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Seven billion and counting

How economists think about overpopulation,and how to moderate its effects

Written by Karna Basu |
October 31, 2011 1:57:01 am

According to the United Nations,the seven billionth human will be born on October 31,possibly in Uttar Pradesh. And though she will undoubtedly be cute,with chubby cheeks and dimple chin,there is some concern about what this means for the future of our species.

The world’s population has indeed risen at an astounding pace over the last century. From 1804 to 1960,we went from one billion to two billion. Since 1960,we have added an extra billion every 12-14 years. While these numbers are large,we also know that population growth rates have been falling for over 40 years. Reductions in fertility have more than compensated for the steady worldwide drop in death rates.

There is a misplaced Malthusian gloom in current discussions about world population. Malthus’ panic about the world’s inability to feed itself stemmed from his insights into the properties of compounding — a population that grows at a steady rate will double with increasing speed over the years. In reality,our population is growing at a declining rate and will peak before the end of this century.

I have heard that it was once possible for a pedestrian to cross Subbaiah Circle in Bangalore with limbs intact. But such nostalgic visions of an un-crowded past divert from a clear-eyed analysis of the pitfalls of population growth. Policy-makers should focus on assessing tangible impacts of population on poverty,hunger,and the environment.

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The concerns deserve to be taken seriously. There are two broad categories — first,how does an additional child affect the household she is born into,and second,how does this child affect the rest of the world? Unfortunately,much of the discourse on this topic confuses these categories and ends up in muddled,moralising waters.

For the first category,it is significant that the fastest growing populations today lie mostly in Sub-Saharan Africa,one of the poorest regions of the world. The fact that population grows fast in poor areas does not tell us much about the causal links between population and poverty. But it does mean that large numbers of babies will be born poor.

If households are reproducing faster than is in their interests,what can be done? There is no need for governments to resort to coercionary measures. Research shows that targeting underlying market failures — in particular the deficient provision of contraceptives and information — can produce dramatic results. An experiment in Bangladesh (the “Matlab Project”) did just this and found that fertility dropped by one-third in three years.

There remains one worrying question: are we going to hit a physical limit in food production before world population stabilises? Though some arable land remains,further increases in agricultural productivity are no longer guaranteed. But we’re getting ahead of ourselves here. Given that the world currently produces more than enough to feed everyone,we need to understand how to get food to those who need it most before addressing the question of aggregate output.

The second category of concern involves negative externalities. A negative externality exists where an individual’s choices have a direct adverse impact on another individual. Examples abound — a cigarette smoker in a bar hurts the health of the waiter; a person who does not take a TB vaccine puts others at risk; my uncle’s singing makes me nauseous.

Similarly,a newborn baby is going to spend a lifetime degrading the environment. But this is no reason to deny the baby’s right to be born: taxes exist to deal with exactly this sort of problem. Rather than taxing children,however,we need to tax particular activities. Not everyone has the same impact on the environment. Consider the following comparison: in 2008,the average Indian used one-fourteenth the energy of the average American. Most Sub-Saharan countries used even less.

A tax that targets environmentally unfriendly activities will allow individuals the freedom to make decisions that are in line with global long-term interests. This will happen in two ways. First,families will change their behaviour (driving less,for example). Second,couples will be compelled to consider the environmental costs when making childbearing decisions.

It might appear that such policies are biased against the poor — even though they use less energy,they are less able to shoulder the burden of such taxes. But this need not be the case. Environmental taxes serve to help people internalise the social costs of their actions. To the extent that these hurt poor households,other forms of redistribution can compensate. In any case,there are good reasons,from the perspective of both fairness and efficiency,to redistribute resources to the poor.

This is all easier said than done since environmental externalities do not respect national boundaries. And any consensus will also have to address the decades of untaxed damage done by industrialised populations.

In 1961,as world population approached the three billion mark,The New York Times wrote: “The brotherhood of man is no longer a pious wish — it is a necessity for civilised survival.” We have survived 50 years without much brotherhood,but we need more of it now,if only to coordinate population and environmental policy.

The writer teaches economics at Hunter College,New York

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