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Market-Smart Environmentalism

The Economic Analysis

From Principles of Economics (Mankiw) Ch. 11 "Public Goods and Common Resources":

When one person uses a common resource, such as the fish in the ocean, other people are worse off, and yet they are not compensated for this loss. Because of these external effects, private decisions about consumption and production can lead to an inefficient allocation of resources, and government intervention can potentially raise economic well-being.

There are some “goods” that the market does not provide adequately. Markets do not ensure that the air we breathe is clean or that our country is defended from foreign aggressors. Instead, societies rely on the government to protect the environment and to provide for the national defense.

[For common resources and public goods,] the market fails to allocate resources efficiently because property rights are not well established. That is, some item of value does not have an owner with the legal authority to control it. For example, although no one doubts that the “good” of clean air or national defense is valuable, no one has the right to attach a price to it and profit from its use. A factory pollutes too much because no one charges the factory for the pollution it emits. The market does not provide for national defense because no one can charge those who are defended for the benefit they receive.

Market-Dumb Environmentalism

Market-Smart Environmentalism

Ecological Challenges

The only long-term constraint on Earth's human population is heat pollution, which sets a limit perhaps as low as a hundred billion persons (at modern industrialized per capita levels). By far the biggeset sins held against our generation by future humans will be our failures to preserve the diversity of Earth's languages and species.  There is no resource we can waste that will create any material privation for them.

Global Warming. Accumulation of greenhouse gases is causing a rise in global temperature of a few degrees celsius. This may by 2050 melt enough antarctic ice to raise sea levels by a few feet and cause some coastal flooding. Warming may make weather cycles more extreme but may also make land more useful in the northern expanses of Asia and North America. Projected greenhouse warming is not severe enough to lead to runaway effects like on Venus.

Heat Pollution.  Over the next millennium and for the rest of human history, earth's major environmental problem will be warming due not to greenhouse gases but rather to increased waste heat from non-solar energy (initially petrochemical, but then fusion). The problem emerges when a world population in the tens  of billions all enjoy an energy budget equivalent to levels in the industrialized West in 2000. Humans in 2000 consume 10 terawatts, wherease the total solar energy received by Earth is estimated variously at 109000 or 174000 terawatts. Ten billion humans at U.S. levels of energy use would consume 1000 terawatts. All the waste heat from all the energy uses adds up, and the laws of thermodynamics guarantee that energy use always creates heat exhaust. Heat pollution will have to be managed to prevent a runaway greenhouse effect like on Venus.

Population. The primary long-term environmental problems caused by human population increase will be heat pollution and pressure on habitats and ecosystems. By contrast, the traditional environmental worries of pollution and resource scarcity are subject to increasingly-effective technological and economic solutions. As Earth's population stabilizes, some will worry that decreasing birth rates will lead to declining population. Any actual decreases in population will be minor and temporary, and underpopulation will never be a long-term problem.

Resource Scarcity. The scarcity of a resource is measured by the cost of satisfying the need that it satisfies. By this measure, almost all resources have throughout human history been getting less and less scarce. Fossil fuels will remain abundant at least through 2050, and will likely not be very scarce before fusion replaces them as humanity's primary energy source starting around 2150. Arable soil will through conservation remain abundant, and minerals will continue to decrease in scarcity (i.e. cost). Many species of fish and game will become increasingly less abundant in the wild, but the cost/scarcity of food in general will continue to decline. Demand for fresh water will outpace most of its natural supply, but the cost of fresh water will eventually plateau at and decline with the energy cost of its desalinization and transportation.

Biodiversity. While food will continue becoming less scarce, the wild plants and animals that constitute earth's ecosystem will come under increasing pressure from humanity's increasing population. Loss of forest and wetlands will threaten fragile ecosystems that harbor rare species. The lost information content of extincted species is effectively impossible to replace.

Pollution.  Pollution levels in humanity's air, water, and land will continue to decrease as per-capita income increases and as government requires that economic transactions internalize their polluting externalities. Earth's crust has sufficient volume that solid waste disposal will be simply a problem of transportation.  Human population will be limited much more by heat pollution much than by solid waste pollution.  Property interests will ensure that soil erosion is mitigated.  Government will successfully prevent destruction of the ozone layer.

Infectious Disease. Pathogens will continue their natural evolutionary race against humanity's immunological and pharmacological defenses.  Further progress against some pathogens may be frustratingly slow, but genetic engineering will by 2300 make most infectious diseases subject to treatment and many subject even to prevention.

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