Why Manhattan is the most environmentally efficient place in the world
Economist Larry Siegel argues urbanism, nuclear power and economic prosperity are the keys to a greener world.
Economist Larry Siegel says, ‘It turns out that the most environmentally efficient place in the world is Manhattan.’
BOSTON (Callaway Climate Insights) — Larry Siegel describes himself first and foremost as an economist.
And it’s from that vantage point that the author of Fewer, Richer, Greener says the world, over time, will have fewer people than we were expecting, will be richer, and — will be greener.
How can that be? In an interview and in his book, Siegel says there are legitimate and serious concerns about the environment today. But when a certain level of wealth is reached in a country, something changes.
“After reaching a tipping point at which environmental protection becomes a desirable and affordable choice, a society becomes a better steward of its natural surroundings,” wrote Siegel, who is also the Gary P. Brinson Director of Research at the CFA Institute Research Foundation. “Richer means greener.”
Indeed, Siegel notes that carbon dioxide emissions are beginning to turn down sharply, as annual incomes in Western Europe, the United States, and Japan pass through the $40,000 to $60,000 range. What’s more, Siegel notes that countries with per capita GDP higher than $7,000 begin to reduce particulate-matter air pollution because people are beginning to express their will through the political system.
Degrowth is not the answer
Siegel, who refers to himself as a conservationist instead of an environmentalist, also addressed dematerialization and degrowth (which, in some ways, is happening now because of the coronavirus pandemic and the stay-at-home orders). Degrowth, he writes, is a return to widespread extreme poverty.
And the remedy to making the world greener is not stopping growth but creating a different kind of growth; an increase in efficiency — fewer inputs being converted to more outputs.
“We're conducting a natural experiment in degrowth right now,” he said in the interview. “Gross domestic product is projected to fall 10% this quarter. Not annualized, but just in one quarter. That's 40% annualized. It's not good and we're going to find out how much we like degrowth when we go to the grocery store and there's nothing there. Degrowth was one of the dumbest ideas that's ever been circulated in the history of the world.”
Siegel also broaches the subject of rematerialization, and the use of wind power, solar power and algae farms. In the main, he’s not fond of these energy alternatives — for economic reasons. The costs don’t justify the benefits, he writes. “Decision making can only be rational if we account for all the costs and benefits of a given energy source.”
Urbanism and nuclear power
According to Siegel, cities are a solution because of housing. Cities are efficient at housing people and saving the countryside. “It sounds a little weird to say that cities are environmentally a good idea, right?” he asks. “But it turns out that the most environmentally efficient place in the world is Manhattan.”
In his book, he explains that cities are the mechanisms that best enable people to find their areas of comparative advantage and trade easily and cheaply with others. Moreover, a place like Manhattan has the virtue of housing density, with some of the most energy-efficient residential structures in the world. Manhattan, and areas like it, also concentrate business, innovation, education and entertainment.
To be sure, urbanism is not all environmental sweetness and light. It’s not ideal, but on balance it’s the better alternative to having a nation of self-sufficient rural farmers.
From his vantage point, a world in which there could be 11 billion people living on the Earth by the year 2100 will need quite a bit of energy — 5 petawatts (a quadrillion watts) and right now we have about 1.5, according to Siegel.
So, if we are thinking about getting rid of fossil fuels, “we better have another source of energy that is just as abundant or more so, and the only one that actually exists is nuclear energy,” he says.
Now, it’s possible that other sources of efficient energy will be discovered between now and 2100, and he’s not ruling that out. “But when you want to start executing on a plan, you want to fight the war with the army you have, not the army that is on ‘Star Trek: The Next Generation.’ So nuclear power is already up and running.”
Plus, he says, new technology is here. The French, for instance, are building small standardized plants with interchangeable parts and interchangeable personnel.
“Renouncing nuclear power,” says Siegel, “just when we need it the most is almost too much for me to bear.”
Geoengineering is a bit harder, says Siegel. But carbon sinks hold promise, as do carbon capture plants, and artificial trees that decarbonize air. Of course, eco- and geoengineering are not without risks but Siegel believes it’s worth terraforming the Earth rather than, say, Mars.
Coronavirus and the environment
Siegel also addressed in the interview the coronavirus pandemic and its effect on the environment. “Well, we're conducting a natural experiment in going back to the pre-industrial age,” he said. “And we're going to have about the same problems we had in the pre-industrial age if we continue the experiment indefinitely. No food, no medicine, no transportation, no communication. So as I said, civilizations do commit suicide. I’m just not volunteering for that assignment.”
According to Siegel, we've already figured out how to limit environmental damage to a very satisfactory — but not perfect — degree. “It will get better, but it won't become perfect without the civilizational suicide that I've been referring to.”
The shutdown is easy if you've got a lot of money, he says. But if you are among the something like 80 million people in India doing things like collecting garbage and selling it that day to buy food, you're not going to appreciate being told to stay in your hovel and not work. “Cause then you won't eat,” he says.
There hasn’t been a serious famine in India in a very long time, according to Siegel, and they're looking at the possibility of it right now.
“Hopefully they'll do the right thing and allow people to return to work,” he says. “Every creature on Earth has always had to work for its dinner, and not allowing people to work is about the cruelest punishment there is for something they didn't do.”
(About the author: Robert Powell, CFP, is a longtime financial journalist whose work appears regularly in TheStreet.com, USA Today and AARP. He is the editor of TheStreet’s Retirement Daily. He can be reached at firstname.lastname@example.org.)