Environmental sustainability. This concerns itself with maintaining a stock of natural resources, a bank of natural capital, to pass on to future generations to ensure they have the same quality of life as today, or more. We need broader measures than GDP or HDI to explore whether any country is only progressing at the expense of the future generations as it is using up its bank of mineral and energy resources, its fertility, its forest, fish and ecological diversity. Uncontrolled growth leaves the environment open to harmful negative externalities. Non renewables like oil, gas and minerals might be disappearing living little for the future. Poverty and overpopulation means the poor are forced to cut down forests for fuel and to exhaust their soil. They leave little for their children to survive on and the world may be heading for malnutrition at some time without more sustainable methods.
Often the problem is lack of property rights, this means the resource is a free good with no one owning the right to limit its use and charge a price. Thus many sustainability problems are outside the price system and a major market failure. No property rights mean no price to limit consumption and make efficient se of a scarce resource. This is very true of global warming and natural resources like fish and forests, especially tropical rain forest. This can only be solved the governments taking action to assert their right to limit supplies through quotas etc and then charging, or even better using regulation to ban or limit use. This happens with fish quotas in the North Sea (UK), and pollution permit trading. The Brazilian government is only just now becoming strong enough to enforce controls against logging and burning of rain forests. This is a big problem, poor governance. Weak or corrupt governments in the 3rd world are not effective in imposing controls or property rights over their resources. MNCs may well exploit their weaknesses to exploit the environment, use their labour force in unsustainable ways, and use up renewables like rain forests, as well as non renewables like mineral reserves. MNCS may of course act ethically, most try as they will be exposed by the media and lose sales. However in remote parts of the world subcontractors working for clothing chains etc may carry out unsustainable practices. The media, consumer pressure, but above all strong and good governments can gradually weed out these practices.
Another cause is lack of capital for modern technology. Poor farmers cannot afford modern crop strains, fertilisers or irrigation. They cannot afford to look after their soil and cannot increase yields with modern methods so they over use their land and exhaust it. Economic growth might help and land may be returned to the wild as it has in the US and EU as farm yields have grown so fast with development.
Ldcs often desperately need to earn an income so apart from poor regulations and lacking money for enforcement they may be tempted to allow unsustainable exploitation of forest or minerals/oil to meet their present needs. This may be good, Dubai is using its revenues from oil and natural gas to diversify into a business/tourist centre. This may well be good governance and sustainable from their point of view, but using up resources fast is not sustainable for the planet. However in many cases this dash for money is bad for present human development, especially under dualistic elites or dictatorships who may exploit their country for their own use and not use the income development or focus on the poor or equity (Zimbabwe and Burma – oil)
Sustainability has other dimensions. One is cultural diversity. We need to consider whether economic growth damages traditional communities. This is generally true as growth equals change. Rostow’s analysis looks at change from traditional societies. Sometimes this might be an improvement if we lift people out of poverty and ill health and illiteracy. However, how can we be sure that we are right? Does the concept of human development cover all? There may be deeper needs for personal and social stability and cohesion that traditional societies give, and growth may simply destroy these. It seems difficult to justify the disappearance of tribal languages, just as it’s not sustainable to destroy the variety of wildlife and plants in the rainforest. Issues of sustainability may sometimes be subjective.
Another approach is to look at sustainability in terms of capital, resource and people as a store of capital, a national store of wealth for now and the future. Many countries are using up their non renewable and renewable resources.
We need wider measures of development to include sustainability in all its complexity. We should deduct from current GDP a sum for depleting its resource bank and for this we use an ISEW (Index of Sustainable Economic Welfare ). This assumes GDP measures the value of welfare from current output. We then remove the monetary value of pollution and global warming. Also we deduct a figure from GDP for renewables and non-renewables depleted. Thus China’s rapid growth would look less good on an ISEW when we deduct air and river pollution and using up its vast coal reserves. We add capital stock built up in the form of infrastructure and industrial capital as well as human investment. Also we must remove forced or defensive expenditure by the state. This includes taking away spending on defence, commuting, insulation against aircraft noise pollution, costs of car accidents etc. We do not increase welfare with these but simply keep ourselves stable. An Isew would make an allowance for non paid domestic work like do it yourself or childcare etc.
It is only sustainable if we can replace used forests and energy sources etc. This focus might act like the HDI to pressure countries into taking effective action – renewables, recycling and encouraging efficiency in use.
Criticism of ISEW- These more complex measures of development have not caught on in general use like GDP or HDI, partly as they are too complex. They are expensive to undertake, and like CBA it is difficult to agree on what is important and what is not. Should we put more weighting on ecology, or less as this may not be human development. Should we worry more about equity or less. A key issue then is how much weighting to give to each aspect and also what is the monetary value of each.
Thus differences in assumptions and values placed, what we include or not all make huge differences to the outcome for each country. Again like CBA and HDI we can defend these measures as they put pressure on governments to reform. They make people think in more complex ways about the point of fast growth or development and what the implications are of achieving it. We do know that GDP figures alone are not good alone as they simply measure the money value of production and consumption, not whether any given GDP produces god benefit or not for people.
There is too much government failure in the world so any improvements in analysis of sustainability issues should lead to a more prefect allocation of resources for these vital issues. Rationality should replace bias, politics and government failure – the same point for CBA.
Population and sustainability- Fast growth of population makes present development difficult and future environmental damage much greater. Population growth does threaten to compromise the future. However we can reduce this through government policies that educate women to give them a wider role than just having children and policies that encourage and enable birth control. Population growth threatens land fertility, water supplies and forests etc. Often population growth is faster than GDP growth so living standards fall.
Technology, organisation, improved supply of bank loans etc can increase food output however quite rapidly so we should concentrate on ways of easing this problem with sound policies on output an birth control. Clearly rural neglect is part of the problem. Rising incomes in the poor world will cut birth rates and mean less pressure on the land if it is more productive per acre.
Urban migration from this overpopulation and rural neglect is putting immense pressure on water, health and crime. This is not sustainable.
Carbon Trading Perhaps the most difficult problem is global warming, which must be tackled globally to bring in the developing world. If permits are given fairly to poorer nations they will gain a surplus as they have not industrialised. This could be a form of aid and would still restrict world carbon emissions f there is a tight world limit and the polluting countries like the US, Europe and China have to buy these permits. This is a big if. Carbon trading is growing, but the big polluters have yet to agree. The poorer countries argue for large quotas of permits, the rich countries disagree, the poor say we should pay for new technology to cut emissions and pay to plant vast forest. No binding agreements have been made yet. The world faces its biggest challenge to sustainability.
