In his Growing, Growing, Gone series, Tom Horton identifies “growth” as the elephant in the room with respect to the Chesapeake Bay restoration effort.
Before one can either support or take issue with that contention, it is first necessary to identify what he means by “growth.” Is it a larger economy? More people? More rapid consumption of natural resources? More refuse and pollution? More artificial impervious surfaces? Whichever one of these factors we choose in our measure of “growth” will make a difference in how we, the people, might want to value it.
Horton identifies economic growth and population growth as the factors that inevitably erode our efforts to restore the Bay. The message from his discussion is that we either need to get rid of some people, live poorer or give up on restoring the Bay. None of those are attractive choices. Is there another way that we can think about this that will leave us with better choices?
Among economists, growth is typically thought of as an expansion in the trade of goods and services — more things being bought and sold. This can happen several ways. More people buying and selling a given amount of things is one. The same number of people buying and selling more things is another. Producing more goods and services with fewer inputs is a third.
All three of these things have been happening in the Chesapeake Bay watershed over the last 40 years. If not for that third source of growth — making more things with fewer inputs — we would have already overwhelmed our natural environment and be drowning in our own refuse.
The technological improvements and efficiency gains that we have enjoyed over the last several centuries are a very important component of economic growth. Is getting more from less a bad thing?
To answer that question, it helps to consider a paradox identified by the English economist W. S. Jevons back when the United States was just getting rid of slavery. Jevons pointed out that an increase in the efficiency of squeezing work energy from coal would not reduce coal consumption, but would increase it. Why? Because an increase in efficiency implies a reduction in the price of an input relative to what it can achieve and, if demand for that input is price elastic (i.e., percentage change in quantity demanded changes more than percentage change in price), then more of it will be used. At that point in the history of fossil fuel use, coal was price elastic.
The greatest problem in discussing economic growth among environmentally concerned people is that at the point where I started talking about the price elasticity of demand, a very large share of my readership said, “what?” And yet, understanding the problem in this way helps us to understand whether efficiency gains will move us toward more or less resource use. There are economic policies that one can employ to ensure that efficiency gains do lead to decreased resource use if, for environmental reasons, we need such an outcome. But if the environmentally concerned citizenry is not even looking at the problem with this in mind, those policies will never be adopted. That, by and large, is where we are today.
I admire the brutal honesty with which Tom Horton holds up an issue that many leading the restoration effort have ignored. It is almost amusing to pair his points with the claim of the Chesapeake Bay Foundation that cleaning up the Bay will increase economic growth.
But I do not agree with him that our choices are constrained to fewer people (though that has its attractions), everybody living poorer (which doesn’t scare me as much as it probably should) or giving up on restoring the Bay.
I believe that managing our economy so that it serves environmental goals is a lot more feasible than telling people that they cannot make children, or move into or start a business in the Chesapeake Bay drainage. Too bad that environmentalists have so little confidence in economists.