The Power of People

How markets and human ingenuity can save the planet

The Infinite Resource: The Power of Ideas on a Finite Planet, by Ramez Naam, University Press of New England, 352 pages, $29.95

“We are a plague on the Earth,” declared the famous British TV naturalist David Attenborough in the January issue of Radio Times. “It’s coming home to roost over the next 50 years or so. It’s not just climate change; it’s sheer space, places to grow food for this enormous horde. Either we limit our population growth or the natural world will do it for us.” 

This is not a new warning. Would-be prophets of doom, from 19th-century population-growth alarmist Thomas Robert Malthus to popular 20th-century starvation forecaster Paul Ehrlich, have been preaching imminent ecological catastrophe for centuries now. All their prophecies have failed to materialize. Is there any reason to believe that Attenborough is any different?

Probably not, argues Ramez Naam in The Infinite Resource: The Power of Ideas on a Finite Planet. Naam, a professional technologist, is no cockeyed optimist. He takes seriously the environmental challenges that confront humanity, from man-made global warming to the depletion of fisheries, fresh water, and forests. He believes (as I do not) in peak oil, the idea that global oil production is almost maxed out and will soon begin an unrelenting decline. Nevertheless, his book’s basic argument is that “it’s possible for humanity to live in higher numbers than today, in far greater wealth, comfort, and prosperity, with far less destructive impact on the planet than we have today.”

Naam, a former executive at Microsoft, where he worked on Internet Explorer and Microsoft Outlook, is a fellow at the Institute for Ethics and Emerging Technologies. He is also the author of More Than Human: Embracing the Promise of Biological Enhancement (2005) and the science fiction novel Nexus (2012). In The Infinite Resource, Naam argues that human ingenuity combined with the incentives of free markets can yield a world of “almost unimaginable wealth, health, and well-being.” Knowledge, he writes, “acts as a multiplier of physical resources, allowing us to extract more value (whether it be food, steel, living space, health, longevity, or something else) from the same physical resource (land, energy, materials, etc.).”

Take agriculture. Ten thousand years ago it took an average of 3,000 acres to feed one hunter-gatherer; farmers today can feed one person using less than one-third of an acre. “Our innovation in farming technology has multiplied the value of a plot of land by nearly 10,000,” Naam notes. If crop yields per acre had remained stuck at 1960 levels, half the world’s remaining forests would have been plowed under by now.

The energy needed to produce a unit of nitrogen fertilizer has fallen nearly 90 percent since 1900. The energy required to produce a ton of steel has dropped by 80 percent since 1950. The amount of energy used to heat an average house in the U.S. is down 50 percent since 1978. The amount of energy needed to desalinate a gallon of seawater has plunged 90 percent since 1970. LED lights use about one-tenth as much energy as incandescents. Humanity has gotten richer during the last couple of centuries not chiefly by doing more of the same old things but by developing better recipes.

To illustrate his point, Naam suggests that readers melt down their iPhones and try to sell the raw materials. They would be worth just a few cents, of course. The value is in the design, which derives from centuries of accumulated scientific and technical knowledge. Not only can an iPhone connect you to nearly anyone on the planet, it can access vast amounts of information instantly, take and store photos and video and audio, navigate the streets of a strange city, and check your flight times, among many other things. As of March, there were 800,000 apps available in Apple’s App Store. “The accumulated knowledge of materials, computing, electromagnetism, product design, and all the rest that we’ve learned over the last several centuries,” Naam enthuses, “converts a few ounces of raw materials worth mere pennies into a device with more computing power than the entire planet possessed fifty years ago.”

Naam acknowledges environmental problems that, if unaddressed, could overwhelm technological and economic progress. The solution, he suggests, lies in the market, which is “far superior to any competing system for producing innovation, for reducing poverty, for growing wealth, and for increasing productivity.” Markets achieve these laudable effects through price signals. If a resource has no price, users can take as much as they want. So all around the world we find rivers, lakes, forests, fisheries, aquifers, and the air being “treated as socialist resources, free for anyone to use, exploit, or damage without direct repercussions to themselves” (emphasis in original).

Naam argues that the solution to depleting resource reserves is putting a price on them so that market actors effectively pay for the damage they cause other users. Surely that is right, but there is a prior step that he largely overlooks: property rights. 

Prices in markets are negotiated between owners and buyers; the overexploitation of rivers, lakes, fisheries, aquifers, forests, and airsheds occurs chiefly because those resources are unowned. The United Nations Food and Agriculture Organization estimates, for example, that one-third of the world’s fisheries are overexploited or crashed already, and more than half are fully exploited now with no room to grow. Naam points out that the production of capture fisheries has been hovering around 90 million tons per year for the last two decades. Aquaculture, by contrast, has gone from producing 14 million tons of fish in 1991 to 63 million in 2011. That’s a good example of technology and innovation coming to the rescue, but Naam might have mentioned that aquaculturists enjoy property rights, and that capture fisheries can be protected and restored by giving people who use them property rights as well. Once the fish are owned, fishers have a strong incentive to protect stocks and increase their numbers.

Another resource problem cited by Naam is the ongoing depletion of aquifers and streams, chiefly by farmers looking to irrigate their crops. Once again, assigning property rights could allow a market price to emerge, forcing users to take into account how they are consuming a scarce resource. For example, unitization, a property system used to manage oil and gas reservoirs, could be applied to aquifers. Similarly, riparian rights can be recognized in rivers and streams. (Another important way to preserve water resources is for governments to stop subsidizing irrigation water and pumps.)

Naam believes the biggest commons problem confronting humanity is global warming, stemming from the fact that burning coal, oil, and natural gas loads up the atmosphere with extra carbon dioxide. He does a good job of examining the evidence suggesting this could be a significant problem by the end of the century. He properly fears the crony-capitalist distortions that accompany proposals to put a price on carbon dioxide emissions through cap-and-trade schemes. Instead, he argues for a simple per-ton carbon tax imposed at the wellhead and the minehead. For the first five years the tax would be zero, permitting people to begin to make future adjustments and investments. In year six, it would be set at $10 per ton—about 10 cents per gallon of gasoline and 0.7 cent per kilowatt-hour of electricity. The price would rise each year, with the aim of reducing emissions 80 percent by 2050.

Naam sets an eventual ceiling at $100 per ton, equivalent to $1 per gallon of gasoline and 7 cents per kilowatt-hour of electricity. “Pricing carbon is not a big-government initiative,” he insists, because all of the revenues would be divvied up equally and sent back to every American. To level the trade playing field, tariffs would be adjusted to take account of carbon taxes for both exports and imports. 

Assuming that policy makers are going to do something, Naam’s proposal is the something that would do the least damage to the economy. Although he likely is underestimating the inventiveness of fossil fuel producers, setting a price on carbon would speed up the process of weaning humanity off fossil fuels and thus allay concerns about reaching peak oil.

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  • Ted S.||

    “Pricing carbon is not a big-government initiative,” he insists, because all of the revenues would be divvied up equally and sent back to every American.

    Yeah right. There has to be a bureaucracy making certain the stuff gets paid, keeping track of how much gets paid, and keeping track of how much everybody's going to get back. It'll make the current IRS look like pikers. And it'll probably take a vig of 90% of the tax.

    Funny how the people who tell us to consume less never want the government to consume less.

  • SugarFree||

    Even if the money had 100% flow through, notice the key phrase: because all of the revenues would be divvied up equally and sent back to every American.

    Some people "consume" far more carbon than others, but the money collected will go out equally. So the smelly hippie that lives in a nest and walks to the co-op gets back the same amount as someone who produces wealth with that carbon.

    It's just another wealth redistribution scheme.

  • Rich||

    Meh. I'm still waiting for my check from Government Motors.

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  • some guy||

    And another example of how environmentalism is the new communism. Bald-faced collectivism couldn't break the back of the productive classes, so about 4 decades ago they disguised it as something that is much easier for people to agree with. I just hope that this doesn't end up having a negative effect on "real" environmentalism in the long run.

  • wareagle||

    He takes seriously the environmental challenges that confront humanity, from man-made global warming to the depletion of fisheries, fresh water, and forests.

    why should I take a man who believes in this seriously even if his view differs from the Attenborough crowd?

    he argues for a simple per-ton carbon tax imposed at the wellhead and the minehead.

    So he believes in the magical fairy dust of govt action as the elixir to all that ails us. Okay.

  • Doctor Whom||

    If a resource has no price, users can take as much as they want. So all around the world we find rivers, lakes, forests, fisheries, aquifers, and the air being “treated as socialist resources, free for anyone to use, exploit, or damage without direct repercussions to themselves

    This. I've been saying for a while that we shouldn't whine about the tragedy of the commons if the commons didn't have to exist in the first place.

  • Rich||

    “Each additional idea is a gift to the future.”

    Not if it's a *bad* idea, especially one that catches on.

    Anyway, generating ideas by human brain will soon be so Twentieth-Century.

  • robc||

    Coase Pigou

    That is all.

  • robc||

    Dammit, put four greater than signs between Coase and Pigou.

    Programming Note for the Squirrels:
    I understand anything after a less than sign disappearing, but there is no need to do anything special with a greater than sign unless there is a matching less than sign preceding it.

  • Scarecrow Repair||

    Symmetry!

  • Sevo||

    “We are a plague on the Earth,” declared the famous British TV naturalist David Attenborough"

    "We"? I think he had something in his pocket.

  • robc||

    It seems he could do something to help out. Set an example, be the first in line at the extermination booth.

  • some guy||

    No, no, see he's helping out by alerting others to the danger. That good that he's doing more than offsets all the carbon emitted by his jet-setting lifestyle.

  • some guy||

    He's like Al Gore, with a more agreeable accent.

  • Sevo||

    Ype, one more new-age charlatan.

  • ||

    "Naam believes.. biggest ..problem ... is global warming,.. He does a good job of examining the evidence suggesting this could be a significant problem by the end of the century."

    Every time in modernity the apocalypse approaches a socialist scheme is touted as the only way to avoid it. Each time the apocalypse fails to materialize a different one is following on it's heels and the same solution is offered.
    This is the latest version of a scenario that has played out countless times through history. The gods are angry, doom approaches, and the only way to avoid being punished is to sacrifice. Sacrifice your crops, your stock, your money, your blood, or your children. Now it is your lifestyle ( and make no mistake, your children too ). It is worth noting that the same people pushing this manage to feather their own nests with everyone else's sacrifice.

    "... not a big-government initiative,” he insists, because all of the revenues would be divvied up equally and sent back to every American. To level the trade playing field"

    There it is. Equality and social justice achieved through big-government socialism and personal sacrifice to the collective.

  • ||

    "....speed up the process of weaning humanity off fossil fuels and thus allay concerns about reaching peak oil."

    Oil is evil. Progress and wealth are evil. Was it RC Dean who said that if we ever get off of oil these same people would be complaining equally about whatever means of producing energy replaced it? They will bitch about Big Solar, you can count on that.

    In 1959 my father studied metallurgy instead of petroleum engineering because his advisors convinced him that we had already reached peak oil and that by the end of the 1960's he would have no career.

  • ||

    Instead of imposing artificial costs on oil production/consumption( there are already plenty of legitimate costs) to drive us prematurely away from it, we can simply let the market govern the production of energy. When a viable means of replacing oil emerges, and it will, industry and consumers will gladly switch over.

  • ||

    Bingo! It's like the market works for pricing everything except energy. Weird, eh?

  • LynchPin1477||

    Serious question: how do property rights work for things like rivers, oceans, and the atmosphere, where the resources in question (water, fish, air) are not confined to man-made legal boundaries?

  • ||

    You own the resource within a geographical boundary. E.g., "American airspace" becomes Jack's airspace above Jack's property, Jill's airspace above Jill's property, Jim's airspace above Jim's property, etc. You run into complications with things like flight and radio transmission that way though. Water rights are easier, since they already exist in a limited sense. Things like "international waters", navigable waterways, and naval operations get tricky.

  • Kuze||

    "I am a wealthy, insular asshole" -David Attenborough

  • Ken Shultz||

    "Prices in markets are negotiated between owners and buyers; the overexploitation of rivers, lakes, fisheries, aquifers, forests, and airsheds occurs chiefly because those resources are unowned."

    The government is just as incompetent at protecting the environment as it is at doing anything else. Privatization is the solution to so many environmental problems--even things like endangered species.

    Congress was enforcing a " sea otter exclusion zone" along California's coast until recently--just to protect a $22 million sea urchin industry.

    http://www.outsideonline.com/o.....20730.html

    Meanwhile, the BLM is selling the wild horses (Mustangs) they're legally compelled to care for--to slaughterhouses to be turned into cat food!

    http://investigations.nbcnews......ild-horses

    What's the ultimate cause of those problems?

    The answer is that no one owns the sea otters or the parts of the ocean they swim in. No one owns the mustangs or the BLM land they live on.

    Some of my fellow libertarians' approach to environmental problems is to try to convince people that the problems don't exist. A much, much better strategy is to try to convince them that the government isn't the solution to environmental problems, which should be easy to do--since it isn't.

  • LynchPin1477||

    The real tragedy here is that those horses are being turned in to cat food instead of people food.

  • Ken Shultz||

    Well that depends on how you look at it.

    From a purely economic perspective, those horses and that land should go to whomever is willing to pay the most.

    If the people who care about Mustangs and their well being care more than $10 a head, then from an economic perspective, selling them for $10 a head for slaughter was foolish.

    From an environmentalist's perspective, thinking that the government is sufficiently competent to protect wild horses is foolish. There will never be a government agency whose primary purpose is to protect wildlife.

    The primary purpose of any government agency is to create and protect their own jobs.

    If you read the article, you'll see that all the procedures were followed. All the boxes were checked!

    Any environmentalist that thinks that's good enough for the animals they supposedly care about--should stop pretending they're environmentalists.

  • LynchPin1477||

    I just want to eat horse.

  • timbo||

    You almost had it with price signals and privatization. The only flaw in this piece is depending on a carbon tax to fix global warming. Using a government mandate to stop CO2 with a tax will only result in the same government abuses. The price signal argument is, and should be, the only way to get alternatives to the market. When fossil fuels are too expensive for the market to absorb, then innovation will answer the call for a cheaper transportation/energy solution. No matter how dire folks claim the man-made problem may be, government will never be able to provide a solution to something as entirely diverse as hot air. There are too many vagaries involved to think that bureaucrats could realistically grasp a solution through allocation of tax resources. They cannot deliver a letter profitably. The real threats are simply water shortages. I think there is a rational argument for global warming to not be that severe. Hotter climates will make more rain through evaporation. We need to get the government out of water management and get real prices to the market. The world takes a long time to make changes. There is no proof that the current warming trend is man-made. The fact that a bunch of government funded scientists and college professors are the die-hard proponents of global warming should be a signal that the debate is questionable. Politicians in the mix make the whole argument is that much less valid.

  • JWatts||

    Naam has confidence that innovators can dramatically improve solar and wind power, allowing those technologies to deliver the bulk of energy that humanity will be using by the end of the century.

    Sigh, more muddle headed thinking. I certainly think that there will be gains from solar and wind power. And I expect that in the long run they'll be competitive and maybe dominant sources of electricity. However there are some very real problems that renewable advocates continuously sweep under the rug.

    The largest issue with solar and wind is not the actual cost to produce the power, but their intermittent nature. The only way to use large quantities of either one (greater than 20% of the electricity supply) is to have cost effective power storage. All of the current power storage solutions are very expensive. Batteries are insanely expensive compared to current electricity prices. Pumped water storage and compressed air storage are limited due to geographical constraints as well as high costs.

    Until we have viable, low cost storage options, we'll be restricted to 20-30% renewable power. More than that is unlikely given current technology. Not that I'm not glad to get to that level.

    Wind power in particular will act as a long term (centuries, in all likelihood) cap on electricity prices.

  • Libertarius||

    Stop bullshitting around with stupid-ass windmills and let's pave the way for Terra Power to build a Traveling Wave Reactor, as well as other companies who are working on the next generation reactors. These guys are going to invent warp drive and everyone will still be prattling about fucking windmills lol

  • NotAnotherSkippy||

    Thorium MSR. Solar has a fatal flaw. I like to call it night. The fact that even after the cost of panels has fallen two orders of magnitude it's still not competitive with conventional power generation should be a hint that it's not going to be. Here's another hint: it's the labor, stupid. People are expensive and wind and solar need a lot more people per MWh. Then there's simply no existing or foreseeable energy storage technology that enables a regional let alone a continental scale "renewables" economy.

    Thorium gives us scalable reactors with high availability, low waste (consumes existing), and significantly reduced proliferation risks. I could point out that we demonstrated many of the enabling technologies on a shoestring budget 50 years ago, but then again we could go to the moon 50 years ago. Now we can't even get into orbit. Thank you mother government.

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  • buybuydandavis||

    "He believes (as I do not) in peak oil, the idea that global oil production is almost maxed out and will soon begin an unrelenting decline."

    The guy has never heard of fracking? Works for oil too.

  • Anthony Ricigliano||

    Great insight on the environmental issues.

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