In a blog post entitled "The End of an Illusion" posted on the Transition Milwaukee website (transitionmilwaukee.org), Mr. Lindberg continues the tired Peak Oil mantra by FINALLY making the critical admission that, in fact, we will never run out of oil:
"Or as economist Zagros Madjd-Sadjadi tries to explain it, 'We will never
run out of non-renewable resources simply because the price will rise to make
extraction cost-prohibitive. At that point, we will have to switch to
renewables simply because of the cost. Furthermore, because of those price
signals, entrepreneurs will come up with new ways to reduce the use of fossil
fuels and other non-renewables.' (http://www.resilience.org/stories/2011-02-28/steady-state-economy-does-not-imply-zero-economic-growth).
If we look closely, we will see that Madjd-Sadjadi is sliding stealthily between
two meanings of “run out.” According to the logic of extraction, it is true,
the cost of rare and buried minerals or fuels does become prohibitively high
before they are entirely depleted. No one will bother to drill 3 miles beneath
the North Pole to extract the last barrel of oil. We won’t actually run all the
way out of oil, but will leave the last and most expensive oil in place. But
the fact that we won’t run out of it or other resources in this, more technical
sense, doesn’t mean that we won’t run out in a more practical sense. When they
become too rare and expensive to extract, we will have in fact run out in any
normal sense of the phrase. Madjd-Sadjadi is hoping that no one, including
himself I would imagine, will notice that the logic of resource depletion and
the way it shows how we will never “run out” does not makes it inevitable that
there will be some equally good renewable that we can “switch to” when the
moment arises. Groggy and groping in the dark for some sort of switch, like
many economists, he doesn’t seem to entertain the fact that many switches simply
toggle between on and off. The whole proposition depends, at any rate, on some
sort of quasi-magical belief that high cost itself can reliably synthesize raw
materials as some sort of automatic price-generated feverish wish-fulfillment.
The American Dream indeed."
Mr. Lindberg claims that we "won't run out of it in a more practical sense. When they become too rare and expensive to extract, we will have in fact run out in any normal sense of the phrase." There is no such thing as a "normal sense of the phrase." Things means precisely what they mean, no more and no less, and there is only one definition of "run out" that can be applicable in this case and that is to literally have no more left. When you run out of food, it isn't that you still have a can in the pantry but don't really care for it, it means that you have actually no food left. Period. So, therefore, he agrees with me that at some point we will no longer wish to continue to pump oil out of the ground and that there will still be oil in the ground at that point. We will not have "run out" of oil because, at some future time, when the costs are no longer so prohibitive, we might choose to go back and extract some more. The fact that this is the case is seen in the current extraction of shale oil, which once was cost-prohibitive but now, through enhanced technology and due to a high equilibrium price for oil, is now cost-competitive.
Then he goes on and says, "Madjd-Sadjadi is hoping that no one, including himself I would imagine, will notice that the logic of resource depletion and the way it shows how we will never “run out” does not makes it inevitable that there will be some equally good renewable that we can “switch to” when the moment arises. Groggy and groping in the dark for some sort of switch, like many economists, he doesn’t seem to entertain the fact that many switches simply toggle between on and off."
Wrong! First, I do not state that it is "inevitable that there will be some equally good renewable that we can "switch to" when the moment arises." I simply said that we would switch to renewables. The fact that we are not currently using these renewables is a testament to the fact that they are not "equally good"! If they were "equally good", we naturally would have switched before but they must be inferior to oil at the current price point simply because if they were "equally good", we would be indifferent at the current price between them and oil and thus would switch over as soon as the price of oil rose (but we didn't even when a barrel of oil was hovering 20% higher in cost than it is today). Might we end up with something that is worse than our current situation? Possibly. But will it be catastrophic and mean the world is coming to an end? Absolutely not. You see, Mr. Lindberg, I am not relying on us not to have some transition pains nor that we will not find ourselves with hardship. However, unlike you, I am not "Groggy and groping in the dark for some sort of switch" when the lights go out. I have a flashlight already in my hand and, while it isn't as good as my electricity, it will make do until I can locate the fuse box and replace the blown fuse. Oh, and what happens if the blown fuse cannot be replaced? So then it cannot. However, it doesn't mean that I will stay in the dark. I also have matches, candles, and a whole host of other options. Just because it isn't necessarily going to be as good as oil doesn't mean that it isn't going to be adequate for a time and, once I realize I do not have oil available at a competitive price, I can always switch to something else, even if does mean some minor (or even major) inconveniences for a time.
"The whole proposition depends, at any rate, on some sort of quasi-magical belief that high cost itself can reliably synthesize raw materials as some sort of automatic price-generated feverish wish-fulfillment."
Wrong again! If the price rises high enough, we already have the technology and the know-how to switch over. In petroleum-poor societies (such as Germany in the 1920s and South Africa during apartheid) oil was made using the Fischer-Tropsch process. Today we have buses running on natural gas (and there is a lot greater supply of natural gas that we can still tap) and cars running on electricity (which is usually generated by coal and we have an even greater supply of that). If we do not have energy in the future it will not be because nature denied us, it will be because we chose to limit ourselves (by deciding that we shall not drill in certain areas, that we shall not have nuclear power, that we shall not dig for coal, we decide to dramatically reduce carbon production, etc.).
These options may not be as energy efficient as oil but it hardly means that we should worry about oil not being easily available. There is nothing magical about the fact that people will do whatever they can to save time and money using technology that actually exists now and they will do their best to find new ways to save time and money through innovation.
The essential difference between Malthusians and those of us who refuse to buy into their doomsday scenarios is that we have far more faith in human ingenuity and rationality than anyone in their camp does.
Wednesday, September 24, 2014
Tuesday, July 22, 2014
The Real Truth About the Debate Between Neo-Malthusian Environmentalists and the Rest of Us
QUESTIONS FROM NEO-MALTHUSIANS ANSWERED BY THE VOICE OF REASON ON THE INTERNET
1) Question: Have we reached the asymptotic limit to growth?
Answer: The asymptotic limit actually describes what will happen AFTER we reach the stationary state of a fixed capital-labor ratio with stagnant technology. We have not yet reached that state, so we are not having to deal with the asymptotic limit. If we limit growth in natural resources by fiat or because of natural limitation, we will start in our progression towards the asymptotic limit to growth (unless technology saves us, which many Malthusian Environmentalists do not believe). So the real question is: have we reached the natural limits of resource extraction?
I believe that from a purely technical perspective, the answer is no, for all the reasons I will shortly enumerate. However, from a holistic perspective, the answer is yes, that we are probably approaching it. In other words, I suspect that we will decide that we do not wish to continue resource extraction ad infinitum for at least some of the reasons the environmental movement itself was born: we like to have pristine venues; our prosperity has awakened us to desires beyond our immediate needs; and we have realized that there are at least some resources for which we cannot maintain the current level of extraction.
As to why, technically, we are nowhere near the limit of (total) resource extraction possibilities:
* There are certain resources that we do not have to worry about conserving (solar power, silicon).
* There are other resources that are likely reaching the plateau of production and thus we will have to find substitutes in those cases where we utilize these resources extensively (gold) or we will have to discontinue their use in favor of alternative technologies (uranium). However, we have such substitutes available.
* There are still other resources where we once had limits but, due to changing technology, we can now create these resources and thus its limits are actually expanding rather than contracting (diamonds, oil).
* Then there are those resources for which we have exceeded our ability to extract them responsibility, chiefly due to the "tragedy of the commons" which can be solved by better allocation of property rights and improved awareness and regulation of externalities (fish).
* Only in the latter case, where we have already exceeded sustainability do we have to worry about limitation on the resource and only in the case where there are no good substitutes. However, there are substitutes for almost everything except the broadest of classes of goods and there are no such broad classes of goods (including energy) that are in imminent danger of complete and total collapse.
As noted, oil is really a case of a resource with expanding limits because of our ability to synthesize it from other materials (coal, natural gas, oil shale). In addition, we can often convert our oil-based products to alternative fuels (cars have run on power from the electric grid and even solar power).
As to the question of increased resource usage, I would argue that is a red herring. We really do not need increased resource usage to grow the economy. When we are faced with limited resources, we find other ways around these limits (using human ingenuity). In the face of an economy that could not generate sufficient finances to import petroleum in the aftermath of onerous conditions imposed on their country by France after World War I, German scientists developed the Fischer-Tropsch process to synthesize petroleum from coal. When diamond production threatened to limit industrial production (diamonds being a important resource used in machine tools), scientists successfully synthesized the diamond.
The interesting thing is that necessity (so to speak) is the mother of invention, as the saying goes. So I would not in the least object to doing everything in our power through selective taxation to make resources that pollute the environment or appear to be extracted at an unsustainable pace more expensive. In such a manner, we will spur innovation.
In addition, we should look at having a separate resource usage tax based on waste. The more you waste of a resource, the higher your tax rate. This will create the proper incentives to conserve and recycle. For example, here in North Carolina, I find it abhorrent that the government charges the same rate for garbage regardless of how much garbage you create and provides no credit for those who recycle. Indeed, when I decided to acquire a larger recycling bin (specifically so that I could reduce the amount of garbage going into the city landfill), the city made me pay the same price for that recycling bin as they charged for someone to purchase a garbage can. Furthermore, even though our household disposes less than the equivalent of one 13 gallon trash bag a week of garbage, recycling everything else that comes into our household, I pay the same rate as those who put 20 times that amount into the landfill and who fail to recycle at all. It is public policies such as this, not the economics profession, that is to blame for our wastefulness (indeed, it amuses some of my colleagues in the economics profession to no end in that I derive absolutely no individualistic benefit from my action and actually have driven up my costs because of my proclivity to recycle).
As to pollution, in point of fact, economic growth has proven to be a boon to the environment. As shown by Grossman and Krueger (1995), while economic growth at lower stages of development is harmful to the environment, after an economy reaches a certain point (a little over US$10,000 in per capita income), the process reverses and environmental quality improves with economic growth. One of the reasons for this is that once a population a certain threshold of prosperity, they can devote more resources to emissions control (prior to that point, other objectives tend to outweigh environmental concerns for the populace).
Now as to the question of an environmental tipping point, we very well might reach one with regard to CO2 emissions and, on that point, I believe that we need to do everything we can to keep a lid on those. However, that does not require the shuttering of our economy. Indeed, by reducing payroll and income taxes while simultaneously introducing a carbon tax, we solve two fundamental problems in our economy: creating incentives for work while reducing incentives to pollute. Indeed, if we do this by reducing predominantly rates at the lower end of the economic spectrum (perhaps by granting exemptions from taxation on the first $50,000 of income), we can accomplish a politically popular objective that both conservatives (who want lower taxes on business and individuals) and liberals (who want the tax burden transferred to the relatively affluent, which it would be in both cases since it is the affluent who would tend to pay the carbon tax and the poor who would receive the largest benefit from the raised tax exemption) could embrace. It will also likely promote economic growth even as it reduces global greenhouse emissions.
2) Question: Are we are currently far into ecological overshoot and must therefore drastically reduce the physical inputs to the economy in order to come into balance with the environment so as not to risk the collapse of our society?
Answer: We DEFINITELY disagree on this point. The reason is actually why I keep arguing that Neo-Malthusianism is pointless. You see, from my perspective, if we are "way into ecological overshoot and must . . . drastically reduce the physical inputs to the economy" it really sounds to me like we need something on the order of a reduction of 80% in our resource usage within the 10 years (or some similar reduction/time frame), which I believe is not achievable without mass extermination (which we all agree is not a viable option).
However, maybe I am misinterpreting the call for reduction because of the doomsday warning attached to it. So we need to be careful and define EXACTLY how quickly and how fast we need to reduce these inputs. You see, neo-Malthusians are arguing that we are essentially on a runaway train with the tracks out ahead. Therefore, it sound like they want us to slam the breaks. Now slamming the breaks is not without its problems: it tends to cause a lot of injuries along the way so we don't want to slam them if there really is no reason to do so. On the other hand, if we are too far-gone already to be able to do anything about it, there is no point in slamming the breaks either. Why cause panic? We are all goners anyway. Thus, my question to you is: why can't we slowly (say cut in half over 50 years) reduce consumption of those resources that have harmful environmental consequences owing to their production or consumption? If we can do this, why the doom-saying? There are plenty of good reasons to reduce the consumption of these resources without doom and gloom. If we can't do that, tell me how fast we have to reduce them. The problem is that if we have to reduce them too fast we will cause, at best, the very collapse that you wish to avoid or, at worst, the killing off a good chunk of the population. Neither of these are viable solutions to the problem.
That being said, I do not object to the concept of eliminating waste in resource usage and engaging in greater conservation and recycling efforts (especially as you have apparently conceded that we do not have to mandate a reduction in our economic growth). What I really have trouble with is the neo-Malthusian "sky is falling" attitude. We all seem to asking for policymakers to the same thing (reduce things that are bad for the ecosystem) but how you say something is often just as important as what you say. If you argue that economic growth ITSELF is a problem and that it must be controlled directly, you alienate a large segment of the population. Furthermore, you have all but admitted that this is not a necessary condition for your end result. Indeed, I would go so far as to argue that if you place artificial limits on economic growth so as to actively seek to stifle it, the result will backfire as a retrenchment of economic growth is inimical to your stated goals.
That being said, is it the case that taxation will reduce economic growth. It is possible but it is not guaranteed. That was my key concern. The problem that I saw with the argument Neo-Malthusians first put out was that economic growth itself is NOT the cause of any of the ills in our society, although economic growth is sometimes associated with those ills. For example, economic growth can lead to environmental degradation when a company engages is strip mining. At the same time, economic growth can actually lead to environmental rejuvenation when strip mining operations are required to account for their negative externalities by paying taxes on their activities that will (1) fund adequate land reclamation after their mines close (and the key is ADEQUATE, not the half-baked schemes allowed under current US law) and (2) pay for the externalities that they cause because of their operations on other parties during the operation of the mines (for example, but not limited to, paying for the cost of effluent treatment so as to not pollute water supplies and requiring mining companies to acquire the surface rights as well as the substrata rights for the entire breadth of their mining operations so that you do not have the problem as in Pennsylvania wherein homeowners and businesses are potentially endangered by having mine sinkholes develop under their properties).
The point is that we can come up with revenue-neutral tax systems that will penalize heavily all of the activities you do not like while reducing taxes on other activities that do not cause the harm over which you are justly concerned. In so doing, we can not only maintain economic growth but, in the long-run, we can actually INCREASE it because of the reduction in human health costs (and a consequent increase in human productivity).
You see, I don't have a problem with environmentalism when it framed in a win-win situation because it gets buy-in and makes us realize that we can utilize free-market capitalism (although guided in its direction via taxation of undesirable activities) as the engine for ecological change. Indeed, one of the major reasons for utilizing the taxation approach instead of the banning approach is that it will typically lead not only to more revenue but also increased compliance (see Prohibition in the United States for a good example as to why the banning approach is not as effective as the tax and let the free market decide approach).
All that is a roundabout way of saying, "yes AND no" to your question of whether we need to drastically reduce our resource inputs. We certainly have to drastically reduce CERTAIN inputs (those that cause environmental harm and those which are unsustainable in their extraction levels) but we don't have to drastically reduce ALL inputs for the reasons stated earlier.
Furthermore, HOW we choose to reduce them matters: a free market taxation-based approach will simply move our economy faster in the direction that we wish to take it and thus is the same type of positive modern state intervention that I have advocated for years. It also matters HOW FAST we choose to reduce them. Certainly, I doubt that most Neo-Malthusians advocate an complete abolishment of our oil consumption by, say, 2020. No, instead, we should seek to reduce our consumption levels and slowly increase taxation levels (or reduce cap and trade levels) so that we can reduce oil consumption at a manageable pace. Very small but steady reductions in our current consumption patterns will achieve large reductions in the not too distant future without causing severe pain to the economy (2% reductions each year in conventional crude for 25 years = 40% lower consumption of that resource) and can be achieved exclusively using higher taxation of such resources. Furthermore, this raising of the price of such resources will encourage the development of alternatives and the rapid introduction of new technologies so I prefer to give a positive spin on the whole thing and point out that there are good reasons to tax that have NOTHING to do with "running out of oil" (overreliance on trading partners who do not hold our same ideals, a trade imbalance that threatens our economic stability and the dollar, and the environmental damage caused by oil spills and increased CO2 emissions that is not paid for because of inadequate property rights regimes).
So, it isn't really true that going with my vision of the future will get us anywhere differently from the Peak Oil enthusiasts (at least with regard to oil). However, scaring people into thinking that the world (or at least our society) will end, I do not believe is the proper mechanism to motivate people and, furthermore, I do not believe that such a calamity will ever come to pass no matter what happens because as I've stated before, I believe that technology will find a way out. That means that even if we do nothing, eventually, the environmental issues will get to be so great or the cost will get to be so great for the resource (due to an imbalance between current production and consumption that cannot be met by drawing down inventories) that, like in Germany in the 1920s, scientists will find a way to substitute for another resource.
There are two dangers, however, with a neo-Malthusian approach that imposes non-market based solutions that are not present if we use a positive argument for economic transformation. First, we might panic into going too far too fast the other way is that the incentive mechanism for coming up with innovations will break down and we will find ourselves with a collapse of the economic system and no mechanism in place to save us. Thus, arguing that technology can't save us and that we are in imminent danger of economic collapse unless we put the breaks on economic growth has far greater potential for destroying our society. The second danger is that because we have heard the neo-Malthusian argument repeated for 210 years without ever having its dire predictions come to pass, many will simply ignore you as they currently are doing and thus you will get nowhere fast. The fact is that if we let the free market work, the price mechanism will cause resources to increase in price when their extraction rates are no longer sustainable and evidence from fisheries suggests that rather than complete worldwide cataclysmic collapse after years of rising production, we will instead see an undulating plateau for quite some time (and one of the reasons that fish stocks face the potential of collapse in the next 50 years is a lack of enforceability of property rights whereas if there were adequate property rights, better management of the resource would likely occur).
3) Question: Can we grow population for some time?
Answer: We MUST grow population for some time unless you want to engage in a mass extermination program (which I would hope all Neo-Malthusians would be completely against). There really is no alternative (well, I guess there is also mass sterilization but I would gather they are against that approach as well). The developing world is still rapidly growing (although at a lesser rate than before, due to enhanced economic opportunities and literacy, especially for women, and greater access to contraception). Even in cases where fertility has dropped precipitously, it will take a long time for this to translate into population reductions. For example, China, with its one-child policy, won't see a stabilization of its population until 2030.
Even in the developed world, where we have been below the replacement ratio for more than a generation, it will take at least another generation in many countries to see a dramatic decline in population. Lets look at a country like Japan (a country that has no net migration and only 1.3 births/woman, which is WELL below replacement rate), we find that the population is projected to drop by only 30% over the next 50 years.
4. Question: Can we grow resource usage for some time?
Answer: I think that the real question is: what do you think the carrying capacity of the Earth is and how fast do we need to reach it? The answer to that question dictates a wide range of policies. If we are way over the carrying capacity and we need to change things fast, it sends the wrong message to those in power to start thinking about genocide in order to achieve the goal of rapid reductions in resource usage (and we both agree that isn't a good solution). After all, it would take more than a century to cut the world population by 75% by 2100 even if tomorrow we were able to reduce the total fertility rate to the Japanese level (all of this is assuming that we reduce death rates in the developing world at the same time--if we don't improve their medical care and allow them to continue to die at current rates, especially as infants, in some countries of the developing world the fertility rate could be as high as 3 or more births per woman in order to achieve the demographic transition due to high infant mortality).
If we are only just above it or we can afford to engage in a short waiting period (say a generation or two) to start worrying about these limitations, we will achieve the demographic transition and our days of worrying will soon be behind us. After all, Japan's total fertility rate dropped in HALF (from 4 to 2) in a span of just 5 years in the 1950s and was basically steady for a generation before starting its precipitous decline in the 1970s. If we can get the growth rate up in the rest of the developed world, just as had happened in Japan, we could see our world population leveling off a lot quicker than anyone realized.
References:
Grossman, Gene M & Krueger, Alan B, 1995. "Economic Growth and the Environment," The Quarterly Journal of Economics, MIT Press, vol. 110(2), pages 353-77, May.
1) Question: Have we reached the asymptotic limit to growth?
Answer: The asymptotic limit actually describes what will happen AFTER we reach the stationary state of a fixed capital-labor ratio with stagnant technology. We have not yet reached that state, so we are not having to deal with the asymptotic limit. If we limit growth in natural resources by fiat or because of natural limitation, we will start in our progression towards the asymptotic limit to growth (unless technology saves us, which many Malthusian Environmentalists do not believe). So the real question is: have we reached the natural limits of resource extraction?
I believe that from a purely technical perspective, the answer is no, for all the reasons I will shortly enumerate. However, from a holistic perspective, the answer is yes, that we are probably approaching it. In other words, I suspect that we will decide that we do not wish to continue resource extraction ad infinitum for at least some of the reasons the environmental movement itself was born: we like to have pristine venues; our prosperity has awakened us to desires beyond our immediate needs; and we have realized that there are at least some resources for which we cannot maintain the current level of extraction.
As to why, technically, we are nowhere near the limit of (total) resource extraction possibilities:
* There are certain resources that we do not have to worry about conserving (solar power, silicon).
* There are other resources that are likely reaching the plateau of production and thus we will have to find substitutes in those cases where we utilize these resources extensively (gold) or we will have to discontinue their use in favor of alternative technologies (uranium). However, we have such substitutes available.
* There are still other resources where we once had limits but, due to changing technology, we can now create these resources and thus its limits are actually expanding rather than contracting (diamonds, oil).
* Then there are those resources for which we have exceeded our ability to extract them responsibility, chiefly due to the "tragedy of the commons" which can be solved by better allocation of property rights and improved awareness and regulation of externalities (fish).
* Only in the latter case, where we have already exceeded sustainability do we have to worry about limitation on the resource and only in the case where there are no good substitutes. However, there are substitutes for almost everything except the broadest of classes of goods and there are no such broad classes of goods (including energy) that are in imminent danger of complete and total collapse.
As noted, oil is really a case of a resource with expanding limits because of our ability to synthesize it from other materials (coal, natural gas, oil shale). In addition, we can often convert our oil-based products to alternative fuels (cars have run on power from the electric grid and even solar power).
As to the question of increased resource usage, I would argue that is a red herring. We really do not need increased resource usage to grow the economy. When we are faced with limited resources, we find other ways around these limits (using human ingenuity). In the face of an economy that could not generate sufficient finances to import petroleum in the aftermath of onerous conditions imposed on their country by France after World War I, German scientists developed the Fischer-Tropsch process to synthesize petroleum from coal. When diamond production threatened to limit industrial production (diamonds being a important resource used in machine tools), scientists successfully synthesized the diamond.
The interesting thing is that necessity (so to speak) is the mother of invention, as the saying goes. So I would not in the least object to doing everything in our power through selective taxation to make resources that pollute the environment or appear to be extracted at an unsustainable pace more expensive. In such a manner, we will spur innovation.
In addition, we should look at having a separate resource usage tax based on waste. The more you waste of a resource, the higher your tax rate. This will create the proper incentives to conserve and recycle. For example, here in North Carolina, I find it abhorrent that the government charges the same rate for garbage regardless of how much garbage you create and provides no credit for those who recycle. Indeed, when I decided to acquire a larger recycling bin (specifically so that I could reduce the amount of garbage going into the city landfill), the city made me pay the same price for that recycling bin as they charged for someone to purchase a garbage can. Furthermore, even though our household disposes less than the equivalent of one 13 gallon trash bag a week of garbage, recycling everything else that comes into our household, I pay the same rate as those who put 20 times that amount into the landfill and who fail to recycle at all. It is public policies such as this, not the economics profession, that is to blame for our wastefulness (indeed, it amuses some of my colleagues in the economics profession to no end in that I derive absolutely no individualistic benefit from my action and actually have driven up my costs because of my proclivity to recycle).
As to pollution, in point of fact, economic growth has proven to be a boon to the environment. As shown by Grossman and Krueger (1995), while economic growth at lower stages of development is harmful to the environment, after an economy reaches a certain point (a little over US$10,000 in per capita income), the process reverses and environmental quality improves with economic growth. One of the reasons for this is that once a population a certain threshold of prosperity, they can devote more resources to emissions control (prior to that point, other objectives tend to outweigh environmental concerns for the populace).
Now as to the question of an environmental tipping point, we very well might reach one with regard to CO2 emissions and, on that point, I believe that we need to do everything we can to keep a lid on those. However, that does not require the shuttering of our economy. Indeed, by reducing payroll and income taxes while simultaneously introducing a carbon tax, we solve two fundamental problems in our economy: creating incentives for work while reducing incentives to pollute. Indeed, if we do this by reducing predominantly rates at the lower end of the economic spectrum (perhaps by granting exemptions from taxation on the first $50,000 of income), we can accomplish a politically popular objective that both conservatives (who want lower taxes on business and individuals) and liberals (who want the tax burden transferred to the relatively affluent, which it would be in both cases since it is the affluent who would tend to pay the carbon tax and the poor who would receive the largest benefit from the raised tax exemption) could embrace. It will also likely promote economic growth even as it reduces global greenhouse emissions.
2) Question: Are we are currently far into ecological overshoot and must therefore drastically reduce the physical inputs to the economy in order to come into balance with the environment so as not to risk the collapse of our society?
Answer: We DEFINITELY disagree on this point. The reason is actually why I keep arguing that Neo-Malthusianism is pointless. You see, from my perspective, if we are "way into ecological overshoot and must . . . drastically reduce the physical inputs to the economy" it really sounds to me like we need something on the order of a reduction of 80% in our resource usage within the 10 years (or some similar reduction/time frame), which I believe is not achievable without mass extermination (which we all agree is not a viable option).
However, maybe I am misinterpreting the call for reduction because of the doomsday warning attached to it. So we need to be careful and define EXACTLY how quickly and how fast we need to reduce these inputs. You see, neo-Malthusians are arguing that we are essentially on a runaway train with the tracks out ahead. Therefore, it sound like they want us to slam the breaks. Now slamming the breaks is not without its problems: it tends to cause a lot of injuries along the way so we don't want to slam them if there really is no reason to do so. On the other hand, if we are too far-gone already to be able to do anything about it, there is no point in slamming the breaks either. Why cause panic? We are all goners anyway. Thus, my question to you is: why can't we slowly (say cut in half over 50 years) reduce consumption of those resources that have harmful environmental consequences owing to their production or consumption? If we can do this, why the doom-saying? There are plenty of good reasons to reduce the consumption of these resources without doom and gloom. If we can't do that, tell me how fast we have to reduce them. The problem is that if we have to reduce them too fast we will cause, at best, the very collapse that you wish to avoid or, at worst, the killing off a good chunk of the population. Neither of these are viable solutions to the problem.
That being said, I do not object to the concept of eliminating waste in resource usage and engaging in greater conservation and recycling efforts (especially as you have apparently conceded that we do not have to mandate a reduction in our economic growth). What I really have trouble with is the neo-Malthusian "sky is falling" attitude. We all seem to asking for policymakers to the same thing (reduce things that are bad for the ecosystem) but how you say something is often just as important as what you say. If you argue that economic growth ITSELF is a problem and that it must be controlled directly, you alienate a large segment of the population. Furthermore, you have all but admitted that this is not a necessary condition for your end result. Indeed, I would go so far as to argue that if you place artificial limits on economic growth so as to actively seek to stifle it, the result will backfire as a retrenchment of economic growth is inimical to your stated goals.
That being said, is it the case that taxation will reduce economic growth. It is possible but it is not guaranteed. That was my key concern. The problem that I saw with the argument Neo-Malthusians first put out was that economic growth itself is NOT the cause of any of the ills in our society, although economic growth is sometimes associated with those ills. For example, economic growth can lead to environmental degradation when a company engages is strip mining. At the same time, economic growth can actually lead to environmental rejuvenation when strip mining operations are required to account for their negative externalities by paying taxes on their activities that will (1) fund adequate land reclamation after their mines close (and the key is ADEQUATE, not the half-baked schemes allowed under current US law) and (2) pay for the externalities that they cause because of their operations on other parties during the operation of the mines (for example, but not limited to, paying for the cost of effluent treatment so as to not pollute water supplies and requiring mining companies to acquire the surface rights as well as the substrata rights for the entire breadth of their mining operations so that you do not have the problem as in Pennsylvania wherein homeowners and businesses are potentially endangered by having mine sinkholes develop under their properties).
The point is that we can come up with revenue-neutral tax systems that will penalize heavily all of the activities you do not like while reducing taxes on other activities that do not cause the harm over which you are justly concerned. In so doing, we can not only maintain economic growth but, in the long-run, we can actually INCREASE it because of the reduction in human health costs (and a consequent increase in human productivity).
You see, I don't have a problem with environmentalism when it framed in a win-win situation because it gets buy-in and makes us realize that we can utilize free-market capitalism (although guided in its direction via taxation of undesirable activities) as the engine for ecological change. Indeed, one of the major reasons for utilizing the taxation approach instead of the banning approach is that it will typically lead not only to more revenue but also increased compliance (see Prohibition in the United States for a good example as to why the banning approach is not as effective as the tax and let the free market decide approach).
All that is a roundabout way of saying, "yes AND no" to your question of whether we need to drastically reduce our resource inputs. We certainly have to drastically reduce CERTAIN inputs (those that cause environmental harm and those which are unsustainable in their extraction levels) but we don't have to drastically reduce ALL inputs for the reasons stated earlier.
Furthermore, HOW we choose to reduce them matters: a free market taxation-based approach will simply move our economy faster in the direction that we wish to take it and thus is the same type of positive modern state intervention that I have advocated for years. It also matters HOW FAST we choose to reduce them. Certainly, I doubt that most Neo-Malthusians advocate an complete abolishment of our oil consumption by, say, 2020. No, instead, we should seek to reduce our consumption levels and slowly increase taxation levels (or reduce cap and trade levels) so that we can reduce oil consumption at a manageable pace. Very small but steady reductions in our current consumption patterns will achieve large reductions in the not too distant future without causing severe pain to the economy (2% reductions each year in conventional crude for 25 years = 40% lower consumption of that resource) and can be achieved exclusively using higher taxation of such resources. Furthermore, this raising of the price of such resources will encourage the development of alternatives and the rapid introduction of new technologies so I prefer to give a positive spin on the whole thing and point out that there are good reasons to tax that have NOTHING to do with "running out of oil" (overreliance on trading partners who do not hold our same ideals, a trade imbalance that threatens our economic stability and the dollar, and the environmental damage caused by oil spills and increased CO2 emissions that is not paid for because of inadequate property rights regimes).
So, it isn't really true that going with my vision of the future will get us anywhere differently from the Peak Oil enthusiasts (at least with regard to oil). However, scaring people into thinking that the world (or at least our society) will end, I do not believe is the proper mechanism to motivate people and, furthermore, I do not believe that such a calamity will ever come to pass no matter what happens because as I've stated before, I believe that technology will find a way out. That means that even if we do nothing, eventually, the environmental issues will get to be so great or the cost will get to be so great for the resource (due to an imbalance between current production and consumption that cannot be met by drawing down inventories) that, like in Germany in the 1920s, scientists will find a way to substitute for another resource.
There are two dangers, however, with a neo-Malthusian approach that imposes non-market based solutions that are not present if we use a positive argument for economic transformation. First, we might panic into going too far too fast the other way is that the incentive mechanism for coming up with innovations will break down and we will find ourselves with a collapse of the economic system and no mechanism in place to save us. Thus, arguing that technology can't save us and that we are in imminent danger of economic collapse unless we put the breaks on economic growth has far greater potential for destroying our society. The second danger is that because we have heard the neo-Malthusian argument repeated for 210 years without ever having its dire predictions come to pass, many will simply ignore you as they currently are doing and thus you will get nowhere fast. The fact is that if we let the free market work, the price mechanism will cause resources to increase in price when their extraction rates are no longer sustainable and evidence from fisheries suggests that rather than complete worldwide cataclysmic collapse after years of rising production, we will instead see an undulating plateau for quite some time (and one of the reasons that fish stocks face the potential of collapse in the next 50 years is a lack of enforceability of property rights whereas if there were adequate property rights, better management of the resource would likely occur).
3) Question: Can we grow population for some time?
Answer: We MUST grow population for some time unless you want to engage in a mass extermination program (which I would hope all Neo-Malthusians would be completely against). There really is no alternative (well, I guess there is also mass sterilization but I would gather they are against that approach as well). The developing world is still rapidly growing (although at a lesser rate than before, due to enhanced economic opportunities and literacy, especially for women, and greater access to contraception). Even in cases where fertility has dropped precipitously, it will take a long time for this to translate into population reductions. For example, China, with its one-child policy, won't see a stabilization of its population until 2030.
Even in the developed world, where we have been below the replacement ratio for more than a generation, it will take at least another generation in many countries to see a dramatic decline in population. Lets look at a country like Japan (a country that has no net migration and only 1.3 births/woman, which is WELL below replacement rate), we find that the population is projected to drop by only 30% over the next 50 years.
4. Question: Can we grow resource usage for some time?
Answer: I think that the real question is: what do you think the carrying capacity of the Earth is and how fast do we need to reach it? The answer to that question dictates a wide range of policies. If we are way over the carrying capacity and we need to change things fast, it sends the wrong message to those in power to start thinking about genocide in order to achieve the goal of rapid reductions in resource usage (and we both agree that isn't a good solution). After all, it would take more than a century to cut the world population by 75% by 2100 even if tomorrow we were able to reduce the total fertility rate to the Japanese level (all of this is assuming that we reduce death rates in the developing world at the same time--if we don't improve their medical care and allow them to continue to die at current rates, especially as infants, in some countries of the developing world the fertility rate could be as high as 3 or more births per woman in order to achieve the demographic transition due to high infant mortality).
If we are only just above it or we can afford to engage in a short waiting period (say a generation or two) to start worrying about these limitations, we will achieve the demographic transition and our days of worrying will soon be behind us. After all, Japan's total fertility rate dropped in HALF (from 4 to 2) in a span of just 5 years in the 1950s and was basically steady for a generation before starting its precipitous decline in the 1970s. If we can get the growth rate up in the rest of the developed world, just as had happened in Japan, we could see our world population leveling off a lot quicker than anyone realized.
References:
Grossman, Gene M & Krueger, Alan B, 1995. "Economic Growth and the Environment," The Quarterly Journal of Economics, MIT Press, vol. 110(2), pages 353-77, May.
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