[proxy] web.archive.org← back | site home | direct (HTTPS) ↗ | proxy home | ◑ dark◐ light

Pervasive Externalities at the Population, Consumption, and Environment Nexus

Paul R. Ehrlich

Science

19 Apr 2013

Vol 340, Issue 6130

pp. 324-328

Sticky Responses

A textbook example of an unaccounted-for consequence (externality) of commercial or industrial activity is the production of pollutants where neither the producer nor the buyer bears the cost of using common environmental resources. Dasgupta and Ehrlich (p. 324) offer a theoretical analysis of externalities in two other areas of modern life—human fertility and material consumption. For example, when fertility decline lags mortality decline, the consequence could be environmental crash, the likelihood of which is greater if the environmental effects of consumption or population growth are external to the market.

Abstract

Growing concerns that contemporary patterns of economic development are unsustainable have given rise to an extensive empirical literature on population growth, consumption increases, and our growing use of nature’s products and services. However, far less has been done to reach a theoretical understanding of the socio-ecological processes at work at the population-consumption-environment nexus. In this Research Article, we highlight the ubiquity of externalities (which are the unaccounted for consequences for others, including future people) of decisions made by each of us on reproduction, consumption, and the use of our natural environment. Externalities, of which the “tragedy of the commons” remains the most widely discussed illustration, are a cause of inefficiency in the allocation of resources across space, time, and contingencies; in many situations, externalities accentuate inequity as well. Here, we identify and classify externalities in consumption and reproductive decisions and use of the natural environment so as to construct a unified theoretical framework for the study of data drawn from the nexus. We show that externalities at the nexus are not self-correcting in the marketplace. We also show that fundamental nonlinearities, built into several categories of externalities, amplify the socio-ecological processes operating at the nexus. Eliminating the externalities would, therefore, require urgent collective action at both local and global levels.

Get full access to this article

View all available purchase options and get full access to this article.

References and Notes

1

United Nations Development Programme, Human Development Report (United Nations, New York, 2010).

2

World Bank, World Development Report (World Bank, Washington, DC, 2010).

3

J. Schor, The Overspent American (Basic Books, New York, 1998).

4

Bongaarts J., Watkins S. C., Social interactions and contemporary fertility transitions. Popul. Dev. Rev. 22, 639 (1996).

5

Jensen R., Oster E., The power of tv: Cable television and women’s status in India. Q. J. Econ. 124, 1057 (2009).

6

Hajnal J., Two kinds of preindustrial household formation system. Popul. Dev. Rev. 8, 449 (1982).

7

Population Reference Bureau, 2012 World Population Data Sheet (Population Reference Bureau, Washington DC, 2012).

8

An international dollar is a hypothetical currency that enables one to compare costs across countries with the help of a common reference point—namely, the U.S. dollar. So, an international dollar has the same purchasing power in all countries as the U.S. dollar has in the United States.

9

Caldwell J. C., Caldwell P., The cultural context of high fertility in sub-Saharan Africa. Popul. Dev. Rev. 13, 409 (1987).

10

J. Illife, Africans: A History of the Continent (Cambridge Univ. Press, Cambridge, 2011).

11

By “excessive,” we mean excessive from the point of view of the society in question.

12

Dasgupta P., Reproductive externalities and fertility behaviour. Eur. Econ. Rev. 44, 619 (2000).

13

Speidel J. J., Weiss D. C., Ethelston S. A., Gilbert S. M., Population policies, programmes and the environment. Philos. Trans. R. Soc. London Ser. B 364, 3049 (2009).

14

Campbell M., Sahin-Hodoglugil N. N., Potts M., Barriers to fertility regulation: A review of the literature. Stud. Fam. Plann. 37, 87 (2006).

15

The Royal Society, People and the Planet (Royal Society, London, 2012).

16

Ehrlich P. R., Ehrlich A. H., Can a collapse of global civilizations be avoided? Proc. R. Soc. London Ser. B 280, 20122845 (2013).

17

P. Bourdieu, Distinction: A Social Critique of the Judgment of Taste (Routledge and Kegan Paul, London, 1984).

18

P. Dasgupta, An Inquiry into Well-Being and Destitution (Clarendon Press, Oxford, 1993).

19

L. E. Blume, W. A. Brock, S. N. Durlauf, Y. M. Ioannides, in Handbook of Social Economics, J. Benhabib, M. O. Jackson, A. Basin, Eds. (North-Holland, Amsterdam, 2011), pp. 853–964.

20

If nh is taken to be a continuous variable, as would be a reasonable assumption in the face of uncertainty in conceiving a child, equilibrium can be shown to exist.

21

The quadratic loss function in Eq. 1 has proven useful in econometric analysis of conformist behavior in consumption choices (19).

22

P. Dasgupta, in Economic Theory for the Environment: Essays in Honour of Karl-Goran Maler, B. Kristrom, P. Dasgupta, K.-G. Lofgren, Eds. (Edward Elgar, Cheltenham, UK, 2002), pp. 118–128.

23

Lutz W., KC S., Global human capital: Integrating education and population. Science 333, 587 (2011).

24

N. S. Jodha, Living on the Edge: Sustaining Agriculture and Community Resources in Fragile Environments (Oxford Univ. Press, Delhi, 2001).

25

E. Ostrom, Governing the Commons: The Evolution of Institutions for Collective Action (Cambridge Univ. Press, Cambridge, 1990).

26

M. Gadgil, R. Guha, This Fissured Land (Oxford Univ. Press, Delhi, 1992).

27

Lopez R., The tragedy of the commons in Cote d’Ivoire agriculture: Empirical evidence and implications for evaluating trade policies. World Bank Econ. Rev. 12, 105 (1998).

28

Aggarwal R., Netanyahu S., Ramano C., Access to natural resources and the fertility decision of women. The case of South Africa. Environ. Dev. Econ. 6, 209 (2001).

29

M. Douglas, B. Isherwood, The World of Goods: Towards an Anthropology of Consumption (Routledge, London, 1996).

30

T. Veblen, The Theory of the Leisure Class: An Economic Study of Institutions (George Allen & Unwin, London, 1925).

31

R. Layard, Happiness: Lessons from a New Science (Penguin, New York, 2005).

32

Arrow K. J., Dasgupta P. S., Conspicuous consumption, inconspicuous leisure. Econ. J. 119, F497 (2009).

33

Household h is assumed to choose Ch and Xh, subject to its budget constraint, having taken X* as given.

34

A. Banerjee, E. Duflo, Poor Economics (Public Affairs, New York, 2011).

35

Kuhn P., Kooreman P., Soetevent A., Kapteyn A., The effects of lottery prizes on winners and their neighbors: Evidence from the Dutch postcode lottery. Am. Econ. Rev. 101, 2226 (2011).

36

Economists advocate taxes in rich countries to blunt the externalities associated with conspicuous consumption (31, 32), but the allied environmental externalities created by such patterns of consumption need to be taxed as well.

37

P. Donati, Relational Sociology: A New Paradigm for the Social Sciences (Routledge, London, 2011).

38

Sunstein C., Ullmann-Margalit E., Solidarity goods. J. Polit. Philos. 9, 129 (2001).

39

G. J. Mailath, L. Samuelson, Repeated Games and Reputations: Long-Run Relationships (Oxford Univ. Press, New York, 2006).

40

The equality-constraint that defines Uh in Eq. 4 is the limiting case of Uh in Eq. 3 when αh is infinity.

41

Ehrlich P. R., Goulder L. H., Is current consumption excessive? A general framework and some indications for the United States. Conserv. Biol. 21, 1145 (2007).

42

R. Repetto, W. Magrath, M. Wells, C. Beer, F. Rossini, Wasting Assets: Natural Resources and the National Income Accounts (World Resources Institute, Washington, DC, 1989).

43

Arrow K. J., Dasgupta P., Goulder L. H., Mumford M. J., Oleson K., Sustainability and the measurement of wealth. Environ. Dev. Econ. 17, 317 (2012).

44

R. Hassan, R. Scholes, N. Ash, Eds., Ecosystems and Well-Being: Current State and Trends (Island Press, Washington, DC, 2005).

45

Ehrlich P. R., Holdren J. P., Impact of population growth. Science 171, 1212 (1971).

46

W. Steffen et al., Global Change and the Earth System (Springer, Berlin, 2004).

47

K. J. Arrow, F. H. Hahn, General Competitive Analysis (Holden Day, San Francisco, 1971).

48

Starrett D. A., Fundamental nonconvexities in the theory of externalities. J. Econ. Theory 4, 180 (1972).

49

May R. M., Levin S. A., Sugihara G., Complex systems: Ecology for bankers. Nature 451, 893 (2008).

50

Vitousek P. M., Ehrlich P. R., Ehrlich A. H., Matson P. A., Human appropriation of the products of photosynthesis. Bioscience 36, 368 (1986).

51

W. E. Rees, in Encyclopedia of Biodiversity, S. A. Levin, Ed. (Academic Press, San Diego, 2001), vol. 2, pp. 229–244.

52

M. Ridley, The Rational Optimist: How Prosperity Evolves (4th Estate, London, 2010).

53

E. Boserup, Population and Technological Change (Univ. of Chicago Press, Chicago, 1981).

54

Turner B. L., Shajaat Ali A. M., Induced intensification: Agricultural change in Bangladesh with implications for Malthus and Boserup. Proc. Natl. Acad. Sci. U.S.A. 93, 14984 (1996).

55

Barrett C. B., Travis A. J., Dasgupta P., On biodiversity conservation and poverty traps. Proc. Natl. Acad. Sci. U.S.A. 108, 13907 (2011).

56

Butzer K. W., Endfield G. H., Critical perspectives on historical collapse. Proc. Natl. Acad. Sci. U.S.A. 109, 3628 (2012).

Information & Authors

Information

Published In

Science

Volume 340 | Issue 6130
19 April 2013

Copyright

Copyright © 2013, American Association for the Advancement of Science.

Submission history

Received: 14 May 2012

Accepted: 28 February 2013

Published in print: 19 April 2013

Permissions

Request permissions for this article.

Acknowledgments

We thank K. Arrow, M. Campbell, G. Daily, A. Dasgupta, N. Diamond-Smith, A. Ehrlich, L. Goulder, D. Karp, D. Kennedy, M. Potts, A. Ulph, and, most especially, the editors and three anonymous referees for their comments. P.R.E. thanks the Mertz Gilmore Foundation, the Winslow Foundation, and P. Bing and H. Bing for their support.

Authors

Affiliations

Faculty of Economics, University of Cambridge, Cambridge CB3 9DD, UK.

Sustainable Consumption Institute, University of Manchester, Manchester M13 9PL, UK.

Centre for Conservation Biology, Department of Biology, Stanford University, Stanford, CA 94305, USA.

Notes

*

Metrics & Citations

Metrics

Article Usage
Altmetrics

Citations

Export citation

Select the format you want to export the citation of this publication.

Media

Figures

Multimedia

Tables