How Growth Can Protect the Environment
The Environmental Kuznets Curve
The pundits tell us that the world’s forests are “nearly gone,” so we must “degrowth” our population and economy to save the little forestry that remains. Not only is the base premise misleading at best, but growth itself is likely the fastest path toward restoring forestry coverage worldwide. Indeed, growth and progress may be the solution, not the cause, of many environmental ills.
By some measures it is true, the world is losing forest coverage, and yes, I think this is a problem. The loss of the Earth’s forests reduces biodiversity and eliminates important carbon sinks that aid in the battle against climate change. But the rate of deforestation needs to be placed into proper context. From Human Progress.org:
According to the United Nations’ Food and Agriculture Organisation (FAO), the annual rate of deforestation has more than halved since the 1990s. Between 2010 and 2015, the world has gained 4.3 million hectares of forest per year, while losing 7.6 million hectares of forest per year. That accounts for a net decrease of 0.08 percent of forest area each year.
As we can see, deforestation has slowed substantially in recent years. Indeed, it did so against a backdrop of unprecedented economic and technological growth. In fact, about half of the world today, we are seeing afforestation, not deforestation. This may come as a surprise to many. The media neglects to report such stories due to a deeply ingrained negativity bias.
But let’s take a moment and look at the countries that are seeing afforestation. Perhaps unsurprisingly, these include “wealthy” countries, like those in North America and Europe, which now have more forest cover than they had before industrialization. But even rapidly developing nations, from China, to Vietnam, to India are also witnessing net afforestation. The common denominator: wealth and growth.
A recent study from the University of Helsinki highlights that between 1990 and 2015, annual forest area grew in high and mid-income nations by 1.31 per cent and 0.5 per cent respectively, while decreasing by 0.72 per cent in 22 low income countries.
This shouldn’t be surprising. As countries develop and citizens are lifted out of abject poverty, public pressure and policymaking are freed to focus more on protecting the environment. Poor nations simply cannot afford to protect their forests. Indeed, the threshold for “turning the corner” on deforestation appears to happen around the $4600 GDP per capita level.
Thus, the most direct, if counterintuitive, means to protect the world’s forests is to accelerate global economic growth and enable all nations to break through that threshold.
A Kuznets curve
This suggests a kind of “Kuznet’s curve” for environmental and economic development. Low wealth and development do indeed lead to environmental degradation, but past a certain level, that damage reverses. Thus, it may be argued that the fastest path toward a sustainable economy is more growth, not less.
Indeed, we see this play out also with Carbon Dioxide emissions, with new technologies helping decouple the economy from greenhouse emissions:
Over the past 15 years…. We have succeeded in making clean energy cheap, with solar power and battery storage costs falling 10-fold since 2009. The world produced more electricity from clean energy — solar, wind, hydro, and nuclear — than from coal over the past two years. And, according to some major oil companies, peak oil is upon us — not because we have run out of cheap oil to produce, but because demand is falling…
Economic growth and progress are playing out exactly as they should; enabling humanity to do more with less. Some 32 nations have now decoupled their economic growth from carbon emissions, a stunning reversal from just a few decades ago. Notably, these nations are almost exclusively “wealthy,” indicating that economic development is crucial to protecting the environment.
Growth as the Cure
As I have noted in prior essays, human progress is fragile because it is counterintuitive. Our brains are simply not wired to accept that more people means greater resource abundance, that trade and immigration make us all better off, or that growth could actually mean less pollution. But the data is slowly coming in, growth and progress are indeed a cure for many ills.