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Is Richer Greener? A Comment on Posner on Tierney:

Eric has an interesting post commenting on John Tierney's recent column on wealth and the environment. Eric notes that Tierney's argument is overly simplistic, and that basic arguments about the correlation between economic growth and environmental performance may not apply in the context of global climate change. Fair enough, but I would also like to qualify some of Eric's remarks.

First, I think it is important to note that one of Tierney's primary claims is that the formula of environmental impact advanced by Paul Ehrlich, John Holdren, and others -- the so-called I-PAT formula -- is incorrect. Ehrlich, et al., asserted that overall environmental impact (I) is a function of population (P), affluence (A), and technology (T), such that increasing P, A or T leads to an increase in I (and impact is presumed to be negative. Thus, as Tierney summarizes, "protecting the planet seemed to require fewer people, less wealth and simpler technology." Yet, as Tierney notes, wealthier societies are more able and willing to pay for environmental protections. Moreover, technology can enable us to satisfy human wants and needs with less environmental impact, as occurs when technology increases agricultural productivity, enabling us to feed more people on less land (and set aside more land for nature).

What about population? Is the relationship between population and environmental impact still a positive one? Not necessarily. As economist Seth Norton has shown, economic institutions have a greater effect on some measures of environmental quality and human well-being than does population growth. Specifically, Norton looked at measures like access to safe drinking water, water pollution, and deforestation rates. As Norton found, "compared with other forces, the purely adverse effects of population are very small." Moreover, as it happens, the institutional arrangements which improved environmental performance in Norton's study (and tend to correlate with, although almost certainly do not explain, reduced fertility rates), are also those that tend to encourage economic growth.

In his post, Eric makes the important point that the Environmental Kuznets Curve (EKC) depends upon "legal institutions to translate people's preferences into outcomes." He further criticizes Tierney for not acknowledging the role of government, in particular the role government plays in enacting people's environmental preferences. He writes: " As I get richer, I am willing to pay more for clean air. But I can't buy clean air at the store. I have to lobby my legislator for regulation that increases the price of goods that I buy. . . . What Tierney misses is that the Kuznets curves assume the government doing something at the behest of citizens." I agree with Eric on the importance of institutions, and I accept that government intervention is sometimes necessary for environmental improvement, but I think it is wrong to suggest that the positive aspects of the EKC are solely (and perhaps even primarily) the result of such governmental intervention.

Some improvements in environmental performance brought about by increased wealth and technological advance are somewhat independent of people's preferences. That is, some technological changes have dramatically positive, albeit unintended (and certainly not governmentally mandated) environmental effects, and there are reasons to expect such changes to be common. So, for instance, replacing copper wire with fiber optics has substantial positive environmental effects. Insofar as increased wealth and market institutions are necessary for such technological change, these are changes that are dependent upon our legal institutions, but are not dependent upon governmental intervention.

A really good example of an EKC effect that is not the result of legislative action is reforestation in developed nations. Let's take the United States (about which I wrote an article "Poplar Front: The Rebirth of America's Forests" about a dozen or so years ago). For most of the 20th century, the U.S. underwent dramatic reforestation -- and legislative action of the sort Eric describes had almost nothing to do with it. Indeed, if anything, it may have slowed down the process. Why did reforestation occur? Many things contributed. First, increased agricultural productivity meant less land was necessary for agriculture. No less important, agricultural production had migrated from the eastern U.S. into the midwest, allowing forest regrowth in areas formerly under plow. Whereas the eastern U.S. was once farm country, it is now quite forested. Even areas that we like to think of as "wilderness," such as portions of the Adirondacks, had been previously cleared and farmed.

Other technological factors leading to greater forest growth were things like improved sawmill technology (e.g. thinner sawblades so there is less waste in timber production) and the development of the internal combustion engine. As cars and tractors took over for horses, much land formerly farmed for animal feed went back to nature.

What about government efforts to protect forestland? Well, much of the "protected" forest land, particularly in the east, was only protected after it had undergone the forest regrowth I describe above. Second, rates of forest growth in the 20th century appear to be greater on private than on government land. Rates of replanting and regrowth after cutting appear to be greater on private land than on federal land.

My point is not that government intervention is never necessary for environmental improvement. Rather, it is the more modest point (with which Eric might agree) that many of the forces that drive EKC effects are more dependent upon the underlying legal institutions of a liberal market order (e.g. property rights, rule of law, etc.) than upon legislative action. I would also suggest that, in many cases, greater reliance upon such institutions might actually produce superior results than legislative intervention. so, for instance, building upon common law protections of property might produce stronger EKC effects than legislation. Work like Elizabeth Brubaker's Property Rights in Defence of Nature, on the history of the use of common law property protections to protect water quality in Canada -- and the eventual sabotage of such protections by legislatures -- is highly suggestive on this point.

Finally, let me note that I agree with Eric with regard to the application of the EKC to climate change. First, although there is evidence of market-driven improvements in energy efficiency and per-GDP greenhouse gas emissions, we have yet to see an EKC effect with greenhouse gases. Further, there are reasons to doubt that such effects will occur on a national level due to the global nature of the atmospheric commons. That said, meeting the climate challenge -- whether through controlling atmospheric carbon, adapting to anticipated climate changes, or (as will almost certainly be necessary) both -- will require increased wealth and technological advance, so it is worth remembering that environmental policies which reduce economic growth can hamper our ability to meet present and future environmental challenges.

Related Posts (on one page):

  1. Is Richer Greener?
  2. Is Richer Greener? A Comment on Posner on Tierney:
  3. Tierney on Using Energy, Getting Rich, and Saving the Planet
Michael Ejercito (mail) (www):
One factor in environmental protection is the existence of enforceable property interests.

No such enforceable property interest exists on the oceans, which is why overfishing is a problem in many areas of the world.
4.25.2009 11:18am
einhverfr (mail) (www):
I disagree with the I-PAT idea. How many species in Australia were hunted to extinction by the Aboriginal population there? How many of the great primeval forests of Europe were cut down in prehistoric or early historic times? In fact, outside of Scandinavia, there aren't any real forests (outside of parks or tree farms) in Europe left. We can even measure the environmental impact in many cases of early bronze age societies (and this is often important in dating kurgans in the steppes because you can show if they were raised before or after overgrazing took a strong toll on the land).

If it weren't for technological improvements, and if we were to roll back the population a hundred years, global climate change would probably be the least of our environmental worries......

One important element that should be considered here is that technology as a whole has been more helpful than that idea implies. A better approach would be that I is a function of (P * A / T).
4.25.2009 11:51am
einhverfr (mail) (www):
Technology increases the sustainable population and does so by reducing, on the whole, the environmental impact of each person.
4.25.2009 11:52am
Allan Walstad (mail):
Wealth and population growth are connected. Beyond some point, wealthier societies have fewer babies, in part because older people are no longer relying on large numbers of adult children to support them, and in part because people have the resources (and want the time) to pursue a lot of other fulfilling activities besides raising children.

As a libertarian/classical liberal, I do grant that there may be necessary and proper functions for coercive government, even tax-financed government, and safeguarding the environment has a compelling rationale. Nevertheless, government is such a blunt instrument. One of the tendencies of political environmentalism is to point with horror to "unsustainable" trends and demand government action. But in fact there are always temporary trends going on that will not continue forever. I shudder to think where we'd be if political environmentalism had been a powerful force in the industrial revolution. Surely there were all sorts of environmental trends--pollution, resource depletion--that pointed toward hell within a few generations. If the rapid growth-producing activities of a couple centuries ago had been shut off, we'd be living poorer and dirtier lives today--those of us who survived.
4.25.2009 1:15pm
John McCall (mail):
Economists are so cute when they start pretending that their discipline has any formal analytic basis whatsoever.

Let me get this straight. A group of Serious Scholars claim without any numeric evidence that "impact", which is never given any definition at all, is the product of population (which is measurable in multiple ways; is density relevant, or just overall population?), affluence (which is measured how?), and technology (frantic hand-waving). And now it's been discussed for thirty years by other Serious Scholars as some sort of real hypothesis, a formula, a valuable scientific precedent which sadly might be wrong in how it precisely captures the relationships involved.

I will give you another formula to stir debate: fruit loops are the sum of fun with the product of energy and the taste that kids love.
4.25.2009 2:36pm
Dave hardy (mail) (www):
As far as reforestation -- you don't have to look far. Problem with most civil war battlefields visits is that you have trouble seeing what happened, because today it's trees all over, and in the Civil War it was open farmland. (the one exception being Wilderness). This rise in ground was important because the artillery battery on it had a beautiful field of fire ... and today you can see about fifty feet from it.

My old house in Falls Church was on a ridge that during the civil war had some small forts and a trench line. Absolutely useless as an observation point today -- you could see about two blocks down the road, and nothing outside of it -- but picture the place without houses and trees, as farmland, and it'd be a wonderful military position.
4.25.2009 4:40pm
markm (mail):
Tierney seems to have confounded technology and affluence. They're strongly positively correlated, but not the same. Improved technology generally produces a given unit of output with less inputs (labor and materials), and less undesired byproducts (including pollution). Affluence means the per-person production of outputs has increased. Improved technology may also derive more of the materials inputs from recycling rather than natural resources, but affluence tends to operate in opposition to this - ragpicking (cloth recycling) is no longer a career because it no longer pays enough to attract even a homeless alcoholic, and the weak point of many other recycling programs is getting the materials sorted at a reasonable cost.

So, I = P*A/T is far closer to the truth, although I don't see a way to assign numeric values to "T", nor is "I" a single number. (I= environmental impact, P= population, A = affluence, T= technology.) Increasing affluence and technology could go either way, if other things stayed the same - but they don't. The Kuznets curve shows the relationship between affluence and population quite well; increased wealth first means that where families once had six children to see two or three survive to adulthood, now five or six survive, leading to rapid population growth. After a few generations, increasingly wealthy adults will recognize that not only do they not need to breed a half-dozen or more children, but also that large families are a burden, that can be avoided at a cost that is now trivial. (Condoms aren't cheap to African subsistence farmers, but to Americans a whole pack is cheaper than a cup of coffee.) So eventually the population growth levels off, more or less. And with that leveling of population growth, the "T" divisor finally has a chance to dominate.

One open question is the extent to which religious doctrine or other cultural differences can prevent the shift to small families. In the USA, Catholics have mostly shifted to small families in spite of church doctrine, but many LDS (Mormons) have not. (Catholicism just deprecates birth control while LDS doctrine glorifies large families.) This has a trivial impact on American demographics because the percentage of LDS is so small, but what would happen in a society where 99% of the people belong to a religion that encourages large families? Does the LDS attract people who want a reason to have huge families, or does it persuade average people to have larger families?

Finally, an affluent society can afford environmental regulations. The public won't stand for them until their basic needs are met.
4.27.2009 6:39am

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