Economics of Growth


Economics of Growth and Growth Control and Growth Myths15 Mar 2006 06:30 pm
Community size correlates with property tax rates! Washington state example shows property tax rates correlate strongly with population growth. [1] Image source: San Juan County Futures Information Resource

Previously here I’ve debunked a number of myths concerning growth and so-called “development.” The very first was the myth that residential development brings in needed tax dollars. Despite the information provided here, however, what I hear around Mount Vernon suggests this is the myth in which residents and policymakers remain the most interested. No doubt the local growth machine would love to show that Mount Vernon is an anomaly, a community where residential growth does pay for itself. It is not impossible, after all, for development to pay for itself. Very specific forms of development sometimes do.

However, apart from biased or otherwise flawed studies (in my opinion, a very real risk in the local instance), their chances of showing that development pays for itself here are slight. (more…)

Economics of Growth and People/Resources and Population Growth07 Mar 2006 10:06 pm

Growth is madness!
“Growth is madness!” Image source: Rama

In the first two parts of this article we began to connect sprawl with its primary root causes: population growth and growth in per capita land consumption. Population growth, of course, drives much more than sprawl. It has combined in recent decades with increased per capita resource consumption (of which per capita land consumption is a part) to bring about the worst human-caused environmental losses ever seen. Why then have the U.S. and other countries not taken decisive steps to address population growth and resource consumption levels? [1]

A corporate culprit
The answer is complex, but we can zero in with confidence on portions of it. The common phrase, “follow the money” is apt when looking for some of the key social forces enabling growth of population and growth of resource consumption to continue unabated in many countries. (more…)

Economics of Growth and Environment19 Dec 2005 04:09 pm

A little California smog Is it a sign of things to come? We’ve discussed the issue of peak oil and how suburban development is a huge oil waster. Oil consumption is, in turn, a major cause of air pollution and climate change. Now air quality officials in California’s Central Valley have taken historic action in that regard. Given the link between automobile dependent sprawl and air pollution, they’ve put into place requirements forcing developers to pay added fees if they fail to design and build in ways that reduce automobile usage.

I’m glad to see this step, though I quite agree with this blogger that this sort of market based approach may not have the results one would hope for. I doubt, in fact, that the results in this case will be anything remarkable. Something more like Janet Kaufman’s proposed “landscape protection law” would have more teeth.

Important here, however, is that a regulatory body has acknowledged an environmental cost of sprawl. That helps push this into public awareness, and is thus a key step in what should, in time, be a major evolution in how we in the U.S. think about “development.”

Economics of Growth and Growth Myths and Population Growth15 Dec 2005 06:16 pm
In Growth We Trust Edwin Stennett’s book — important reading. Growth Education Movement

Not long ago we examined an important Brookings Institution paper by Paul Gottlieb titled Growth Without Growth. Gottlieb shows convincingly that population growth is in no way necessary for a U.S. city to see per-capita income growth. His findings go a long way toward debunking the myth that population growth is necessary for per-capita economic wellbeing.

Edwin Stennett expands on Gottlieb’s finding in In Growth We Trust. This book is a key work on the relationship between sprawl and population growth. I recommend it to anyone serious about studying the issues covered on the Small Town Project.

In it, Stennett reviews the Growth Without Growth paper, then looks at the same question on the level of nations. (pp 61-62) He examines the relationship between rate of population growth and rate of growth of per-capita gross domestic product (as percentages per year) for the United States and 15 western European countries. [1] (The latter data came from U.S. Census Bureau tables.) Using the time span from 1970 to 1998, he finds no significant correlation between the two variables in question. [2] His scattergram shows the individual countries spread essentially randomly around an almost horizontal trendline. Notably, the United States shows by far the most population growth among the 16 countries, yet is only about average in per-capita gross domestic product growth. This is a strong indication that population growth is simply not an important factor in creating or explaining a country’s per-capita economic health. (To be consistent with our series exposing the myths of growth, we can label as “myth #5″ the notion that a country does need such growth.)
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Economics of Growth and Environment11 Dec 2005 09:58 pm

Last Thursday’s Gazette (newspaper serving this part of eastern Iowa) had a letter to the editor worth mentioning here. Responding to a November 27 article on the topic, Kirk Phillips and Mary Jeanne Perino Phillips wrote to express their disagreement with proposed road construction in Johnson county.

Three of the five Johnson County supervisors are in favor of the highway which would connect Newport and Prairie du Chien roads. It’s purpose is to make way for residential construction.

One issue is whether the county should pay for it. I don’t think they have any obligation to do so. Going back to the 11/27 article, that seems to be the opinion of supervisor Terrence Neuzil as well. He suggests developers, not the the county, should be paying for new roads. I’d go a step further and suggest a program whereby the county (or city) buy up the land to save it from development. As I’ve said here repeatedly, given that they can’t grow forever, any economic strategy based on physical expansion guarantees eventual failure.

Here are a few of the Phillips’s comments:

The proposed highway would destroy the rural atmosphere… and encourage further destruction of productive farmland… How will future generations feel about importing food as currently we import oil and natural gas… Between 1992 and 1997, more than 6 million acres of U.S. farmland has been paved, an area approximately equal to the size of Maryland… [Laws intended to preserve farmland] are increasingly dodged by elite commercial interests which do not suit the broader needs of our community and world.

Good points to ponder, if you ask me. It’s nice to know there are some in our neighboring county who oppose needless “development.”

Economics of Growth and Growth Myths23 Nov 2005 11:49 pm

There has long been a tendency in the U.S. to link economic growth with population growth. Many in the growth industry even argue that you need population growth in order to have economic health. We’ve already looked at aspects of this in some of our previous articles showing various growth industry assertions to be myths. We’ve detailed the nature of some of the data, for example, which refute the claim that residential growth brings in needed tax revenues. Now we turn to the more general linkage between population growth and economic growth.
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Economics of Growth and Environment and Sustainable Development16 Nov 2005 01:52 am

4/12/06 - Note: Since writing the following essay, I’ve read additional credible sources which dismiss “peak oil” as a flawed notion. Some experts believe we will not encounter serious problems with regard to oil supplies before the end of this century or even later. Ironically, that may make oil even more of a problem. As Jeffery Sachs’s pointed out in a recent address to the fourth biennial State of the Planet conference at Columbia University, continued ready availability of oil only gives us more opportunity to damage the earth’s ecological systems through fossil fuel consumption. As Sachs put it, “We’re going to be using lots of fossil fuels and putting an enormous amount of carbon in the atmosphere with all of the consequences of anthropogenic climate change, so we have to find a way to de-carbonize our energy.”

That said, I believe this two part essay still gives an adequately balanced overview of the peak oil discusssion. If I feel otherwise in the future I’ll post revisions or a new essay.

———–

She could see the valley barbecues
From her window sill
See the blue pools in the squinting sun
Hear the hissing of summer lawns
— Joni Mitchell

It's suicidal to build subdivisions now. It’s suicidal to build suburban subdivisions with peak oil looming. Image source: amazon.com/Richard Heinberg

In Part I of this essay, we reviewed the range of opinion on peak oil. In the long term, the end of easy and cheap oil, will be a huge issue. Fossil fuels are finite in supply, and peak oil, no matter its form or intensity, will necessitate worldwide fundamental changes in energy production and usage. That much is beyond debate.

We boiled the peak oil debate down to a couple of safe assumptions: Peak oil will have at least moderate economic consequences, and at least a moderate impact on our lifestyles. So while its historic impact will be tremendous, we can hope to luck out and see our lives as individual citizens affected only modestly. For our purposes on the Small Town Project, we needn’t go beyond this “moderate” assumption.
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Economics of Growth and Environment and Sustainable Development11 Nov 2005 05:41 pm

4/12/06 - Note: Since writing the following essay, I’ve read additional credible sources which dismiss “peak oil” as a flawed notion. Some experts believe we will not encounter serious problems with regard to oil supplies before the end of this century or even later. Ironically, that may make oil even more of a problem. As Jeffery Sachs’s pointed out in a recent address to the fourth biennial State of the Planet conference at Columbia University, continued ready availability of oil only gives us more opportunity to damage the earth’s ecological systems through fossil fuel consumption. As Sachs put it, “We’re going to be using lots of fossil fuels and putting an enormous amount of carbon in the atmosphere with all of the consequences of anthropogenic climate change, so we have to find a way to de-carbonize our energy.”

That said, I believe this two part essay still gives an adequately balanced overview of the peak oil discusssion. If I feel otherwise in the future I’ll post revisions or a new essay.

————

“Peak oil” is fast becoming one of the most talked about topics on the Net. Given that oil is a finite resource, the idea is that the amount of oil we can extract worldwide will peak at some point, after which we will see a decline in oil production. This is not just a guess. In 1956 a geophysicist for Shell oil named M. King Hubbert created a model, ran some calculations, and predicted peak oil for U.S production would occur between 1965 and 1970. What happened? It peaked in 1970.
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Economics of Growth and Growth Myths20 Oct 2005 12:02 am
In historic Lisbon. In historic Lisbon — definitely not paid for by newer developments.

In our last installment in this three part series we showed how an assertion heard around here, “The new developments pay for the old ones,” implies an unwitting admission on the part of those in the growth machine, an admission that nearly all our residential development fails to pay for itself. Now that’s something the Small Town Project and the growth machine agree on! Continued residential development costs more to serve than the revenues it generates, and creates a deficit, sucking up the revenues generated by farmland, open land, and commercial property. Ultimately it leads to tax increases for all of us, and diverts money away from beneficial community projects. We covered much of this in the first of our myth-debunking essays.
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Economics of Growth and Growth Myths and Local Debate17 Oct 2005 11:41 pm

Monday night: Today I received an anonymous email from someone who disagrees with some of my views on the site. Well, probably all of them. :roll: First, I want to mention that I’m not much interested in private debate with anonymous emailers as it does nothing to bring information to the citizens of our communities. I have therefore made additions to the “contact the author” form and the comment policy to minimize this sort of thing.

With that in mind, I invite the emailer to comment under this article. Can you support your position with logic or data? Let’s discuss it. (more…)

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