of World 3. . . . . . . . . . . . . . . . . . . . . . . . . . . 15Conclusions of World 3.... . . . . . . . . . . . . . . . . . . . 18

World Integrated Model—Mankind atthe Turning Point . . . . . . . . . . . . . . . . . . . . . 19

Origin and Purpose. . . . . . . . . . . . . . . . . . . . . . . . . . . . 19Structure and Assumptions. . . . . . . . . . . . . . . . . . . . . 19Findings of WIM.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21Conclusions of WIM. . . . . . . . . . . . . . . . . . . . . . . . . . 23U.S. Government Use of WIM. . . . . . . . . . . . . . . . . . 23

Latin American World Model–Catastrophe or New Society?. . . . . . . . . . . . . 24

Origin and Purpose. . . . . . . . . . . . . . . . . . . . . . . . . . . . 24Structure and Assumptions . . . . . . . . . . . . . . . . . . . . . 25Findings of LAWM.. . . . . . . . . . . . . . . . . . . . . . . . . . 25Conclusions ofLAWM. . . . . . . . . . . . . . . . . . . . . . . . 29

United Nations Input-output World Model–The Future of the World Economy.. . . . . . . 30

Origin and Purpose. . . . . . . . . . . . . . . . . . . . . . . . . . . . 30Structure and Assurnptions . . . . . . . . . . . . . . . . . . . . . 30

PageFindings of UNIOWM. . . . . . . . . . . . . . . . . . . . . . . . . 31Conclusions of UNIOWM. . . . . . . . . . . . . . . . . . . . . 34

Globa1 2000–Entering the 21st Century. . . . . 34Origin and Purposes. . . . . . . . . . . . . . . . . . . . . . . . . . . 35Structure and Assurnptions . . . . . . . . . . . . . . . . . . . . . 36Findings and Conclusions of Global 2000. . . . . . . . . 37

Figures

F i g u r e N o . Page1.2.3.4.5.

6.7.

8.9.

104

11<

Types of Models. . . . . . . . . . . . . . . . . . . . . . . . . . . 12Possible Global Behavior Modes . . . . . . . . . . . . . 16World 3 Standard Run... . . . . . . . . . . . . . . . . . . 17World 3 Equilibrium Run. . . . . . . . . . . . . . . . . . . 17World 3 Run With Stabilizing PoliciesIntroduced in the Year 2000. . . . . . . . . . . . . . . . . 18Regionalization of the World Integrated Model. 20Block Diagram of the Basic Elements of theWorld Integrated Model. . . . . . . . . . . . . . . . . . . . 21WIM Historical Scenario. . . . . . . . . . . . . . . . . . . . 22WIM Isolationist Scenario. . . . . . . . . . . . . . . . . . . 22Comparison of WIM Low- and Optimal-PriceOil Scenarios. . . . . . . . . . . . . . . . . . . . . .. .....+. 22LAWM Standard Run for Developed Nations. . 26

12. LAWM Standard Run for Latin America. . . . . . 2713. LAWM Standard Run for Asia..... . . . . . . . . . 2814. Regional Economic Growth Under

Three UNIOWM Scenarios . . . . . . . . . . . . . . . . . 32

CHAPTER 2

Major Global Modeling Studies

Introduction

Forecasts and Forecasting

Formal forecasting, which appeared in the early20th century, is based on the rigorous applicationof empirical inquiry and statistical analysis to theprediction of socioeconomic change. It insists oncareful monitoring, a firm data base, and the ju-dicious use of trend extrapolation, while rejectingunfounded optimism and utopianism as “wishfulthinking.” The first use of formal forecasting bythe U.S. Government came in 1929, when Presi-dent Hoover created a Presidential Research Com-mittee on Social Trends, and its techniques andfindings became linked with comprehensive plan-ning and decisionmaking during the New Deal.Further theoretical improvements and practicalapplications have emerged since World War 11through developments in econometrics, generalsystems theory, cybernetics, operations research,and input-output analysis. 1

For strategic analysis and policymaking pur-poses, three general types of forecasts can bedistinguished, based on their approach to foresee-ing the future:z

. unconditional forecasts, which determinethat certain events or trends will, in all pro-bability, occur in the future (these forecastsmight properly be called “predictions”);

● conditional or probabil ist ic forecastswhich determine that certain events or trendsare more or less likely to occur in the future,given certain limiting assumptions concerningpresent and future conditions and policy ac-tions (and that, given a different set ofassumptions, different events or trends aremore or less likely to occur); and

● exploratory forecasts, which examine a widerrange of policies and trends in an open-ended

exploration of possible future developments,with less emphasis on the plausibility ofassumptions or scenarios.

To these three types of descriptive forecasts, whichattempt to project what will or might happen inthe

●

future, a fourth could be added:

prescriptive or normative forecasts, whichidentify events or trends that should (orshould not) happen and determine the pol-icies and conditions that will promote the de-sired outcome.

Models and Modeling

A model is a simplified or generalized represen-tation of something else—an object, process, orsystem. The model need not resemble the originaland can in fact take many forms, depending onthe purpose it is to serve: as an aid to memory, asmall two-dimensional photograph can remind usof a large three-dimensional person or place wehave seen; as an aid to discocery, a 3-lb modelairplane can be tested in a wind tunnel to predictthe performance of a 30-ton airliner built on thesame design; and as an aid to explanation, a set ofgravitational equations can be used to elucidatethe intricate motion of planets orbiting a sun.

The model need not depict every detail of thething it represents. A good model reduces thecomplexity of the original by eliminating elementsand relations that are irrelevant to the purpose athand, retaining only the characteristics that areneeded for that purpose. Ingeniously simple mod-els may be described as “elegant, ” but in the end“a model can be made and judged only with respect toa clear purpose.”3

Models can be divided into three basic types:mental models, physical models, and symbolicmodels (see fig. 1). Mental models are the concep-

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11

12 . Global Models, World Futures, and Public Policy

Figure I.—Types of Models

SOURCE: Arthur D. Little, Inc.

tual models people carry about in their heads anduse to think about the world. They are flexible,adaptable, creative, and contain rich stores of in-formation about such intangible factors as valuesand motivations. Some mental models are ex-tremely subtle and elaborate, even elegant. Butthey can also be vague, shifting, unverbalized, andimmune to objective criticism, and they are oftenbased on dubious but strongly held assumptions.Judgmental and qualitative forecasts (includingmany unconditional forecasts) are often based onmental models.4

Physical models are created from tangiblematerials, and the process of embodying the modelcan usually make it both more explicit and more

+Ibid., pp. 20-21, 37-38; and Arthur D. Little, Inc., op. cit., p. 11.6.

open to objective criticism. Iconic or schematicmodels, such as maps or diagrams, are physicallysimilar to their originals, although they may notbehave in the same manner. Analog models, suchas wind tunnels, reproduce the behavior of theiroriginals without necessarily resembling them inappearances Physical models can be a usefulmeans of communicating, clarifying, and correct-ing mental models.

Symbolic models make use of some system orlanguage of symbols to describe the relevant ele-ments and relations of the object, process, or sys-tem they represent. Verbal models, such as DasKapital or Wealth and Poverty, take the form of oralor written language. As a result, they can be more

‘Arthur D. Ltttle, Inc., op. ctt., p. 11.6.

Ch. 2—Major Global Modeling Studies ● 1 3

explicit and precise than mental models, but at thesame time they are potentially diffuse, impres-s ionis t i c , ambiguous, and rhetoric al.Mathematical models, on the other hand, canrepresent the relevant elements and relations of areal object, process, or system in mathematicalsymbols and equations. This allows them to ex-press complex operations concisely, precisely, andexplicitly in a rigorous and consistent language.This in turn makes them more open to objectivecriticism and correction, but mathematical modelsremain susceptible to omissions, distortions, andmisinterpretations like those that afflict mentaland verbal models. They can be no more valid orreliable than the theoretical understanding onwhich they are based and the mathematical formin which they are expressed.

Computerized models are mathematical mod-els that have been rewritten in a programinglanguage that can be run on a computer. They canbe used to investigate a process, system, or theorythat is too large or too complicated to model ade-quately (or manipulate conveniently) in words or afew simple equations. 6 Such models can containmore elements (variables), more relations (equa-tions), and far more empirical data than simplermodels. The computer can keep track of all ofthese factors simultaneously, manipulate themvery rapidly, and produce results that are free fromcomputational error. However, human judgment

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The Trend Away From

Until about 1970, most long-range forecastswere characterized by generalized optimism aboutthe benefits of continued economic growth andconfidence in the ability of technology to over-come any barriers. The most influential of theforecasts was The Year 2000, by Herman Kahn andAnthony Wiener of the Hudson Institute, whichoffered a set of alternative “scenarios” as a“framework for speculation” on the future. Its cen-tral finding was “that economic trends will pro-ceed more or less smoothly through the next thirtyyears and beyond,” and that “we are entering aperiod of general political and economic stability

is still required to determine what factors to in-clude, hem’ to represent them, what data to use,and how to interpret the numerical findings. Con-sequently, the results that come out of the com-puter are only as reliable as the general assump-tions, structural decisions, and data that go into it,and even the best results are subject to biased ormistaken interpretations.

Global models are simply computerized mathe-matical models whose purpose is to investigatesystems, theories, and issues of a global scale andcomplexity, usually with a relatively long timehorizon:

Global modeling is distinguishable from othertypes of modeling of social systems only by thequestions it asks. Its methods, strengths, andweaknesses are identical to those of all policy-oriented computer models. It draws from the samebase of theory and data. Therefore, if there are anydistinct properties of global modeling, they followdirectly from the characteristics of globalproblems. i

The following survey will therefore focus not onlyon the modeling techniques that have been usedand the findings that have resulted, but also onthe global problems that have been addressed inthe models and the purposes to which their find-ings have been put.

-It.ld , p 45

Technological Optimism

at least so far as the frontiers and economies ofmost of the old nations are concerned.”8 This“surprise-free” scenario was based on exponentialextrapolations of postwar demographic and eco--nomic trends, but it was also influenced by the au--thors’ underlying assumption of “continuity” inglobal affairs, particularly the increased rate oftechnological innovation, and by their confidencethat society would be able to find “physically non-harmful methods of over-indulging.”9 Kahn and

14 ● Global Models, World Futures, and Public Policy

Wiener do caution that “increasing discrepanciesbetween rich and poor” could lead to resentmentand instability, and that the “problems of develop-ment constitute a serious economic and moralconcern. ”1° Nevertheless, according to one critic,“they simply refuse to be overawed by themagnitude of the problems posed. ”l 1 Althoughsharply criticized in recent years, this view of thefuture has remained influential in both Govern-ment and corporate policy, as well as public opin-ion, in the United States. 12

Since the late 1960’s–and particularly since the1973 oil embargo–a less optimistic view of thefuture has gained currency, a view characterizedby increased concern for the feasibility and envi-ronmental consequences of unrestrained eco-nomic growth and by criticism of the social andpolitical institutions that have supported suchgrowth, This new mood, which has been charac-terized as “neo-Malthusian pessimism, ” was influ-enced in part by the projections of economistJoseph Spengler and by the popular success of sev-eral books by Anne and Paul Ehrlich, who arguedthat the world is already over-populated and over-developed in terms of its ecological resources.13 Byfar the largest stimulus to public debate over theseissues came from the activities of the Club of Rome(an international group of businessmen, academ-ics, and civil servants) that was organized in 1968by Italian management consultant Aurelio Peccei,

The Club of Rome’s “Project on the Predica-ment of Mankind” focuses on the complex inter-

acting socioeconomic problems that make up theso-called “world problematique:”14

● poverty in the midst of plenty;● degradation of the environment;● loss of faith in institutions;● u n c o n r t o l l e d u r b a n s p r e a d ;● insecurity of employment;● a l i e n a t i o n o f y o u t h ;. rejection of traditional values; and. inflation and other monetary and economic

disruptions.

The predicament of mankind, according to theClub, is to be able to perceive this problematiquebut to be unable to understand its origins or oper-ation and, therefore, unable to respond to it effec-tivelv.

The Club’s continuing program, consequently,has two objectives: 1) to gain a better understand-ing of the limits of the world system, the interac-tion of its dominant elements, and the constraintsit puts on human numbers and activities; l 5 and 2)to encourage appropriate sociopolitical reforms by

bringing the world problematique to the attentionof the general public and (more pointedly) theworld’s leaders and decisionmakers. The Club “hiton the idea of using a computer to advertise theircause, ” as one critic puts it, not only because “thefield of Systems Dynamics had created a bodyof expertise uniquely suited to the research de-mands,” but also because the resulting reportmight prove to be “a vehicle to move the heartsand minds of men out of their ingrained habits. ”16

These dual purposes led to the first true globalmodel, which also remains the best known and themost controversial.


World 3—The Limits to Growth

Origin and Purpose

In June 1970, when the Club of Rome was seek-ing a suitable methodology for their investimationof the global system, Jay For-rester of the Massa-chusetts Institute of Technology (MIT) invited thegroup to Cambridge for a demonstration of the ca-pabilities of systems dynamics. Within 3 weeks hedesigned and documented a simple global model- World l - as the basis for presentations and dis-cussions at the end of July 1970. (A revised ver-sion, World 2, was the subject of Forrester’s subse-quent World Dynamics (197l).) Impressed, theClub obtained a $250,000 grant from the Volks-wagen Foundation to fund For-rester’s colleagueDennis Meadow’s and a team from MIT indeveloping a full-scale model—World 3—based onthe systems dynamics approach. Under theauspices and direction of the Club of Rome, theMIT team produced both an elaborated modeland a popularized presentation of it in less than 2years—perhaps too quickly, in the view of onecritic:

The Club only relinquished control then the ex-ercise had produced their desired product, as evi-denced by the fact that client pressure drove themodelers to violate their scientific values by pub-lishing The Limits of Growth beforc the technicaldocumentation for World 3 was completed.

Structure and Assumptions

The World 3 model describes the global systemin terms of five interacting subsystems—popula-tion, natural resources, capital, agriculture, andpollution-which are averaged on a global basis.Its most important conceptual contribution is the incor-poration of “feedback” relations between these vari-

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ables; due to these relations, attempts to solve oneproblem may unintentionally exacerbate another.The model also introduced the concept of “carry--ing capacity ’’—the level of population and produc-tion that could be sustained indefinitely by theprevailing physical, political, and biological sys-tems of the world-and posited four possible “be-havior modes” that a growing population couldexhibit with regard to this carrying capacity (seefig. 2). None of these behavior modes reflects thepotential ability of technology to expand the carry-ing capacity, primarily because the model assumesnonsubstitutibility between technology and resources.

The purposes of the model, according to theauthors, were “to determine which of [these] be-havior modes . . . is most characteristic of theglobe’s population and material outputs under dif-ferent conditions and to identify the future policiesthat may lead to a stable rather than an unstablebehavior mode,”18 According to one critic, how-ever, given the authors’ “ specific motivating con-cern with limits, the broad conclusions thatemerged from the model are, perhaps, not surpris-ing’’—they assumed that limits exist and wouldeventually be reached; “[the] question was whenand how.”19

Findings of World 3

The standard or “reference run” of World 3,based on a continuation of the trends that havecharacterized the world system since 1900, resultsin the model output that has given The Limits ofGrowth its reputation for “gloom and doom” (seefig. 3). In this case the collapse of the system iscaused by rapidly expanding population and in-

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Figure 2.— Possible Global Behavior Modes

Organic growth

Oscillationabout stablecarryingcapacity

Time

TimeTime

Erosion ofcarryingcapacity

Time

dustrial output and a diminishing resource base.Essentially the same results are achieved in addi-tional runs with increasingly optimistic assump-tions about the five system variables:

● doubling the nonrenewable resource base;● “unlimited” nuclear power and extensive re-

cycling;. strict and effective pollution control;● doubling the average agricultural yield; and● “perfectly effective” but voluntary birth con-

trol.

In some of the runs population and industrial pro-duction climb to higher levels before collapsing,but–according to this analysis–no single techno-logical change can avert the final catastrophe, norcan any combination of them delay the collapsebeyond the year 2100. In some runs the collapse iscaused by a resource crisis, in others by a pollutioncrisis or a food crisis; but no matter what the as-

sumptions, say the authors, “The basic behaviormode of the world system is exponential growth ofpopulation and capital, followed by collapse.”20

In keeping with their second objective, the MITteam also used the World 3 model to identify con-ditions and policies that would avoid these prob-lems and lead to a stable behavior mode like one ofthose in figure 2. Continuous growth was ruledout by the basic assumptions of the model; theywere looking for an output that represented a “sus-tainable” world system that would avoid collapseand would also be “capable of satisfying the basicmaterial requirements of all of its people. ”21

By working backward from the desired outcometo the conditions that would produce it, the au-thors were able to find a combination of “realistic”policy changes that, implemented simultaneously


Figure 3. —World 3 Standard Run

1900 2100

The “standard” world model run assumes no major changein the physical, economic, or social relationships that havehistorically governed the development of the world system.All variables plotted here follow historical values from 1900to 1970. Food, industrial output, and population grow ex-ponentially until the rapidly diminishing resource baseforces a slowdown in industrial growth. Because of naturaldelays in the system, both population and pollution con-tinue to increase for some time after the peak of industri-alization. Population growth is finally halted by a rise in thedeath rate due to decreased food and medical services.SOURCE: Limits to Growth.

in 1975, would lead to an “equilibrium state” (seefig.

●

●

●

4): 22

restrict population growth by reducing aver-age desired family size to two children andmaking “perfect” birth control universally ac-cessible (population stabilizes at about 6 bil-lion in 2050, after a delay inherent in the agestructure of the current population);restrict capital growth by maintaining aver-age industrial output per capita at the 1975level and holding the capital investment rateequal to the depreciation rate (excess capacityis used to produce consumer goods and serv-ices);reduce resource consumption and pollu-tion generation per unit ‘of industrial andagricultural output to one-fourth of their 1970

1900 2100

Technological policies and growth-regulating policies pro-duce an equilibrium state sustainable far into the future.Technological policies include resource recycling, pollu-tion control devices, increased lifetime of all forms of capi-tal, and methods to restore eroded and infertile soil. Valuechanges include increased emphasis on food and servicesrather than on industrial production. Births are set equal todeaths and industrial capital investment equal to capitaldepreciation. Equilibrium value of industrial output percapita is three times the 1970 world average.

SOURCE: Limits to Growth,

●

●

●

levels (largely through recycling and advancedabatement technologies);divert capital to agricultural production inorder to produce sufficient food for all people,even if such an investment would be consid-ered “uneconomic;”prevent soil depletion and erosion by usingsome of the agricultural capital for enrich-ment and preservation (e.g., comporting ur-ban organic wastes and returning them to theland); andextend the average lifetime of industrialcapital stock through improved durabilityand maintenance, in order to reduce obsoles-cence and make more capital and resourcesavailable for other sectors.

The authors recognized that different combina-tions of the above policies might be adopted by dif-ferent societies, and that “[a] society choosing sta-


bility as a goal certainly must approach that goalgradually.” 23 However, they hastened to add thataction must be taken soon: if the implementationof these policies were to be delayed by 25 years, forexample, they would not result in an “equilibriumstate” (see fig. 5); this implicitly suggests that farmore severe measures would be required after thattime.

These findings led the authors to call for a “con-trolled, orderly transition from growth to globalequilibrium, ” but they were vague about the spe-cific actions and tradeoffs this transition would re-quire, explaining that “much more information isneeded to manage the transition. ”24 Some criticsfeel that the model’s “no growth” bias “can be seenas supporting the interests of the materially well-

25 However, others Pointoff” and the rich nations.out that the equilibrium state necessarily implies a“world-wide radical egalitarian levelling of in-comes and property, ”26 yet the MIT team has“almost nothing to say about what should ormight happen to poor nations . . . under thepolicy of no growth. ”27 Because of “their deliberateself-restriction to physical properties of the world,”according to another critic, “they have chosen tobe unconcerned with politics [and] social struc-ture; ”28 The Limits to Growth speaks instead of thegreater demands that will be placed on“humanity’s moral resources. ”29 Above all,however, the model’s simplification and global ag-gregation of imperfectly understood factors makeit unsuited for generating specific, detailed policyrecommendations. This is a limitation shared byother global models:

The breadth of focus and coherent conceptualdevelopment of the world models ensure their util-ity for clarifying the nature of long-term globalproblems. However, their limitations render themunsuitable as primary tools of analysis or as toolsfor detailed analysis of global problems and theirsolutions. 30

“ibid., p. 167.“11md., p. 180.J5Keith L. R. Pawtt, “Malthus and C)ther E c o n o m i s t s : S o m e Doomsdavs

Rewslted,” In IMocfek oj Doom A CrltIque of [he Llmm to Grouth, H. S. D. Cole(eel.) (New York: Unlveme Books, 1973), pp. 154-157.

2sHarvey S i m m o n s , “Svstems Dynamtcs a n d T e c h n o c r a c y ) ” [n ,Models of

Doom, pp. 206-207.27c(11e ,n W’Or/d Futures T h e Grear Debate, P. 29.28 Marie Jahoda, “Postscript on Social Change,” In Models of Doom, p. 212 .Z~Meadc)w,s, et al., T h e Ltmtts to Grouth, P. 179.

~O]ennifer Robinson, “worlds 2 and 3,” [n The Glofra/ 2(XN.I ~eporc [0 lb Presl-

dem (Washington, D. C.: U.S. Council on Environmental Qualltv and Depart-m e n t of State, 1980), Iol. 2, ~, 608,

Figure 5.—World 3 Run With Stabilizing PoliciesIntroduced in the Year 2000

1900 2100

If all the policies instituted in 1975 in the previous figure aredelayed until the year 2000, the equilibrium state is nolonger sustainable. Population and industrial capital reachlevels high enough to create food and resource shortagesbefore the year 2100.

SOURCE: Limits to Growth,

Conclusions of World 3

Within these limits, World 3 arrives at three cen-tral conclusions that have been influential in thesubsequent “futures debate:”31

10

2.

3.

If present growth trends in global population,industrialization, resource depletion, pollu-tion, and food production are allowed to con-tinue unchanged, the limits to growth on thisplanet will be reached sometime within thenext 100 years, resulting in a catastrophicdecline in both population and industrial ca-pacity.These growth trends can be altered in such away as to establish economic stability at levelsthat are both sustainable into the foreseeablefuture and capable of satisfying the basic ma-terial needs of all the world’s people.If the people and nations of the world decideto strive for this equilibrium state, the soonerthey start working to attain it, the greatertheir chances for success will be.

1JILleadous, Rl~hardson, a n d Bruckmann, op. cit., PP. ~7-68.

Ch. 2—Major Global Modeling Studies • 19

Similarly, the technical limitations that restrict creasingly have been to achieve both greaterthe utility of World 3 have proven to be a stimulus specificity and greater relevance to the needs offor subsequent global models, whose purposes in- policy makers.

World Integrated Model —Mankind at the Turning Point

Origin and Purpose

The World 3 model achieved most of the objec-tives set for it by the MIT team and by the Club ofRome, but system dynamics was still viewed withskepticism in traditional scientific and policy cir-cles. As a result, the popularized report on themodel, The Limits to Growth, was the subject ofconsiderable debate and controversy because of itsmethods—primarily its radical aggregation ofglobal factors—and because of its vagueness onpolicy issues. When the club began planning a fol-lowup in 1972, therefore, it sought a modeling ap-proach that would accomplish three goals:32

●

●

●

to represent the world as a system of interde-pendent regions, rather than a single homoge-neous unit, and to represent those regions ingreater sectoral detail;to develop recommendations that would be ofmore direct relevance to policy makers; andto gain greater acceptance from the scientificcommunity by incorporating more “harddata” and, wherever possible, by explicitlyemploying state-of-the-art theories and meth-odologies from the relevant academic disci-plines.

The model the club chose to support, again withfunds from the Volkswagen Foundation, was theWorld Integrated Model (WIM). This model wasdeveloped in parallel by two teams, one led byMihajlo Mesarovic at Case Western Reserve Uni-versity in Cleveland and the other by EduardPestel (a member of the executive committee of theClub of Rome) at the Technical University inHannover, West Germany.

The authors first presented their model at a con-ference for high-level policy makers sponsored bythe Woodrow Wilson International Center forScholars in Washington, D. C., then at the firstglobal modeling conference of the International

‘>lhd , pp. ;~-?+.

Institute for Applied Systems Analysis (IIASA) inAustria, and finally at a series of scientific meet-ings and congresses throughout the world. Onlyafter these formal presentations—and the distribu-tion of technical documentation to selected ex-perts—did they release the popular description ofthe model in the fall of 1974.


The WIM methodology is based on Mesarovic’s“multilevel hierarchical systems theory, ” whichviews the world in terms of five interrelated planesor strata:

●

●

●

●

●

the environmental stratum, which com-bines geophysical and ecological factors andcorresponds roughly to the natural “carryingcapacity,” although perhaps too superficiallyto satisfy some environmentalists;the technology stratum, which embraces ac-tivities whose biological, chemical, or physicalterms involve mass and energy transfer;the demographic-economic stratum, whichcombines the human population and indus-trial capital of World 3 and, with the environ-ment stratum, makes up most of the model’scontent;the group stratum, made up of sociopoliticalinstitutions, policies, and decisions, which areusually represented as sets of alternative sce-narios among which the model user chooses;andthe individual stratum, reflecting personalattitudes and values, again represented by al-ternative scenarios to be selected by the modeluser.

According to the theory, these levels ordinarilyoperate with a fair degree of independence, al-though they can become highly interactive under“crisis” conditions. The authors therefore feel thattheir model can help us to understand and predict


the system’s behavior in both present and futurecrises. 33

The major improvement in the WIM representa-tion of the world system, however, is its greatergeographic and economic detail (regionalizationand disaggregation). Instead of a single homogene-ous world, the model contains 10 regions made upof similar countries (see fig. 6), although in someruns they are grouped in three or four blocs. As aresult, WIM can represent varying levels of devel-opment and resource endowment, as well as cul-tural and environmental differences; and it cantherefore be used to investigate potential regional(as opposed to global) problems and crises. In addi-tion, because these regions are connected by atrade network, WIM can be used to investigate thepotentially mitigating effects of international trade(see fig. 7). Within each region, physical and eco-nomic sectors are differentiated into numeroussubcategories—85 age groups for population, 19

‘JJennLfer Rolxnson, “Mesaro\w-Pestel W o r l d M o d e l , ” In The Global 2cXXIReport to the Presderrt, vol. 2, p. 6 1 6 .

categories for industrial capital, five for energy cap-ital, two for agricultural capital, and so on. Fromthe point of view of an economist, in fact, WIM isa collection of regional economic models. Theresulting mathematical model is quite large: World1 contained only.40 equations, and World 3 about200, while WIM (according to its creators) con-tains over 100,000.34

Another improvement, one that is more directlyrelevant to policy applications, is the model’s in-teractive design. The model user is allowed to esti-mate social and political behavior by selectingamong alternative scenarios in the individual andgroup strata, thereby manipulating certain vari-ables in such a way as to test a wide range of policyassumptions about energy prices, food exports,capital investments, and development aid. In addi-tion, WIM’S various submodels can be used inde-pendently to generate and test alternative policiesfor specific countries and regions. This capability

~+cole in World Futures: The Great Debate, P . 34

Figure 6.—Regionaiization of the Worid integrated Modei

SOURCE: Mankind at the Turning Point.


Figure 7.—Block Diagram of the Basic Elements of the World Integrated Model

. . ‘ .

Trade and payments

Agriculture

SOURCE: Command and Control Technical Center.

was in fact one of the stated objectives of the mod-elers:

We hoped thus to furnish political and economicdecisionmakers in various parts of the world with acomprehensive global planning tool, which couldhelp them to act in anticipation of the crises at ourdoorstep and of those that loom increasingly largein the distance, instead of reacting in the spirit ofshort-term pragmatism .35

In keeping with this objective, which is shared bythe Club of Rome, the WIM team at Case WesternReserve has actively marketed their model, usingsatellite-telephone patches to make presentationsto prime ministers and other officials in at least 18different nations.

Findings of WIM

The WIM model has shown its versatility in ex-tensive use for policy testing, both to evaluate al-ternative scenarios within its own assumptionsand to test the scenarios and assumptions of other

~j~~ihallo D, Mesaroi,lc and Ecjuard Pestel, hfankmd at the T[/mw Pomr (New

Y o r k : Dutton, 1974), p. Ix.

modelers and futurists. 36 Because the purpose andoutput of the model vary significantly from user touser and run to run, however, it is difficult toisolate any particular “results, ” although severaltest runs are illustrative. The reference or “histor-ical scenario” run of the model, based on a con-tinuation of present trends, results in the modeloutput shown in figure 8: a steady increase in thereal cost of food on the world market, whichwould also drive up domestic prices in the UnitedStates, and a catastrophic increase in the numberof deaths caused by starvation in South Asia. Thealternative “isolationist scenario” (fig. 9) indicatesthat, should the United States act to keep domes-tic food prices down by restricting exports, starva-tion in South Asia comes sooner and is even morewidespread. In another pair of policy tests (fig. 10),the model output suggests that a policy of low,fixed oil prices leads to a catastrophic economic de-cline in the developed world when the resource isexhausted, whereas “optimal” price increases (per-

Msee for example Barry B, Hughes and Mlha]lo D. Mesarowc, “Tes t ing the

Hudson Institute %enarlos” (~’ashlngton, D. C.: U.S. Assmlatmn for the Club

of Rome, Sept. 1979, mimeograph .


1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025

SOURCE: Systems Research Center, Case Western Reserve University.

Figure 10.–Comparison of WIM(A)

0

1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025

SOURCE: Systems Research Center, Case Western Reserve University,

1975 1980 1985 1990 1995 2000 2005 2010 2015 20202025

Year

Cheap energy in the form of oil has been a prime fuel for theunprecedented growth of the world economy in the 1950’sand 1960’s. The dramatic increase in oil prices in 1973 wasviewed as a catastrophe. However, computer analysis ofour world system model indicates that the continuation ofwhat amounts to overexploitation of oil, spurred by anunreasonably low price, would lead to major dislocationsbecause of the exhaustion of reserves and the lack ofmotivation to develop substitutes in time. Pursuance ofshort term objectives would lead to major dislocations in

SOURCE: Mankind at the Turning Point.

Low” and Optimal”Price Oil Scenarios

. . . ‘ 14

01975 1980 1985 1990 1995 2000 2005 2010 2015 20202025

Year

the long run (see A). A much more beneficial developmentfor all concerned results from the “optimal price scenario”in which the price is gradually increased up to the “op-timum” level. Such a policy would bring in the substitutesin a more regular fashion while prolonging the reserves.Both exporting and importing regions would fare better(see B). It is only by taking a global and long term view thatsuch a course of development, most beneficial to all con-cerned, can be identified.


mitting gradual adaptation and substitution) bene-fits both oil producers and consumers; a third oil-price scenario (not shown) suggests that increasesabove the “optimal” level leave all regions worseoff. 3’

Conclusions of WIM

From these and numerous additional interac-tions with the model, the authors arrive at severalconclusions about the nature of the world systemand

●

●

●

the management of future development:38

the current crises in agriculture, energy, etc.,are not transient but persistent, and representthe first signs of an “oncoming era ofscarcity ;“the solutions to these crises cannot be foundthrough isolated, short-term, or narrowly na-tionalistic strategies, but only through an inte-grated global context and “in the spirit oftruly global” cooperation . . . guided by a ra-tional master plan for long-term organicgrowth;” and“the time that can be wasted before develop-ing such a global world system is runningout .“

The model indicates that oil, substitutes for oil,and agricultural land will be the greatest con-straints on growth. To address these problems, theauthors recommend a policy of “organic growth,”based on a recognition that the world system is a“collect ion of functionally interdependentparts, ”39 This policy, which would encouragegrowth where needed and discourage it where it“threatens not only that part but the whole aswell, ” include such specific steps as the following:40

●

●

●

●

encourage worldwide diversification of indus-try to achieve a truly global economic system;build up the economic base and especially theexport potential of the poorest countries sothey can pay for food imports;give food aid to the poorest countries, but giveinvestment aid only in the form of “intermedi-ate” or appropriate technology; andcarry out effective social and institutional re-forms, because the required economic trans-

fers are impossible under prevailing inter-national economic arrangements.

The authors suggest that unless such steps aretaken, spreading regional collapse and interna-tional tension will, like falling dominoes, eventu-ally reach the developed world. If these and othersteps are taken, on the other hand, “the worldgrowth rates implied by (WIM’s) computer resultsare much closer to those of Kahn and Wiener thanto those of Meadows and Forrester. ”41

U.S. Government Use of WIM

More recently, former members of the modelingteam have designed a specially tailored version ofWIM for the U.S. Department of Defense.42 Themodel, which is fully operational, is maintainedand operated by the Command and ControlTechnical Center (CCTC) in support of the Plansand Policy Directorate (J-5) of the Joint Chiefs ofStaff. J-5 is currently creating a new division, spe-cifically devoted to long-range analysis, which willuse the model to develop projections of global sys-tems behavior for use in long-range nationalsecurity planning. At present, the model is beingdeveloped to provide data on political, economic,and demographic conditions under varioussubcontingencies of four basic scenarios or “futureworlds” defined by J-5:

●

●

●

●

“A-muted bipolarity,” essentially a referencerun based on current trends and internationalrelations;“B-superpower dominance (conflict mode),”including contingencies representing differentlevels of East-West conflict;“C-superpower dominance (cooperationmode);” and“D-devolution of power,” representing a fu-ture in which the superpowers must shareworld power with other groups of nations,and including contingencies for potentialNorth-South conflicts, such as an oil em-bargo.


These WIM projections will become an input tothe Joint Long-Range Strategic Appraisal begin-ning with its 1982 revision. CCTC also plans acomplete update of its data base (facilitated by anew software package) and further refinements inWIM itself that may make it a more flexible toolfor determining future military requirements. Forinstance, CCTC's version of WIM contains 12geographical regions rather than 10 and will soonbe expanded to 14, with the further capability ofsubdividing each new region into five subregions;it also contains 87 rather than 85 age groups and(for the United States and Soviet Union) a labor-skills submodel that further divides the population

into male or female and urban or rural; and therehave been similar refinements in the agriculturaland materials submodels. These improvementscreate data problems, however, since reliable dataare not available for many subregions and sectors.CCTC is working with the Bureau of Mines to up-date and expand the data base for the materialssector; in addition, J-5 has instructed CCTC tocontact other Federal agencies about possible coor-dination of global modeling and strategic assess-ment activities. Such coordination might be facil-itated in at least two cases by the fact that the De-partment of Agriculture, as well as the Bureau ofMines, is already using a version of WIM.

Latin American World Model—Catastropheor New Society?

Origin and Purpose

When the Club of Rome presented the prelim-inary results of World 3 at a 1970 meeting in Riode Janeiro, the reaction of the mostly Latin Ameri-can audience was strongly negative. They felt thatpredictions of global crises, based on extrapolationof present trends and arrangements, reflected a pa-rochial developed-world perspective; for two-thirds of the world’s people such crises are alreadyat hand. The audience refused to accept scenariosthat implicitly curbed development and widenedthe income gap, and they felt that policies aimed atachieving a state of global equilibrium wouldmerely ensure that the present disparities and in-equities in the world system are perpetuated. Theyresolved, therefore, to design a model of an egali-tarian “ideal society” in which basic human needs(not profits) would be the basis for resource alloca-tion. The purpose of the model is to demonstratethe material viability of such a society, and there-by to demonstrate “that the different countriesand regions of the world (particularly the poorest)could reach the goals we advocate in a reasonableperiod of time,” relying primarily on their ownhuman and economic resources.43

This global modeling effort was carried out atthe Fundacion Bariloche in Argentina, with prin-cipal support from the International DevelopmentResearch Center in Ottawa, and was first pre-sented at the second IIASA modeling conferencein Berlin in October 1974. An expanded version ofthe model, developed for the International LaborOrganization (ILO), was warmly received at the1976 World Employment Conference in Geneva,where “basic needs” were formally adopted as amajor target of development.44 The model contin-ues to have considerable impact through UnitedNations organizations, including the United Na-tions Educational, Scientific, and CulturalOrganization (UNESCO) and the United NationsIndustrial Development Organization (UNIDO) aswell as ILO, and it is by far the most popularglobal model among scientists and decisionmakersin the Third World.45

Unlike World 3 and WIM, which provide condi-tional descriptive forecasts of global trends, theLatin American World Model (LAWM) is openlyand insistently normative—it is not concernedwith “predicting what will occur if the contem-porary tendencies of mankind continue, butrather with sketching a way of arriving at the final

+JAmllCar 0. Herrera, et al., catu.s[~ophe or ~eu, %et>? A Lutm A m e r i c a n

World ,Model (Ottawa: Internatmnal Development Research Center, 1976), p. 8.++cole In WOTM Futures T h e G r e a t D e b a t e , P . 39.+5 Meadow5, Richar&n, and Bruckmann, op. at., P. 92.


goals of a world liberated from underdevelopmentand misery. ”4b Its purpose is not to demonstratethat certain changes might bring the present worldsystem into equilibrium, but rather “to show thefeasibility of solving the fundamental problemsthrough deep socio-political changes.” 47 T h emodel is also distinguished by its emphasis on theideological issues involved in global modeling: themodeling team was composed of humanistic social-ists, 48and on questions of development and redis-

tribution they “explicitly take up a stance favour-able to the Third World in general, and to LatinAmerica in particular.”49


The LAWM team’s goals and purposes leadthem to include some rather unusual assumptionsin the structure of their model. For instance, themodel divides the world into four regions (later15), each of which is treated as an economic unit,which “presupposes total collaboration betweenthe countries forming it.”50 The model contains“simplistic” trade linkages: the contribution of in-ternational trade relative to regional gross na-tional product (GNP) is held constant at the 1970level, and all trade deficits are eliminated by2000. 51 Instead, each region satisfied basic needsthrough “autarchy, ” using almost exclusively localeconomic resources. However, these resources areassumed to be available in unlimited quantitiesand at constant cost: after a static analysis of cur-rent resource data, the modelers conclude that“the environment and its natural resources willnot impose barriers of absolute physical limits onthe attainment of [an ideal] society,” at least notwithin a “historically significant time-scale. ”52

AS

a result, they do not include these physical factorsin the computer model, and in this specific theirmodel reflects a technological optimism akin toHerman Kahn’s.

+ 6 Amllcar 0. Herrera, Procwd[ngs of the Zil IIAS,4 Global l+foddmg Con/ercnce

(Beriln, 1~74), quoted h}, hleaclow$, RIC hardwn, and Bruckmann, op. cit.,p, 9],

‘THURO t). Sc(,lnlk, et al., “The Barlloche !tfodel,” In Meadow, R icha rdson ,

a n d Bruc kmann, op. cit., p. 247.‘S]enntfcr Robinson, “The Latin American V’c,rld Model,” in The G/obul ?000

Report co (h,’ PrLw&n[, \wl. 2, p. 647.~~~ole ,n ~’or/~ Fu[14rcI Tht, GTCU[ Dc/w[c, P. %.5 0 Herrera, et al., op. L i t . , P. ‘~.

‘lRohlnwn, “ T h e L a t i n Amcrlcan V’orld klociel,” p. 642‘ : Herrera, ct al., (Jp. cit., p. 8.

However, the authors do assume a radicalchange in the sociopolitical factors that controlpatterns of resource use—i.e., an equal distributionof consumption between regions and a total, egali-tarian redistribution of income within regions. Inaddition, the model includes no assumptionsabout population policies, although it does includeseveral untested assumptions about the effect ofliving conditions on demographic change. LAWMalso appears to assume automatic growth in pro-ductivity through technological progress, at nocost, at rates between 0.5 and 1.5 percent annuallydepending on the sector.53

LAWM is essentially an economic model thatoperates through optimization procedures; i.e., ithas five production sectors representing basicneeds—food, housing, education, capital goods,and other goods and services—to which labor andcapital are allocated through optimal control tech-niques in such a way as to maximize life expect-ancy at birth, which is taken to be the best indi-cator of general living conditions. These calcula-tions proceed independently for each region from1960 to 2060, but all countries are assumed to fol-low optimal policies after 1980.

Findings of LAWM

The standard or reference run of this optimiza-tion model indicates that all regions except Asiacan reach their basic needs targets within 30 years.Developed nations (including the Communistworld) “can reach high levels of well-being even iftheir economic growth rate is reduced drasticallyin the future” (fig. 11); in reality, economic growthis restricted to between 1 and 2 percent—far belowthe developed region’s capacity for growth—whichthe authors acknowledge “assumes a political deci-sion. ”54

Latin America could fulfill basic needs by theearly 1990’s by maintaining a relatively high in-vestment rate, particularly in housing and educa-tion (fig. 12). The output for Africa closely resem-bles that for Latin America, although basic needsare not met until 2008 and some shortfalls occur inthe housing sector.

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found on one of the OTA websites.


Figure 12.— LAWM Standard Run for Latin America

1960 1970 1980 1990 2000 2010 2020 2030

Key;

1 (B) Birthrate 7 (C) Total calories2 (5) Percentage of GNP allocated to sector 5 8 (E) Life expectancy3 (4) Percentage of GNP allocated to sector 4 9 ($) GNP per capita in4 (A) Population growth rate 10 (P) Total population5 (M) Enrollment 11 (U) Urbanization6 (V) Houses per family

SOURCE Catastrophe or New Society?

2040 2050 2060

1960 dollars

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It has been intentionally omitted.If a replacement page image of higher quality

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Ch. 2—Major Global Modeling Studies Ž 29

not keep up with population growth; daily food in-take peaks at less than 3,000 calories per capita in2008 and declines steadily thereafter. (These in-vestments would also divert resources from the sat-isfaction of other basic needs, and they wouldprobably prevent economic growth if investmentin capital goods were not fixed at 25 percent.)Only an effective population policy and the use ofnonconventional foodstuffs, both of which the au-thors advocate, could avoid catastrophe in Asiaunder these conditions.

The policy tests conducted with LAWM indi-cate that capital transfers from the industrializedcountries (in isolation from other measures) wouldhave little effect on the above outcomes, but theyalso reveal that both technological progress andinternal income redistribution are vital to achiev-ing regional goals.

●

●

●

In the “international solidarity” run, the devel-oped nations transfer capital aid to Africa andAsia at a rate that rises from 0.2 percent of GNPin 1980 to 2.0 percent in 1990 and thereafter.The result is higher investment rates and fastereconomic growth in the industrialized nations(in order to compensate for the aid), but very lit-tle effect on the time needed to satisfy basicneeds elsewhere and a negligible impact on thefood shortage in Asia.In the “technological stagnation” run, on theother hand, growth in economic productiondue to technical progress falls to zero between1980 and 2000 and remains there. The outcomeis disastrous in every region except the devel-oped nations. Latin America requires a longerperiod of time to satisfy basic needs, particularlyfood and housing, and in Africa and Asia “theeconomic system finally collapses” sometime be-tween 1990 and 2020 as population steadily out-strips production.By far the greatest difference in results, however,comes from the “historical” run, in which theassumption of egalitarian intraregional redistri-bution is replaced by a pattern of consumptionthat reflects current income distributions andsocioeconomic structures. To satisfy basic needsin the same period of time under these condi-tions would require economic growth rates of 10to 12 percent in the developing countries, rates

which “are in fact impossible to attain. ” The au-thors conclude that “at the very best” theirgoals would be delayed by two or three genera-tions, and would require 3 to 5 times more re-sources, under these conditions.55

Conclusions of LAWM

The conclusions the LAWM team draws fromits interactions with the model do not always re-flect the above results (apparent discrepancies arenoted in parentheses):56

●

●

●

●

●

“it is possible to control population growth tothe point of equilibrium by raising the generalstandard of living” (population stabilizes onlyin the developed regions, and is still growingglobally at a rate of 1.1 percent per year in2040);“if the policies proposed here are applied, allof humanity could attain an adequate stand-ard of living within a period little longer thanone generation” (this is true for Asia onlywith an effective population policy and con-siderable development aid);“this equilibrium could be achieved on aglobal scale well before the earth’s capacity toproduce food—the only foreseeable physicallimitation within the time horizon of the mod-el—is fully exploited even if food productioncontinues to be based on currently availabletechnology” (the model assumes considerabletechnical progress at no cost in agricultureand all other sectors, and fails to achieve itsgoals if technology stagnates);“[the] obstacles that stand in the way of theharmonious development of humanity are notphysical or economic in the strict sense, butare essentially sociopolitical;” and“[the] goals are therefore [to be] achieved . . .by a reduction of nonessential consumption;increased investment; . . . the rational use ofland . . . the egalitarian distribution of basicgoods and services; and . . . the implementa-tion of an active policy to eliminate deficits ininternational trade.”

~jlbld., pp. 106-107.

Wbd.t p. 107.‘ L .-

30 • Global Models, World Futures, and Public Policy

United Nations Input-Output World Model—The Future of the World Economy

Origin and Purpose

Like LAWM, the United Nations Input-OutputWorld Model (UNIOWM) represents a ThirdWorld reaction to the unpalatable conclusions ofThe Limits to Growth. However, its central concernis not the satisfaction of basic needs, but rather thenarrowing of the income gap between the rich andpoor nations. The model was commissioned in late1972 by the Centre for Development Planning,Projections, and Policies (CDPPP), a U.N. agencyresponsible for long-range integrated planning. In-itial financial support came from the Governmentof the Netherlands, and subsequent funding wasobtained from the U. N., the Ford Foundation,and the National Science Foundation. WassilyLeontief, the project director, outlined the con-cepts behind the model in his acceptance speechfor the Nobel Prize in economics in 1973; the workof collecting data and building the model was car-ried out by Anne Carter, Peter Petri, and others atBrandeis University. Petri presented the model atthe Fifth IIASA modeling conference in Septem-ber 1977, shortly after The Future of the WorldEconomy was released in New York.

The study was conducted under U.N. auspicesand direction. Although its findings did not repre-sent official U.N. recommendations, the model’sprimary purpose was to determine whether phys-ical or environmental limits would pose a signifi-cant barrier to the economic growth targets set bythe U.N.’S International Development Strategy,which had been proposed by the General Assem-bly in 1970 as the basis for the Second Develop-ment Decade. As modified and expanded by var-ious U.N. agencies, these targets include the fol-lowing:

●

●

●

●

reducing the average income ratio betweenthe developing and developed countries byalmost 50 percent, from 12:1 to 7:1;improving internal income distribution toeradicate mass poverty;creating 1 billion new jobs in the developingworld by 2000;satisfying the basic needs of all people;

●

●

increasing food production in developingcountries by at least 4 percent per year;increasing the developing nations’ share of theworld market in manufacturing to 14.3 per-cent by 1985 and 25 percent by 2000; andachieving a new international economic order(NIEO), including stabilized commodityprices, increased financial and technologytransfers, open markets for the less developedcountries’ (LDC) exports, and a code of con-duct of translational enterprises.


The authors describe UNIOWM as “basically ageneral-purpose economic model and thus applic-able to the analysis of the evolution of the worldeconomy from other points of view, ”5’ notably theenvironmental. However, Leontief has cautionedthat:

We cannot predict the future of the worldeconomy. However, we can rule out of our expecta-tions future scenarios that are internally inconsis-tent and thus impossible.

To rule out internally inconsistent expectationswe need to construct a model that guarantees inter-nal consistency . . . by visualizing the world as asystem of interdependent process in which eachprocess . . . generates certain output and absorbs aspecific combination of input.58

The rigorous accounting required by this input-output analysis forces the model to balance thegrowth of one economic sector against its effect onother sectors; similarly, imports and exports in oneregion must be balanced against the imports andexports of other regions. This technique also per-mits “an unusual degree of detail” in representingparticular industries or regions, which is “advan-tageous” because of its “relatively specific policysignificance. “59 On the other hand, critics have

STW~~SllV LeOnrlef, Anne Carter, and Peter Petri, The Future Of t~ wor~

Econom>: A Uruted Nutlom Stud} (New York: Oxford, 1977), p. 7.58wa5511y Leontlef, “s t ruc ture of the V’orld E c o n o m y : Outline o f a S imple

I n p u t - O u t p u t F o r m u l a t i o n ” ( N o b e l Memorial Lecture), Amencun Econom~cRetwu, D e c e m b e r 1977, p. 823.

5gLeonttef, Carter, and Petr], op. cit., p. 8.


questioned whether this level of explicit detail isworthwhile or justifiable, particularly since it de-mands an enormous amount of data, much ofwhich had to be adapted from other informationand data bases.

60 UNIOWM’s population sector,for example, merely assumes the projectionsprepared by the U.N. Population Division in 1973(see app. A).

The model divides the world into 15 regionscomposed of fairly homogeneous economies, al-though for purposes of interpretation and presen-tation of results these regions are further aggre-gated in three categories: developed nations (eightregions), resource-rich LDCs (three regions), andresource-poor nations (four regions). Each region’seconomy contains 45 sectors of economic activity,described by 175 equations with 229 variables.Prices are calculated in a separate submodel, and(as in LAWM) the representation of internationaltrade has been kept “almost artificially simple. ”61

The environmental sector includes eight pollut-ants and five types of abatement activities, but themodel does not reflect the effect of developmenton ecological systems, nor does it contain anyother feedback loops; “it cannot, in any sense, beviewed as a dynamic model. ”62 The model’s equa-tions are solved simultaneously, usually at 5-yearintervals, in order to provide “snapshots” of theworld in 1980, 1990, and 2000.

The model can be applied to a wide variety oftasks, but its utility is limited by its large data re-quirements and by the many controversial as-sumptions that have been included. This has ledone critic to conclude that:

The huge number of assumptions made inestimating time trends for input-output matricesmakes for confusion when it comes to consideringthe model as a whole. There are so many assump-tions that one is hard put to evaluate the reason-ableness of the total picture. 63

Nevertheless, the model could be and has beenused for a wide range of policy tests that reflect the

S o sam Cole, G/oba[ LIo&/s and [he Inw-nattonal Economc ~d~ A pQPH ~or t~

L’N’ITAR ProJecr on the Future (New York: Pergamon Press, 19?7), p. 22; and .len-nlfer Rc>hlnqc>n, “(J, N. World )wfodel,” In The G1oIxI1 2(XXI Report to the Presdenc,

, 0 1 . 2 , p. 64961Rc)b1n\On, “IJ,N. World Nlodel,” p. 6 5 2 .

‘~ifeadows, RIL hardson, and Bruckmann, op. c[t., p . 167; a slmllar crltlclsmcould he made of ‘W’Ihf.

b~Rohlnson, “~1.N. N’orld Model,” p. 652.

interests of the modelers and the organizationsthat commissioned them.

Findings of UNIOWM

The study’s optimistic findings, particularly that“no insurmountable physical barriers exist withinthis century to the accelerated development of thedeveloping regions” and that “pollution . . . is atechnologically manageable problem,”64 receivedwidespread attention in the media, where it wassometimes reported that UNIOWM “discredited”The Limits to Growth. However, the authors havecautioned that the model “cannot settle, and wasnot designed to settle, the many fundamentalquestions raised in The Limits-to-Growth debate.”65

And in fact the optimism of these general state-ments is not supported by the specific results ofmost of UNIOWM scenarios.

Policy tests conducted for the UN have includeda number of different scenarios relating to eco-nomic growth rates and per capita income gaps.

●

●

The “old economic order” scenario is basedon historical trends in internal and externalinvestment and existing international eco-nomic arrangements. Income per capita growsin all three categories of nations but incomegaps increase, despite decelerating growth inthe developed regions after 1990, and someLDCs would face an absolute decline in livingstandards (see fig. 14). This scenario “turnsout to be rather pessimistic, ” according to theauthors, and because of its dim economicprospects for the developing regions it is“downplayed in the UN documentation. ”66

The standard run, based on the minimumgrowth targets of the International Develop-ment Strategy (IDS), also turns out to be rela-tively pessimistic. Because of their higher ratesof population growth, accelerated economicgrowth in the LDCs does not lead to corre-sponding gains in GNP per capita. The in-come gap between developed and less devel-oped regions remains at the current 12:1 ratio.

6+ LeOntle(, Carter, and Petri, OP. Cit., P P. 48-49.

“Peter Petri , “An Introductmn to the Structure and Applications of the~lnlred N a t i o n s ~’or[d hfodel,” App/,ed hfa[hm[tcal ,Mode/lng, vol. 1, No. 5,

-June 1977, p. ?62.66 Leontief, Carter, and Petri, op. cit., p. 73; Robinson, “L1. N. World Model,”

p. 653.

32 . Global /Mode/s, Wor/d Futures, and Public Policy

Fig

7,000

6,000

5,000

4,000

3,000

2,000

1,000900

800

700

600

500


● Four additional runs were then conducted byaltering the standard or IDS scenario in sucha way as to reflect more optimistic assump-tions about: 1) resource endowments; 2) in-creased foreign aid from the developed re-gions; 3) fewer constraints on balance-of-payment deficits; and 4) faster agricultural in-vestments to achieve food self-sufficiency inlow-income Asia.

None of these scenarios, however, was capable ofproducing the desired reduction in per capita in-come ratios. In two final scenarios, therefore, theauthors preset the model in such a way as toroughly halve the income gap by 2000 and close itcompletely by about 2050, and then solved itsequations to determine the investment andgrowth rates that would produce the desiredresults:

● Scenario “C,” based on the U.N.’s “low”population growth projections (see app. A),requires a 6.9 percent GNP growth rate in theLDCs to reduce the income ratio to 7.15:1 by2000.

● Scenario “X, ” based on the U.N.’s “medium”population projections, requires an evenhigher GNP growth rate of 7.2 percent in theLDCs and reduces the income ratio only to7.69:1. Scenario “X” also requires a fivefoldincrease in overall agricultural output in thedeveloping regions, including a nearly tenfoldincrease in resource-poor Latin America.

In subsequent policy tests, UNIOWM has beenused to examine the economic consequences ofmineral- and energy-conservation strategies. Astudy of the future production and consumptionof nonfuel minerals, based on the resource conser-vation strategies of the Economic Council of Can-ada, is nearing completion but has yet to be pub-licly documented.b7 Another study, conducted forthe U.S. Department of Commerce, compares the“old economic order” scenario with an “energyconservation” scenario based on the maximumreasonable reduction in fossil fuel consumptionover the next 20 years through the substitution oflabor and capital for energy. It revealed that ener-gy conservation could reduce the balance-of-pay-ments deficits of both developed regions and

b~kleadows, Richardson, and Bruckmann, op. cit., p. 175; Rohlnson, “U.N.

‘ik’orld ktodel,” p. 653.

resource-poor LDCs and allow increased GNPgrowth in the latter, but that the capital require-ments for conservation would require a 17- to23-percent increase in the savings rate.ba

More recently, Leontief has conducted twostudies of the economic implications of the NIEOand of worldwide military spending, with fundingfrom the U.N. and from American disarmamentorganizations.b9 In the NIEO scenario, theresource-poor LDCs are allowed to import what-ever quantities of goods and services are requiredto reduce income ratios by 50 percent by the year2000, with their balance-of-payments deficits–upto 75 percent of their imports—to be financed by“extraordinary credits” from the developed re-gions and resource-rich LDCs, carrying a nominal5-percent interest rate. The model output for thisscenario (see fig. 1.4) shows that the developedregions, w h i c h w o u l d h a v e t o ‘‘workovertime . . . to provide [these] huge amounts ofeconomic aid,” would have a higher GNP butlower per capita consumption in 2000, at whichtime they would be allocating 3.1 percent of theirtotal GNP to development assistance. Leontiefhimself doubts that such a plan could be imple-mented:

On the whole this projection of the future devel-opment of the world economy under the new eco-nomic order suggests that the practical possibilityof carrying out such an optimistic program must beseriously questioned.70

As an alternative, Leontief proposes an “armslimitation” scenario, noting that the current half-trillion-dollar annual worldwide defense spendingrepresents “the largest existing economic reservethat might be utilized to accelerate the growth ofthe resource-poor less developed regions. ” Wherethe “old economic order” scenario assumed thatall regions would continue to devote the same per-centage of their respective GNPs to defense thatthey had in 1970, the “arms limitation” scenarioassumes that by 2000 the defense expenditures ofthe United States and the Soviet Union would bereduced by one-third, and that all other regions

6B.Anne P. carter and Alan K. Sin, “An Energy Ccmser~wt[on Scenario for

t h e V’orlcl kfodel,” prepared for the Bureau of Internatmnal and Econornlc

POIICY, L1.S. Department of Commerce, No~ember 1977, p. 2.s~L~eadc>ws, R i c h a r d s o n , a n d Bruckmann, op. clt., P. 175.

~OM’assll}, W’, Leontlef, “ T h e V’orld E~onomv o f t h e Y e a r 2030,” Sclentlfic

A m e m x m , jol. 243, No. 3, Septemher 1980, p. 230.


would reduce defense spending 25 percent by 1990and 40 percent by 2000. The savings realized ineach region would first be used to satisfy its owncivilian needs, but the developed regions would al-locate 15 percent of their savings to developmentaid by 1990 and 25 percent by 2000. The modeloutput for this scenario (see fig. 14) indicates thatper capita income and consumption in the re-source-poor LDCs would increase far faster thanunder the old economic order. Since developed-region defense savings would be given to LDCs inthe form of direct aid, their balance-of-paymentsdeficits would also be far smaller. Based on a com-parison of these scenarios, Leontief concludesthat:

. $ . the reallocation of economic resources arisingfrom the kind of international arms-limitationagreement that has been suggested repeatedly, bothformally and informally by individuals and organi-zations inside and outside the U. N., is by far themost promising of the three schemes for world eco-nomic development .71

Conclusions of UNIOWM

The results of these numerous UNIOWM sce-narios suggest, in general, that the economic pros-pects of the resource-poor LDCs are not very opti-mistic. The growth rate targets of the U.N.’s Sec-ond Development Decade are insufficient to beginclosing thedevelopingtaken into

7 Ilbld., p. 231.

income gaps between developed andregions when population increases areconsideration. The limits imposed by

mineral resources, agriculture, and the environ-ment are not insurmountable and could be over-come through appropriate policies and invest-ments; but “the principal limits to sustained eco-nomic growth and accelerated development arepolitical, social and institutional in character.”TzTotwo

●

●

achieve accelerated development, therefore,general conditions are considered necessary:

far-reaching internal reforms in the LDCs in-cluding often drastic changes in sociopoliticalinstitutions and economic policies—between30 and 40 percent of GNP ‘must be used forcapital investment, particularly in the agricul-tural and export sectors, and both equitableincome redistribution and increased public-sector participation are needed to increase theeffectiveness of these investments; andsignificant reforms in the international eco-nomic order, aimed at reducing the potential-ly large balance-of-payments deficits in thedeveloping regions—stabilizing commoditymarkets, stimulating exports of manufacturedgoods from the LDCs, and increasing finan-cial transfers from the developed regions andresource-rich LDCs.

Neither of these conditions, taken separately, issufficient to ensure a favorable outcome: 4’Ac-celerated development leading to a substantialreduction of the income gap between the develop-ing and the developed countries can only beachieved through a combination of both of theseconditions. ”73

TILeontief, Carter, and Petri , op. cit., p. 4~.

TIIbld., p. 11.

Global 2000—Entering the 21st Century

Global 2000 is a global modeling study, rather plus a number of projections based on analyticalthan a “global model” in the same sense that techniques other than computerized simulationWorld 3, WIM, LAWM, or UNIOWM are. Its models. Despite the very limited degree of interac-projections result not from a single, integrated tion among the sectors and agencies, however, andmodel but rather from a collection of sectoral despite the frequent lack of consistency in theirmodels, independently developed or adopted by various assumption and data bases, these sectoralvarious Federal agencies and other organizations, “submodels” collectively provide the U.S. Govern-


ment with the same type of projections that theother more integrated global models produce fortheir users.74

Origin and Purposes

Global 2000 was carried out by an interagencytask force of the U.S. Government in response to adirective issued by former President Carter in hisenvironmental message to Congress on May 23,1977:

Environmental problems do not stop at nationalboundaries. In the past decade, we and other na-tions have come to recognize the urgency of inter-national efforts to protect our common environ-ment.

As part of this process, I am directing the Coun-cil on Environmental Quality and the Departmentof State, working in cooperation with . . . other ap-propriate agencies, to make a one-year study of theprobable changes in the world’s population, natu-ral resources, and environment through the end ofthe century. This study will serve as the foundationof our longer-term planning. ’s

This mandate, as interpreted by the Global 2000task force, imposed dual objectives on the study:its purpose was not only to “identify [future] prob-lems to which world attention must be directed,”but also “to identify and strengthen the Govern-ment’s capability for longer-term planning andanalysis. ”7b The resulting report, released in July1980, addressed both of these goals, although rely-ing on the Government’s existing capability mayhave detracted from the accuracy and usefulness ofthe resulting projections. According to a Scienceeditorial:

A reading of portions of the report producedafter 3 years reveals more about the functioning ofthe federal government than it conveys new reli-able information about the future of the world. ”

‘ + G e r a l d 0. Barney, stud} director, The Globul 2000 Report m the Pre.wdetr[:

Enwmg the Tu mt>-fmt Cenrum (V’a~hlngrnn, D. C.: U.S. C o u n c i l on En-~vronmental Qualitv a n d D e p a r t m e n t o f S t a t e , 1980, ~’01. ~, PP. ~’-vI.

75Jlmmv C a r t e r , The Pre~ldmrr’~ En{ [mnmental P r o g r a m 1977 (W’ashlngton,

D. C.: U.S. Government Prlntlng Offlce, 1977), p. hi-l 1.?SBarnel,, The G/o~a/ ~~] ~ePf)7[ tO [~, pr~s&nt, km!. 1 , p . 6.

~~rhdlp H , A b e l s o n , “The Global 2@W Reporr,” Scwnce, vol. Z@9, No. 4458,

A u g . 1 5 , 1980, p. 76].

Various Federal agencies are already conductinga considerable amount of long-term analysis andplanning, and a number of them have the capabil-ity to produce projections based on extensive databases and sophisticated sectoral models, many ofthem computerized. These existing tools and pro-cedures (and the skilled personnel who use them)represent the “present foundation” of the Govern-ment’s long-range global planning—they embodythe assumptions on which current analysis isbased, and they are actually being used as at least apartial basis for current planning and decision-making. As a result, the study plan chosen by thetask force was “to develop trend projections using,to the fullest extent possible, the long-term globaldata and models routinely employed by the Feder-al agencies. ”78

However, they found that “each agency has itsown idiosyncratic way of projecting the future, ”based on its individual planning requirements andarea of responsibility .79 As a result, each agency’sprojections tend to focus on a single factor (such aspopulation, food, or energy) without adequatelyconsidering the feedback involved in a systemwhere these factors are interacting variables. Fur-thermore, although these separate projections“have generally been used by the Government andothers as though they had been calculated on amutually consistent basis, ” the different agencies’models “were never designed to be used as part ofan integrated, self-consistent system. ”8° This leadsto one of the study’s basic findings:

To put it more simply, the analysis shows thatthe executive agencies of the U.S. Government arenot now capable of presenting the President withinternally consistent projections of world trends inpopulation, resources, and the environment for thenext two decades.81

Despite these deficiencies, Global 2000 presentsthe most comprehensive and consistent set of pro-jections yet produced by the U.S. Government,and it represents the first attempt to make such

7L3T~, ~~oba/ 2000 Rcport to the Pr~~[dent, fw1. 1 , p. 6.

Wbid., J,oI. 2, p. 454.‘OIhld.8’Ihld.


projections on a coordinated, integrated basis.The task force has been disarmingly frank andf o r t h c o m i n g i n t h e i r a n a l y s i s o f “ t h eGovernment’s global model,” and their discussionof its current weaknesses points to a number ofways in which existing long-range analysis andplanning tools can be improved. Several of themodels have in fact been modified or expanded inthe last 3 years, often in response to problemsidentified by the task force, although many prob-lems still remain.

82 T he task force cautions, how-ever, that “in the absence of ongoing institutionalincentives to address cross-sectional interactions,the present form of the government’s global modelis not likely to change significantly in the foresee-able future. ”83


For the purposes of Global 2000, the study teamimposed a “special limited discipline, ” within thetime and resource constraints of the study, underwhich: 1) the assumptions, structures, and projec-tions of the agencies’ sectoral submodels weremade “more mutually consistent” and 2) the out-put from one sector was used as the input foranother “whenever this was readily feasible. ”84 De-spite these efforts, however, the Government’smodel has almost no feedback loops and remainsat best “quasi-integrated,” with the result that, “ifanything, the severity of the effects of these basictrends may be understated. ”8S In addition, thesubmodels employ different patterns of regionali-zation, varying from as few as five to as many as 28regions, with a similar variation in the degree ofdetail provided.86 This not only makes coordina-tion difficult but also leaves the projections with-out a consistent geographic reference for policy

analysis.

Furthermore, there are numerous major incon-sistencies in the values assigned to the same vari-able in different sectoral submodels, reflecting mu-tually contradictory agency assumptions about the

behavior of crucial factors.87 The population sec-tor, for example, assumes that birth rates in LDCswill decline because of continued moderate socio-economic development, whereas the agriculturaland economic projections indicate only marginalincreases in global food and GNP per capita, withreal declines in some LDCs—hardly reflectingmoderate socioeconomic development.88 Similar-ly, the GNP submodel assumes that the real priceof wheat will decrease by 0.6 percent per year andthat the real price of oil will remain constant dur-ing the early 1980’s, whereas the food and energyprojections indicate real price increases of 2.1 and5.0 percent per year, respectively, over roughly thesame period.

Far more serious, however, is the absence of anyconsistent accounting of capital or resource alloca-tions in any of the sectoral submodels. This leadsto what the report calls “significant omissions anddouble-counting’ –in effect, the model recognizesno conflicts from competing demands or uses, andit places no constraints on the amount of capitaland resources available to each sector.89 Underthese conditions, the same acre-foot of water is as-sumed to be available for both irrigation andenergy development, just as the same barrel of oilis assumed to be available for transportation, ener-gy generation, and petrochemical feedstock.

Different sectors also contain contrasting or con-tradictory assumptions about the course of publicpolicy, despite the report’s frequent repetition ofthe caveat that its trend projections are made “un-der the assumption that present policies and policytrends continue without major change. “9° The mostsignificant exception to this rule comes in the pop-ulation projections, which are based on the as-sumptions of: 1) continued socioeconomic progressdespite marginal gains in food and GNP per capitain the LDCs; and 2) adoption of family planningpolicies in all countries and major extensions of ex-isting programs, especially in rural areas. Theother sectoral projections, however, are based onequally significant policy assumptions, includingthe following:91

ezlbid., vol. 2, p. 46J) n. 2.

a]lbld., VO[. 2, p. 461.*’Ibid., vol. 2, p. 457.e>[hid., J*oI. 2, pp. 456, 481.s’$Ibid., VOI. 2, pp. 485 n. 1, 478; see also table 14-3, p. 479, and the n-d-md-

ological maps following p. 442.

eTIbld ~,ol. 2, pp. 46 I -476; see also tahle 14-2 and pp. 470-475 for an extensive.!discussion of “selected contrasrtng assumptmns,”

ssIbld., vol. 2, pp. 481-482.

aglbld., vol. 2, p. 467.~OIb,d, ~,oI, 2, p. 3; emphasis theirs.$IIIM,l \(~I, 2, table 14-2 and ~Ip. 470-475; see also pp. 485-4~.

Ch. 2—Major Global Modeling Studies . 37

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GNP.—Implementation of “prudent” policiesto maximize export earnings, with GNPgrowth in the LDCs largely dependent onGNP growth in the developed regions;Food.—Major public and private investmentsin land development; a worldwide shift to-ward more fossil-fuel-intensive agriculturaltechniques and inputs; and (implicitly) im-proved resource management to protect fish-eries and to prevent overgrazing, erosion, andfarmland degradation;Energy.–Widespread deployment of light-water nuclear electric powerplants; implemen-tation of more effective energy conservationprograms in OECD countries; willingness ofOPEC countries to meet oil demand up totheir maximum production capacity; and ma-jor public and private investment in air pollu-tion abatement so that by 1985 all countries’energy facilities are retrofitted to meet U.S.new-source performance standards for CO,S OX, NOX, and particulate; andTechnology.–Major technological progressin almost ‘all sectors, with no ‘technologicalsetbacks or adverse side effects; and extensiveworldwide transfer and deployment of family-planning, yield-enhancing, nuclear-power,and pollution-abatement technologies.

In addition, the “no-policy-change” assumptionitself explicitly excludes the possibility of eitherplanned change or sudden upheaval in the world’sexisting political institutions and economic ar-rangements:

. . . the Study assumes that there will be no majordisruptions of international trade as a result of war,disturbance of the international monetary system,or political disruption. The findings of the Studydo, however, point to increasing potential for inter-national conflict and increasing stress on interna-tional financial arrangements. Should wars or a sig-nificant disturbance of the international monetarysystem occur, the projected trends would be alteredin unpredictable ways.92

Findings and Conclusionsof Global 2000

In the absence of more extensive policy testing,and because of the presence of contradictory and

often controversial policy assumptions, Global2000 does not provide an adequate basis for coor-dinated analysis or detailed policy recommenda-tions. Furthermore, because of the omissions andinconsistencies outlined above, the study teamconcludes “that it is impossible to assign a highprobability to any of the specific numeric projec-tions presented” for its different sectors. 9 3

However, the current weaknesses and deficienciesof “the Government’s global model” do not neces-sarily or completely invalidate its overall results,and the study team concludes that “these basicfindings are qualitatively correct,” since they arein general agreement with past projections by thesame agencies, are supported collaterally by thealternative sectoral projections of outside organiza-tions, and correspond “in . . . their most basicthrusts” with projections generated by “less com-plex but more highly integrated global models. ”9q

Global 2000’s often-quoted general conclusionsabout the future are as follows:

If present trends continue, the world in 2000 willbe more crowded, more polluted, less stable ecolog-ically, and more vulnerable to disruption than theworld we live in now. Serious stresses involvingpopulation, resources, and environment are clearlyvisible ahead. Despite greater material output, theworld’s people will be poorer in many ways thanthey are today.

For hundreds of millions of the desperately poor,the outlook for food and other necessities of lifewill be no better. For many it will be worse. Barringrevolutionary advances in technology, life for mostpeople on earth will be more precarious in 2000than it is now—unless the nations of the world actdecisively to alter current trends.95

The principal sectoral findings on which thesegeneral conclusions are based, briefly outlined, areas follows:

● Population.—Global population growth rateswill not decline significantly by 2000 and, inabsolute terms, net population growth will befaster than it is today. The world’s total popu-lation will increase by 55 percent, from 4.1billion in 1975 to 6.35 billion in 2000, with 92percent of the growth occurring in the LDCs,particularly in Africa and Latin America.

9’Ihld. , \ [)1. 2, p. +31.‘+Ihd.

‘51hd. , \ 01, 1, p. 1.

.

38 “ Global Models, World Futures, and Public Policy

● GNP.—Worldwide GNP is projected to in-crease 145 percent during the 1975-2000 per-iod, with faster annual growth in the LDCs(4.5 percent) than in the developed nations(3.3 percent), although growth rates in allregions will decline after 1985. Due to dif-ferential population growth, however, GNPper capita will grow much more slowly—anoverall increase of only 53 percent worldwide,with marginal improvements or actual de-clines in a number of LDCs in Africa andSouth Asia. Existing income disparities be-tween the richest and poorest nations willwiden, and “dramatically different rates ofchange would be needed to reduce the gap sig-nificantly by the end of the century. ”9b

● Food.—Worldwide food production is pro-jected to increase by 2.2 percent annuallyfrom 1970 to 2000, a rate approximating therecord increases of the Green Revolution.Since most of the good arable land is alreadyunder cultivation, most of this increase willcome from more intensive use of energy-inten-sive inputs and technologies, resulting in anincreased dependence on oil and gas and atleast a doubling of real food prices by the endof the century. Since food production growsmore rapidly than population, average percapita consumption will increase 15 percentworldwide by 2000, but with significant re-gional variations—increases of 21 percent inthe developed regions but only 9 percent inthe LDCs, with smaller increases in NorthAfrica, the Middle East, and South Asia; anda “calamitous” 19. l-percent decline in CentralAfrica, where average caloric intake is alreadywell below the minimum requirements set bythe U.N. Food and Agriculture Organization.These projections suggest the need for foodimports and food assistance will continue togrow in the developing regions, particularly inthe poorest countries.

● Energy .-The energy projections, made inlate 1977, indicate that world energy demandwill increase 58 percent over the 1975-90 peri-od. However, petroleum production capacityis not increasing as rapidly as demand, andthe rate of reserve additions per unit of ex-

~~[b,~, ~,c)l 1 ~,, 13; ‘c,~l,il~c tl,lth rhe Jlic u+ion ()( L ‘h’IIJ\~’hl, Jk)\ c.

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ploratory effort appears to be declining. As aresult, technical considerations indicate thatpetroleum production will peak before the endof the century, although political and eco-nomic decisions by OPEC countries couldcause production to level off even earlier. Theresulting transition away from petroleum de-pendence is projected to be led by nuclear andrenewable sources (primarily nuclear, but in-cluding hydro, solar, and geothermal), whichare forecast to increase 226 percent by 1990;production of petroleum, natural gas, andcoal is projected to increase by 58, 43, and 13percent, respectively, over the same period.The projections also indicate considerable po-tential for reducing energy consumption perunit of economic production.Resource prices.–Global 2000 finds that thereal prices of food, fish, lumber, water, and en-ergy will increase significantly by 2000, withthe steepest increases occurring after 1985.However, this finding shows how the noninte-grated model can lead to an economic para-dox:

If the real prices of these commodities in-crease as projected, for what correspondingcommodities will real prices decrease? If nocompensating real-price decreases are pro-jected, what do these “real” price increasesmean theoretically—or even semantically?Unfortunately, even attempting to developanswers to these difficult questions wouldhave exceeded the time and resource con-straints of the study .97

Environment.–Major strains will be placedon ecological systems throughout the world,leading to significant deterioration in terres-trial, aquatic, and atmospheric resources thatwould have adverse impacts on agriculturalproductivity, human mortality, and economicdevelopment. There are already signs of manyof these effects, which will be felt more strong-ly, particularly in the LDCs, toward the endof the century. The projected increase in fossilfuel combustion could be expected to doublethe COZ content of the atmosphere by 2050,leading to a 2° to 3° C rise in temperaturesand significant alterations in weather and pre-cipitation patterns in the temperate zones,


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where most of the world’s food-exporting na-tions are located.Species extinctions.—Between 0.5 millionand 2.0 million species of plants and animalscould be extinguished by 2000, mainlythrough the loss of wild habitats or throughpollution. This threat is particularly great inthe tropical forests, which are an importantpotential source of new foods, pharmaceuti-cals, and building materials. An equally im-portant threat is posed by the possible loss oflocal and wild varieties that are needed tobreed pest-and disease-resistant traits intohigh-yield cereal grains.

Updates of these projections, developed on thebasis of subsequent events or improvements in theforecasting tools, generally support the initial find-ings of Global 2000 and, if anything, provide evenless

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reason for optimism:

Fertility rates have declined more rapidly thanexpected in some areas, but world populationin 2000 will be only 3 percent lower than orig-inally projected.GNP projections are somewhat lower, due toincreased petroleum prices and efforts to con-trol inflation in OECD countries, with a con-sequent drop in LDC growth rates.Agricultural projections have also been re-

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vised downward, due to rapid increases in en-ergy-related production costs and diminishingreturns for other yield-enhancing inputs. Inaddition, increased concern with the conse-quences of intensive cultivation has led (in theUnited States and other developed nations) topressure for resource-management policiesthat would prevent further erosion and soildeterioration. Some LDC governments are in-tervening in domestic markets to keep foodprices low, often to the detriment of ruraldevelopment and production capacity.The greatest differences are found in theenergy sector: updated projections, reflectingthe sudden large increase in oil prices in 1979,show that demand will be lower due to higherprices and slower economic growth caused byenergy impacts in other sectors. Estimates ofmaximum OPEC production levels are lower,reflecting the cartel’s resource-conservationpolicies. Estimates of future OECD nuclearcapacity are also lower, reflecting constructiondelays and public concern as well as the U.S.licensing moratorium, and coal is projected toprovide a larger share of energy supplies.Higher prices are also expected to encouragethe adoption of alternative sources (includingsolar) and conservation measures.

CHAPTER 2 Major Global Modeling Studies

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