however, that other things aren’t necessarily equal: countries can and do take action
to protect their environments. In fact, air and water quality in today’s advanced
countries is generally much better than it was a few decades ago. London’s famous
“fog”—actually a form of air pollution, which killed 4,000 people during a two - week
episode in 1952—is gone, thanks to regulations that virtually eliminated the use
of coal heat. The equally famous smog of Los Angeles, although not extinguished,
is far less severe than it was in the 1960s and early 1970s, again thanks to pollution
regulations.
Despite these past environmental success stories, there is widespread concern today
about the environmental impacts of continuing economic growth, reflecting a change
in the scale of the problem. Environmental success stories have mainly involved dealing
withlocalimpacts of economic growth, such as the effect of widespread car ownership
on air quality in the Los Angeles basin. Today, however, we are faced with globalenvi-
ronmental issues—the adverse impacts on the environment of the Earth as a whole by
module 39 Growth Policy: Why Economic Growth Rates Differ 393
Section 7 Economic Growth and Productivity
figure 39.2U.S. Oil Consumption
and Growth over Time
Until 1973, the real price of oil was
relatively cheap and there was a
more or less one -to -one relationship
between economic growth and oil
consumption. Conservation efforts
increased sharply after the spike
in the real price of oil in the
mid -1970s. Yet the U.S. economy
was still able to grow despite cutting
back on oil consumption.
Sources:Energy Information Administration;
Bureau of Economic Analysis.Oil consumption
(thousands of
barrels per day)Real GDP
per capita
(2005 dollars)25,00020,00015,00010,0005,000$45,000
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000Year1949 1960 1970 1980 1990 2000 2008Real GDPOil consumptionCoal Comfort on Resources
Those who worry that exhaustion of natural
resources will bring an end to economic
growth can take some comfort from the
story of William Stanley Jevons, a nineteenth-
century British economist best known today
for his role in the development of marginal
analysis. In addition to his work in economic
theory, Jevons worked on the real - world
economic problems of the day, and in 1865
he published an influential book, The CoalQuestion,that foreshadowed many modern
concerns about resources and growth. But his
pessimism was proved wrong.
The Industrial Revolution was launched in
Britain, and in 1865 Britain still had the
world’s richest major economy. But Jevons ar-
gued that Britain’s economic success had de-
pended on the availability of cheap coal and
that the gradual exhaustion of Britain’s coal
resources, as miners were forced to dig everfyi
deeper, would threaten the nation’s long - run
prosperity.
He was right about the exhaustion of Britain’s
coal: production peaked in 1913, and today the
British coal industry is a shadow of its former
self. But Britain was able to turn to alternative
sources of energy, including imported coal and
oil. And economic growth did not collapse: real
GDP per capita in Britain today is about seven
times its level in 1865.