ABSTRACT: Economic growth, as conventionally measured, is a ‘good news’ scenario for many; not so good if you think city life is polluted and congested enough already; not so good if you hate seeing ecosystems degraded and destroyed; not so good if you think that successive increments of economic growth are less and less beneficial to the average Australian. Should the community come to agree that economic growth needs to be slowed, reducing the rate of population growth is one effective readily-available way of doing so.
It is Saturday May 25 2001 and I have just heard an Earthbeat program on ABC Radio National in which Paul Ehrlich, Tim Flannery and David Buckingham (of the Business Council of Australia) have been debating what Australia's population policy should be. Buckingham wanted strong population growth, Ehrlich wanted a much smaller population than at present and Flannery, recanting on his sometime population target of 6-12 million, didn’t seem to know what he wanted---figures of 10, 12 and 20 million were offered as possible working targets along with the idea that we should set a target and somehow revise it every few years, depending on how the environment is faring at the time.
Before going any further, I should place my own position on population policy on record. In my 1996 book, People Policy: Australia's Population Choices (UNSW Press), I concluded that a sensible population policy for Australia would be to aim at stabilising the population within a generation or so and that this was quite feasible if net immigration of something below about 50 000 a year could be maintained. Population would then more-or-less stabilise somewhere between 19 and 23 million (depending on actual immigration) sometime before 2050. To get to that conclusion I examined, as disinterestedly, as honestly, as I could all the environmental, economic and social arguments I could find both for and against a much larger population. I did have a prior predisposition in favour of a stable population but I bent over backwards to discount my own prejiduces (pre-judgements).
If the contributions I heard on the Earthbeat program are representative of the contemporary population debate, then things have not gone anywhere in the six years since my book was published.
As then, business people and their economist friends are the main proponents of strong population growth and it’s the biologists who want stable or reduced populations. Try as I might I cannot escape the feeling that business basically wants strong population growth because they see bigger markets as being good for immediate profits. If they could only admit that making maximum profits right now is extremely important to them then the grounds of the debate could be shifted, eg to asking why high profits are so desirable. Instead, they have started talking about the importance of pursuing a triple bottom line (TBL), ie environmental and social objectives as well as (less-than-maximum) profits. But, with a few exceptions, I feel that they are paying lip service to what their public relations friends tell them is good marketing strategy. Their talk is all at the level of the individual firm, not the society as a whole. I wonder if the stablists could develop a line of debate here---ask business what TBL thinking means in terms of guidelines for managing the whole economy?
Turning to the stablists---the biologists and ecologists---their basic message is still that population growth is strongly correlated with economic growth and that economic growth requires rates of energy and material throughput that destroy or disable ecosystems. But they have made no progress in crafting a convincing argument that something really, really awful will happen if we do not stop destroying and disabling ecosystems. After all we have been doing this for 12 000 years. Historically, we have just folded tents and moved on, admittedly creating a lot of misery in the process. But having now filled the world with people, moving on when ecosystems stop delivering the services that the economy requires is no longer an option.
If I were a hired gun for the growth lobby I would agree that it is a pity that ecosystem services are no longer being provided free. If that’s the case, I would say, flicking a speck of dust off my Italian suit, the economy will just have to start buying human-made versions of those services. You know, water purification plants, soil conditioners, plantation timber, minesite rehabilitation and so on. Or, I’d say, we entrepreneurs might have to move towards a product mix that is less dependent on the natural resource base. Sure, profits might go down as costs go up but the name of the game will be to see that your costs go up more slowly than the competition’s. And anyway, offsetting technologies might appear. As for those ecosystem services that aren’t being traded in the market, like smelling the flowers and bushwalking, well, people will just have to start paying for them if they want the remaining supply to be protected.
And smug business will be right. As long as the community values the marginal net products of the growth cocktail (population growth and higher consumption per head) more highly than the amenity losses associated with lost ecosystem services, it is perfectly rational to keep on destroying and disabling ecosystems. And the community will let it happen.
Of course it won’t go on forever. First, people will start valuing the natural world more highly as it disappears, and tell the politicians. Second, the proportion of additional GDP coming as things people want will keep falling relative to the proportion devoted to suppressing things people do not want or to replacing things they once had. This ‘useless’ component of GDP includes not only the costs of replacing lost ecosystem services but the market costs of ameliorating the growth cocktail’s impacts on urban quality of life---air pollution, congestion etc. And to the extent that those impacts are not ameliorated, they need to be recognised as non-market costs to be set against the value of additional GDP.
Unfortunately, there are several reasons why GDP growth will not stop even when the net value of additional GDP reaches zero (which it already has for many people). One is that many of the costs that business is imposing on the community are externalities (unpriced side-effects) for which business does not have to pay. Indeed, many externalities are not even recognised as such (eg urban sprawl, increasing energy dependency). So it remains profitable for business to expand output beyond the point where extra benefits to the community (but not business) are less than the extra disbenefits. In economist-speak, marginal social net benefits go negative at a lower GDP than marginal private net benefits.
The recognised remedy for this, even among laissez-faire free marketeers, is to internalise (sheet home to business) those externalities by making entrepreneurs pay compensation in various ways for the external disbenefits they are imposing on the community, and hence discourage them. Another is for the community to directly regulate to stop business imposing the worst of these disbenefits on people.
The more general point though is that only the community as a whole can decide when the net benefits of further economic growth have fallen below the net disbenefits of further ecosystem and cityscape degradation. But there is no institution in place to even attempt this evaluation in a disinterested manner. There is not even a public debate in which opposing sides are willing to concede legitimate points to each other. What we call public debate is better described as aggressive adversarialism. Ant it is not just useless, it is worse than useless. Why? Because it gives some illusion that we are trying to address the issue when all we are doing is providing a sideshow while the growthists proceed on their merry way. Spare us the population inquiry that Labor is promising if it wins the next election.
Should the community become convinced that the social net benefits of further economic growth are zero or negative, the population argument comes right back into the picture. While increasing consumption per head is an important part of the growth cocktail, the single simplest, most effective action for slowing economic growth is to slash population growth. In Australia, we are fortunate in being able to do this by simply slashing immigration.
Let me see if I can reduce the above argument to a few assertions around which I would like to see the population debate framed:
These assertions need to be debated in two ways. Are they correct in principle? If so, what are the numbers? That is, what are socially acceptable measures of wildscape and cityscape degradation and destruction; what is a socially acceptable measure of ‘useful’ GDP; what is a socially acceptable tradeoff rate or exchange rate between environmental losses and ‘useful’ GDP? The sorts of social technologies that can help the community decide whether the value of extra economic growth is going negative include state of environment monitoring and constructing alternatives to GDP such as the genuine progress indicator.
Bio Note for Doug Cocks
I am a human ecologist with a MAgrSc degree from University of Melbourne and a PhD in production economics from University of California. Currently I am a Divisional Fellow of the CSIRO (Commonwealth Scientific and Industrial Research Organisation) Division of Sustainable Ecosystems in Canberra, contributing to the Resource Futures program there. I have taught and been a staff researcher at the universities of Cambridge and California as well as being a guest lecturer, course presenter, visiting fellow etc at various Australian universities
The three books I have written since 1992 represent explorations from different perspectives of a common theme: How can Australian society best manage itself in the 21st century? Use With Care, which has been a text in 23 tertiary courses, examines the way natural resources have been managed in Australia and how they will have to be managed in the future if an acceptable balance is to be established between the demands of the economy and the demands of an increasingly-prosperous community for a high quality living environment. People Policy examines in detail the economic, social and environmental arguments for and against building a much larger population in Australia. Future Makers, Future Takers identifies, elaborates and evaluates three distinctly different socio-political strategies for guiding the governance of Australia over coming decades.