Defusing the population bomb.

Can global economies just keep growing forever? Or will we finally reach the ultimate limits of growth – with disastrous consequences for humanity?

 

The charts are scary, as they’re meant to be. You’ve probably seen this one before: human population levels trundling along for millennia, then suddenly shooting upwards with no apparent end.

It is easy to conclude, from that almost-vertical line, that humanity is doomed because the world is too small for it.

There are plausible arguments for this view. Humans have so altered the ecology of the Earth that we have now entered a new geological era: the Anthropocene. The term remains, for the time, unofficial. But it is nevertheless the case.

Of all the biomass attributed to mammals, wild animals now account for four per cent, humans for 34% and the animals we use as livestock for 62%. Vertebrate populations have declined by an estimated 60% since 1970. We are now believed to be in the sixth mass extinction event since life on Earth began three billion years ago.

 

The climate crisis is another aspect of the defining impact of Homo sapiens on this planet, and another good reason to be aware of the limits placed on uncontrolled growth by the natural environment.

But can human civilisation continue to function? Or are we populating our way into a catastrophe?

A glance at the first chart invites a simple, shocking answer. But that chart is misleading, and seriously so. What’s true is that, for the past 4,000 years, there has been exponential population growth, taking the total number of humans on the planet from a few million to eight billion. What is not true is that this will keep going. It can’t and won’t.

Much depends on perspective. If we look at the period since 1950, we can start to see where the change is coming from. Most of the increase is from the (previously) under-developed world: east and south-east Asia, central and south Asia and, to some extent, from sub-Saharan Africa. The rich world’s population increased too, but by much less.

On charts like these, Australia and New Zealand (the very thin red line) are barely visible: Oceania (mostly the Pacific island nations) cannot be seen at all.

But the growth patterns shown in the UN projections give good reasons to expect that the future will be different from the past. The exponential population growth of the past four thousand years is coming to an end.

In east and south Asia, populations are projected to peak and then start to fall within the current century. Globally, they show a continued rise from eight billion to over 10 billion. But almost all the increase is expected to come from sub-Saharan Africa (shown in orange at the bottom of this chart):

According to the UN Population Division’s base-case estimates, China’s population has now peaked and will start an increasingly rapid fall throughout the rest of the century. India’s peak is seen at around 2050, followed by a more modest decline. Africa, though, keeps on rising.

But this depends on fertility rates: the number of children born to each woman of child-bearing age. The UN provides four scenarios, which provide both hope and a warning. The welfare of Africa and the world is intimately tied up with population growth in the poorest countries of Africa. Unless fertility can be reduced, an unprecedented human catastrophe seems unavoidable.

In the same set of scenarios for the world, we can see how significant this issue is. Africa is the key.

There is only one plausible way out of this conundrum: improve the economies of African countries and, therefore, the incomes of the poor. The link between poverty and fertility is well-known and almost universal. Poor people have more children for many reasons, such as insurance against child mortality, lack of access to contraception, insurance for the parents’ old age, poor education, and a plethora cultural issues. But at the base of it all is poverty.

China’s one-child policy is dead, replaced by campaigns urging people to have more kids – and the reason is economic progress. India, moving in the same direction but more slowly, tells the same story.

The most certain way of controlling global overpopulation is to bring the incomes of the poorest up to a level that permits a decent lifestyle, with access to education and healthcare.

This has been widely studied. A 2022 investigation examined data on 171 countries to quantify the impact of increased income in poor countries on birth rates:

“The negative factor with the greatest impact on female fertility is represented by the level of income per capita: as societies progress, fertility tends to decrease. Thus, exceeding the median level of income per capita ($US6,180 per year) by a certain country, initially situated below this level, leads to a decrease in the crude birth rate by about 8.65%.

“We could say that starting with a level of about $US515 average monthly income for a person, every year the crude birth rate in a country or area would decrease by about nine children for every 1,000 inhabitants.”

A countervailing trend is that, as income rises, so does life expectancy. But, as this chart shows, it is not a simple, linear relationship. Only when per capita GDP reaches around $20,000 does average life expectancy at birth show major increase. Another consideration is that young people are likely to benefit more than older people from any change, pushing the full effect well into the future.

Average global GDP per head is just above $20,000, so bringing the poor up to a middle-income level will not substantially counteract the benefits of reduced birth rates.

The economies of the world are interconnected as never before and, again, China is the clearest example. According to the World Bank, 800 million Chinese people have been lifted above the international poverty line in the past 40 years. In 2021 alone, China’s exports to the rest of the world amounted to $US3.34 trillion and its imports to $US1.97 trillion.

The shape of global inequality is well known. What is less well known is that everyone suffers from that inequality, not only the poor. The economies of a globalised world will never function at their optimum while so many live in conditions that make economic participation all but impossible.

But can we do this without destroying the natural resources – the air, water, food, soil, minerals – on which everything depends?

The answer to both is yes – but not if we go on doing things the same way. But to understand all this we must go back to basics.

How economists get it wrong

Economists try to understand the world by spotting the trends in a multitude of figures. But if they look at the wrong figures, and ignore important trends, their picture of the world will be wrong and perhaps dangerously so.

That is what is happening now. But to see why, we need to go back more than 200 years to the beginning of modern economics.

The pioneering writers, led by Adam Smith and David Ricardo, saw that money did not constitute wealth. Money, they said, is merely a means of exchange and a store of wealth. Real wealth is what we produce.

“It would be too ridiculous to go about seriously to prove,” wrote Smith in The Wealth of Nations, “that wealth does not consist in money or in gold and silver, but in what money purchases.”

A baker who produces a loaf of bread has added to the national wealth. Today, we measure this in gross domestic product. Wealth, then is the same as production. And those same early economic writers realised that production depended on three major inputs, which we call the factors of production: land, labour and capital.

• Land means natural resources. These were assumed to be infinitely abundant, there to be used by whoever had the means to do so.

• Labor is self-explanatory.

• Capital is not money but the (mostly) physical equipment needed to produce goods and services. It’s the buildings, plant and equipment that investors put into place.

Later economists developed the measurement of productivity – the efficiency with which those factors of production are used. In practice, this is limited to labour productivity. If the amount of product made this year by a single worker is one per cent more than it was last year, then productivity has risen by one per cent.

But labour productivity is no longer the main economic game. Within the next decade or so, artificial intelligence is likely to displace so many jobs that the problem will not be that  labour productivity is too low but too high. What will happen to all those people whose jobs are taken by a machine?

Capital productivity is also measured but does not form a central place in the calculations of treasuries and central banks. Capital productivity (because computers are capital) will soar too. But that will create problems the world has not seen since the start of the industrial revolution.

And conventional macroeconomics ignores land productivity – the efficiency (or otherwise) with which we use natural resources – almost completely. Some national statistical agencies, including Australia’s Bureau of Statistics, have begun to collect basic sectoral data about the amount of resources being used but not about how efficiently they’re used. So this crucial information remains isolated from core calculations on the state of the economy.

The 18^th century assumption that global resources are effectively infinite remains today at the centre of government economic policy. That omission is astoundingly dangerous.

Growth and its limits

There is a third name that should be added to those of Adam Smith and David Ricardo in the early development of economics: Thomas Malthus. His work ranged beyond that for which he is now famous, his Essay on the Principles of Population, first published in 1798.

Malthus’s big idea was that if population was allowed to grow faster than the food supply, the result would be general catastrophe, famine and collapse. His solution, to prevent the poor from breeding, was inhuman and brutal. He opposed any method of social relief that would relieve hunger or homelessness among the poor. Leaving them to starve was a better alternative to general calamity. If population was not controlled, Malthus thought, the result would be mass starvation and death until the balance was restored. And then the dreadful cycle would start again. Today, that scenario is called the Malthusian catastrophe.

Almost everything Malthus thought about population was wrong, except for one thing: he, alone among his peers, recognised that natural resources were critically important to any sensible discussion of population and economic growth.

He did not take into account the agrarian and industrial revolutions, which were about to sweep such limits away. And he did not understand that the poverty does not decrease the birth rate but, rather, the precise opposite.

But for the next century and a half, the notion that there might be natural limits to humanity’s ever-growing population and the consumption of resources was allowed to lapse. There seemed to be no end to the increasing numbers and, at least in some countries, an unending increase in prosperity.

In 1968 a biologist from Stanford University, Paul Ehrich, published The Population Bomb, an alarming and spectacular updating of Malthus’s proposition. It sold over two million copies worldwide and restarted a debate that had never quite died.

“The battle to feed all of humanity is over,” he wrote on the first page. “In the 1970s and 1980s hundreds of millions of people will starve to death in spite of any crash programs embarked on now … We are today involved in the events leading to famine and eco-catastrophe; tomorrow we may be destroyed by them.”

He was, like Malthus, mostly wrong. There was no eco-catastrophe in the 1970s and 1980s. His answer was population control, including forced methods. And, like Malthus, he did not understand that advances in food production would continue and ignored the relationship between income and fertility.

In 1972 an environmental NGO, the Club of Rome, published a more rigorous analysis of the same ideas. The Limits to Growth. It was less hyperbolic but even more influential, selling 12 million copies worldwide.

They modelled twelve scenarios, with its “standard run” (or business-as usual) as the base case. This forecast a Malthusian catastrophe some time in the 21^st century.

“If the present growth trends in world population, industrialization, pollution, food production, and resource depletion continue unchanged, the limits to growth on this planet will be reached sometime within the next one hundred years,” wrote the authors. ^“The most probable result will be a rather sudden and uncontrollable decline in both population and industrial capacity.

“It is possible to alter these growth trends and to establish a condition of ecological and economic stability that is sustainable far into the future. The state of global equilibrium could be designed so that the basic material needs of each person on earth are satisfied and each person has an equal opportunity to realize his individual human potential.

“If the world's people decide to strive for this second outcome rather than the first, the sooner they begin working to attain it, the greater will be their chances of success.”

Despite its popular success, The Limits to Growth was panned and disregarded by most scientists. More recent analyses, though, indicate it may have been remarkably prescient. Dr Graham Turner, principal research fellow at the University of Melbourne’s Sustainable Society Institute, has spent much of the past 20 years examining how that book’s modelling corresponds with subsequent reality. It is, he has found, rather alarmingly on track.

“Data from the 40 years or so since the LTG study was completed indicates that the world is closely tracking the business-as-usual scenario,” Dr Turner wrote in a 2014 update.

“The business-as-usual scenario results in collapse of the global economy and environment (where standards of living fall at rates faster than they have historically risen due to disruption of normal economic functions), subsequently forcing population down. Although the modelled fall in population occurs after about 2030 – with death rates rising from 2020 onward, reversing contemporary trends – the general onset of collapse first appears at about 2015 when per capita industrial output begins a sharp decline.”

So far, such doomsday scenarios have been seriously wrong and this one looks set to follow. Even since Turner’s paper was written in 2014, new developments have changed the outlook. Artificial intelligence promises soon to disrupt employment and economic life in a way that has not been seen since the industrial revolution. The increase in income, particularly in China but also in India and elsewhere, has indeed led to lower birth rates. And – far too late, but finally – the world is taking serious action to avoid the most pressing environmental concern, climate change.

But a crucial question is whether the decline in birth rates produced by rising prosperity is more than offset by increased consumption of limited resources. There’s reasonable evidence that it will not be.

People living in great poverty consume so little now that an increase of, say, five per cent off such a low base doesn’t amount to all that much. Bringing the poorest up to a decent standard of living should therefore improve prospects for everyone.

A study of countries in the European Union found that increasing incomes of a nation’s poor people to that of the same nation’s middle-income earners would increase greenhouse gas emissions – a reasonable proxy for overall environmental impact – by only 3.15%. In poorer European countries, the figure was lower still.

A broader study of the relationship between income and consumption used World Bank data for 79 countries over 30 years found that poor people – predictably – spent extra income (consumption) rather than saving it. But people in middle-income countries were far less likely to consume and far more likely to save instead.

“The level of income has a greater importance for consumption for the individuals from countries with low and high income levels,” the researchers wrote, “but the association between these two variables is weaker in the countries with a middle income level.

“An explanation of this fact could be that the two extremes, of a reduced and a raised level of income, coordinate in a large extent the consumption behaviour. People from low income countries use their budget predominantly for consumption, as they need to primarily satisfy their basic necessities …

“A moderate level of income can allow and determine people to save more (compared for example with low income countries), in order to improve their future lifestyle.”

That adds to the attraction of moving poor people into middle-income brackets: they then have a lower marginal propensity to consume. This means any further lift in income, beyond that required for necessities, is less likely to add as much to consumption, because more of it is saved.

So it is at least plausible that the decrease in birth rates as a result of ending poverty would more than offset the impact of per capita consumption on the environment and on finite natural resources.

The other part of the equation is to reduce the waste of resources.

It will be by the skin of our teeth, but we can avoid disaster.

Feeding the people

Without really knowing it, the world has made substantial advances in the efficiency of resource use. Given that the most critical element of human life is the availability of food, and that land is necessarily limited, the area under cultivation is an important indicator.

Since 1950, around 360 million hectares of forest has been lost, mainly to agricultural production.

There are signs, though, that this is turning around, substantially due to concern about climate change. The orgy of forest-clearing in the Amazon under the presidency of Jair Bolsonaro in Brazil is now over. In China and Central Asia, forest cover increased by 1% in a single year. But in sub-Saharan Africa, commercial pressures combine with widespread hunger to put more and more forest land into production.

As the following chart also shows, the area under cultivation grew strongly in the first half of the last century but then slowed. The global population kept growing but we used the land more and more efficiently.

In the developed world, the amount of land under cultivation has remained relatively stable. But in countries with high population growth, the situation is different:

In the past 60 years, cereal production has increased by almost four times but the amount of land being used for those grains went up by only a quarter. The difference was all down to yield – the amount each hectare of farmland could produce. And there was more food to go round, because the increase in production far outpaced the growth in population.

That broad pattern exists on every populated continent except one: Africa. Here, production has had to rise by far more than in the rest of the world but has only just managed to keep up with a fast-increasing population. Yields have risen too, but by much less than elsewhere. So the gap had to be filled by bringing more and more land into production.

Across the range of plant-based food production, that increased efficiency has reduced the pressure to use more land. Without that saving, the world would have needed an extra 3.5 billion hectares of land under cultivation to produce the same amount of food. That has had massive environmental advantages, sparing forests and water catchments, and allowing reforestation.

But those increases in yield also comes at an a price. As land is used more intensively, it requires more fertiliser; and present sources of the main fertility-boosting elements, nitrogen and phosphorus, are finite. It is therefore important not to waste them but, at present, that waste is immense.

Nitrogenous fertilisers include manure and legumes but are mainly derived from ammonia. The key input for ammonia production is natural gas. As the use of gas for energy will fall dramatically over the next several decades, the overall supply is not in serious doubt.

The same may not be true of phosphorus, typically applied to farmland in the form of superphosphate. Most of the supply comes from rock phosphate deposits, 30% of which are in Morocco. Unlike natural gas, the current phosphate deposits are being fairly quickly outstripped by consumption.

Of eight international studies of the subject, seven estimate that the current supplies will be exhausted some time this century. Proposed alternatives, which include biochar, fungi and bacteria, are either unproven or difficult to bring to large scale. Therefore, the waste of phosphate fertilisers is increasingly serious.

Phosphate-poor soils, such as Australia’s, require substantial supplements but when those levels have been rectified, much less is needed to make up for losses through leaching and take-up by plants.

Usage in many countries far exceeds that amount. Australia uses 10.8 kg per hectare more than the amount taken up by crops. For China, the figure is 28 kg; for India, 16.8; and for Chile, 35.

For other major grain-growing nations, the figures are much better (6.4 kg for the US, 1.5 kg for Canada and 1.4 kg for Russia. But still involve substantial over-use in total – 879 million tonnes in the US alone. Reducing this would save growers substantial amounts and could, in turn, significantly reduce prices to consumers.

Most countries in sub-Saharan Africa cannot afford the superphosphate needed to improve their yields. It is necessary to improve that situation, but that would add to pressures on supply. An Australian study found:

“Industry projections of demand are often based on the current market demand, that is, those players with purchasing power. However there is a large ‘silent’ demand from poor farmers with phosphorus-deficient soils that cannot currently access fertilizer markets. In sub-Saharan Africa, for example, where at least 30% of the population is undernourished, fertilizer application rates are extremely low and 75% of agricultural soils are nutrient deficient, thus yields are falling.”

Finding new deposits is highly desirable but these are likely to be much more difficult and expensive to mine.

If fertilisers become more scarce and expensive, and yields decline, more land will have to come into production to make up the shortfall. As populations have become richer, their taste for meat and other animal products has increased dramatically. The balance of western diets has swung substantially away from plant-based foods.

But this takes up an enormous amount of land. It is a luxury that the world may no longer be able to support – and certainly not at its historic rate of increase.

As this chart shows, farming animals for food is a highly inefficient way of feeding the peoples of the world.

The situation becomes even less sustainable when grain is grown for animal feed rather than for direct human consumption. Over the past 60 years the proportion of global grain production used as stock feed has declined, but only marginally. In Europe, Australia and South America, it has increased.

Changing land use from pasture to cropping is a highly attractive idea for many parts of the world, particularly in Africa but also in China, the US and Brazil.

The availability of water for any use – agriculture, domestic supply, industry or natural flows – is under stress almost everywhere. As populations have increased and living standards improved, the amount of water for each person has diminished. Globally, per capita water supply is only 40% of what it was 60 years ago. For sub-Saharan Africa, the figure is 20%.

There are only two solutions: massively improved efficiency of water use, and a control on population. Both are not only possible but are already happening. Avoiding tragedy will depend on them happening fast enough, and happening everywhere.

Wasting food

The UN's Food and Agriculture Organisation estimates that about one third of the food produced for human consumption is wasted. It calculates that 14% of all food produced globally is wasted by poor transport, storage and processing before it reaches the point of sale. And another 17% is wasted at retail, food service outlets and household levels.

Although industrialised countries account for a great deal of food waste, it is more critical in poorer nations, where huge numbers of people live in conditions of permanent food insecurity or malnutrition. As the next chart shows, some of the largest losses are in such nations: Nigeria, Rwanda, Iraq, Tanzania, Burkina Faso and Burundi.

Nigeria, which has Africa’s largest population and its biggest economy, has the world’s second-worst food waste problem. And 44% of the population  live in conditions of food insecurity.

An FAO report says: “Nigeria cannot afford to continue to expand its agricultural footprint, which at best is on marginal land with low yields, and at worst can lead to loss of life.”

“At present, in most parts of the country, the land frontier has already been exhausted. Any expansion that is taking place currently is increasingly on marginal land where yields are lower. In the south, crop land expansion can only come at the expense of the last remaining dense forest areas; while in the north, crop production is in serious competition – sometimes to the point of open conflict – with pastoral livestock systems.

“In 2018, the violence between nomadic cow herders, migrating south due to climate-induced degradation of pasture and increasing violence in the far north, and crop farmers in Nigeria’s Middle Belt was six time deadlier than that of the insurgency group Boko Haram, claiming 1,949 lives, nearly double the 2017 figure.”

In developed nations, though the issue is also serious, it does not have such dire consequences.

A study by researchers at the London School of Economics calculated each country’s “fair share” of global resources use, based what the figure would be if all resources were distributed equally to all the people on Earth. And it then showed which countries get more than that fair share. They looked both at the “biotic” or biological resources (including food and timber) and at non-biotic (mostly the things that are dug up, such as metal ores and fossil fuels).

The study also identified 58 countries that got less than their fair share. All except one, Trinidad and Tobago, were low or low-middle income countries. The next chart shows what this looks like on a global basis:

The simmering African disaster

If a Malthusian catastrophe occurs, it will not be evenly shared. It will be in Africa.

There is a good argument that governance should be regarded as a fourth factor of production. Without good governance – rule of law, low corruption, responsiveness to the needs of ordinary people – economies cannot thrive and crucial policy decisions, such as making better use of resources, are much less likely.

Most of the world’s population live under governments that fail in the most basic task of tailoring their actions to the needs of their people. The degree of failure varies from the mediocre (South America) to the inadequate (Russia and China) to the egregiously bad (most of Africa).

And the same countries in which law does not rule, corruption becomes normal. In the end, nobody can be trusted.

Nor can an economy or a population thrive – or even survive – in war. Most of the killings are in wars that the rest of the world almost ignores. Ukraine and Gaza are high-intensity and highly publicised conflicts, but they can be expected to finish within a few years at most. But conflicts in Africa and Mexico have gone on for decades. The authoritative US-based think-tank, the Council on Foreign Relations, has estimated that 270,000 people died in armed conflict around the world in 2022 alone.

Since 1996, recurring conflicts in the Democratic Republic of Congo have accounted for around six million deaths. The wars broke out following the genocide of Tutsi tribespeople in neighbouring Rwanda by Hutsis; since then, there have been successive wars in the Congo between tribal-based Congolese and Rwandan-backed forces.

In Somalia, fighting began between the weak central government and the notorious al-Shabaab Islamist terrorists in 1996 and has crippled the country ever since. In Sudan, ethnically-based civil war has displaced 5.6 million people. In South Sudan, a power struggle between rival warlords sparked a civil war that officially ended in 2018 but violence and kidnapping continue, despite the presence of thousands of UN peacekeepers. Because farmers were prevented by war from planting crops, ongoing famine and food crises developed, prompting the UN to describe it as the worst in the world.

There are parallel situations in other countries, both in Africa and elsewhere, particularly in Mexico and Myanmar.

Governance is the key to improving lives. The former colonial powers bear considerable responsibility for partitioning Africa and the Middle East into areas which bore little correlation to ethnicity, setting these regions up for internal conflict in artificially created nations. The problem now may be insoluble. If it is, the likelihood of environmental disaster envisaged by Thomas Malthus will become greater and, perhaps, inevitable.

This does not apply equally to the whole of Africa. But the outlook for the worst-hit countries of central Africa, from Somalia in the east to the Sahel in the west, is dire; and there are severe limits on what the rest of the world can achieve there.

Growth can continue, but only if we’re clever

For as long as records have been kept, prosperity has risen. We are so accustomed to ever-rising standards of living, life expectancy, healthcare, education and (we hope) happiness that we assume it will go on forever. Even a minor blip in economic growth, such as the one we’re now experiencing, causes alarm.

The benefits of growth have not, of course, been evenly shared. Since 1961, World Bank data show the economic output of high-income countries has grown by an average of 2.2%. For sub-Saharan Africa, the figure is 0.6%. We live in rich countries, so we forget about those who do not. But even the poor, in aggregate, are better off than they used to be and in some cases (most notably China) massively better off.

It's not just generals who always fight the last war. So do countries. The most basic assumption of governments and their statistics agencies is that all this will roll on forever, so they’re still measuring what was important in the past and ignoring what is critical for the future.

The current worry is that labour productivity is too low. Many learned papers have been written on how to change that, but very few on why it soon won’t matter any more. Artificial intelligence will revolutionise so many workplaces, replacing workers with computers, that the problem will no longer be too little labour productivity but too much.

And the people we trust to prepare us for the future are failing to do so because they do not measure and understand the most important productivity of all: the efficiency with which we use the natural resources on which prosperity – and life itself – depend.

The world, finally, is taking serious action to combat climate change. But that could never have happened if the first step had not been taken: measuring and documenting what was happening to the climate. Reducing the impact of greenhouse gases on the atmosphere is the best example of improved environmental productivity. It is also one of the few.

As we have seen, there are two reasons for optimism about why economic growth and living standards can continue, even though centuries of oblivious exploitation have pushed many of the natural resources on which that depends into deep deficit.

One of those reasons for hope is that the population growth in most of the world’s regions is about to head downwards, or is already doing so.

The second is that we can, if we are clever about it, use those essential resources more efficiently while maintaining and enhancing economic output. The switch from fossil fuels to renewable energy is a good example. Renewables do more than reduce greenhouse gas emissions: they will end up being far cheaper.

Land, labour, capital. Of those three, only land really matters. It is the foundation of everything. Our whole existence depends on it. Knowing what’s happening is only the first step but, without that first step, nothing else can follow.

If our governments and statistical agencies don’t do their job – measuring what matters – we will continue to stumble blindly towards disaster.