Population, Poverty and Inequality

Impossibly busy today with sick kid and meetings, etc.  So for your edification I recommend Felix Salmon's piece on population growth.  Here is a teaser graph:

For more fun here is his cutesy video:

Eco-nomics: Population

The Economist has a nice piece on the environmental impact of population growth that mirrors things I have said here. But they are the economist so it is ever so much more persuasive.

In a nutshell, my take is that population is an aggregate problem, not in individual one. By this I mean that population growth rates are correlated with many macroeconomic and socio-economic factors, therefore the way to achieve the decline in population growth that environmental alarmists wish to see is not to appeal to individual's guilt but to focus on economic development. High income country fertility rates are below replacement level in many cases, France for example is trying hard to get it up, not down. And, in general, fertility is falling in the world fairly rapidly thanks in large part to improvements in development.

Anyway here is an excerpt of The Economist's take:

Astonishing falls in the fertility rate are bringing with them big benefits

THOMAS MALTHUS first published his “Essay on the Principle of Population”, in which he forecast that population growth would outstrip the world’s food supply, in 1798. His timing was unfortunate, for something started happening around then which made nonsense of his ideas. As industrialisation swept through what is now the developed world, fertility fell sharply, first in France, then in Britain, then throughout Europe and America. When people got richer, families got smaller; and as families got smaller, people got richer.

Now, something similar is happening in developing countries. Fertility is falling and families are shrinking in places— such as Brazil, Indonesia, and even parts of India—that people think of as teeming with children. As our briefing shows, the fertility rate of half the world is now 2.1 or less—the magic number that is consistent with a stable population and is usually called “the replacement rate of fertility”. Sometime between 2020 and 2050 the world’s fertility rate will fall below the global replacement rate.

At a time when Malthusian worries are resurgent and people fear the consequences for an overcrowded planet, the decline in fertility is surprising and somewhat reassuring. It means that worries about a population explosion are themselves being exploded—and it carries a lesson about how to solve the problems of climate change.

Today’s fall in fertility is both very large and very fast. Poor countries are racing through the same demographic transition as rich ones, starting at an earlier stage of development and moving more quickly. The transition from a rate of five to that of two, which took 130 years to happen in Britain—from 1800 to 1930—took just 20 years—from 1965 to 1985—in South Korea. Mothers in developing countries today can expect to have three children. Their mothers had six. In some countries the speed of decline in the fertility rate has been astonishing. In Iran, it dropped from seven in 1984 to 1.9 in 2006—and to just 1.5 in Tehran. That is about as fast as social change can happen.

Falling fertility in poor and middle-income societies is a boon in and of itself. It means that, for the first time, the majority of mothers are having the number of children they want, which seems to be—as best one can judge—two. (China is an exception: its fall in fertility has been coerced.)

It is also a boon in what it represents, which is greater security for billions of vulnerable people. Subsistence farmers, who live off their harvest and risk falling victim to rapine or drought, can depend only on themselves and their children. For them, a family of eight may be the only insurance against disaster. But for the new middle classes of China, India or Brazil, with factory jobs, cars and bank accounts, the problems of extreme insecurity lie in the past. For them, a child may be a joy, a liability or an accident—but not an insurance policy.

And falling fertility is a boon for what it makes possible, which is economic growth. Demography used to be thought of as neutral for growth. But that was because, until the 1990s, there were few developing countries with records of declining fertility and rising incomes. Now there are dozens and they show that as countries move from large families and poverty into wealth and ageing they pass through a Goldilocks period: a generation or two in which fertility is neither too high nor too low and in which there are few dependent children, few dependent grandparents—and a bulge of adults in the middle who, if conditions are right, make the factories hum. For countries in demographic transition, the fall to replacement fertility is a unique and precious opportunity.

Nonsense, say Malthus’s heirs. All this misses the point: there are too many people for the Earth’s fragile ecosystems. It is time to stop—and ideally reverse—the population increase. To celebrate falling fertility is like congratulating the captain of the Titanic on heading towards the iceberg more slowly.

The Malthusians are right that the world’s population is still increasing and can do a lot more environmental damage before it peaks at just over 9 billion in 2050. That will certainly be the case if poor, fast-growing countries follow the economic trajectories of those in the rich world. The poorest Africans and Asians produce 0.1 tonnes of CO2 each a year, compared with 20 tonnes for each American. Growth is helping hundreds of millions to escape grinding poverty. But if the poor copy the pattern of wealth creation that made Europe and America rich, they will eat up as many resources as the Americans do, with grim consequences for the planet. What’s more, the parts of the world where populations are growing fastest are also those most vulnerable to climate change, and a rising population will exacerbate the consequences of global warming—water shortages, mass migration, declining food yields.

In principle, there are three ways of limiting human environmental impacts: through population policy, technology and governance. The first of those does not offer much scope. Population growth is already slowing almost as fast as it naturally could. Easier access to family planning, especially in Africa, could probably lower its expected peak from around 9 billion to perhaps 8.5 billion. Only Chinese-style coercion would bring it down much below that; and forcing poor people to have fewer children than they want because the rich consume too many of the world’s resources would be immoral.

If population policy can do little more to alleviate environmental damage, then the human race will have to rely on technology and governance to shift the world’s economy towards cleaner growth. Mankind needs to develop more and cheaper technologies that can enable people to enjoy the fruits of economic growth without destroying the planet’s natural capital. That’s not going to happen unless governments both use carbon pricing and other policies to encourage investment in those technologies and constrain the damage that economic development does to biodiversity.

Falling fertility may be making poor people’s lives better, but it cannot save the Earth. That lies in our own hands.

Eco-nomics: Carbon Footprint and Children

The Oregonian reports on a study by OSU statisticians that suggests that the biggest carbon footprint we have is our children. This begs certain moral and metaphysical questions like is it appropriate to control individuals' fertility decisions, and when is my carbon footprint my own and not my parent's? But to me, the focus on the individual aspect of population growth it totally misses the bigger points: one, what are the incentives for families to have children and what can we do to alter these incentives; and two, do the incentives that more people provide actually represent the solution to the climate change problem?

In high income countries, birth rates are very low - in fact in some Western European countries, they are below the replacement rate. This is true for may reasons but some of the biggest are the expense of children (more space, more food, more clothes, etc.), and the fact that children are less important for ensuring the welfare of the parents in their old age. In the United States space is generally less expensive and old age benefits smaller, but education is much more expensive for individual families and there are less generous benefits for families who have children. In general, however, as societies become more wealthy, birth rates decline. Families in low income countries face a tremendously higher risk of a child dying in infancy, often need many children for labor and security and may have lower access to birth control information and supplies.

As energy becomes more expensive it will further increase the expense of children in high income countries and we might expect birth rates to fall farther. So, once again, it is the middle income countries with relatively high birth rates and rapidly increasing energy needs that are the most pressing challenge to the global climate. Countries like India are going to be the key. So continuing to focus on what we are doing at home is great, but misses the real elephant in the room (to quote the LA Times): high-income countries must become serious about assisting low and middle income countries develop and do so with moderate energy usage if we are going to address in any meaningful way global climate change. As these countries become more prosperous, it is highly likely that population growth rates will fall significantly.

The other problem with this assertion about children having to do with incentives is the fact that population pressures create the very incentives that can transform the energy economy. [And what is shocking is that the authors of this study are statisticians and yet they seem comfortable assuming that correlation and causation are the same thing] Demand pressures on oil are raising the price of gas and spikes in gas prices (like last summer's) are just about the only thing that can cause people to drive less and drive more efficient cars.

To understand how this study assumes correlation and causation are troublingly conflated, consider this thought experiment: if the globe had a significantly smaller population, would the climate be much better off as is assumed? I am not so sure, it has been the pressures of population that have made us concerned about acid rain, the health concerns from pollution, the dirtying of rivers, the collapsing of fisheries, the effects of rising sea levels and on and on and on. With fewer people we can more easily ignore the impact of our actions. And going forward will more people actually create the very incentives to make rapid changes to our energy consumption - I think it pretty likely that it will. And as I have said before, in each new person comes the potential for creating the new technology or coming up with the next great idea that will transform the way we live. It is people who have discovered the global climate - human activity link. It is people who are figuring our how to effectively harness the energy of the wind, sun and waves. And it is future generations that provide us the incentives to be good caretakers of the planet.

So I am not afraid of population per se. I see it largely as a development problem and another aspect of the challenge high income countries face when they ignore the reality of poverty in the rest of the world. It is becoming harder and harder for the high income countries of the world to consider themselves as insulated from the problems in other countries. The externality aspect of global climate change make that less and less true. This calls for a new engagement with the developing world.

Eco-nomics: Children and Resources

I have been sitting on this one for a while, trying to decide whether to touch it with my 10 foot pole. A few weeks ago, the Oregonian profiled a few families that have, for environmental reasons, decided to have only one child. My first thought was: why not zero? But my second thought was: why so pessimistic about children?

Most people who worry about the environmental impact of large families think of children solely as resource depleters. More children means more people which means more energy demand, more bodies to fill with water and calories, more people to pollute and ravage the landscape. But children are also resources in and of themselves: they are the ones who will have to come up with the solutions to the resource issues and I have faith that they can and will do it. Within each child comes the potential for being a vital part of the world's human capital resource that will solve global warming, find new renewable energy technologies, will invent more efficient ways to produces goods and services that use fewer resources, and so on. They are the ones that will create the new resources with which humanity will thrive. In fact, during the recent explosion in human population, living standards have risen considerably.

I must admit that I find the view of children as resource drains quite depressing. People don't just use resources, people also create new resources, so the question comes down to whether the new children you bring in the world end up consuming more than they create. I like to see children as potential - as the hope of humanity, not a drag on society and the source of humanity's downfall.

Besides, it is not at all clear to me that the most efficient way to bring people into the world is a bunch of one-child households. It is probably a lot more efficient to have 11 zero child households and one 12 child household - cheaper by the dozen indeed.

And as a moral aside, it seems funny how we celebrate life once it is here, but fret about new lives being created. We cheer for each new medical breakthrough, but are concerned about new babies? I can't quite articulate it, but that just seems odd.