Biophysical Limits to Economic Growth

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Biophysical Limits to Economic Growth

• The Malthusian Perspective

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Introduction

• For the rest of this quarter, we will attempt to
  systematically explore the association of
  ecological limits and economic growth.
• The main questions that would be addressed are
  Can we expect unlimited economic growth in a
  world endowed with finite resources? If
  ecological limits are important factors in
  determining future trends of ...

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• economic growth, what steps or precautions
  should be taken in order to avoid transgressing
  these biophysical limits?
• Three approaches
• The Malthusian Perspective
• The Neoclassical economic perspective
• The Ecological economic perspective

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The Simple Malthusian Model

• Basic Postulates of the Malthusian doctrine of
  resource scarcity and economic growth
• Resources are scarce in absolute terms --
  resources are available in finite amount.
• If uncontrolled, the tendency of human population
  is to grow exponentially.
• Technology should not be perceived as the
  ultimate escape from the problem of resource
  scarcity.

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• Thomas Malthus (1766- 1834)
• An Essay on the Principle of Population as Its
  Affects the Future Improvement of Mankind (1798)
• Basic Assumptions of the model
• The total amount of land available for
  agriculture is immutably fixed
• The growth of population is limited by the amount
  of food available for subsistence.
• Human population will invariably increase where
  the means of subsistence increase.

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• Malthus famous doctrine or assertion
• if not prevented by some checks, the tendency is
  for the population to grow geometrically (2, 4,
  8, 16, etc.) while the means of subsistence grows
  arithmetically (1, 2, 3, 4, etc.) Unless this
  tendency of ever-increasing imbalance between the
  grrowth of population and the means...

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• of subsistence is resolved by moral restraints
  (negative checks), in the long run vice and
  misery (positive checks) will ultimately
  repress the superior power of population to a
  level consistent with means of subsistence.
• Explain this using Figure 6.1 from the text.

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• Criticisms of the Malthusian Simple Model
• It ignores the institutional factor that affect
  population growth
• Overlooks the important role that technology
  plays in ameliorating resource scarcity
• It could be considered ecologically naïve. Does
  not go beyond the acknowledgement of the
  finiteness of resources.

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The Ehrlich-Commoner Model

• The model starts with the premise that all human
  activities modify the natural environment to some
  extent. In its simplest form, this model can be
  mathematically expressed as follows
• I P x F

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• The variable I represents the total
  environmental effect or damage measured in some
  standard unit, P is a variable representing
  population size in terms of head count, and F
  is an index that measures the per capita impact
  (damage) to the environment.
• F fP, c, g(t)

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Paul Ehrlich Model

• Population, P, plays a primary role in explaining
  the impact human activities have on the
  environment and resource use.
• I P x F
• Two factors
• Increase population itself
• impact on per capita impact (increase in F) do
  to the Law of Diminishing Marginal Product. That
  is, F, is an increasing function of population.

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• In conclusion, if other factors are held
  constant, successive addition of people would
  require increased use of resources, such as
  energy, water, fertilizer, pesticides, and other
  renewable and nonrenewable resources. Thus as
  population continued to grow, the per capita
  impact, in terms of pf resource depletion and
  environmental deterioration, would increase
  successively.

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Per Capita Consumption, C

• If population, consumer preference and technology
  are held constant, an increase in per capita
  consumption, c, would only result form increased
  use of resources (hence, environmental damage).
  Explain using graph
• Some scholars, for example, Durning, asserts that
  over consumption is the main culprit of
  environmental deterioration and resource
  depletion.

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Commoners Model

• Modern technology is the main source of
  environmental problems.
• Commoner views modern technology as being
  ill-conceived and not wisely applied in the
  production of goods and services.
• Why? See next slide

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• Because the decisions to change the composition
  of economic input and output is made purely on
  the basis of technical efficiency (increase per
  capita production), rather than the impacts these
  decisions ma y possibly have on the environment.
• (See page 126 in the text)