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Population Growth and the Environment: A Neoclassical View

Clayton Reed

 

Introduction:


Population growth has been widely described to be the cause of our environmental problems. Some economists see the population exceeding the carrying capacity of the land we live on. However, a second group of neo-Malthusian economists claim that increasing populations are the drive efficiency by creating technology to increase the carrying capacity without degrading the environment. In neo-classical thinking we would call the carrying capacity the steady state. However circumstances can create reproductive externalities and feed-back loops that make reproduction persistent beyond what would be considered sustainable (Dasgupta 2000). One model suggests that environmental degradation is part of a vicious cycle, whereby groups of people will increase the number of children the have in order to maximize their share of a common good such as water (Dasgupta 2000). However the cause of environmental problems, there is no debate over the solutions. Policy and institutional changes must be made in order to 'internalize' these environmental externalities associated with free-riding on common goods in order to reduce the high fertility rates associated with it.


This paper will be divided into four sections. The first section will discuss the efficiency model that increasing population is good for the environment. The second section will discuss three persistent models of environmental and reproductive externalities. The third will discuss a fourth persistent model, the vicious circle. The final discussion will cover solutions to the problems of the vicious circle as well as policy and institutional changes that will encourage sustainable development.

The Efficiency Argument


With increased population comes necessity for efficient use of resources. The population growth produces more able minded people who are technologically adapted (Johnson 2001). People can also create knowledge, universities and institutions now contribute greatly to new technology produced (Johnson 2001). Knowledge will only grow faster as developing countries invest in human capital and research (Johnson 2001). Africa for example is a vast untapped human resource. Increases in the efficiency of the land we have been using mean that we get more produce from the same land we were using 40 years ago.


This increase in population over the last few centuries has made the majority of nations better off in terms of living standards. Most people in Europe today are better off than their grandparents living in poverty in 1750 (Johnson 2001). Life expectancy has nearly doubled in the same time period (Johnson 2001). These are reasons to believe that the increase of population has made the world better off and that environmental degradation has not decreased to the effect that populations are starving because of the limits in carrying capacity.

Reproductive Externalities


Cost sharing is the first of the persistent models and deals with communities that share kinship responsibilities. These communities are typical of sub-Saharan Africa, whereby the responsibility of raising a child is shared among members of the kin-based group. The most common of these family types are patrilineal (Dasgupta 2000). These communities are characterized by communal land tenure. The father is rarely responsible for raising the child and so do not bear the cost of them (Dasgupta 2000). In addition often times a large family is rewarded by a greater share of land (Dasgupta 2000). All of these factors decrease the personal cost of having a child and put the problem more on the shoulders of the community. This is a source of reproductive externalities that stimulate fertility (Dasgupta 2000).


Conformity can play a role in fertility decisions and can make decisions on having a child hard to change even when it is in the family's best interest. Reasons for the initial high fertility rate can be quite rational, high mortality rates, low population densities and threat of outside extermination (Dasgupta 2000). This is a common problem in India, where only the birth of a male child ensures the parents security in old age. This does not have to continue forever and can be altered by access to the outside world through newspapers and television (Dasgupta 2000).


In some countries where long-term relationships are unstable people build new ones based on children in order to maintain an economic dependence (Dasgupta 2000). One example of this is in the Yoruba area of Nigeria, where woman will have children with more than one man (Dasgupta 2000). Another is children provide old age security.

The Common Problem: Vicious Circle


Common goods are most important to the livelihood of those in poor areas and as a result the most problematic areas of free-riding (Dasgupta 2000). Free access to resources creates a problem whereby anyone who wants resources can get them but for an opportunity cost of time. This also means that if a family wishes to get more of the good they simply need to find more hands to harvest it (Panayotou 1996). Children are an easily exploited for this resource gathering. They do not go to school in most poor areas (Dasgupta 2000). While each family is having more kids the situation of the common good is getting worse because of overuse or outright depletion.


An argument against the vicious circle is that communities will not just sit back and watch the exploitation of their resources and will establish community management systems (Panayotou 1996). These systems vary from taboos and customs to more active management (Panayotou 1996). Institutional community responses are more familiar, such as state ownership of forests and water. The key to management is proper enforcement. Without enforcement there is the tendency to degenerate into open access.


A test of the vicious circle in Pakistan found the theory plausible but that the evidence of the empirical case study provided no clear answer (Filmer and Pritchett 2002). In this study three premise that must be true in order for the vicious circle model to be true. First, collection goods should be a reasonably important component of household income. Second, the depletion costs of goods should not fall entirely on the household, in other words the common good causality. Lastly, children should be an important part of the collection labor of the family. The study found that collected firewood was important to income but that children did not systematically increase the chances of collection versus buying the wood. The authors admit that the inconclusive evidence but suggest the plausibility of the argument.

Solutions to Promote Sustainability


A mix of population policies and institutional changes must be implemented if any country hopes to solve the problem of environmental degradation.


Full cost pricing can ensure a stable high steady state. A natural steady state is determined by the productivity of forests fisheries and agricultural land (Panayotou 1996). The market can correctly regulate the scarcity in resources by maintaining the right commodity prices (Panayotou 1996). In Chile and much of the American Mid-west, systems of water rights regulate the price of water to sustainable levels. A competing perspective promotes a provision of infrastructural goods, such as cheap sources of household fuel and potable water that might decrease the need for families to increase numbers to collect these common goods (Dasgupta 2000). In addition to reducing use, high commodity prices increase the development of resource-saving environment-friendly technology (Panayotou 1996). By correctly measuring the value of your commodity you will ensure that it is used more efficiently.


Land reform and privatization of land can also cause the effect of sustainable land use. Deforestation is a major problem is several major Asian countries and it is a problem where population policies would do little help (Panayotou 1996). In this instance it is the removal of subsidies to ranchers and a reform of land ownership laws for forest clearing that will do the most good (Panayotou 1996). Poor farming practices that result in erosion and desertification of land can be stopped by similar measures, securing land ownership and responsibility for the longevity of productive land and reducing price supports for erosive crops such as maize, cassava and sugar cane on high slopes (Panayotou 1996). Policies like this put the real cost of deforestation and poor farming on those who are cutting down the trees and harvesting the land, not on the community as a whole.


Population policies can also have the desired effect of reducing the persistent nature of many of the previously discussed population problems. Measures that empower woman and make them more responsible can be effective in reducing the conformity population problems among others (Dasgupta 2000). More educated women more likely to find employment. An employed mother bears more opportunity cost by having to raise children and this can effectively limit the amount of children a family has (Panayotou 1996). In addition to opportunity cost, education means that they might use resources more effectively (Panayotou 1996). The weakness of population policy is that they occur too slowly and more often rapid and flexible responses are needed to promote the kind of changes necessary for sustainable development (Panayotou 1996).

Conclusions


While it has been claimed many times over that population has been the cause of environmental problems, it is just as likely to be poor institutions and policies. There is some substance to the efficiency argument and given the proper framework, limiting open access to common goods, it should work. In addition to institutional changes and policy measures the measures should also include family planning and population policy to be balanced.
Given the neo-classical view, a society will tend upon a steady state. It is important for a country in order to maintain a high steady state to commit to sustainable environmental practices. A high steady state is the result of capital depreciation and investment as well as technological adaptation in the long run. Proper management of resources will encourage technological adaptation and ensure the capital invested in natural resources does not depreciate. This should increase the likelihood of a high steady state.

 

 

Reference List

Filmer, Deon and Pritchett, Lant H., "Environmental degradation and the demand for children: searching for the vicious circle in Pakistan" Environment and Development Economics v7 (2002): 123-146

Dasgupta, Partha, "Population and Resources: An Exploration of Reproductive and Environmental Externalities" Population and Development Review, v26 n4 (December 2000): 643-689.

Johnson, Gale D., "On Population and Resources: A Comment", Population and Development Review, v27 n4 (December 2001): 739-747.

Panayotou, Theodore, "An Inquiry into Population, Resources and Environment" in The Impact of Population Growth on Well-being in Developing Countries, Springer-Verlag, Berlin, 1996, pp. 259-298.