The Poverty Trap: Environmental Implications

“Inequality”.  It is becoming a bigger and bigger buzzword these days.  In the United States, we spend a lot of time talking about the increasing wealth of the “top 1%”, income inequality, and wage inequality.  On a more global scale, we talk about extreme poverty and inequality, the inability the access natural resources and the bare necessities for survival.  These conversations are all related to the idea of the “poverty trap”, a concept that I have been learning about in my development economics class.  Basically, in an economy where there is inequality and credit markets are imperfect (also known as all world economies), inequality reproduces itself.  Poor parents do not have the same ability as the wealthy to invest in things like education and health, thus making it more difficult for their children to succeed.  Due to the inability of poor parents to accumulate capital, the poverty trap makes sure that their children also do not have any capital to help them invest in education and health the way the wealthy do.  Thus they must continue to struggle just to maintain enough income to survive.  It is a vicious cycle and a market failure that bars the impoverished from investing in goods and futures that everyone should have equal access to.

However, when we talk about the poverty trap and inequality in the general media, we do not often link it to increasing environmental degradation.  Colin Kahl says, “At both the global and local levels, natural resource depletion and environmental degradation result from interactions among extreme wealth, population pressures, and extreme poverty”.  In less developed countries where the current exclusive political institutions allow for an extremely high level of poverty, where wealth and power is concentrated in the hands of a few, there is also a higher level of environmental degradation.  When families are so incredibly impoverished, their main focus is survival, day to day.  This leads to an inability to accumulate capital and knowledge for parents and their children.  The inability to accumulate capital leads to a lower level of interest in environmental protection because families need to use all the resources they can to survive.  For example, there is a fuel wood crisis in Africa because families are growing and rapidly harvesting wood to fuel their stoves.  Also, a lack of knowledge and the inability to obtain education makes it impossible for the impoverished to learn more about environmental issues and family planning.  The poverty trap can be applied specifically to environmental issues because poverty contributes to environmental degradation, which in turn worsens poverty.  Extreme poverty and declining resources can lead to civil strife and resource conflicts, such as the Zapatista uprising that happened in Chiapas, Mexico due to the unequal distribution of land that made it difficult for the indigenous peoples to accumulate any capital from farming and harvesting the land.

So what is our solution to the poverty trap?  Will alleviating the poverty trap allow us to better protect against environmental degradation?  In my opinion, there is a huge need for social consensus and public intervention on the issue.  For example, public investments are needed in education and early childhood development, taxes for the wealthy must increase, and political and financial institutions must be re-vamped to make way for inclusive instead of exclusive institutions.  These changes need to happen before environmental degradation so undermines the power of state authority and legitimacy that civil strife breaks out.  Uprisings like the Zapatista rebellion in Chiapas may cause regime and institutional change if they occur on a large scale, but this is not the ideal solution.  In terms of protecting against environmental degradation, I think alleviating the poverty trap is one part of the solution.  By allowing the poor to accumulate more capital and invest more in education and health, they will be able to focus more on conservation and sustainable use of the environment as well as better family planning and more investment in their children’s futures.