Why is the global economy constrained by the energy cost of energy?
The carrying capacity is the number of individuals that an area can support without sustaining damage. Carrying capacity is exceeded if so many individuals use an area that their activities cause deterioration in the very systems that support them. Exceeding the carrying capacity sometimes harms an environment so severely that the new number who can be supported is smaller than the original equilibrium population. The carrying capacity would then have declined, perhaps permanently.
Any number of elements or systems can be hurt by overuse. A field can be grazed down until the root systems of grasses are damaged; or so much game can be hunted off that food species are effectively extirpated. Now, the foragers that ate the grass or the predators that killed the game have lost a food source. In effect, the carrying capacity has been exceeded so that the population dependent on the area's productive systems is worse off than it was originally.
Animal populations that destroy their niche come and go. If not too many examples come to mind, it is because they rather quickly go. The miniature ponies on Assateague Island illustrate a point on the continuum. They would overgraze their island, seriously depleting their future food supply, except for the fact that a portion of each year's colt crop is removed. Without human intervention (there are no predators and apparently no reservoir of infectious disease), the pony population would explode. Probably it happened in the past. Their very small size today is a vestigial effect of starvation, when only the tiniest, for whom the least blades of grass were lifesaving, survived.
A population cannot be stable if, by its size or behavior, it destroys the very life-support systems on which it depends. Sooner or later, degradation of the environment is felt in inadequacies of the food or water supply, shelter, or havens where individuals can be safe and the young can develop. Sustainability requires human or animal populations to stay at or below the carrying capacity of their physical environment.
Humans are a little different because of wanting more than bare subsistence. Humans value their aesthetic, intellectual, cultural, and political creations. People want more than a loaf of bread and processed grape juice. For humans, then, carrying capacity refers to the number who can be supported without degrading the physical, ecological, cultural, and social environments. Carrying capacity relates to the desired quality of life.
The carrying capacity of the United States depends upon standard-of-living targets, including high-quality recreational opportunities, coexistence with an abundance and diversity of wild species, tolerable work-to-home commuting conditions, favorable conditions for childrearing, and safe neighborhoods. Where population size detracts from the capacity to provide these amenities, overpopulation exists.
One may discern overpopulation quite apart from large systems and specific resources. Overpopulation shows up in quality of life and cost of living. Repeatedly one seesleast those who wish to, will seethat more people mean more problems from pollution, crowding, and resource scarcity because even conservationists pollute and consume. The costs of adjusting (i.e., decently accommodating more and more people in the same amount of space and with the same fund of natural resources) are monetized. Garbage is the topic of the hour. In just a few years, dumping fees in U.S. cities have skyrocketed, from $5 or $10 a ton to an average of over $150. Burning questions are whether to incinerate or not, how to recycle, and how to make money from one's ash heap.
The rising cost of water in areas that are not naturally arid makes the same point. Even if the quantity of water is sufficient, purity tends to suffer when population density grows. It costs money to keep clean or clean up. A 1992 Wall Street Journal account (Poor Pay, 1992) states that "Boston water and sewer bills have risen 39% in the past two years as the costs of cleaning up Boston Harbor have been phased into rates." In 1991, the average household paid $500 a year in water and sewer bills, and "water shutoffs as a result of nonpayment of water bills tripled."
Demands on the public sector also increase as population grows. Taxes invariably rise to meet the higher demand for education, social services, health care, law enforcement, infrastructure such as schools, hospitals, prisons, systems for human transportation, and disposal of sewage and other wastes. Concurrently, systems are often left to deteriorate, an attractive option because taxpayers and users may not see meaningful gains even with higher spending. Infrastructure is decaying nationwide, but goes unnoticed until a bridge collapses, sewers leak, or tunnels cave in.
The disappearance of natural capital is equally silent, but it is continuing at a great rate and is compromising future production. Iowa has lost 50 percent of its topsoil since the advent of farming in the nineteenth century. The drawdown of U.S. aquifers is also proceeding quickly and, so far, has led to abandonment of over 300,000 formerly irrigated acres in Arizona alone. Seventy-five percent of irrigation is threatened in Nebraska. Good air, land, water, and energy are the nuts and jolts of carrying capacity. It is not trivial for the sustainability of our society that, as summarized by Carrying Capacity Network (1991), the United States is "currently losing topsoil 18 times faster than [it is being replaced; or that] groundwater, much of which we stored during the Ice Age and is nonrenewable, is currently being pumped out of the ground 25 percent faster than it is being replenished."
Substitution for very basic inputs such as soil and fresh water will be difficult. Moreover, there may be an interactive effect: Up to now, irrigation and petroleum-based fertilizers have compensated for deterioration in the innate productivity of the land. But even a temporary rise in the price of petroleum, if it led to cutbacks on fertilizer use, could unmask the hidden cost of topsoil loss. When farmers recognize that their long-term income stream is jeopardized by present farming practices, they are likely to shift toward a more sustainable process. Holding farmers' capitaltheir soilintact will have the immediate result of lowering production to below what can be realized by current, soil depleting agricultural methods.
Recognition of true costs and adoption of alternate (sustainable) agricultural technologies could come suddenly, wiping out food surpluses in just a few growing seasons. Some farmers already forgo maximizing the size of crops in order to preserve soil. But a prudent farmer might not switch all his acreage at one time. He knows that prices will not rise to compensate him for the decreased size of his crop until virtually all farmers make the transition. Changes will come when the cost of production on depleted soils rises, that is, ever-larger fertilizer and pesticide requirements and/or higher-priced petroleum force a reduction in production targets. This paradigmatic shift in agricultural accounting will be a cultural as much as an economic phenomenon.
The price of food might rise if the crop got smaller, but that effect would be limited by market mechanisms. Demand falls when prices rise, keeping downward pressure on prices of even the most essential commodities. This constitutes price elasticity, and it implies a question: Can people afford to buy?
Commodity prices are an unreliable indicator of scarcity, in fact, because workers in rapidly growing populations command less and less for their labor and thus have little to spend. Poor people do not buy much. They exert negligible effective demand. They go without. Thus, rapid population growth causes very little pull on most commodity prices. The price of food might not go up even if the crop were small and the number of hungry people, large.
Most of the world's 5.5 billion people are becoming poorer as they compete against each other for jobs. Most lose purchasing power on a yearly basis. Increasing numbers drop out of the consumer market altogether, exerting no effective demand. Thus; it was a fact that December, 1990, oat and wheat prices sank to their lowest levels since 1972 while more people than before starved or lived on the edge of famine. The multitudes do not bid up prices. Quality of life and environmental health, not commodity prices, are clues that the carrying capacity is being exceeded.
Energy security is a key element of America's long-run, sustainable carrying capacity. Estimates of the carrying capacity assume a particular standard of living. The focus on energy recommends itself because, except for amenities provided by nature and our communities, per capita energy use is a good proxy for standard of living.
The eighty years between 1890 and 1970 were marked by the fastest rise in the standard of living that a whole country has ever seen; indeed, the first three-quarters of the twentieth century saw real disposable personal income rise at an average rate of 2.2 percent per year. This same period, according to energy specialist John Holdren (1991) of the University of California (Berkeley), saw a record 7 kW per capita increase in use of energy (from about 4 kW to over 11 kW). That works out to about 1.75 kW per twenty-year period, which is important for comparison with the latest twenty years: From 1970 to 1990, per capita energy use increased just 0.18 kW. Growth in inflation-adjusted after-tax income also stalled, averaging about 0.5 percent per year from 1973 to 1990.
The link between energy use per capita and standard of living is clear enough in concrete terms: Energy in the form of petroleum is the base for fertilizer, pesticides, on-farm mechanization, and much food processing and distribution. Energy lets us live somewhat distant from our place of work. Energy is the basis for heating, cooling, lighting, much communication, and most laborsaving devices in the home. Without plentiful energy, would your job exist?
To judge if we are within the carrying capacity of the United States, given the present standard of living, ask if our rate of energy use is sustainable. The related policy question is: Does the United States enjoy energy security? Geologists, computer modelers, petroleum industry analysts, and life scientists largely concur in projecting a bleak future.
A 1986 book, Beyond Oil The Threat to Food and Fuel in Coming Decades by John Gever et al., develops the concept of "energy/profit ratio": How much usable energy comes out for every unit of energy put in? That is, how much energy does one get for the energy used to find, produce, refine, and distribute energy? Long before all petroleum is used up, the best and easiest to recover deposits will be gone. Thus, the cost in energy associated with recovering petrochemical energy (oil and natural gas) will rise so that the profit ratio becomes less and less favorable. This ratio will be reflected partly in higher prices and partly in lower use of oil-based products.
In the decade or so after World War II, the supply of oil seemed inexhaustible. John Gever and his coauthors point out that oil fuels were easy to tap because fields lay close to the surface; the wells were shallow and cheap to drill. Prospecting revealed so many good sites that dry wells were few and far between. The energy/profit ratio for domestic petroleum stood at about 50 to 1. But by the mid-1980s, the situation was far different. The energy/profit ratio of domestic oil was 8 to 1; of foreign oil (because of greater distribution costs), 5 to 1.
The 1991 Gulf War made the energy/profit ratio of foreign oil dramatically, if somewhat temporarily, still less favorable: Add together the investment in transporting and operating allied tanks, planes and all else. How much energy did it take just to save future units of energy from Kuwaiti fields?
When the energy/profit ratio reaches 1 to 1, there will be little point in going back to the well. Effectively, we will be out of oil; the cost of production will exceed the value of the goods and services derived from oil. New domestic oil production will reach this point, predict Gever and company, between 1995 and 2005. Although older wells will continue to pump profitably for some years longer, the diseconomies of new production signal the beginning of true energy insecurity. The point of vanishing returns for foreign producers extends out for another fifty years.
Geologists with the U.S. Geological Survey do not contradict John Gever or others' similar conclusions. Beyond Oil appeared in 1986. In 1991, C. D. Masters et al. of the U.S. Geological Survey wrote that:
Fleshing out scientific overviews, Gutfeld (1992) reports the American Petroleum Institute's early 1992 estimate that "Total United States output is currently declining at an annual rate of 300,000 barrels a day." That is, the year by year decline represents 300,000 barrels less production each day. Speaking for the institute, Edward Murphy warned of this "substantial and largely unanticipated" trend: "The evidence indicates that the exploration and production sectors of the petroleum industry in the United States have entered a period of accelerated decline." The output picture is not expected to "righten unless the oil industry wins greater access to public lands such as the Arctic National Wildlife Refuge in Alaska and certain offshore areas."
Mention of the Arctic National Wildlife Refuge (ANWR) in Alaska arouses environmentalists. For good reason, says Jan C. Lundberg, former publisher of the Lundberg Oil Letter and founder of Fossil Fuels Policy Action (Arcata, Calif.). A large and pristine environment would be put at risk for an amount of oil that would make only a small contribution to U.S. security. At best, the ANWR field would extend domestic oil supplies by two years.
Energy security is in far greater jeopardy from our population growth than from denying access to the few remaining pools of oil in the northern hemisphere. Indeed, population growth in the United States drives the increasing use of energy: From 1970 to 1990-while per capita use hardly budged-total energy consumption increased by 24 percent. John Holdren (1991) states that 93 percent of the increase in the United States' use of energy in this twenty-year period can be traced to population growth. With population growth, planning for energy security means taking aim at a moving target.
The next several decades will not likely experience just a gradual exhaustion of oil as the primary energy source. Rather, the supply of oil likely will be periodically disrupted owing to its increasingly narrow geographic distribution into the single dominant area of occurrencethe Middle East.
We can be substantially confident that new, large occurrences of oil, such as would be necessary to alter the proportional contribution of the Middle East to world petroleum, are not likely to be found; certainly, no such occurrences have been found in the several recent decades of intense worldwide petroleum exploration.
Even without figuring in population growth, consensus among experts about the steep decline in domestic oil production means that we should evaluate oil's most essential uses. Perhaps domestic production for use in those most essential sectors will have to be subsidized by the society at large. That is other energy sources might be diverted to production of oil even from wells where the energy profit ratio is 1 to 1 or less. The policy question now becomes: Where is fossil petrochemical fuel most productive, and where is substitution most difficult?
Agriculture is Gever at al.'s selection for this most sensitive sector of the U.S. economy. Food is essential. It generates much of our foreign exchange. No good substitutes for petroleum-and natural-gas-based pesticides and fertilizers exist, although a switch to organic farming (and avoidance of removing crop residues for alcohol-based fuels) would preserve soil fertility and minimize demand for artificial fertilizer.
These changes will be driven by the rising price of petroleum based agricultural inputs. Supply will be in jeopardy when new wells cannot be brought in with better than a I to I energy/profit ratio, and old wells peter out. The prediction is that 2007-2025 will become the watershed years for agriculture. By this time, say Gever et al., 10 percent of all U.S. oil consumption (from domestic and imported sources combined) and 60 percent of all natural gas will be required for on-farm uses. Not coincidentally, the United States will have ceased by then to be a net exporter of food.
Now for the bad news. Depletion of soil, water, and fuel at a much faster rate than any of these can be replenished suggests that the carrying capacity of the United States already has been exceeded. David and Marcia Pimentel (1991) of the College of Agriculture and Life Sciences, Cornell University, take these three factors into account to estimate that, at a standard of living only slightly lower than is enjoyed today, the sustainable population size for the United States is less than half its present number. Beyond this, we abuse the carrying capacity and should expect sudden shocks that will massively drive down the standard of living.
The Pimentels embrace the desirability and potential for a transition to clean, renewable energy sources as substitute for most uses of oil. The very breadth of their approach leads to their addressing all present and potential energy sources. They find:
Evaluating land, energy, and water, the Pimentels conclude that the United States is rapidly depleting its nonrenewable or very slowly renewable resources and overwhelming the capacity of the environment to neutralize wastes. The present level of resource use is probably unsustainable in even the minimal, physical sense. If population increase and the present per capita use of resources persist, a crash becomes likely.
The Pimentels do, however, offer two alternate scenarios. Either one of them is stable and sustainable. They differ only in population size and standard of living. Both scenarios envision the United States moving to a solar-energy-based economy, that is, to total replacement of our current fossil-fuel energy dependence. Solar energy is a renewable, steady stream, so it meets a key criterion for sustainability. From renewable sources alone, however, only one-fifth to one-half of the present level of energy use would be available. To maintain a standard of living only slightly lower than we enjoy today, population size would need to decline to about 100 million people.
The estimate of maximum sustainable population size takes into account both the source and sink functions of Earth. At least two effects of pollutiongreenhouse warming and the ozone hole are poorly understood. One can only estimate the extent of change to which present levels of pollutants commit us already, the lead time before effects become manifest, and the damage that is being done. Nevertheless, the shift away from a fossil-fuel based economy, adopted in order to minimize greenhouse gas emissions and/or as a market response to high prices, will be one of the severest constraints.
Others, more sanguine, peg the U.S. carrying capacity at a higher level. Economist Robert Costanza of the Marine Biological Institute (University of Maryland) and editor of Ecological Economics thinks the carrying capacity is closer to being 150 million persons (Carrying Capacity, 1991).
In the United States, humankind is already managing and using more than half of all the solar energy captured by photosynthesis. Yet even this is insufficient to our needs, and we are actually using nearly three times that much energy, or about 40% more energy than is captured by all plants in the United States [italics in the original]. This rate is made possible only because we are temporarily drawing upon stored fossil energy; the very use of these fossil fuels, plus erosion and other misuse of our natural resources, are reducing the carrying capacity of our ecosystem.
The Pimentels, Jan Lundberg, and John Gever et al. start from very different premises and institutional biases. But their conclusions accord well with each other and with earlier estimates. With twenty years' hindsight, respect for Dennis and Donnella Meadows's Limits to Growth is renewed. This computer model of global dynamics was published in 1972 by the Club of Rome. It traces five factors including population size, energy throughput, and pollution under different assumptions (values and feedback loops) to conclude that the system faces collapse before the end of the twenty-first century. Fossil fuels still are being depleted at a faster rate than new discoveries are made (or likely to be made in the United States, which is thoroughly explored). Nuclear-waste disposal remains an intractable problem. Water for farmers and population centers is scarcer and more contaminated. Plus, threats the Meadows foretold in general, but could not have known specifically in 1972, now include possible global warming and the widening ozone hole. The time frame for experiencing "udden shocks"is perhaps thirty to fifty years-beyond most legislators' lifetimes. But all our children and grandchildren should prepare, if our generation cannot reverse present demographic and environmental trends.
The question is not whether the carrying capacity of land, air, and water ultimately limits how many people can subsist on Earth and in the United States. The limits are real; the only discussion can be about whether we have passed them or how close they are coming. The ultimate question is: What combination of population size and standard of living is wanted in America?
We need ask only for ourselves. American influence truly extends little beyond U.S. borders. Sovereign nations brook no outside interference with population targets or the fertility of their people. Money, they take; pressure to democratize and free their economy is grudgingly heeded as the price paid for aid. But unsolicited advice on fertility? That is an affront!
So, for the United States and the United States only we may ask: What is the optimum population size? If a target is not chosen as a matter of policy, if we continue to grow by more than 3 million persons a year, one of the Pimentels' scenarios becomes academic, a nonpossibility. The larger we grow, the less likely we are to shrink gracefully back to 100 million or 150 million people; that is, we probably cannot hope, in the long term, to maintain a standard of living that much resembles what we now enjoy.
One need not accept the Pimentels' or Costanza's estimates of limits in order to see that overpopulation is not just a third world problem. It is America's as well. Population stabilization was the target spelled out in the 1972 recommendations of the President's Commission on Population Growth and the American Future (the Rockefeller Commission). Citing considerations such as energy and mineral resources, water supply, agricultural land supply, outdoor recreation resources, and environmental pollution, the commission concluded that "Neither the health of our economy nor the welfare of individual businesses depends on continued population growth. In fact, the average person will be markedly better off in terms of traditional economic values if population growth slows down than if it resumes the pace of growth experienced in the recent past." The Commission dosed with the recommendation "that the nation welcome and plan for a stabilized population."
In 1972, the population of the United States had just passed the 210 million mark. In 1990, it passed 255 million. Because of immigration, population stabilization is a more distant goal today than in 1972, when replacement-level fertility was the issue. Moreover, the American future foreseen two decades ago appears to have arrived.
The standard of living has barely risen, and even this has come at the cost of borrowing from abroad. In many households, two earners are needed where one formerly sufficed. Home ownership and a college education are unaffordable for many Americans. Public parks and recreational areas are deteriorating from overuse. Wilderness, a refuge in thought even when not easily reached, is disappearing from America. The very poor are often "discouraged" workers, uncounted in unemployment statistics. Education, health-care, garbage-disposal, correctional, water, and highway costs have become more burdensome, while education, housing, social-service, and welfare monies are spread mere thinly. The number of poor grows constantly. More children (and a larger proportion) than before live in poverty. Homelessness appears chronic.
Domestic population stabilization will not instantly cure these ills, but all become more intractable as population grows. Generations of Americans have been believers in abundance (their legacy from the frontier) and in immigration (to populate that frontier). National needs change, however.
Events will show how long complacency with domestic population growth survives realization that overpopulation causes poverty; or that the poverty of the high-fertility-rate countries which send their unskilled emigrants to the United States is being shared with most native-born Americans.
1993 Plenum Press Population Politics: The Choices that Shape Our Future. By Virginia D. Abernethy, Ph.D. Reprinted with permission.
Repoduced from Carrying Capacity Network material.