Monday, September 23, 2013

Is Growth Good for Biodiversity?

by Duncan Gromko

Growth is good for the environment. At least that’s the headline from an Economist special issue on biodiversity.

They argue that, in the long run, economic growth allows countries to invest in governance and technological innovation that improve environmental conservation. This is the idea behind the environmental Kuznets curve (EKC), which says that there is an inverse U-shaped relationship between income and environmental degradation. The argument goes that, early on in a country’s development, it exploits its natural resources to grow. However, at some tipping point, the country stops degrading its resources as growth continues.

Environmental Kuznets Curve. Source:
It’s a popular argument since everyone likes growth. If only it were so easy! We could just focus on growth and the rest would sort itself out. Unfortunately there are a lot of reasons to be skeptical.

The statistical, empirical case for EKC is questionable. Some indicators of environmental degradation have peaked in developed countries, but others have not. After a tipping point, deforestation does tend to decrease as a country grows, but greenhouse gas emissions have not. Given the projected impact of climate change on biodiversity, it’s hard to “leave aside the huge unknown of climate change,” as the Economist suggests.

Any time scientific research gets condensed into a newspaper headline, a lot of important nuance is lost. The nuance here is that growth itself is not the reason that some environmental indicators have improved in rich countries. Political, social, and technological changes – which often accompany growth – tend to be the reason that environmental outcomes improve. The Economist brings up agricultural intensification as one technological change that reduces pressure on biodiversity. In this case it is not growth that results in better environmental outcomes, but changing technology that leads to increased growth and reduced pressure on the environment. This is a mistake of confusing correlation with causation – growth itself is not the mechanism of change.

Another issue is that wealthy countries are able to “export” their environmental production. A good example is Japan, which banned timber harvest, resulting in a dramatic revival of the countries’ forests. However, Japan remains a major consumer and producer of timber goods. It pulls this trick off by importing timber products from Southeast Asia, where deforestation rates are amongst the highest in the world. Wealthier countries tend to have higher per capita environmental footprints. While developed countries have been able to export some of their environmental degradation oversees, clearly this won’t work for every country on earth.

Last, the EKC theory does not account for the importance of the environment in enabling growth. Ecosystem services are a major determinant of a country’s productive capacity. If short-term growth leads to significant environmental degradation, per capita income will stagnate and the tipping point envisioned in the EKC will never be reached. The Economist is saying: growth leads to biodiversity protection, but I think they have it backwards. Managing natural resources responsibly can enable and protect growth.

1 comment:

  1. Not everybody is for growth. There is a case for a steady-state economy. It's not a popular case, but it does exist. It's founded on the belief that economic growth and environmental protection will always be in conflict and that one should not depend on economic growth and the technological advances that come with it to resolve this conflict.

    The merits of agricultural intensification are very complex. The loss of habitat to agriculture is a major threat to biodiversity and needs to be reduced, but the current methods used to reduce our impact (chemical fertilizers, mutated species, large scale specialized farming) all have negative impacts on biodiversity. I would be 100% behind the land-sparing methodology if the methods were to actually leave the surrounding habitat healthy, but it doesn’t. It pollutes the waterways promoting unnatural eutrophication and introduces mutated species to the ecosystem with unknown consequences. The resulting depauperation can have a significant impact on the global ecosystem.

    That said, one could also argue against land sharing just as vehemently. It’s an interesting point to ponder. In order for land-sparing to win this argument, I would have to see the population booming up to 9+ billion as being inevitable and our current methods for growth which don’t manage natural resources responsibly as continuing. But I don’t see things that way, so I will continue to buy local organic produce, and bird friendly coffee in hopes that I can put money towards agricultural practices that promote maintaining the health of the local ecosystems.

    On another note, the authors of these Economist articles seem to bring a close-minded perspective on what it means to benefit other species. One says “economic growth has enabled man to do more of what he wants from less, to the benefit of other species” while the other says "endangered species have benefited from some of the concomitants of growth". To some extent this is true, but they fail to see that our growth will result in more energy consumed, more raw materials consumed, more pollution, more infrastructure, etc…What’s actually happening is the situation would be worse without these advancements, but it’s far from actually benefitting the other species.