The Wall Street Journal reports that New Limits to Growth Revive Malthusian Fears:
As the world grows more populous — the United Nations projects eight billion people by 2025, up from 6.6 billion today — it also is growing more prosperous. The average person is consuming more food, water, metal and power. Growing numbers of China’s 1.3 billion people and India’s 1.1 billion are stepping up to the middle class, adopting the high-protein diets, gasoline-fueled transport and electric gadgets that developed nations enjoy.The result is that demand for resources has soared. If supplies don’t keep pace, prices are likely to climb further, economic growth in rich and poor nations alike could suffer, and some fear violent conflicts could ensue.
Of course, when higher demand leads to higher prices, that price signal leads to a search for new supplies and innovative alternatives, and conservation suddenly becomes worth the effort. Factories switch from burning wood to burning coal. Lamp-owners switch from whale oil to kerosene. That’s why the Club of Rome‘s dire predictions were so far off.
The real problems arise when those price signals are blunted, as with water, which is provided for free — or close to free — in much of the world. Of course, it’s not easy to pick a single static price for a vital commodity that is almost free to provide below some moving threshold — depending on local rainfall — but prohibitively expensive beyond that threshold. It also doesn’t help that most stores of water are hidden underground and informally shared, without ownership, by large numbers of people:
Throughout the world, water is often priced too low. Farmers, the biggest users, pay less than others, if they pay at all.In California, the subsidized rates for farmers have become a contentious political issue. Chinese farmers receive water at next to no cost, accounting for 65% of all water used in the country.
In Pondhe, an Indian village of about 1,000 on a barren plateau east of Mumbai, water wasn’t a problem until the 1970s, when farmers began using diesel-powered pumps to transport water farther and faster. Local wells used to overflow during the monsoon season, recalls Vasantrao Wagle, who has farmed in the area for four decades. Today, they top off about 10 feet below the surface, and drop even lower during the dry season. “Even when it rains a lot, we aren’t getting enough water,” he says.
Parched northern China has been drawing down groundwater supplies. In Beijing, water tables have dropped hundreds of feet. In nearby Hebei province, once large Baiyangdian Lake has shrunk, and survives mainly because the government has diverted water into it from the Yellow River.
Again, it’s a problem of political will, as Matthew Kahn elaborates:
Water provides an important example of resource scarcity. It rarely rains in Los Angeles, but golf courses and most people’s homes there have green lawns, rather than cactuses. If the people of Los Angeles faced higher water prices, I bet that we would see households switch away from green grass. This raises the political economy question of which politicians have the backbone to allow prices to reflect scarcity. The easy — and unsustainable — path is to vote in favor of keeping prices artificially low.
Many less-developed countries face a clear Malthusian Trap, but developed countries seem to innovate around the problem:
Optimists such as Julian Simon have argued that population growth helps to solve environmental problems as each new person represents a lottery ticket who could grow up and give us a cure for cancer or the next Google.
What no one seems to want to admit is that one more American — one more person from anywhere with solid education and access to other technical people, really — increases the odds of a technical breakthrough for humanity much, much more than one more semi-starved peasant or slum-dweller in a third-world country. I don’t know if One Laptop Per Child is enough to turn that around.