The Ingenuity Gap: Can Poor Countries Adapt to Resource Scarcity?

Abstract

THE EARTH'S CURRENT human population of 5.7 billion is growing by 1.6 percent a year. On a global average, real economic product per capita is also growing at 1.5 percent a year. These increases combine to boost the globe's total economic product by about 3 percent annually. Extrapolation therefore suggests that today's global product of US$25 trillion will exceed $50 trillion in today's dollars by 2020. A large portion of this doubling of world product, should it occur, will be achieved through increased consumption of the planet's natural resources, including nonrenewables like petroleum and ores, and renewables like cropland, forests, fresh water, and fisheries. Already, we are causing major changes in these resources: transformed, managed, and utilized ecosystems constitute about half of the ice-free earth; human-mobilized material and energy flows rival those of nature (Kates, Turner, and Clark 1990: 13). Such changes are certain to grow in magnitude because of the rapidly increasing scale of economic activity. Increased resource consumption can cause resource scarcities, and scarcities impose costs on societies. But experts debate the severity of future scarcities and human capacity to adapt to them. There are three main positions in this debate (see, e.g., Barbier 1989; Matthaei 1984). NeoMalthusians, who are often biologists or ecologists, claim that finite natural resources place strict limits on the growth of human population and consumption; if these limits are exceeded, poverty and social breakdown result. Many neoclassical economists, in contrast, say that there need be few, if any, strict limits to human population, consumption, and prosperity.' Properly functioning economic institutions, especially markets, provide incentives to encourage conservation, resource substitution, development of new stores of scarce resources, and technological innovation.2 Finally, analysts whom I call distributionists acknowledge that there may