Economists versus ecologists and the limits to growth

My Saturday essay in the Wall Street Journal on resources and why they get more abundant, not less:

How many times have you heard that we humans are "using up" the world's resources, "running out" of oil, "reaching the limits" of the atmosphere's capacity to cope with pollution or "approaching the carrying capacity" of the land's ability to support a greater population? The assumption behind all such statements is that there is a fixed amount of stuff—metals, oil, clean air, land—and that we risk exhausting it through our consumption.

"We are using 50% more resources than the Earth can sustainably produce, and unless we change course, that number will grow fast—by 2030, even two planets will not be enough," says Jim Leape, director general of the World Wide Fund for Nature International (formerly the World Wildlife Fund).

But here's a peculiar feature of human history: We burst through such limits again and again. After all, as a Saudi oil minister once said, the Stone Age didn't end for lack of stone. Ecologists call this "niche construction"—that people (and indeed some other animals) can create new opportunities for themselves by making their habitats more productive in some way. Agriculture is the classic example of niche construction: We stopped relying on nature's bounty and substituted an artificial and much larger bounty.

Economists call the same phenomenon innovation. What frustrates them about ecologists is the latter's tendency to think in terms of static limits. Ecologists can't seem to see that when whale oil starts to run out, petroleum is discovered, or that when farm yields flatten, fertilizer comes along, or that when glass fiber is invented, demand for copper falls.

That frustration is heartily reciprocated. Ecologists think that economists espouse a sort of superstitious magic called "markets" or "prices" to avoid confronting the reality of limits to growth. The easiest way to raise a cheer in a conference of ecologists is to make a rude joke about economists.

I have lived among both tribes. I studied various forms of ecology in an academic setting for seven years and then worked at the Economist magazine for eight years. When I was an ecologist (in the academic sense of the word, not the political one, though I also had antinuclear stickers on my car), I very much espoused the carrying-capacity viewpoint—that there were limits to growth. I nowadays lean to the view that there are no limits because we can invent new ways of doing more with less.

This disagreement goes to the heart of many current political issues and explains much about why people disagree about environmental policy. In the climate debate, for example, pessimists see a limit to the atmosphere's capacity to cope with extra carbon dioxide without rapid warming. So a continuing increase in emissions if economic growth continues will eventually accelerate warming to dangerous rates. But optimists see economic growth leading to technological change that would result in the use of lower-carbon energy. That would allow warming to level off long before it does much harm.

It is striking, for example, that the Intergovernmental Panel on Climate Change's recent forecast that temperatures would rise by 3.7 to 4.8 degrees Celsius compared with preindustrial levels by 2100 was based on several assumptions: little technological change, an end to the 50-year fall in population growth rates, a tripling (only) of per capita income and not much improvement in the energy efficiency of the economy. Basically, that would mean a world much like today's but with lots more people burning lots more coal and oil, leading to an increase in emissions. Most economists expect a five- or tenfold increase in income, huge changes in technology and an end to population growth by 2100: not so many more people needing much less carbon.

In 1679, Antonie van Leeuwenhoek, the great Dutch microscopist, estimated that the planet could hold 13.4 billion people, a number that most demographers think we may never reach. Since then, estimates have bounced around between 1 billion and 100 billion, with no sign of converging on an agreed figure.

Economists point out that we keep improving the productivity of each acre of land by applying fertilizer, mechanization, pesticides and irrigation. Further innovation is bound to shift the ceiling upward. Jesse Ausubel at Rockefeller University calculates that the amount of land required to grow a given quantity of food has fallen by 65% over the past 50 years, world-wide.

Ecologists object that these innovations rely on nonrenewable resources, such as oil and gas, or renewable ones that are being used up faster than they are replenished, such as aquifers. So current yields cannot be maintained, let alone improved.

In his recent book "The View from Lazy Point," the ecologist Carl Safina estimates that if everybody had the living standards of Americans, we would need 2.5 Earths because the world's agricultural land just couldn't grow enough food for more than 2.5 billion people at that level of consumption. Harvard emeritus professor E.O. Wilson, one of ecology's patriarchs, reckoned that only if we all turned vegetarian could the world's farms grow enough food to support 10 billion people.

Economists respond by saying that since large parts of the world, especially in Africa, have yet to gain access to fertilizer and modern farming techniques, there is no reason to think that the global land requirements for a given amount of food will cease shrinking any time soon. Indeed, Mr. Ausubel, together with his colleagues Iddo Wernick and Paul Waggoner, came to the startling conclusion that, even with generous assumptions about population growth and growing affluence leading to greater demand for meat and other luxuries, and with ungenerous assumptions about future global yield improvements, we will need less farmland in 2050 than we needed in 2000. (So long, that is, as we don't grow more biofuels on land that could be growing food.)

But surely intensification of yields depends on inputs that may run out? Take water, a commodity that limits the production of food in many places. Estimates made in the 1960s and 1970s of water demand by the year 2000 proved grossly overestimated: The world used half as much water as experts had projected 30 years before.

The reason was greater economy in the use of water by new irrigation techniques. Some countries, such as Israel and Cyprus, have cut water use for irrigation through the use of drip irrigation. Combine these improvements with solar-driven desalination of seawater world-wide, and it is highly unlikely that fresh water will limit human population.

The best-selling book "Limits to Growth," published in 1972 by the Club of Rome (an influential global think tank), argued that we would have bumped our heads against all sorts of ceilings by now, running short of various metals, fuels, minerals and space. Why did it not happen? In a word, technology: better mining techniques, more frugal use of materials, and if scarcity causes price increases, substitution by cheaper material. We use 100 times thinner gold plating on computer connectors than we did 40 years ago. The steel content of cars and buildings keeps on falling.

Until about 10 years ago, it was reasonable to expect that natural gas might run out in a few short decades and oil soon thereafter. If that were to happen, agricultural yields would plummet, and the world would be faced with a stark dilemma: Plow up all the remaining rain forest to grow food, or starve.

But thanks to fracking and the shale revolution, peak oil and gas have been postponed. They will run out one day, but only in the sense that you will run out of Atlantic Ocean one day if you take a rowboat west out of a harbor in Ireland. Just as you are likely to stop rowing long before you bump into Newfoundland, so we may well find cheap substitutes for fossil fuels long before they run out.

The economist and metals dealer Tim Worstall gives the example of tellurium, a key ingredient of some kinds of solar panels. Tellurium is one of the rarest elements in the Earth's crust—one atom per billion. Will it soon run out? Mr. Worstall estimates that there are 120 million tons of it, or a million years' supply altogether. It is sufficiently concentrated in the residues from refining copper ores, called copper slimes, to be worth extracting for a very long time to come. One day, it will also be recycled as old solar panels get cannibalized to make new ones.

Or take phosphorus, an element vital to agricultural fertility. The richest phosphate mines, such as on the island of Nauru in the South Pacific, are all but exhausted. Does that mean the world is running out? No: There are extensive lower grade deposits, and if we get desperate, all the phosphorus atoms put into the ground over past centuries still exist, especially in the mud of estuaries. It's just a matter of concentrating them again.

In 1972, the ecologist Paul Ehrlich of Stanford University came up with a simple formula called IPAT, which stated that the impact of humankind was equal to population multiplied by affluence multiplied again by technology. In other words, the damage done to Earth increases the more people there are, the richer they get and the more technology they have.

Many ecologists still subscribe to this doctrine, which has attained the status of holy writ in ecology. But the past 40 years haven't been kind to it. In many respects, greater affluence and new technology have led to less human impact on the planet, not more. Richer people with new technologies tend not to collect firewood and bushmeat from natural forests; instead, they use electricity and farmed chicken—both of which need much less land. In 2006, Mr. Ausubel calculated that no country with a GDP per head greater than $4,600 has a falling stock of forest (in density as well as in acreage).

Haiti is 98% deforested and literally brown on satellite images, compared with its green, well-forested neighbor, the Dominican Republic. The difference stems from Haiti's poverty, which causes it to rely on charcoal for domestic and industrial energy, whereas the Dominican Republic is wealthy enough to use fossil fuels, subsidizing propane gas for cooking fuel specifically so that people won't cut down forests.

Part of the problem is that the word "consumption" means different things to the two tribes. Ecologists use it to mean "the act of using up a resource"; economists mean "the purchase of goods and services by the public" (both definitions taken from the Oxford dictionary).

But in what sense is water, tellurium or phosphorus "used up" when products made with them are bought by the public? They still exist in the objects themselves or in the environment. Water returns to the environment through sewage and can be reused. Phosphorus gets recycled through compost. Tellurium is in solar panels, which can be recycled. As the economist Thomas Sowell wrote in his 1980 book "Knowledge and Decisions," "Although we speak loosely of 'production,' man neither creates nor destroys matter, but only transforms it."

Given that innovation—or "niche construction"—causes ever more productivity, how do ecologists justify the claim that we are already overdrawn at the planetary bank and would need at least another planet to sustain the lifestyles of 10 billion people at U.S. standards of living?

Examine the calculations done by a group called the Global Footprint Network—a think tank founded by Mathis Wackernagel in Oakland, Calif., and supported by more than 70 international environmental organizations—and it becomes clear. The group assumes that the fossil fuels burned in the pursuit of higher yields must be offset in the future by tree planting on a scale that could soak up the emitted carbon dioxide. A widely used measure of "ecological footprint" simply assumes that 54% of the acreage we need should be devoted to "carbon uptake."

But what if tree planting wasn't the only way to soak up carbon dioxide? Or if trees grew faster when irrigated and fertilized so you needed fewer of them? Or if we cut emissions, as the U.S. has recently done by substituting gas for coal in electricity generation? Or if we tolerated some increase in emissions (which are measurably increasing crop yields, by the way)? Any of these factors could wipe out a huge chunk of the deemed ecological overdraft and put us back in planetary credit.

Helmut Haberl of Klagenfurt University in Austria is a rare example of an ecologist who takes economics seriously. He points out that his fellow ecologists have been using "human appropriation of net primary production"—that is, the percentage of the world's green vegetation eaten or prevented from growing by us and our domestic animals—as an indicator of ecological limits to growth. Some ecologists had begun to argue that we were using half or more of all the greenery on the planet.

This is wrong, says Dr. Haberl, for several reasons. First, the amount appropriated is still fairly low: About 14.2% is eaten by us and our animals, and an additional 9.6% is prevented from growing by goats and buildings, according to his estimates. Second, most economic growth happens without any greater use of biomass. Indeed, human appropriation usually declines as a country industrializes and the harvest grows—as a result of agricultural intensification rather than through plowing more land.

Finally, human activities actually increase the production of green vegetation in natural ecosystems. Fertilizer taken up by crops is carried into forests and rivers by wild birds and animals, where it boosts yields of wild vegetation too (sometimes too much, causing algal blooms in water). In places like the Nile delta, wild ecosystems are more productive than they would be without human intervention, despite the fact that much of the land is used for growing human food.

If I could have one wish for the Earth's environment, it would be to bring together the two tribes—to convene a grand powwow of ecologists and economists. I would pose them this simple question and not let them leave the room until they had answered it: How can innovation improve the environment?