Putin's Invasion Reminds Us That We Live In A Finite World

Executive Summary

As a species, we must make the jump to full sustainability. Decarbonizing our economy will be spectacularly resource intensive, and all key commodities required are finite in supply. Russia’s desperate attack on Ukraine makes everything more unpredictable but for one certainty – this war will increase the pressure on raw materials in the short term. It serves as a reminder more broadly that we will have to innovate around the bottlenecks, shortages, price spikes, and climate damage that are almost certainly coming our way so that we might survive to tell the tale.


Spaceship Earth, together with its local galaxies, is speeding through our part of the universe at over 600 miles per second. The good news is that no Klingon battle cruisers have yet appeared. The bad news is that there are no space stations that we can stop at for repairs and supplies. We have only the limited resources that we carry with us. Some of these can be recycled, but many, including metals and fossil fuels, once used cannot be reconstituted and often become damaging waste. Our natural habitat on Spaceship Earth is incredibly complex but almost perfectly suited to our species. It is, though, extremely sensitive to misuse and has been easily and substantially damaged. Our spaceship, like every spaceship, has a limited carrying capacity for not only resources but also the people using them. A challenge to our particular spaceship is that on our bridge there is no commander and there are no rules. Our species, as it learned to survive over millennia, has adopted a style of "get what you need now by any means possible!" There has been no incentive to worry about the distant future, and so we don't. Our current attitude has been described by Kenneth Boulding as “cowboy economics,” driven by the spirit of the limitless frontier, where we shoot (or drill) first and ask about consequences later. Regrettably this natural response must change, and change fast, for finally after a few hundred thousand years we are approaching our limits to physical growth. Perhaps we are already into our last doubling in resource use, having doubled many, many times before. We must now make the jump to full sustainability, or Spaceship Earth as a haven for our species will come to a sticky end.

"Anyone who believes that exponential growth can go on forever in a finite world is either a madman or an economist."

- Kenneth Boulding

The simple fact, often ignored, is that all key commodities required by the modern economy are finite in supply, and the cheapest and best have gone first. There is still plenty of oil in the Earth's crust, but the best resources have gone: where simple gushers once were common, we now ingeniously torture the solid rock – euphemistically known as shale – or drill miles below the deep seabed offshore Brazil. As a result, the real price trend of oil has reached 3 or 4 times its 1965 level in spite of incredible innovation by the energy industry. This is shown in Exhibit 1. Oil was the first important commodity paradigm shift, breaking out of a long flat trend back in the early 1970s, with its price trend rising as the prices of other commodities continued to fall. In this sense it was the canary in the mine for other commodities, whose prices also began to rise about 30 years later.