Wealth and the Environment

Stephen DeAngelis

May 4, 2009

For years analysts have noted that the wealthier a country is the more environmentally concerned it becomes. Adherents of Abraham Maslow’s hierarchy of needs find this relationship completely understandable. When one is struggling to survive (that is, when one is living at the bottom of Maslow’s pyramid), saving oneself is more important than saving the planet. The higher on the pyramid one climbs the more aware one becomes of his or her surroundings and the impact that his or her behavior has on it. Not everyone agrees, however, that development and wealth are the answers to saving the planet. When environmental awareness first became a cause célèbre back in 1960s and 1970s, development was frowned upon by environmentalists [“Use Energy, Get Rich and Save the Planet,” by John Tierney, New York Times, 20 April 2009]. Tierney notes that two scientists, ecologist Paul Ehrlich and the physicist John P. Holdren, who is now President Obama’s science adviser, developed a formula that made “affluence and advanced technology seem … bad for the planet.”

“Their equation was I=PAT, which means that environmental impact is equal to population multiplied by affluence multiplied by technology. Protecting the planet seemed to require fewer people, less wealth and simpler technology.”

Tierney notes that a lot has changed in four decades since that equation was written. As a result, Tierney makes two bold predictions:

“1. There will be no green revolution in energy or anything else. No leader or law or treaty will radically change the energy sources for people and industries in the United States or other countries. No recession or depression will make a lasting change in consumers’ passions to use energy, make money and buy new technology — and that, believe it or not, is good news, because…

2. The richer everyone gets, the greener the planet will be in the long run.”

His bad news/good news predictions obviously seem contradictory. Tierney’s predictions rely on the data I noted at the beginning of this post — that as people get richer they become more concerned about the environment in which they live.

“While pollution can increase when a country starts industrializing, as people get wealthier they can afford cleaner water and air. They start using sources of energy that are less carbon-intensive — and not just because they’re worried about global warming. The process of ‘decarbonization’ started long before Al Gore was born. The old wealth-is-bad IPAT theory may have made intuitive sense, but it didn’t jibe with the data.”

Tierney reports that dozens of studies have shown that the environmental impact of development rises as a country industrializes, then flattens out, then starts falling. On a graph, the environmental impact of development would form an inverted “U”– what’s called a Kuznets curve. These studies also note that as people become wealthier they move up the carbon chain “wood to coal and oil, and then to natural gas and nuclear power, progressively emitting less carbon per unit of energy.” Of course energy sources like wind and sunlight take you off the carbon chain altogether. Environmentalists question these studies because the U.S., a very rich and industrialized country, continues to pollute. Surprisingly, Tierney reports that the U.S. is just reaching the acme of its Kuznets curve.

“The United States and other Western countries seem to be near the top of a Kuznets curve for carbon emissions and ready to start the happy downward slope. The amount of carbon emitted by the average American has remained fairly flat for the past couple of decades, and per capita carbon emissions have started declining in some countries, like France. Some researchers estimate that the turning point might come when a country’s per capita income reaches $30,000, but it can vary widely, depending on what fuels are available.”

Of course, France uses a higher percentage of nuclear power than any country on earth. It has even stopped mining coal. Tierney notes that deforestation follows a Kuznets curve as well. As countries develop, forests start to disappear, then stabilize, then people begin planting more trees. I’m not sure that the Kuznets curve will apply when it comes to rain forests. Recreating a rain forest seems much different than planting a forest of pine trees, maples, or oaks. Tierney believes that people like Al Gore who are hoping to change human behaviors that impact the environment are “hoping against history.” Jesse Ausubel of Rockefeller University, asserts that “nothing has drastically altered the long-term trends in the way Americans produce or use energy — not the Great Depression, not the world wars, not the energy crisis of the 1970s or the grand programs to produce alternative energy.” Ausubel, however, is a big believer in the Kuznets curve.

 

Although Tierney predicted that there wouldn’t be a green revolution, his other arguments could lead one to conclude that something approaching a green revolution is, in fact, about to take place. The U.S. has just come off a period where high oil prices were affecting the way people drove. That has been followed by a deep recession that has had an impact on how people spend. Now he tells us that the U.S. may be about to make the turn at the top of its Kuznets curve. On the surface, the confluence of these events would appear to make it a great time to push for green technologies. Whether something “revolutionary” will actually occur remains to be seen. Tierney’s and Ausubel’s arguments against something revolutionary occurring are bolstered by theories that claim human brains just aren’t wired to think green [“Why Isn’t the Brain Green?,” by Jon Gertner, New York Times, 16 April 2009]. Gertner reports that in a poll conducted by the Pew Research Center, people ranked climate change at the bottom of issues they were asked to prioritize (20 out of 20). Those poll results caused scientists associated with the Center for Research on Environmental Decisions (CRED) to reflect on the future of their discipline, which sits at “the intersection of psychology and economics, decision science focuses on the mental processes that shape our choices, behaviors and attitudes.”

“Aided by a $6 million grant from the National Science Foundation, CRED has the primary objective of studying how perceptions of risk and uncertainty shape our responses to climate change and other weather phenomena like hurricanes and droughts. The goal, in other words, isn’t so much to explore theories about how people relate to nature, which has been a longtime pursuit of some environmental psychologists and even academics like the Harvard biologist E. O. Wilson. Rather, it is to finance laboratory and field experiments in North America, South America, Europe and Africa and then place the findings within an environmental context. It isn’t immediately obvious why such studies are necessary or even valuable. Indeed, in the United States scientific community, where nearly all dollars for climate investigation are directed toward physical or biological projects, the notion that vital environmental solutions will be attained through social-science research — instead of improved climate models or innovative technologies — is an aggressively insurgent view. … CRED’s researchers consider global warming a singular opportunity to study how we react to long-term trade-offs, in the form of sacrifices we might make now in exchange for uncertain climate benefits far off in the future.”

One of the reasons that people don’t “think green” is because we are apparently wired to select near-term benefits over long-term benefits. “We are not always adept at long-term thinking,” Gertner writes, “experiments have shown a frequent dislike for delayed benefits, so we undervalue promised future outcomes.” One only has to look at the massive amounts of consumer debt that has added to the current financial crisis to find evidence that Gertner is correct. That also means, he points out, that we are unlikely to make lifestyle changes in order to pursue a more environmentally friendly future — just like Tierney predicted. The question that interested Gertner was whether that meant the world was likely to sit back and do nothing about the approaching dangers. One of the answers he received indicated that groups can be motivated to change behavior.

“Ben Orlove, an anthropologist at the University of California, Davis, … studied farmers in southern Uganda. In 2005 and 2006, Orlove observed how the behavior of the region’s poor farmers could be influenced by whether they listened to crucial rainy-season radio broadcasts in groups or as individuals. Farmers in ‘community groups,’ as Orlove described them to me, engaged in discussions that led to a consensus, and farmers made better use of the forecast. ‘They might alter their planting date,’ he said, ‘or use a more drought-resistant variety of seed.’ Those in the community groups also seemed more satisfied with the steps they took to increase their yields.”

The implications of this research are far-reaching; especially for people in the developing world. One of the reasons that Muhammad Yunus insisted that women take out microloans in groups rather than as individuals is because group support dramatically increased the chances of success. Getting neighbors to cooperate with neighbors always helps improve the chances that a particular project will succeed. Of course, community action has also been stirred to the point that it has ensured that projects fail or never begin. Individuals are important, but community action is critical for achieving most development objectives. Elke Weber, who holds a chair at Columbia’s business school as well as an appointment in the school’s psychology department, believes that “any potential climate disasters would likely signal the start of an intriguing but ultimately dismal chain of events. A few years ago Weber wrote a paper for the journal Climatic Change that detailed the psychological reasons that global warming doesn’t yet scare us; in it, she concluded that the difficulties of getting humans to act are inherently self-correcting. ‘Increasing personal evidence of global warming and its potentially devastating consequences can be counted on to be an extremely effective teacher and motivator,’ she wrote, pointing to how emotional and experiential feelings of risk are superb drivers of action. ‘Unfortunately, such lessons may arrive too late for corrective action.'”

 

The bottom line of Gertner’s article is that because we aren’t wired to think green, environmental issues must be engaged locally more than nationally (so that regional impacts can be more readily seen and understood) and must use language that touches the hearts and minds of its intended audience. In other words, you talk about the impact of climate change on crop yields to farmers, about the impact on snowfall to skiers, about the impact on wildlife to hunters, on the health of their children to parents, and so forth. Then you get those communal groups (i.e., farmers, skiers, hunters, parents, etc.) to agree on community action. Taken together Tierney’s and Gertner’s articles don’t shower a lot of sunshine on a short-term greener future. Let’s hope, however, that lessons are learned before it’s too late for corrective action.