The Limits to Ingenuity: Innovation as a Response to Ecological Loss

Marine biologists predict the collapse of harvested seafood species by 2050. But do we really need those species? I ask this question to generate ethical discomfort, if not outright disgust—and also to trigger another line of thought: that humanity might be able to innovate its way around part of the problem caused by species loss. If seafood is narrowly thought of as a source of food protein, it is entirely possible that advances in genomics, food science, and agriculture will solve the problem. This raises a question for conservation advocates: Is humanity’s ability to substitute or innovate its way around environmental problems relevant to how we think about conservation?

Our planet has looming resource availability issues. We have to find food, water, and shelter for two billion additional humans by 2050. Not only that, the nine billion of us in 2050 will be richer than we are now. We’ll demand more steaks and hamburgers, which means more cows and corn to feed them, which means more land and water consumption. Not to mention all the IKEAs. These concerns aren’t new—they’ve been periodically reignited, whether by Thomas Malthus, the Club of Rome’s Limits to Growth, or the “peak oil” debate. Most economists will tell you that Malthus was wrong: Malthusian handwringing is just that, a lot of worrying about problems that never develop. Billions of people live more materially rich lives than in Malthus’s time. The Green Revolution in agriculture means billions more have their nutritional needs satisfied than 50 years ago. And don’t worry about oil, because we can always drill deeper or frack our way out of it. Scarcity isn’t a problem, the argument goes, because ingenuity yields abundance in response.

An illustration is the Ehrlich–Simon wager. In the 1970s, biologist Paul Ehrlich parlayed his book The Population Bomb into a public discussion of our effect on the planet. His thesis was that population growth drives appetites for natural resources that outstrip their availability. Contesting this view, economist Julian Simon bet Ehrlich $1,000 that the combined price of five commodity metals would fall over the next decade.

Ehrlich lost the bet. The main reason was that he picked commodities for which opportunities for demand substitution and supply innovation were present. The trap Simon laid was obvious to economists because for these metals—and for most market goods—scarcity increases prices. Higher prices lead consumers to seek substitutes, and higher prices push producers to innovate, find, extract, or produce more. The metals in the bet had substitutes (other metals), and innovations in extraction technology meant that more could be produced in 1990 than in 1980, even as population grew.

Ingenuity Has Limits

But can we expect human ingenuity to always save the day? Consider two different natural resources: clean drinking water and a rare bird species. Can we innovate our way around scarce drinking water? It is likely we can, at least in the long run. The developed world already does this to a certain extent. We build facilities to treat water, drill deeper to access aquifers, and find ways to waste less. Should energy become cheap enough, we can desalinate all we want.

But now consider a threatened bird species, whose very existence we value. How would we innovate our way out of the extinction of that species? Just switch our affections to some other species? It’s also hard to imagine how we would innovate our way around the loss of natural resources important to our cultural identity or sense of beauty and wonder. There aren’t many substitutes for the relatively untouched expanse of Alaska’s North Slope if what matters to you is its very wildness.

"There aren’t many substitutes for the relatively untouched expanse of Alaska’s North Slope if what matters to you is its very wildness."

These examples suggest that all the things we value in nature are not equivalent in terms of the ability of innovation to deal with their scarcity or loss. In particular, the examples relate to environmental features that are culturally, spiritually, and aesthetically rooted in our values, rather than the more utilitarian contributions of nature to food, shelter, and human health.

Ehrlich’s wager might have been (tragically) successful if he had chosen commodities such as rare species, wilderness, or coral reefs. Those are much more likely to be a “winning” bet, for two reasons. First, because it’s almost impossible to innovate our way around a loss of species and wilderness, and it’s relatively hard to innovate our way around a loss of coral reefs— people wouldn’t be able to find substitutes for those things. Second, the combination of scarcity and limited substitutes typically means that those things will become more and more valuable to people.

When we ask what natural resources our growing appetites will threaten, we should also ask which of these scarcities will most resist our ingenuity.

Ingenuity Is a Function of Policy

Economics, not just ecology, suggests we should focus on the environmental places, features, and functions for which there really are no substitutes. Economics also suggests that we need to think about ingenuity as a social process, including the ways in which policy can accelerate or thwart it. If we return to the bet between Ehrlich and Simon, note that the commodities in question were all private goods serving the private needs of commerce. As a result, the incentives to innovate were particularly potent.

Innovation thrives when private markets—and the incentives and information they provide—can be harnessed. Unfortunately, ecological features and qualities are often shared, public goods. This can be bad news for ingenuity. We can’t sit back and expect the market to just do its thing. Public problems rarely generate the same frenzy of entrepreneurial activity as private problems.

Consider a simple exercise like knowing when something is being lost or becoming more scarce. The beauty of markets is that they generate a particularly credible signal of scarcity—the market price. But what about ecological public goods? How do we know when they are getting scarce? This is a much harder question to answer because we can’t rely on the invisible hand to tell us. We have to deploy teams of scientists (assuming we have enough of them) to measure and track things that are not currently measured and tracked, and we need to lobby foundations and governments to support this activity. Not only are ecological goods and services public goods, information about them is a public good. Two public goods in one is a recipe for underinvestment and a reason we know far too little about our ecological systems.

Underinvestment in ecological information thwarts ingenuity because innovators are constantly scanning the horizon for information that signals a profitable investment in new products and techniques. Where ecological trends are concerned, that horizon is very cloudy. This is one reason I and others concerned with ecological wealth feel so strongly about the development of so-called Green GDP accounts. Green GDP accounts would track over time, in a systematic and transparent way, gains and losses in ecological public goods, such as clean available water, open space, species, and natural features that protect us against disease and hazards. The information created by such accounts would provide valuable signals to innovators that would foster and accelerate ingenuity. The fact that the United States resists such accounts is a scandal.

Another issue is that not everyone has the same access to innovation and substitutes. Because many of the world’s poor are particularly vulnerable to ecological problems, it’s important to note that access to innovation (including the ability to pay for it) can place additional limits on ingenuity’s impact.

To be clear, ecological threats and losses can be dealt with even in the absence of formal markets and governance structures. Elinor Ostrom’s Nobel Prize–winning work documented this possibility. But governance failures are also a huge part of the ingenuity story. The conservation community has long been sensitive to governance failures and their impact on ecological conditions—arising, for example, from unfettered access to common property resources. After all, the main reason our marine species are in such precipitous decline is because we ineffectively govern fisheries.

But governance also relates to policies that affect incentives for innovation. As noted already, such policies include the provision of information through ecological accounts, for example, that would send important signals to innovators. They also include intellectual property laws and safety and environmental regulations that, if poorly designed and implemented, can weaken incentives to innovate.

Conservation Advocates Should Take Ingenuity More Seriously

A gentle recommendation for those concerned about ecological losses is to become as sensitive to the effect of policy on ingenuity as they are to the effect of policy on resource governance. As emphasized earlier, not all ecological problems have a technological solution. But many will. As a very broad generalization, environmentalists are too averse to technology discussions for their own good.

"The environmental community rightly prides itself on the scientific basis for its concerns and prescriptions. Avoiding scientific discussion around technological solutions damages that brand."

Here’s another set of questions designed to trigger discomfort: How do you feel about genomic manipulation? Are you opposed to it? Always? Why? Could it be good for conservation? Experts at RFF are confronting such questions head-on for several reasons. First, genomic innovation is already happening, like it or not—Brazil and China are unlikely to be as squeamish about genetic engineering as are Europe and the United States. Second, along with the risks, genomic innovation presents opportunities to reduce agricultural stresses and offers a variety of ecological mitigation, remediation, and restoration innovations. Third, our reflexive anxieties about this kind of technology marginalize conservation’s voice in these matters. The environmental community rightly prides itself on the scientific basis for its concerns and prescriptions. Avoiding scientific discussion around technological solutions damages that brand.

The Limits to Growth debate has become stale. Too often it’s reduced to two simplistic arguments: “markets will solve everything” versus “we are killing the planet.” A much more productive middle ground is getting lost. When is ingenuity likely to help solve ecological problems? What can we do to spur that ingenuity? And what are the limits to that ingenuity? To move forward, we must understand how conservationists can better prioritize their efforts and better engage around those questions.