In this and the following two chapters, we create a language in which to study the three factors that were identified as comprising humanity’s impact on the biosphere (the left-hand side of the Impact Equation in Chapter 4): population (N), the standard of living (y), and the efficiency with which we transform the biosphere’s goods and services into the goods and services we produce and consume (α). Our aim is to explain the Impact Inequality.

Processes driving a wedge between our demand for the biosphere’s goods and services and its ability to supply them without undergoing decline harbour externalities. These are the unaccounted-for consequences for others, including future people, of actions taken by one or more persons. The qualifier ‘unaccounted-for’ means that the consequences in question follow without prior engagement with those who are affected. Inefficiencies in the production, consumption and exchange of goods and services are an expression of externalities.