One of the biggest intellectual debates in the history of economics has been concerned with the nature of relationship between the economic system and the environment.
The earliest economists, known as the Classical School, worried about the interaction of the two systems. Thomas Malthus (1766-1834) set out to formularize the implications of people’s standard of living on exponential population growth coupled with linear growth of food output from farming. In Malthus’ view (1798), rising living standards were causing the birth rate to rise. Eventually, food demand would outstrip food supply, and war, diseases, or famine would occur.
The population would then crash, before restarting its exponential growth once food production per head had recovered. It is not surprising, given this picture, that economics became known as the dismal science, since the only equilibrium situation was one of subsistence wages. Malthus’s model was overly simplistic, as it ignored many of the factors that we now see as important, such as technological progress.
More specifically, he failed to foresee the Green Revolution which dramatically expanded the capacity to grow more food to feed the larger population. Though his predictions have not come true in general, but they had a great influence on later thinkers, including Darwin and Keynes. The work of David Ricardo (1772-1823), a British political economist, led to a similar longrun gloomy prediction as that of Malthus, although at a more general level. In 1817, Ricardo used the concept of diminishing marginal returns.
As wage rose above subsistence levels and population increased, the rise in food demand caused agriculture to expand on to land of lower productive quality. Since the food prices would have to rise to cover the increasing costs of producing on less fertile land, those farmers growing on the most fertile land would earn a profit, or rent, as the difference between price and production cost. The distributional implications were profound: as food prices rose, workers got poorer and poorer, while landlords earned higher and higher rents.
Ricardo and Malthus put forward two different explanations for increasing scarcity. According to Malthus, the problem was that we have a fixed amount of natural resources (land) but increasing demand on those resources. For Ricardo, as the demand on food rose, the average productivity of land fell and the cost of producing food rose. These two views, of absolute and relative scarcity, are famously referred to as Malthusian and Ricardian scarcity respectively.
Ricardo’s work is still very important when the current status of cultivation in the developing countries vis-à-vis its impact on climate is taken into account. However, the book entitled Principles of Political Economy of John Stuart Mill, published in 1857, is considered as the climax of Classical economics. Mill makes clear that economic growth is a race between diminishing marginal returns and technological progress. The link between economic growth and the environment and finally sustainable development has been crucial presently.
The conventional economics approach to assessing climate change policy is to calculate the benefits and costs of action and inactions. Humanity’s longest struggle has been the ongoing battle waged on different fronts to feed itself. Over the last 10,000 years, food production and consumption have been rigorously engineered to meet demand.
To ensure food security for the growing population, agriculture has been modernised with the use of machines, large quantities of fuels, pesticides, herbicides, synthetic fertilisers and chemicals. This facilitated the Green Revolution, the specialisation of farm that had led to the reality that agriculture is a modern miracle of food production. Every year, the world produces enough to feed 10 billion people, much more than its current population. The modern food system has proved Malthus wrong.
Between the 1960s and 2020s, global populations rose by 142 percent, whereas cereals yield increased by 193 percent and calorie production by 217 percent, as reported in the journal Global Sustainability in its April 2019 issue. Indeed, it is a form of industrialisation of agriculture which is the opposite of conservation agriculture, a form of farming that is environmentally safe. The growing body of scientific evidence indicate that our dietary habits vis-à-vis food systems are putting way too much pressure on the environment.
Meanwhile, neo-Malthusians are alerting us with worrying signs: hunger, malnutrition and diseases continue to haunt us. In September, 2020, the United Nations Environment Programme (UNEP) along with three other International Organisations ~ WWF, EAT and Climate Focus -released a report that said the largest food production line of the world involving everything from growing and harvesting crops to processing, transporting, marketing, consumption and disposal of food and related items was sustaining around 7.8 billion people and also fueling climate change.
Approximate percentage of contributions food and non-food items toward total global emissions caused by the food system are shown in the Table. The amount of Greenhouse Gases emitted by the food system are quite enough to heat the planet above the 1.50 C target under the Paris agreement between 2051 and 2063 as predicted in the November 2020 issue of Science. This may sound absurd to those who think of plants as carbon sinks. It is true that plants remove CO2 from the atmosphere by the process of photosynthesis.
Photosynthesis converts CO2 into energy in the form of sugars that help trees grow and form part of their structures. During growing of plants some of these sugars are exuded into the soil from their roots. When the plants and roots perish, insects, bacteria and fungi etc., living in the soil break down sugar from plants.
Some CO2 stays in the soil carbon pool, particularly in the bits of the plant that are harder to decompose ~ these then becomes the part of soil organic matters. This overall process is what we call the soil carbon sequestration, as the soil holds CO2 in the more stable form. Indeed, globally, there is more carbon in soil than in living trees.
(The writer is a retired IAS officer)