Today I’d like to talk to about the number thirty-two. It’s two raised to the fifth power. To an economist it’s interest because it measures the difference in consumption rates between first and third world, we use about 32x oil and power. Today the world has about 6.5 billion people, will rise to about 9 billion in the coming decades. Several decades ago people considered population the most important issue.
The product that matters to us is total world consumption. Local population times local per capita consumption rate. Population only matters only as much as they consume or produce. Most of the impact occurs in the first world. The US consumers 322x more resources than Kenya. This difference in consumption rates motivates countries to support their “crazy people.”
To improve your conditions in a third world country, you can either try to do it at home, or immigrate to someplace that has higher consumption rates. It’s proven impossible, even for Japan, to keep out the immigrants. Each immigrant raises the world consumption rates, even if most immigrants take time to ramp up.
Americans are obsessed with China, good reasons. It has the most rapidly growing economy, and consumption rates, and there are 1.2 billion Chinese, 4x the US. We reason that the world is going to run out of resources much quicker if China reaches its goals of reaching first-world consumption rates. The rates have risen from 32x below first world, to 11x first world rates. Let’s assume nothing in the world changes except China reaches first-world consumption, assume all populations stay the same, everyone else consumes the same amount, and that there is no immigration. You’ll see that China catching up will double the world’s consumption rates, including oil and metal consumption. If India catches up too, world consumption rates triple.
If the entire world was at first world consumption rates, it would be the equivalent of 72 billion people at current consumption distributions. We promise and hope that we hold out to third world countries is that if they embrace free economies and honest governments they can have similar rates as us. But it’s a cruel lie, and we’re having maintaining our consumption rates in the first world. The only sustainable outcome, that China, India, etc will accept, would be an outcome where consumption rates were equal around the world, but there’s not enough resources.
The only thing that would work is if we met in the middle, at levels significantly below current first world consumption rates. The world doesn’t have enough resources. Consumption and living standards are related, but not tightly coupled. Consumption in the US much wasteful. Places in Europe use half as much oil as we do, but their quality of life are higher. Look at the cars in the garage of the Getty, think of their gas consumption, and ask if that consumption really contributes to quality of life.
We know how to manage fisheries sustainable. We could meet historic fish levels sustainable, the world’s timber needs sustainable, etc. It’s likely that consumption rates in the first world are going to be lower in our lifetimes, the only question is whether that’s by force or choice. The gap between consumption rates of first and third world are going to be more equal. These are not trends we should resist, the main thing lacking is the political will. Some encouraging events, Australia just had an election that reversed their ecological course of the last decade. I would describe myself as a cautious optimist. The world has serious problems, but we can solve them if we choose to do so.
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