Pervasive Externalities at the Population, Consumption, and Environment Nexus

Abstract

Sticky Responses A textbook example of an unaccounted-for consequence (externality) of commercial or industrial activity is the production of pollutants where neither the producer nor the buyer bears the cost of using common environmental resources. Dasgupta and Ehrlich (p. 324 ) offer a theoretical analysis of externalities in two other areas of modern life—human fertility and material consumption. For example, when fertility decline lags mortality decline, the consequence could be environmental crash, the likelihood of which is greater if the environmental effects of consumption or population growth are external to the market.