Ryan Bourne is Chair in Public Understanding of Economics at the Cato Institute.
Spare a thought for Prince Harry. By all accounts he is finding it difficult to get out of bed in the mornings, due to “eco-anxiety.” The Sun reports from Botswana that he believes “everything is good in the world except for us humans.” He’s not the only one struggling. At the UN recently, Greta Thunberg was visibly shaken as she denounced the people who had stolen her dreams of a cooler world with “fairytales of eternal economic growth.”
In case it wasn’t clear before, more radical parts of the “green movement” hold a consistent preconception: that human beings and our innate desire for betterment are the problem where environmental issues are concerned. We are destroying the planet, devouring its finite resources through selfish fertility and consumption decisions, while pumping greenhouse gases into its atmosphere. “A plague on the earth,” is how David Attenborough once kindly described us.
The high priest of this worldview was Paul Ehrlich, who coined the oft-repeated assertion that “you can’t go on growing forever on a finite planet.” Prince Charles agrees. Earth simply can’t sustain us if more and more people aspire to Western consumption levels, he says. To save the planet therefore requires curbing population growth, rowing back substantially on consumption (so-called degrowth), or both. Little surprise then that contemporary climate change “solutions” from radical environmentalists include economically destructive, rapid carbon mitigation (“Bring on the recession!” as George Monbiot once said) or curbing global population growth.
Yet there’s a big problem here: Ehrlich and Prince Charles’ analysis was and is wrong. Population growth doesn’t “use up” the earth’s finite resources and economic growth possibilities are not finite. That’s because technologies and human ideas are not fixed. Resource constraint worriers ignore that humans adapt, dream up efficiencies, and change behaviours. As countries become much richer, they become better placed, and more willing to, care for the environment. Even on climate change, a classic “externality” problem, it is the same innovative spirit that drives economic progress that will deliver any transition or adaptation to a lower carbon economy and warmer world.
Consider the evidence. If growth in population or consumption were simply about running down scarce resources, we’d expect commodity prices to continuously rise with population or economic growth. Yet from 1980 to 2017, when the world’s population shot up by nearly 70 per cent, prices of a basket of 50 important commodities actually fell by an average of 36 per cent (or 65 per cent, if instead you consider the reduction in time an average human had to work to purchase them).
Population and consumption growth might put pressure on resource availability for any given level of technology or set of demands. But human innovation means, over time, we devise better ideas and forms of technology to access or convert those resources, or shift to other alternatives when prices rise. In the race between the human brain and resource scarcity, we are winning. As my colleague Marian Tupy has said: “the Earth’s atoms may be fixed, but the possible combinations of those atoms are infinite.”
As counterintuitive as it sounds, that same innovation means economic growth doesn’t necessitate more and more resource use either. Greens think of growth as about consuming “stuff.” And for good reason: during and after the industrial revolution, GDP growth really did go hand in hand with energy use growth. But in a service and high productivity world, production and value clearly arises from doing more with less too. The iPhone in your pocket has replaced a clock, diaries, calendars, letters, calculators, photo albums, large telephones, trips to the bank, compasses, a contact book, and much else. Think of all the resources saved! No wonder Ronald Reagan once said “there are no such things as limits to growth, because there are no limits to the human capacity for intelligence, imagination and wonder.”
Again, the distinction between a static and dynamic world is crucial when considering the environmental impact of this. As Tim Harford explains, if we were all suddenly a fair bit poorer, we’d probably substitute a hat and coat for heating in our homes. But this doesn’t mean that if our incomes trebled over the next five decades, we’d crank up the heating and boil ourselves in our homes. In fact, as we’ve got richer over the last quarter of a century, total energy use per person has actually been falling in countries such as the US and UK, even beyond that accounted for by offshoring of manufacturing.
This is one good example of how economic growth helps shift us up the hierarchy of needs. As advanced countries have solved problems of food, warmth, and shelter, people can afford to worry more about the natural world around them more broadly too. Recent global growth has gone hand-in-hand with the forested area of the planet increasing since 1982 and a continuous fall in fertility, in part because wealthier people want to invest more in the “quality” of their children.
In this light, Prince Harry and Greta’s eco-anxiety is a clear sign of privilege. Neither is having to scramble to illegally chop trees for money to survive, overhunt wild animals as a source of a nutritious diet, or spend half their adult lives pregnant to ensure at least a couple of their kids survive. Many around the world aren’t so lucky, or comfortable enough to put the environment first. A UN poll of 10 million people around the globe showed far more worry about their educational opportunities or whether their kids are starving or dying from disease.
Once you understand this: what growth is, how it is driven by human innovation, and what consequences it has, you see how futile and damaging an “anti-human” approach to global climate change would be. Drastic mitigation would condemn much of humanity to poorer lives, making us worse environmental stewards in other regards and facing much worse consequences of any warming that occurs. Authoritarian population controls would backfire too, reducing the potential market and payoffs for innovators developing climate change remedies in everything from electric cars to solar panels.
No, the only sustainable, credible route to reducing carbon emissions and adapting to warming will come precisely from the sorts of innovation driving the “fairytales” Thunberg bemoans. Acknowledging this does not preclude modest, economically reasonable policies, such as R&D investments, or even a degree of carbon pricing, to speed up and incentivise innovation and entrepreneurship on low carbon climate solutions. What it does rule out is drastically rowing back on our activities, freedoms, or desires for children.
If Prince Harry is to regain his morning sprightliness, he’ll have to find more faith in economic growth and innovation to the challenges that face us. Human ingenuity, far from being a burden, is the world’s most important resource.