Economic Vs Environmental Sustainability

What is ECONOMIC sustainability?

• The ability of economies to maintain themselves when resources decline or become too expensive and when populations dependent on those resources are increasing.

What is ENVIRONMENTAL sustainability?

• A process by which environment is used and managed to supply people on a long term basis while maintaining ecological processes, preserving genetic diversity and utilising ecosystems and species without destroying them

What is the link between the two?

• The global economy depends on the natural environment as a source of resources and a sink for emissions. The ability of the natural environment to fulfill this role determines how far population can increase and the economy expand.

The relationship between these two types of sustainability is the key issue you need to be able to discuss. Can they coexist? Do they support each other or do they progress at each other’s expense?

The following sections will explore this relationship further…

NICK CLEGG ON SUSTAINABILITY

In his speech in 2012 Clegg outlines how economic and environmentally sustainability can be seen as conflicting priorities:

• Economic recovery and sustainability has been put before environmental concerns as countries struggle to recover from the financial crisis of 2008.
• Environmental restrictions place a burden on struggling businesses
• ‘Cash-strapped citizens cannot be expected to live more sustainably’
• Environmental concerns must take/have taken a back seat in to allow the economy to grow

However, he then went on to challenge these assumptions:

• Household bills can be reduced by using less energy
• Economic overreliance on the City of London can be rebalanced by capitalising on our competitive edge in green industries, generating jobs and wealth outside London.
• Competing in the global low carbon market can attract billions of pounds of outside investment.
• Reducing our dependency on fossil fuels and investing in clean energy will shield consumers from price shocks in oil and gas.
• Germany, China, Brazil and Korea are recovering from the recession by investing heavily in low carbon industries.
• The environment can contribute to our economy, e.g. saving bee populations will save money in agriculture as it would cost £1.8billion to pollinate crops without them.
• ‘Lean times can be green times too’

(http://www.theguardian.com/environment/2012/apr/11/nick-clegg-speech-green-economy)

THE ENVIRONMENTAL KUZNETZ CURVE

The EKC takes after the name of Nobel Laureate Simon Kuznets who had famously hypothesized an inverted ‘U’ income-inequality relationship. Later economists found this hypothesis analogous to the income-pollution relationship and popularized the phrase Environmental Kuznets Curve.

The EKC hypothesis contends that pollution increases initially as a country develops its industry and thereafter declines after reaching a certain level of economic progress. This implicitly suggests that environmental damage is unavoidable in the initial stage of economic development and therefore, has to be tolerated until the inversion effect kicks in. It is oxymoronic that irreversible damage is to be accepted in return for future improvement, which will definitely not be able to restitute the environment to its pristine state.

There are 3 reasons for the inversion of pollution.

1. The turning point for pollution is the result of more affluent and progressive communities placing greater value on the cleaner environment and thus putting into place institutional and non-institutional measures to affect this.
2. Pollution increases at the early phase of a country’s industrialization due to the setting up of rudimentary, inefficient and polluting industries. When industrialization is sufficiently advanced, service industries will gain prominence. This will reduce pollution further.
3. When a country begins industrialization pollution increases as more and more industries are established. After a while, firms switching to less-polluting industries, which levels the rate of pollution. Finally, mature companies invest in pollution abatement equipment and technology, which reduces pollution.

Unanswered questions

• How much environmental damage will incur before the critical turning point and how much of this damage is reversible?
• Which institutional reforms would hasten environmental improvement?
• Should economic growth be encouraged to bring the economy to the turning point?
• Is environmental damage unavoidable as a country develops; is it not possible to develop without damaging the environment?

THE ENVIRONMENTAL PERFORMANCE INDEX

The EPI ranks how well countries perform on high-priority environmental issues in two broad policy areas: protection of human health from environmental harm and protection of ecosystems. See this website for a 2014 chart and more info about the indicator: http://epi.yale.edu/epi

Overall there is a positive correlation between EPI and GDP showing that richer countries are more environmentally friendly. This would suggest that Economic and Environmental sustainability compliment rather than oppose each other. However, it is also clear that some countries score much better or worse than their GDP would suggest. E.g. Niger performs particularly badly, while Costa Rica performs exceptionally well. This shows that the relationship is not straight forward and depends on the different circumstances of each individual country.

CASE STUDIES

CHINA
An example of a rapidly developing country that has also had severe environmental impacts. This supports the EK Curve.

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      China’s development raises a number of controversial issues:

“Industrialisation is our priority because we have to support growing populations. We cannot afford to worry about the distant future. It’s unfair for countries that are are already developed to demand that we limit our growth because of problems they caused’”

“Industrial countries such as the USA and Germany have depended upon polluting industries for their wealth. Now they fear that development in developing countries will lead to environmental disaster”

“No one wants to stop economic progress but we must insist on sustainable development that combines this with social justice and environmental care. Companies in developed countries have higher costs due to environmental laws. It’s unfair for their prices to be undercut by cheap goods in developing countries produced at the expense of the environment ”

You can read more about China on p.238 of your textbook (Oxford)

You can also watch more about China’s development at the expense of their environment in the short documentary ‘Dirty Little Secrets’ here: https://www.youtube.com/watch?v=cQaiJxK-qZY&feature=related

DEFORESTATION
This is a major environmental consequence of economic activity

It can be linked to a lack of development (e.g. the fuel-wood crisis in the Sahel) or attempts to develop (e.g. clearance of the amazon for agriculture). However there are strategies that help countries to develop and protect their environment at the same time, e.g. using 'Debt for Nature' swaps.

You can read more about this issue on p.238-239 of your textbook (Oxford)

EXAMPLE ESSAY QUESTION

Jan 12

To what extent can development be sustainable? (40 marks)

Notes for Answers

Appropriate content for a response to this question might include:

• definition of the term ‘sustainability’

• knowledge and understanding of sustainability issues in countries, such as trade versus aid, economic sustainability versus environmental sustainability, and tourism. (NB these are quoted in the specification, and these are likely to dominate answers, but we should be prepared to accept other issues such as food supply, energy supply, water supply)

• outlines of the solutions/management strategies adopted by identified areas

• a comparison between contrasting countries along the development continuum, and within the same level of economic development

• use of case studies/exemplars.

Synopticity emerges from some of the following:

• evidence in the breadth/depth of case-study material

• detailed critical understanding of the sustainability issues identified

• detailed critical understanding of the responses to the issues above

• detailed critical understanding of the management, where applicable, of the sustainability issues identified

• a recognition of the importance of values and attitudes, and of the role of decision makers at a variety of levels

• evaluative comments as to whether sustainability can be achieved.

This question requires an overall judgement to be expressed and the response should come to a view. Any conclusion is creditable as long as it is reasonable and related to the preceding content and argument.

Examiner Report

The central focus of the argument was whether or not sustainability could be achieved in the context of development. Some candidates felt the need to tell examiners all they knew about development theory without relating that theory to actual locations and actual events. Many answers descended into sweeping generality, making simplistic points. Those candidates who could recognise that the terms ‘development’ and ‘sustainability’ are themselves complex terms – for example sustainability could be economic, environmental or social – and illustrate their arguments by referring to examples and case studies, often at a national scale, accessed the higher levels of credit. It should also be pointed out that regional and local scale examples could also have been used, provided they were being referred to in the development context.

A very small number of candidates attempted to answer this question in the urban context. They had

answered the World Cities structured question earlier in the paper, and also perhaps wanted to

answer the World Cities essay question....attempting it here.