Science

How Free Markets and Human Ingenuity Can Save the Planet

A review of The Infinite Resource: The Power of Ideas.

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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. It's coming home to roost over the next 50 years or so," warned the famed British television naturalist David Attenborough in the January Radio Times. He added: "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." Would-be prophets of disaster from Malthus to Paul Ehrlich have been preaching imminent ecological doom for centuries now. All such prophecies have so far failed. But is Attenborough right; is it different this time?

Probably not, Ramez Naam argues in The Infinite Resource: The Power of Ideas on a Finite Planet. Naam is no cock-eyed optimist. He takes seriously the environmental challenges that currently confront humanity, from man-made global warming to the depletion of fisheries, fresh water, and forests. And he believes in peak oil. Nevertheless, he argues 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 is a professional technologist. He is a former Microsoft executive, where he worked on Internet Explorer and Microsoft Outlook, and he's a fellow at the Institute of Ethics and Emerging Technologies. He is also the author of More Than Human: Embracing the Promise of Biological Enhancement and the science fiction novel Nexus. In The Infinite Resource, he 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. 10,000 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 their 1960 level, half of the world's remaining forests would have been plowed down by now.

Infinite Resource
Credit: Naam

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 five-fold 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 water has plunged 90 percent since 1970. LED lights use about 10 times less energy than incandescents. Humanity has gotten richer over the past 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. Of course, they would be worth just a few cents. 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, you can access vast amounts of information instantly, take and store photos and video and audio, navigate the streets of a strange city, check your flight times, and…well, as of January 2013, there were 775,000 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 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 writes.

Naam acknowledges that there are 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 laudatory effects by means of 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."

Naam argues that the solution to most resource problems is to put a price on them so that market actors pay for the damage they cause other users of these resources. Surely that is right, but there is 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 a 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 past 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 he could have mentioned that aquaculturists enjoy property rights, and that capture fisheries can be protected and restored by giving those fishers property rights as well. Once the fish are owned, fishers have a strong incentive to protect stocks and work to increase their numbers.

Another resource problem cited by Naam is the ongoing depletion of aquifers and streams around the world, chiefly by farmers who are irrigating their crops. Once again, assigning property rights can allow a market price to emerge, forcing users to take into account how they consuming a resource. For example, unitization, a property right 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 are loading up the atmosphere with extra carbon dioxide. He does a good job of examining the evidence that 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 cents per kilowatt-hour of electricity. The price would rise each year aiming to reduce emissions by 80 percent by 2050.

Naam sets an eventual ceiling of $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 policymakers are going to do something, Naam's proposal is the something that would do the least damage to the economy. Although Naam is likely underestimating the inventiveness of fossil fuel producers, setting a price on carbon would speed up the process of weaning humanity off of fossil fuels and thus allay concerns about reaching peak oil.

Naam has confidence that innovators can dramatically improve solar and wind power, allowing those technologies to deliver the bulk of energy humanity will be using at the end of the century. He points out that the cost of photovoltaic modules has dropped by a factor of 20 since 1980. Nevertheless, he acknowledges that other energy options will likely be necessary for a transition to renewables. Consequently, he urges environmentalists to embrace nuclear power, highlighting the economic and safety advantages of small modular nuclear reactors. In some designs, the reactors can be fueled by the nuclear wastes produced by conventional reactors over the past 50 years, solving both an energy supply problem and a waste problem simultaneously. He also wants to jettison the Price-Anderson Act, a law limiting liability for nuclear accidents to just $12 billion. That will encourage nuclear innovators to come up with safer designs.

That said, Naam does think government-funded research and development can help jump-start many of the technologies he anticipates, especially in energy. I would argue that allocating property rights to common pool resources, and the market prices that would thus result, could well be enough to encourage innovators to develop resource-conserving technologies without recourse to handouts.

While Attenborough laments that humanity is a plague upon the earth, Naam asks an intriguing question: "Would your life be better off if only half as many people had lived before you?" In this thought experiment, you don't get to pick which people are never born. Perhaps there would have been no Newton, Edison, or Pasteur, no Socrates, Shakespeare, or Jefferson. "Each additional idea is a gift to the future," Naam writes. "Each additional idea producer is a source of wealth for future generations." Fewer people means fewer new ideas about how to improve humanity's lot. In any case, Naam shows that current demographic trends suggest that world population will peak below 10 billion before the end of this century.

"If we fix our economic system and invest in the human capital of the poor, then we should welcome every new person born as a source of betterment for our world and all of us on it," Naam writes. He makes a persuasive case that human ingenuity will enable both people and planet to flourish.

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  1. “The planet isn’t going anywhere. We are.” – George Carlin

    1. I think of this line every time I hear some prat yammering about “saving the planet.”

      Herewith Carlin’s, occasionally profane, rant on the subject.

      http://www.youtube.com/watch?v=7W33HRc1A6c

    2. Start working at home with Google! It’s by-far the best job Ive had. Last Monday I got a new Alfa Romeo from bringing in $7778. I started this 9 months ago and practically straight away started making more than $83 per hour. I work through this link, mojo50.com

    3. There are always certain kinds of people who think the world is in a crisis, because they can’t imagine that we are just living our lives and not following some grand design that the crisis is somehow impeding us from achieving.

  2. Well, at least this post has the word “Infinite” in it. We’re getting closer.

  3. blah blah blah blah Something about Bioshock?

  4. He is a former Microsoft executive, where he worked on Internet Explorer and Microsoft Outlook, and he’s a fellow at the Institute of Ethics and Emerging Technologies.

    Well, if that doesn’t scream TOP. MAN. I don’t know what does.

    1. IE and Outlook? SNEER. When you have someone who worked on Visual Studio or SQL Server get back to me.

      1. Yeah, that guys worse than someone who plays games on a console. What a loser. I wonder if he plays with spreadsheets as well and pretends like they’re a DB, with really important data?

        1. ACID compliant? What’s that?

    2. So he’s the “lid”?

  5. To paraphrase Einstein, “Insanity: making the same prophecies over and over, getting it wrong every time”.

  6. 50 years ensures he won’t be around to be embarassed by how wrong he was.

  7. WRONG. Just like your parents eventually stop at some point progressing with the times and wear the same look while running out the clock, so technology has hit its plateau. There will be no better forms of energy, not greater means of food production, no more efficient living accommodations. Particularly with the sequester in full effect.

    1. The Theory of Star Trek Remakes seems to suggest that even the most entropied system can continue indefinitely.

      1. In an alternating one-good-one-bad cycle? (Or have recent films disrupted that?)

  8. it’s sheer space, places to grow food for this enormous horde.

    You know who else worried about der Lebensraum?

    1. Nazi.

    2. The Katzenjammer Kids?

    3. Poland and Czechoslovakia?

    4. “Horde”. That one word perfectly captures the environazi mindset. People are just mindless droves, incapable of providing solutions for their respective selves.

      1. It mus piss off Ehrlich something fierce that people just won’t act like the rats in his maze!

    5. Kids going to a Waldorf school?

    6. The Axis of Jerk?

  9. Libertarians suck

    1. So you’ve been to the Reason glory hole, I guess.

      1. PRIMUS!!!

  10. Captain Bailey! He’s our hero! ‘Gonna bring the libertarian carbon footprint down to zero!!

  11. BIOSHOCK! BIOSHOCK! BIOSHOCK! BIOSHOCK! BIOSHOCK! BIOSHOCK! BIOSHOCK! BIOSHOCK! BIOSHOCK! BIOSHOCK! BIOSHOCK! BIOSHOCK!VBIOSHOCK! BIOSHOCK! BIOSHOCK! BIOSHOCK! BIOSHOCK! BIOSHOCK! BIOSHOCK! BIOSHOCK!

    HAVE YOU HAD ENOUGH YET, H&R? THERE’S MOAR WHERE THAT CAME FROM!

    I lost 2 posts to that pathetic debacle, you bastards!

    1. And I lost a real zinger about Hugh Akston. We’re talking quality stuff here, the ‘A’ material!

      1. I know, I saw that post, right before the great disappearance.

        I had a good one too, something about how in Soviet Russia, game plays you.

        They’re gonna pay for this injustice!

  12. ‘We are a plague on the Earth. It’s coming home to roost over the next 50 years or so,” warned the famed British pundit Thomas Malthus’

    Shame Attenborough can’t be bothered to read history.

  13. Nope. Ya wanna save the planet, ya gotta do it by taxing people for the amount of rain that falls on their property, which can be determined by spying on them via satellite:

    “The rationale is that since “roofs, driveways and carparks create more potential for drainage problems and water contamination,” a fundraising fee will be assessed based on the size of the building and surrounding paved surfaces.”

    http://now.msn.com/maryland-in…..d=ansnowex

    “The tax, mandated by the EPA and enforced locally, will be calculated “through satellite surveillance of your property,” the statement claims.”

    http://www.breitbart.com/Big-G…..taxes-rain

    1. Surely this is not serious. That would be turning up the heat way too fast.

      1. Not exactly. The tax isn’t on the amount of rain but on the amount of built-on or paved surface area. It’s still fucking retarded.

  14. Reminds me a lot of Bucky Fuller’s Critical Path

  15. The rationale is that since “roofs, driveways and carparks create more potential for drainage problems and water contamination,” a fundraising fee will be assessed based on the size of the building and surrounding paved surfaces.

    What the fuck now?

    1. “What the fuck now?”

      You think those bozos need a justification?

    2. Seems to me to be a close cousin to the ole, “wealthy people have more property, so the police do more to protect them, ergo they should pay exponentially higher taxes than everyone else and demonized at every opportunity” chestnut.

  16. Meh, Deregulating nuclear power to open it up to legitimate innovation could help solve a lot of problems. It is essentially an infinite source of energy that we can control, unlike wind and solar. With cheap energy (which is clean of airborne pollutants) you can do a lot of things to allow for the survival of a lot of humans.

    1. But . . . but . . . that doesn’t fill the pockets of greentech cronies at taxpayer expense and warm the hearts of the economically illiterate.

      1. I really think that if it wasn’t for WW2, nuclear power would have evolved much faster and become much more accepted as the true energy source of the future. But the gov’ment took it over, made nuclear science secretive and built a bomb from the tech and dropped a couple on some cities.

        Nuclear power never had a starting time where there was no regulations for it to flourish in. It was born into government control and was ruined by radiation fear mongering.

        1. Dont’ forget Hollywood’s China Syndrome-the Fracking whistleblowing of 1979

      2. everyone knows that solar and wind industries crashed in Europe and China because of the corporations…not because we stopped using windmills (oops! Turbines) fucking centuries ago.

  17. If they aren’t right in the next 50 years, at least they’ll be spared future opportunities for error by the fact that the world population will crash thereafter due to non-replacement fertility rates.

    1. Tax-incentives for having kids will fix that.

      http://www.washingtonpost.com/…..01652.html

    2. yeah cuz lefties totally admit they’re wrong once proven wrong

  18. “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.

    Sure. Taking money from some people, running it through the government apparatchiks and distributing it back out isn’t “big government”.

    1. 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, in the form of….?

      1. Ration tickets

        1. I was hoping someone would say “drink tickets”

  19. You know if I spent my whole life in the hive like environs of one of the world’s major cities, I’d be worried about overcrowding too.

    Except, you know, I’ve been to the vast wilds and the big city, and everything in between. So I know that there’s plenty of space on this amazing planet.

    One of the most irritating things about the greens is their small mindedness. Humanity is capable of great things. We have chained the lighting, we have rode pillars of fire to the sky and beyond. Human beings have lived on the slopes of volcanoes, and at the coldest places in the world. We have climbed the highest peak just because it was there, we have descended in tiny metal spheres to the very bottom of the ocean, to bring light to a place that’s never had a glimpse of it.

    What do the greens offer us? Lukewarm showers and rationed resources. Dim lights and tiny cars. Fuck that.

    1. I believe the Sierra Club accidentally admitted that the entire world’s population could fit into one county in Texas.

      1. The Sierra Club can’t even tell the truth accidentally.

        If you crammed people in as densely as Mumbai, you could fit 475.5 million people in Brewster County. At those densities, you could fit 20 billion in Texas.

        You could also fit half a billion suburban single-family homes in the continental US.

        1. Of course people’s foot prints are a bit bigger than that. Plus there is the foot prints of other stuff that makes it possible for Earth to support life

          1. Kroneborge| 4.12.13 @ 5:10PM |#
            “Of course people’s foot prints are a bit bigger than that. Plus there is the foot prints of other stuff that makes it possible for Earth to support life.”

            So we need TWO Texas-sized areas?!

        2. You could fit a half a billion suburban homes in Texas.

          Texas = 172 million acres

    2. This always amazes me. They constantly think we have reached the end of our ability to innovate. That we must now settle for unreliable windmills and solar panels for energy and must stop heating and air conditioning our homes/anything else cheap energy has allowed us to enjoy.

      I can’t stand to listen to these types and will not give them the time of day. They seem to be the biggest hypocrits out there as they preach energy conservation but live on a MacBook in an air conditioned apartment.

    3. You know if I spent my whole life in the hive like environs of one of the world’s major cities, I’d be worried about overcrowding too.

      Exactly this. The people who complain about the lack of space have never been to fucking Wyoming, or read anything at all about the Asian Steppes.

    4. …”We have chained the lighting, we have rode pillars of fire to the sky and beyond…”

      (MAKES HEAVY METAL HORNS WITH RIGHT HAND!!)

      Screaming guitar solo!!!!

  20. Didn’t Julian Simon already write this book?

    1. He did, only better

      1. TW: He did, but people need updated versions.

  21. since “roofs, driveways and carparks create more potential for drainage problems

    What are the chances the EPA would allow you to use rain barrels to capture the runoff from your roof and water the lawn with it, thereby “mitigating” the problem?

    That’s what I thought.

    1. “Oregon Man Jailed For Collecting Rainwater On His Property …”
      http://thecount.com/2012/07/28…..-property/

    2. Until 2009, it was illegal to collect rain water in the state of Washington.

      http://www.ehow.com/info_87497…..state.html

      Dregulashun!

  22. Naam believes the biggest commons problem confronting humanity is global warming

    I stopped reading right here.

    1. MG: That’s a pity. Aside from your disagreement over that issue, you’d probably like the book.

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

    Naam is being an idealistic and romantic fool. It does not matter how much imagination you can squeeze out of an “innovator”, you can’t violate the laws of physics… or economics, for that matter.

    The value is in the design, which derives from centuries of accumulated scientific and technical knowledge.

    Naam has a special gift for stating the obvious. Only the most unsophisticated and economics-illiterate of liberals (but I repeat myself…) believe that the wealth and value is right on the Earth in the form of “resources,” which is how they can then argue that rich countries – and the Market – are raping Gaia.

    That said, Naam does think government-funded research and development can help jump-start many of the technologies he anticipates, especially in energy.

    Especially because bureaucrats are these incredibly gifted individuals who can foresee the potential on investments even when they’re not risking their own dough but someone else’s, at no cost to themselves.

    Makes sense, right?

  24. “We are a plague on the Earth. It’s coming home to roost over the next 50 years or so,” warned the famed British television naturalist David Attenborough in the January Radio Times.

    And I will take his word for it once he demonstrates the sincerity of his belief and kills himself in the name of saving Gaia.

    I’m patient, I can wait…

    1. Richard Attenborough is someone who REALLY should know better.

  25. “it’s possible for humanity to live in higher numbers than today, in far greater wealth, comfort, and prosperity, with far less” Even if this is true (which I find doubtful) there is still some limit somewhere. If not 10 billion then what about 20, or 50, or 500000 billion? There is a limit to how many people can live on the planet, and there’s an even lower limit to the number of people that can life on the planet and enjoy a middle class lifestyle.

    “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.).” This is only true to a point, The invention of power tools allows us to build a house much more efficiently, but it doesn’t replace the need for natural resources. Or the invention of a Kindle allows us to do without paper books, but we still need to make the Kindle.

    “Take agriculture. 10,000 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” This is also dependent on finite resources.

    Good points on a net zero carbon tax.

    1. What is your point? The fact is, every time someone says “oh crap we are using too many “, humanity figures a way to use it more efficiently.

      You pointed out the kindle. Where one person may have consumed 20 trees worth of books in his life, now he consumes a much smaller amount in the resources needed to produce a kindle. And in 30 years, he won’t even need the kindle- it will be some smaller artifact or a shunt into his brain.

      Yes there will always be SOME impact, but when you are cutting that impact by factors of 10, it has a big effect.

      And that’s why this environmentalist hand-wringing is so stupid. You have these eco-nuts insisting that they should cut some resource use by 20% or 40%. That’s NOTHING compared to the resource efficiencies we have gained through innovation. Conservation means making innovation more expensive.

    2. Kroneborge| 4.12.13 @ 5:04PM |#
      “it’s possible for humanity to live in higher numbers than today, in far greater wealth, comfort, and prosperity, with far less” Even if this is true (which I find doubtful) there is still some limit somewhere. If not 10 billion then what about 20, or 50, or 500000 billion? There is a limit to how many people can live on the planet, and there’s an even lower limit to the number of people that can life on the planet and enjoy a middle class lifestyle.”

      And?

      1. People keep acting like the limit doesn’t exist. First step admit it exists, then we can figure out what that limit is.

        I expect it’s nowhere near the 10 billion people we expect to have by 2050, but I guess we will find out.

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  38. To paraphrase Einstein, “Insanity: making the same prophecies over and over, getting it wrong every time”.

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