I never thought I’d have to explain this to anyone, but it’s better to be rich than poor. Accordingly, I hope the population of the earth keeps getting richer.
Why would anyone think otherwise? Those holding the contrary opinion probably never have been poor. I have been poor, and it wasn’t great. It didn’t even make me a better person, but actually worse. Honor and dignity are often so costly that only the affluent can easily afford them.
The leading members of the “poor is good” club nowadays are a small subset of the environmental movement — those who expect the impending shortage of oil to lead to millions, maybe even billions, of human deaths. Convinced that we are rapidly approaching immutable “limits to growth,” they believe that we must drastically curtail economic expansion and live with the poverty that lack of fuel will bring. Still, they reassure us, this is not entirely bad, for the poor are as happy as the rich.
I’ll call these people “Peak Oil pessimists.” They are not necessarily cruel. Indeed, they favor equitable sharing, while nevertheless forecasting that humankind must retrench to lower standards of living and “steady state” economies. Since the size of our pie won’t expand, their solution is to keep dividing it into smaller pieces. Yet because the population will continue increasing, these portions cannot suffice. Many will die, leaving some survivors subsisting until another epidemic, war, famine, or energy shortage thins out our species again. In the meantime, the Peak Oil pessimists recommend that you move to a farm and grow your own food.
You’ve heard versions of this theory before. Previously, as with Malthus, the predicted scarcity was supposed to involve food, whereas now it is energy. Almost everyone who ever took a social science course now knows how wrong Malthus was. In 1969 it was Paul Ehrlich who predicted looming famine on the basis of malthusian logic; his book, The Population Bomb, argued that we’re outstripping the means of our own subsistence. It was so convincing that in 1970 I sent out about 25 copies as Christmas gifts. (Sorry, friends — what was I thinking?)
As Ehrlich predicted, the world’s population did double between 1960 and 1998, but the world’s food production tripled and its price dropped almost in half. So did the price of several finite mineral commodities that he predicted would be used up within a decade or two. Like Malthus, Ehrlich supposed that human population growth rates would remain at the maximum possible level, whereas in reality global population growth reduced from 2.1 percent to 1.1 today. This decline was not caused by increased deaths but rather by the steep, voluntary reduction of birthrates, even when food was plentiful — a change that malthusians never expect.
Now, to be sure there are compelling reasons to worry about the future of humankind — but mainly because of climate change, not the impending shortage of oil. Fortunately, the solutions to both climate change and looming oil depletion are the same: shift quickly to renewable forms of energy. Yet the Peak Oil doomsayers doubt that alternative forms of energy can be harnessed in time to prevent one or both of these new calamities. Why so?
It’s not because energy is ultimately scarce. (In only 24 hours the solar energy absorbed by the Earth is equal to 9252 times all the fossil fuel, nuclear, and hydro used by people in 24 hours.) The problem, claim the Peak Oil pessimists, is that so much energy is required to obtain renewable energy that we can’t come out ahead. The jargon term for this relationship is EROEI: “energy return on energy.” The EROEI of early oil wells was as high as 100, whereas — according to these pessimists — the renewable sources are vastly lower, if not actually negative.
But they are mistaken. The various sources of energy differ markedly with respect to EROEI, and neither renewables nor fossil fuels are consistently superior to the other. I spent some time this week looking up such estimates. According to Wikipedia, oil has become much harder to produce, so that its EROEI in the United States is now only 3, and in Saudi Arabia about 10. Compare that to electricity produced by wind turbines: 20.
Another estimate from an Australian group is even more favorable to certain renewables. “Both solar parabolic dish and wind turbine returns 30 times more energy than was used to manufacture them — about the same return as the cheapest oil discovered in Saudi Arabia. "Oil on average now, has an EROEI of 8.4. Oil’s chief advantage is its high energy density as a transport fuel. Coal’s EROEI is about 25 now and dropping. Nuclear power plants with an EROEI ranging from 3.84 to 4.5 take about 10 years to build. Photovoltaic panels themselves have an EROEI of 4...”
A Swiss parliamentarian, Rudolf Rechsteiner, is even more enthusiastic about wind’s return, which he claims is in the range of 80 to 100. He writes, “Recently, wind power enjoyed dramatic cost reductions. In many locations the generation cost of electricity from new wind power plants are lower than those of new coal or nuclear-fueled plants of equivalent capacity.”
Compare the EROEI of these fuels. By most estimates, oil from Alaska is 11; Natural gas onshore is 10, and offshore it’s 17. Hydro is 11. Solar photovoltaic ranges from 1.7 to 10. Ethanol from corn is about 1.3 and from sugarcane about between .8 and 1.7. Probably the new cellulosic ethanol, which can be made from waste products, will be considerably higher, but these numbers are not established yet.
In any case, it is clear that some new renewable fuels can easily pay their own way in the world just as well as today’s fossil fuels, allowing us to introduce rapid substitutions and thereby prevent the catastrophic results of either Peak Oil or the genuinely menacing climate change.
Why, then, do the Peak Oil pessimists still insist that economic growth must come to an end? Their reasoning goes like this: there are too many people on earth, and if we all keep producing and consuming, we’ll be putting amounts of natural resources through our industrial system, wrecking forests, fish, minerals, coral reefs — the whole of nature. Even if we stop emitting carbon dioxide from our cars and factories, our processing of other raw materials will destroy our planet. The only solution, they say, is to stop growth.
That’s unacceptable! In 2001 there were still 2.7 billion human beings living on less than $2 a day. In fact, 1.1 billion of them lived on less than a dollar. Their future prospects depend entirely on the continued growth of their economies. Every small decline in growth has measurable effects on child mortality rates. As Lant Pritchett and Lawrence H. Summers have written in an article appropriately titled “Wealthier is Healthier,” “...we calculate that over a half a million child deaths in the developing world in 1990 alone can be attributed to the poor economic performance in the 1980s.” Economic growth is essential.
Besides, far from being the problem, economic growth is actually required if we are to manage climate change and other looming disasters. The only real possibilitu for changing over to renewable energy systems is through private investment. fortunately, the new wind turbines, for example, are exceedingly profitable to manufacture. Where profits can be made, innovations will be forthcoming. We must offer all kinds of positive incentives to encourage human creativity, so as to solve the problems such as pollution that tend to arise within a rapidly growing economy. As the world has become more efficient economically, the “carrying capacity” of the earth has increased enormously and can continue increasing — especially in richer, more developed societies, which are able to address environmental challenges.
And human innovations need not use up the natural resources. Economic growth can take place while conserving the environment. This will, of course, require changed attitudes about how to live well and enjoyably, but many affluent people already live rather simply anyhow, Instead of keeping a country house, or traveling for pleasure abroad, there are other sources of pleasure that require few materials. We live in post-industrial society, where instead of producing goods, most jobs involve the exchange of services — especially the “knowledge” industries.
The main feature of the post-industrial economy is information and — unlike cars, rocks, clothes, houses, and oil — information is not conserved. It is not scarce. If I give money to you, I have that much left for myself, but if I give information to you, you and I both have it. We can both pass it on to others, endlessly. Information is the opposite of entropy. According to the second law of thermodynamics, the physical world is running down, disintegrating into disorder, chaos (entropy). But there’s an opposing process going on — the creation and dissemination of information, which counteracts entropy by making the world more orderly. Specialists who do knowledge work may rarely handle physical materials. We who make our livings as teachers, writers, therapists, dramatists, or financial counselors, need few tools besides a telephone, computer, and a pencil or two. And we're happy doing it.
What kind of lifestyle makes us happy? Some scholars (notably Richard Easterlin and Richard Layard) claim, with some evidence, that above about $10,000 income per year, additional money does not make people happier. There are several possible explanations for this finding — the most important being an apparently genetic “set-point” for each individual’s happiness level. People tend to hover around a given level of happiness, despite a little fluctuation based on their changing circumstances. Prisoners in jail go back to their typical happiness level after they get used to their new, confined living arrangements. However, there are some psychological circumstances that also affect one’s happiness. Among the chief ones is a sense of control over one’s own life, and the existence of challenges and incentives for taking charge of one’s life in an active way. As Johan Norberg has shown, money does help make us happier – but only money that we have gained by our own efforts. Giving people money does not make them happier if it does not also empower them.
Social justice is often considered a matter of equalizing wealth, but that is generally a false solution. Fair allocation is not the main issue.
Kenneth Boulding (see photo) once wrote a paper about his friendly disagreements with Johan Galtung. One of the contrasts had to do with their diverging notions about how to foster equality and well-being. Galtung thinks a great deal about how to redistribute the existing wealth of humankind, said Boulding. He imagines a big pie and reflects at length on the optimum way to divide it up. But Boulding himself claimed to think in terms of many small tarts, all representing the national economies of the world. These tarts are growing at different rates. For Boulding, the question was how to encourage the growth of the smallest tarts.
That’s the real challenge – not how to encourage redistribution but how to encourage growth. And by doing that, we can solve the world’s climate and energy problems, even while making unhappy people happier, for growth is the most interesting challenge of all.