[Relevant technical note from one of the SPC co-chairs: While revisiting a stream reference site within an extensive forest reserve last November, I observed that a site that featured coarse substrate and several large deep pools 2 years ago was now covered by many centimeters of sand obliterating the gravel, cobble, and pools. Such changes have occurred in similar streamscapes across the planet; in this case they occurred in western Sao Paulo state, Brasil. The proximal cause was transformation of upland pasture/grassland to rowcrop sugar plantation for biofuel--fueled in turn by economic and population growth. As a result of the physical habitat changes, the stream fish and macroinvertebrate assemblages were reduced to a small fraction of their previous richness and abundance within, and at least 1 kilometer upstream and downstream of, the reference site. These same processes are occurring from east to west throughout Brasil as its population and economy grow and as it transforms forest and savanna to pastureland and cropland at a massive scale, just as they occurred in North America a century or more earlier.]
Robert M. Hughes & Betsy Colburn
Co-chairs, SFS Science & Policy Committee
Economic Growth and Aquatic Ecosystem Conservation
This is a condensed version of a 70 page draft study report on economic growth and fish conservation produced by the Water Quality Section (WQS) of the American Fisheries Society and edited for SFS by the SPC. A similar report with a wildlife focus was produced by the Wildlife Society. For the sake of conserving space, references are not provided here but are available in the full draft study report, which may be obtained from the SPC co-chairs.
Economic Growth and Population Growth
Economic growth is an increase in the level of national product, income, and expenditure; i.e., an increase in the production and consumption of goods and services. It occurs via increasing population and per capita consumption, where “consumption” refers to that of households, firms, and government. Economic growth is indicated by increasing gross domestic product (GDP) or gross national product (GNP).
U.S. and North American economies have grown continually throughout their histories. In recent decades, the U.S. economy grew at a rate of approximately 2.5% per year. By the end of 2005, U.S., Canada, and Mexico GDPs were $12.37, $1.08, and $1.06 trillion, respectively.
Population growth and economic growth are virtually inextricable. All else equal, an economy grows at the rate of its population. Historically, however, North American economies have grown as a result of per capita consumption growth as well as population growth. In the U.S., for example, per capita consumption is now more than 4 times its 1900 level.
It is theoretically possible to have economic growth based solely on growth in per capita consumption. However, population growth provides firms with excess labor and consumers, and the government with more taxpayers. Public policy that encourages population growth is usually motivated out of concerns for economic growth. Therefore, it is impractical to address the issue of population growth in the policy arena without concomitantly addressing the issue of economic growth.
Economic Growth and Aquatic Ecosystem Trends
Aquatic ecosystems are in decline worldwide. At least 364 North American freshwater fishes are endangered, threatened, or vulnerable; nearly 50% of all USA mussel species are currently listed or proposed for listing as threatened or endangered; two-thirds of North America’s crayfish species are rare or imperiled; 42% (281,170 miles) of wadeable streams in the conterminous USA are in poor condition based on their benthic macroinvertebrate assemblages. This situation is mostly attributable to habitat degradation.
The linkage of economic growth to habitat degradation is clear. When we look at the causes of habitat degradation, these causes invariably represent sectors, infrastructure, or byproducts of the economy. The sectors include such prominent economic activities as agriculture, mining, logging, ranching, and fishing. Examples of infrastructure include roads, power plants, and dams. The byproducts of economic production are generally referred to as pollution or wastes.
It is also worth noting the connection of economic growth to three other prominent threats to aquatic ecosystems: invasive species, urbanization, and global warming. Invasive species travel the globe as a function of commerce, often via ballast waters, the aquarium trade, and deliberate stocking of sport and forage fish. Urbanization represents the concentrated proliferation of the labor force, light manufacturing, and service sectors, resulting in fundamental alteration of natural habitats. Global warming is a function of economic activity, and nowhere is this clearer than in the U.S. where the economy is 85% fossil-fueled.
Economic Growth, Ecological Economics, and Aquatic Ecosystem Conservation
For some, the empirical evidence for a conflict between economic growth and aquatic ecosystem conservation may seem too obvious to warrant further debate. However, principles from the natural sciences are required to demonstrate that this conflict is “fundamental,” i.e., irreconcilable. Most basic are the first two laws of thermodynamics and their corollaries: 1) neither matter nor energy may be created nor destroyed, and; 2) entropy increases and 100% efficiency is impossible in all transformations. In other words, there is a physical limit to the amount of energy and matter that may enter into the production process and a limit to the efficiency with which matter and energy may be transformed into goods and services.
Complementing the laws of thermodynamics are basic principles of ecology including carrying capacity, niche breadth, and competitive exclusion. Carrying capacity is the principle that the population of each species, including Homo sapiens, is limited because of the finity of natural resources. The principle of carrying capacity is underwritten by the laws of thermodynamics, and may be applied to the issue of economic growth as well as population growth.
Humans are ultimately limited by such ecosystem goods and services as soil, water, minerals, primary production, renewable and non-renewable fuels, natural pathogen controls, and natural air and water purification. The less each human consumes, the more (or longer) humans (or other species) may be supported. Theoretically, the ultimate carrying capacity would be reached when all individuals in the population were using the bare minimum of resources to survive and all available resources were being used. If each human consumed twice as much, then the planet could support one half as many. In other words, human carrying capacity may not be described solely in terms of population, nor solely in terms of per capita consumption, but rather in terms of population times per capita consumption; i.e., in terms of the size of the economy as indicated or approximated by GDP.
The breadth of a species’ niche depends on the complexity of its lifestyle and the variety of habitat components related to its life cycle. A species’ niche expands when it develops a new way of using its environment. For example, when a primate learns to use a new tool for accessing a new food source, its niche broadens. No species in natural history has developed a broader niche than H. sapiens. The inventions and innovations of humans have allowed it to broaden its niche throughout the planet, using a tremendous variety of natural resources, including other living beings, as food, fiber, and other raw materials.
A concept closely related to niche breadth is competitive exclusion, the principle that no two species may occupy an identical niche. A natural corollary of this principle is that the niche expansion of one species occurs at the expense of one or more other species.
These principles of ecology add essential context for understanding the relationship of economic growth to aquatic ecosystem conservation. Due to the tremendous breadth of the human niche, which continues to expand with new technology, the human economy grows at the competitive exclusion of nonhuman species in the aggregate, including fish, benthic macroinvertebrates, and other species. That growth also fundamentally alters the structure and function of aquatic ecosystems.
Economic Growth, Technological Progress, and Aquatic Ecosystem Conservation
Technological progress has allowed H. sapiens to broaden its niche dramatically at the competitive exclusion of other species. Yet there is another side of technological progress cited by those who do not acknowledge a fundamental conflict between economic growth and biodiversity conservation. In purely economic terms, technological progress refers to increasing output (of goods and services) per unit input (of land, labor, and capital). If this aspect of technological progress was predominant, then perhaps economic growth could be reconciled with biodiversity conservation. This prospect is sometimes referred to as “green growth.”
We do not view this prospect as valid, much less likely. When technological progress occurs in the context of economic growth as a national goal, the efficiency gains are not used to conserve input (land, labor, and capital) in the aggregate. Rather, when the goal is economic growth, the input that may have been conserved is used instead to obtain more output (goods and services).
Furthermore, there is an overlooked linkage between technological progress and economic growth at current levels of technology. Technological progress is big business in North America, stemming primarily from the research and development, or “R&D,” of corporations. Corporations are motivated to invest in R&D because the resulting technological progress leads to increased profits. However, there is another source of increased efficiency and profits: “economies of scale,” or the increased efficiency derived from expanding the size of an operation. Profits obtained via economies of scale are also, in part, invested in R&D. In other words, technological progress is a function of economic growth at current (pre-technological progress) levels of technology, and that technological progress, in turn, allows for an even broader human niche.
We note again the applicability of the entropy law. No particular production process can occur at 100% efficiency, and when limits to efficiency in one method (e.g., using manual tools to harvest food) are reached, then technological progress is no longer a matter of improving upon that method but rather finding a new one that typically increases both input and output (e.g., using petroleum-powered equipment to harvest food). Invariably, the competitive exclusion of nonhuman species has occurred as a result of technological progress put in the service of economic growth.
Addressing the Conflict Between Economic Growth and Aquatic Ecosystem Conservation
The purpose of SFS is to “promote further understanding of the benthic biological community, and its relationship to aquatic ecosystems, by providing a medium for exchange of appropriate information among the membership and with other professional societies and groups interested in aquatic ecosystems.” SFS’ science education and advocacy statement states that, “It is incumbent upon SFS to make available its collective expertise and knowledge to educate and advocate for the use of science based insights as a basis for decision-making.”
It seems clear that aquatic ecosystem conditions will not improve when: 1) there is a fundamental conflict between economic growth and aquatic ecosystem conservation, and; 2) economic growth is among nations’ highest priorities. Both of these conditions exist, and only the second is malleable.
Science has been omitted from policy discussions relevant to economic growth and aquatic ecosystem conservation. Economic growth policy has been left entirely to politicians and economists. SFS must advance aquatic science for purposes of informed economic policy-making.
The easiest, clearest, and perhaps most effective way for SFS to address the issue of economic growth is to issue a policy statement on economic growth, which may then be used to help enlighten the public and policy makers. However, if SFS takes a position explaining the conflict between economic growth and aquatic ecosystem conservation, it must identify the alternatives to economic growth.
The Steady State Economy as an Alternative to Economic Growth
In terms of the level of production and consumption, the basic alternatives are economic growth, recession, and a steady state economy. Recession is not a valid policy target for many reasons (although it will likely be foisted upon human society by resource shortfalls and periodic miscalculations of continued economic growth in one or more economic sectors). For policy purposes, a realistic alternative to economic growth is a sustainable steady state economy, which has been advocated by ecological economists for decades.
A steady state economy occurs when there is a stable or mildly fluctuating production and consumption of goods and services, which entails stable or mildly fluctuating population times per capita consumption. A steady state economy is not a particular kind of political or economic system. A steady state economy may be achieved in a capitalist democracy, a capitalist dictatorship, a capitalist theocracy, or any number of political-economic systems. The concern of the SFS is with the conflict between economic growth and aquatic ecosystem conservation, not with political-economic systems.
It is unrealistic to expect the public and policy makers to immediately embrace a steady state economy as an immediate policy goal, although it is reasonable to expect the public and policy makers to slowly accept the appropriateness of a steady state economy as a long-term policy goal. In the interim, we must consider short-term approaches, or “stepping stones” toward a steady state economy. These stepping stones amount to lowered rates of economic growth. Therefore, it behooves SFS to support a downward trend in the rate of economic growth. As the economic growth rate decreases, the rate of natural capital depletion will also decrease as will the declines in aquatic ecosystems and biodiversity.
Unlike a steady state economy, a gradually declining rate of economic growth is something that may be advocated and implemented immediately, because it is the normal course of affairs in economic policy-making to debate and negotiate preferred rates of economic growth. In the U.S., for example, such dialogue regularly occurs among the Council of Economic Advisors, Federal Reserve System, and Department of Commerce, with various amounts of input from the public and other entities. The parties to the dialogue cannot do an adequate job of considering the public welfare without information on the conflict between economic growth and various aspects of environmental protection and ecological condition, including aquatic ecosystem conservation. Such information is unlikely to come from sources other than professional natural resources societies.
Policy Tools for Aquatic Ecosystem Conservation
Policy tools for aquatic ecosystem conservation may be considered in terms of achieving sustainability, equitable distribution, and efficient allocation. In more conventional economic terms, some of these policy tools would be classified as “microeconomic” and some as “macroeconomic.”
An example of a microeconomic policy tool is a tax on pollution. Polluters may be taxed to compensate for the costs to society of the pollution. Pollution is a major threat to aquatic ecosystem conservation, and SFS should support all efforts to establish taxes that “internalize” the social costs of pollution (including degradation and loss of aquatic ecosystems).
Macroeconomic policies are roughly divided into fiscal and monetary. Fiscal policy refers to government expenditure and the financing thereof, most notably via taxes. Total expenditures and total taxes influence the scale of an economy. In general, increased expenditures have an expanding effect on scale, and increased taxes have a contractionary effect.
Monetary policy refers to the manipulation of the money supply and interest rates, which in turn affect each other. Along with fiscal policy, monetary policy is a blunt tool for affecting the scale of the economy. In general, expanding the money supply and decreasing interest rates have the general effect of expanding scale. These actions tend to stimulate spending and, especially in the case of lowering interest rates, investment, which stimulates the establishment and expansion of housing, infrastructure, and industry. The money supply may be expanded by reducing reserve requirements (i.e., the fraction of bank deposits that must be held on demand), selling government bonds on the open market, and lowering the interest rate.
Facing a conflict between economic growth and aquatic ecosystem conservation, yet acknowledging the hardships that would accompany a long-run recession, and the uncertainties about foreseeable prospects for economic growth, an appropriate approach for SFS is to support macroeconomic policy reforms conducive to a steady state economy. These should be advocated in a way that makes it clear that an immediate transition from a growing economy to a steady state economy is both virtually impossible and highly undesirable. Instead, SFS should advocate a cautious and gradual transition toward a steady state economy.
No credible set of economic policy recommendations for sustainability would be complete without addressing population growth. All else equal, population growth results in economic growth and is, along with economic growth, unsustainable. As with aquatic ecosystem conservation, population growth may be addressed with economic tools. For example, certain aspects of the U.S. and state tax codes provide incentives for having children. The most obvious example is a per-dependent tax break for parents. Tax breaks could be provided for having no children, or for the first child and eliminated for further children. A more stringent approach would entail a graduated tax on parents based on the number of children and the parent’s income.
SFS Position on Economic Growth
The SFS SPC proposes that the following position on economic growth be considered for adoption by SFS, posted on its website, and distributed to the press and Congress:
- Economic growth is an increase in the production and consumption of goods and services, and;
- Economic growth occurs when there is an increase in the product of population multiplied by the per capita production and consumption of households, firms, and government entities, and;
- Economic growth is indicated by increasing real gross domestic product (GDP) or real gross national product (GNP), and;
- Economies grow as integrated wholes consisting of agricultural, extractive, manufacturing, and services sectors that require physical inputs and produce wastes, and;
- Based upon established principles of physics and ecology, there is a limit to economic growth, and;
- A steady state economy is an economy with mildly fluctuating production and consumption of goods and services, and with a mildly fluctuating product of population multiplied by per capita consumption, and;
- A steady-state economy is generally indicated by mildly fluctuating real gross domestic product (GDP) or real gross national product (GNP).
Therefore SFS believes that,
- There is a fundamental conflict between economic growth and aquatic ecosystem conservation based on ecological principles including niche breadth, carrying capacity, and competitive exclusion, and;
- Technological progress occurs via research and development that requires funding and the use of natural resources, has negative ecological and economic effects, and may not be depended upon to reconcile the conflict between economic growth and aquatic ecosystem conservation, and;
- A steady-state economy is a viable, sustainable alternative to a growing economy, especially in larger, wealthier economies, and;
- The long-run sustainability of a steady state economy requires its establishment at a size that does not breach ecological and economic capacity during expected or unexpected supply shocks such as disasters, climate change, and energy shortages, and;
- A steady state economy does not preclude economic development, a qualitative process in which different technologies may be employed and the relative prominence of economic sectors may evolve, and;
- A steady-state economy is ultimately required for the conservation of healthy aquatic ecosystems, and;
- Macroeconomic and microeconomic policy tools may be used in tandem to gradually reduce rates of economic growth pursuant to the long-run goal of a steady state economy, and;
- Economic policy tools for human population reduction and stabilization may be carefully and gradually introduced for purposes of achieving sustainable, healthy economies and sustainable, healthy aquatic ecosystems.