July 13, 2017    7 minute read

Is the World Overpopulated or Are Resources Being Wasted?

Bursting at the Seams    July 13, 2017    7 minute read

Is the World Overpopulated or Are Resources Being Wasted?

In 1950, the world population was at 2.5 billion, and fifty years later, it had reached 6.0 billion. Today, world population stands at 7.5 billion, and according to projections by the UN, in roughly 30 years from now, global population will be slightly less than 10 billion. As these numbers illustrate, the delta of the population growth hasn’t slowed down. To sustain the number of people today at current standards of living, for 50 to 100 years, would require the resources of 150% more ‘earths’.

As far back as 1968, the American biologist Paul R. Ehrlich, in his book ‘The Population Bomb’, made grim predictions about humanity’s capacity to nourish future generations. Indeed, many scientists are acutely aware that there are too many people on this Earth consuming too much, and at the same time destroying the life support systems by killing off other organisms on the planet. Currently, the sixth mass extinction is taking place in the animal kingdom due to increasing human demographics and their impact on the environment; many animals see their habitat disappearing, and concomitantly, their lives threatened.

Ecological Footprint

In other words, humankind’s ecological footprint has become too unbearable for this planet – even with all the technological advances that have been ,and will be made in the future. According to the UN, as population, economic development and urban pressure are growing, simultaneously, water resources are becoming more scarce, and the risk of conflict among community groups increase.

The geopolitics of water is already a real subject matter nowadays, and stands high on the agenda of many senior military leaders; further, the problem of South-to-North mass immigration triggers significant socio-political tensions.

Tragically, the battle against growing world population is not only fought on the front-line of politics and ecology but also economics. A book dating from 1972 “Limits to Growth” predicts a collapse of our civilisation, taking into account the rapid development of industrialisation, population, and food, as well as the use of resources, and last but not least, the negative impact of pollution. This book was commissioned by a Thinktank called the Club of Rome, and in the 1970s, many politicians and academics wanted to throw the findings of this book into the dustbin of history as they viewed these conclusions too doomsday-minded.

However, research conducted in 2014 by the University of Melbourne confirmed these forecasts to be more accurate than previously imagined. The central point of this recent research (and the one of 1972) is that the planet Earth is deemed to be finite, and concomitantly, the search for unlimited growth in population, material goods, etc. will eventually lead to a collapse. In essence, to make a modern standard of living accessible to an ever greater group of people, economic development needs to be up to par. But, this quest for broader economic development fuels an ongoing growth in industrial output, in turn requiring more and more resources to be allocated (not only mining but also food) – and, eventually, resources become costlier to obtain as they become scarcer.

The Problems of Population Growth

And, with the flow of population growing out of control, in-fighting for the more limited food resources become inevitable, leading to death and starvation. Another theorem that might bring the economic exploitation of the earth’s resources into jeopardy is the principle of profit maximisation.

Within neoclassical economic theory, the maximisation of profit is a mandatory behavioural hypothesis that defines the decision-making of corporations on pricing and output. The profit-maximizing actions of firms are deemed to foster economic efficiency, defined as the efficient allocation of resources regardless of relative scarcity. The scarcer the resource, the pricier it is.

But, profit maximisation ignores some unquantifiable costs to the economic system, such as opportunity costs and shortsightedness. Alas, profit maximisation still represents the raison d’être of corporations and the accepted primary goal in any business activity.

This raison d’être also feeds an economic system that does not sufficiently take into account a more holistic view of economic resources and the negative impact of overpopulation. The first phases of the fallout may already have taken place. The 2007-2008 global financial crisis and the ongoing economic malaise may have been an early warning of the fallout from resource constraints.

The Problems of Consumption

The hunger for material wealth (including generous social benefits) caused the growth in unbearable levels of debt, eventually leading to more defaults. Granted, nowadays energy prices are down, and there seems to be a glut regarding mining overcapacity. But, as emerging countries will again aspire to become more developed, the requirements for accessing broader economic development will become higher, thus causing a stress and burden on the existing resources. But, there are other experts who claim the opposite, namely that more people can often mean fewer problems. These statements, though, seem to be based on regional observations, not taking into account a holistic view of the earth.

Therefore, and generally speaking, the 21st-century world demands a deeply different kind of managerial economics, one that acknowledges that merely seeking short-term profits for the sake of simple profits does not automatically lead to a long-term value for the economic system as a whole. Fortunately, in light of the growing world population and scarcer resources, things are already changing as not every entrepreneur or economist follows mindlessly the short-term profit maximisation theorem – instead embracing a more eco-friendly longer-term durable approach.

As stated by a survey from PwC, many CEOs are even now convinced that within a medium-term time frame, the shortage of resources will be a bigger hazard to their firms’ expectations than climate change as a whole. Indeed, these CEOs are convinced that business stakeholders need to go beyond mere profit-maximization. Many of these companies honestly believe that with every business decision one needs to apprehend and assess the wider (holistic) impacts on both the environment (nature) and society (humans). And, consequently, these CEOS are not setting their expectations in terms of return on investment for the short-term but rather on the long haul. So, what is the best approach for conducting an eco-friendly business in an overpopulated resource-constrained future?

Corporate Responsibility

Simply put from a managerial economics standpoint: build a leaner business model that ultimately results in cutting energy costs, reducing production costs, improving waste management, and eventually increasing profit margins. Indeed, with the coming population bomb that we will experience, resources need to be exploited in a more efficient matter that emphasis waste management (through recycling for example) and better use of commodities (energy, water, and mining). Already, look at this list of global companies that are leading by example: indeed, failing international government action, some prominent businesses are embracing the idea of going green.

For example, CocaCola, DuPont, General Electric, M&S, Pepsi, Tesco, Toyota, Sainsbury’s, Unilever, and WalMart to name but a few have all taken drastic environmental decisions to cut down waste (be it water, energy, chemicals, etc.), and thus reduce their ecological footprint. Other businesses would be well advised to follow these eco-friendly paths because by exploiting the earth’s resources more carefully you take a more durable view on your business as well. In addition, these green ideas are not only money-making and help create new jobs, but also make sure that access to these resources is equal in a world that gets overpopulated.

Conclusion

Now, notwithstanding the usual complaints that the adoption of green business ideas would take a toll in terms of capital expenditures, all national business chambers should embrace these kinds of green & lean actions as it would be a win-win for both the companies, the economy, society, and the environment. In essence, conducting a business with leaner operational processes results in not only doing more with less, but also giving more to more people, and that’s why lean (efficiency) management assists green logic (and the other way around).

In summary, there are only a few options that can address the risks associated with overpopulation. Firstly, as an immediate fix, it is to preserve and exploit the Earth’s resources more responsibly so that all people have access more equally to these resources as well as to enable the coming generations to continue to benefit from these Earth’s resources. Secondly, for the long haul, by raising awareness though ongoing education with people (including corporates) on the negative impact of overpopulation on the environment. But, it is the latter solution that is truly important as, one day, humankind will endure the limitations of the Earth’s ability to sustain all of us – unless, that is, humankind can come up with a solution to regulate world population growth.

 

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