Although it is clear that growth within the current economic paradigm is environmentally unsustainable, it is less clear whether the adoption of sustainable development can save our planet from environmental collapse. Countries are aggressively trying to stimulate their economies and create new jobs while at the same time, it is becoming increasingly obvious that we urgently need to address a range of far-reaching environmental problems.
In 2011 the International Resource Panel, hosted by the United Nations Environment Programme (UNEP), warned that by 2050, the human race could be devouring 140 billion tons of minerals, ores, fossil fuels and biomass per year – three times its current rate of consumption. The report demonstrated that most of this consumption comes from the developed world (up to 40 or more tons per person in some developed countries compared to an average of four tons per year for people in places like India).
Some believe that sustainable development could bring about meaningful change. Sustainable development focuses on reducing the amount of required resources through improved economic management, product design, and technology. Environmental sustainability emulates the biosphere and functions as part of the ecosystem. This means being efficient, adapting to local conditions and using sources of energy which are renewable. At its best, sustainability incorporates the concept of cradle-to-cradle design, which factors the entire life cycle.
Sustainable development supports economic growth. The Brundtland Report argued that economic growth was necessary for poorer nations to meet their needs; they also used this argument to support economic growth in all nations.
Criticisms of sustainable development
For many people concerned about ecological degradation, growth is an environmental anathema and sustainable development does not make sense. This idea was elaborated by Michael Redclift in his 2005 paper “Sustainable Development (1987–2005): an Oxymoron Comes of Age.”
A 1993 paper by Herman E. Daly and Kenneth N. Townsend argue that it is impossible for the world economy to grow its way out of poverty and environmental degradation. According to these authors, the term “sustainable growth”, when applied to the economy, is a “bad oxymoron.” The term sustainable development makes sense for the economy only if it is understood as development without growth. “To delude ourselves into believing that growth is still possible and desirable if only we label it “sustainable” or color it “green” will just delay the inevitable transition and make it more painful.” The authors advocate a policy for the U.S. and other industrialized countries that prevent growth by taxing resource extraction, especially energy, very heavily.
Environmental sustainability precludes fossil fuels
Sustainable economic growth is utterly impossible as long as oil, coal and natural gas provide nearly 88 per cent of the world’s energy needs. According to EIA (the US Energy Information Administration), total world consumption of marketed energy will increase by 49 percent between 2007 to 2035. The International Energy Agency predicted that Chinese energy demand would soar 75 per cent by 2035, accounting for more than a third of the growth in global consumption.
The most egregious source of energy is coal, in India, more than 50 per cent of commercial energy demand is met with coal and according to 2008 statistics, coal accounts for 71 per cent of China’s energy mix. The US is not much better with 23 per cent of its total energy demand being met with coal. Economic growth that includes fossil fuels precludes the possibility of a livable planet.
Incorporating the environment into the economic system
For development to be truly sustainable, it must balance human welfare with the welfare of the planet. Sustainable development can avoid environmental degradation by integrating the environment into the economic system. Environmental economists argue that environmental degradation is a function of the failure of the market system to put a value on the environment.
Cost-benefit analysis (CBA) and economic instruments offer a couple of ways in which environmental values could be incorporated into economic activities. Economic instruments include taxes and charges on polluters that aim to internalize environmental costs into the decisions of companies and individuals. This provides an incentive to curtail environmental degradation.
There are a number of other ways the environment could be factored into our economic decision-making. Measuring environmental damage includes the value of earnings lost through health problems associated with pollution. It also includes health care and the costs associated with decreased agricultural yields.
In such a system, valuing the environment must account for future generations of humans and other species. The cost of ecological destruction must be prohibitive and not limited to monetary costs. This translates to criminal sanctions including jail terms.
Can technology save us?
Technology is an important adjunct of sustainable development. Improving technology makes growth and environmental sustainability compatible. According to the Council of Academies of Engineering and Technological Sciences, economic growth can be made compatible with environmental enhancement, but “technologies affecting all societal activities must reflect the goals of sustainable economic development.”
Environmentalists Winin Pereira and Jeremy Seabrook (1991) point out that a high of living standard is unsustainable. They say: “
“Economic growth can be made compatible with environmental enhancement only if the emission of pollution is less than that which can be assimilated and transformed by the natural environment. In order for resources to be conserved, all articles must be manufactured so as to be fully recyclable. Further, they must be manufactured, transported, used, and recycled with energy from renewable sources only.”
The apparent conflict between growth and environmental sustainability may be at least partially addressed by new technological developments. A good example comes from recent advances in catalytic science.
“With the recent advent of molecular design techniques, the modernized form of this broadly applicable technological tool has the potential to change the face of the four fundamental needs of humanity–health care, food supply, energy, and materials. This can be done in a way that provides a path to environmentally sustainable development for all citizens of the planet.”
Ecological economics and decoupling
While conventional economics is concerned largely with economic growth and the efficient allocation of resources, ecological economics has the explicit goal of sustainable scale (rather than continual growth), fair distribution and efficient allocation.
The World Business Council for Sustainable Development states that “business cannot succeed in societies that fail,” and societies that do not reduce their resource intensity are doomed to fail.
Ecological economics must reach far beyond the understanding of conventional economics and focus on people and nature.
In economic and environmental fields, the term decoupling is used to refer to the ability of an economy to grow without incurring corresponding increases in environmental pressure. An economy that is able to sustain GDP growth without having a negative impact on the environment is said to be decoupled.
We now have a leadership competency model for sustainability. The expansion of sustainable business opportunities can contribute to job creation.
Innovative economics internalizing ecosystems
There is no single economic answer to the environmental crisis we face. The closest thing we have to a useful approach is cultivating pragmatic innovation. Going forward, our economies must constantly adapt to meet present and future needs.
While some would like to do away with the concept of profit, this may not produce the results they seek. Peter Drucker said that “profit for a company is like oxygen for a person. If you don’t have it, you’re out of the game. But if you think your life is about breathing you’re really missing something.”
From this standpoint, a business should aim to make a profit to ensure it is financially sustainable, but this should not be at the expense of the planet or the life forms that inhabit it.
We cannot continue to treat ecosystems as economic externalities. Conservation of resources is best served by putting a price on natural systems so that they are not overused and degraded. Internalizing these externalities entails using market strategies like ecotaxes and incentives, tradeable permits for carbon, and the encouragement of payment for ecosystem services.
Europe 2020 is the EU’s sustainable development growth strategy. The EU wants to become a smart, sustainable and inclusive economy with high levels of employment, productivity and social cohesion.
Concretely, the Union has set five ambitious objectives – on employment, innovation, education, social inclusion and climate/energy – to be reached by 2020. This includes building a more competitive low-carbon economy that makes efficient, sustainable use of resources. It also involves protecting the environment, reducing emissions and preventing biodiversity loss.
The EU intends to boost sustainable growth through resource-efficiency in Europe. Economic growth will be decoupled from resource and energy use by:
- reducing CO2 emissions
- promoting greater energy security.
- reducing the resource intensity of what we use and consume
ADB strategy 2020
ADB Strategy 2020 is Asia’s sustainable development growth strategy. ADB’s efforts in greening economic growth aim at promoting environmentally sustainable and inclusive growth while addressing climate change.
ADB is committed to doing a better job of managing biodiversity and natural resources. They realize that large-scale ecosystems are central to the future well-being of Asia-Pacific. They will focus on national leadership, innovative partnerships and integrated approaches.
ADB’s climate change program focuses on five region-wide priorities: (i) expanding the use of clean energy; (ii) encouraging sustainable transport and urban development; (iii) managing land use and forests for carbon sequestration; (iv) promoting climate-resilient development; and (v) strengthening related policies and institutions.
A range of approaches are necessary, including regulations, market-based instruments, voluntary schemes, and information disclosure. Environmental impact assessment and social safeguards processes are also important. In total, it is estimated that it will cost 8 trillion dollars in infrastructure investment to get to where they need to be.
Recognizing that many of the region’s critical ecosystems transcend political boundaries and that several pollution issues have a transboundary nature, governance arrangements at the regional and subregional level are also increasingly becoming a necessity.
This agenda is generally consistent with the green economy and green growth concepts as discussed in the Rio+20 process.
The Rio+ 20 Conference on Sustainable Development
The Rio+ 20 Conference on Sustainable Development provides a strategic opportunity for the global community to take stock of the current status of the environment and its links with supporting inclusive economic growth and poverty reduction.
The UNCSD will need to develop a new agreed vision and a set of solutions and mechanisms that can support and finance inclusive and environmentally sustainable growth. It is also important to develop mechanisms using innovative approaches that leverage both public financial resources and the private sector. To achieve this goal, there will need to be incentives to help shift economies to a sustainable path. This may include removing harmful subsidies and providing tax breaks and other incentives.
Governments will need to work together in support of strengthening the environmentally advantageous technologies of developing nations. This includes incentives such as market-opening measures, intellectual-property protection, support for universities and other research institutions.
Governments will also have to pursue arrangements for monitoring and assessing environmental conditions and their economic implications.
Sustainable Development is an Ethical and Social Issue
There are important ethical and political and social dimensions associated with sustainable development. Government incentives, market based mechanisms and even punitive measures are not adequate in and of themselves. Incorporating environmental sustainability on a broad scale is also a matter of cultural and social change. Ultimately, it reflects a dramatically transformed value system which acknowledges the overarching value of the natural world.
One need only look at the domestic unrest in so many European countries to realize that growth (or the lack thereof) is also a social issue. As William Rees has said: “economic growth is a major instrument of social policy. By sustaining hope for improvement, it relieves the pressure for policies aimed at more equitable distribution of wealth.”
We need to develop new ethics and new forms of social decision-making that integrate the environment. We also need incentives to stimulate technological innovation.
It is not certain that sustainable development will succeed, but it may be the best chance we have not only to save our economies but to save our planet from an environmental apocalypse.
Richard Matthews is a consultant, eco-entrepreneur, green investor and owner of THE GREEN MARKET, a leading sustainable business blog.