Economic dimension

On one account, sustainability "concerns the specification of a set of actions to be taken by present persons that will not diminish the prospects of future persons to enjoy levels of consumption, wealth, utility, or welfare comparable to those enjoyed by present persons."[115] Sustainability interfaces with economics through the social and ecological consequences of economic activity.[19] Sustainability economics represents: "... a broad interpretation of ecological economics where environmental and ecological variables and issues are basic but part of a multidimensional perspective. Social, cultural, health-related and monetary/financial aspects have to be integrated into the analysis."[116] However, the concept of sustainability is much broader than the concepts of sustained yield of welfare, resources, or profit margins.[117] At present, the average per capita consumption of people in the developing world is sustainable but population numbers are increasing and individuals are aspiring to high-consumption Western lifestyles. The developed world population is only increasing slightly but consumption levels are unsustainable. The challenge for sustainability is to curb and manage Western consumption while raising the standard of living of the developing world without increasing its resource use and environmental impact. This must be done by using strategies and technology that break the link between, on the one hand, economic growth and on the other, environmental damage and resource depletion.[118] A recent UNEP report proposes a green economy defined as one that improves human well-being and social equity, while significantly reducing environmental risks and ecological scarcities: it "does not favour one political perspective over another but works to minimise excessive depletion of natural capital". The report makes three key findings: that greening not only generates increases in wealth, in particular a gain in ecological commons or natural capital, but also (over a period of six years) produces a higher rate of GDP growth; that there is an inextricable link between poverty eradication and better maintenance and conservation of the ecological commons, arising from the benefit flows from natural capital that are received directly by the poor; "in the transition to a green economy, new jobs are created, which in time exceed the losses in brown economy jobs. However, there is a period of job losses in transition, which requires investment in re-skilling and re-educating the workforce.[119] Several key areas have been targeted for economic analysis and reform: the environmental effects of unconstrained economic growth; the consequences of nature being treated as an economic externality; and the possibility of an economics that takes greater account of the social and environmental consequences of market behaviour.

Decoupling environmental degradation and economic growth Further information: Ecological economics Part of a series on Environmental economics Concepts[show] Policies[show] Dynamics[show] Carbon related[show] v t e Historically there has been a close correlation between economic growth and environmental degradation: as communities grow, so the environment declines. This trend is clearly demonstrated on graphs of human population numbers, economic growth, and environmental indicators.[121] Unsustainable economic growth has been starkly compared to the malignant growth of a cancer[122] because it eats away at the Earth's ecosystem services which are its life-support system. There is concern that, unless resource use is checked, modern global civilization will follow the path of ancient civilizations that collapsed through overexploitation of their resource base.[123][124] 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, in that order.[125][126] The World Business Council for Sustainable Development states that "business cannot succeed in societies that fail".[127] In economic and environmental fields, the term decoupling is becoming increasingly used in the context of economic production and environmental quality. When used in this way, it refers to the ability of an economy to grow without incurring corresponding increases in environmental pressure. Ecological economics includes the study of societal metabolism, the throughput of resources that enter and exit the economic system in relation to environmental quality.[128][129] An economy that is able to sustain GDP growth without having a negative impact on the environment is said to be decoupled. Exactly how, if, or to what extent this can be achieved is a subject of much debate. 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 unless nations can make serious attempts at decoupling.[130] The report noted that citizens of developed countries consume an average of 16 tons of those four key resources per capita per annum (ranging up to 40 or more tons per person in some developed countries). By comparison, the average person in India today consumes four tons per year. Sustainability studies analyse ways to reduce resource intensity (the amount of resource (e.g. water, energy, or materials) needed for the production, consumption and disposal of a unit of good or service) whether this be achieved from improved economic management, product design, or new technology.[131] There are conflicting views whether improvements in technological efficiency and innovation will enable a complete decoupling of economic growth from environmental degradation. On the one hand, it has been claimed repeatedly by efficiency experts that resource use intensity (i.e., energy and materials use per unit GDP) could in principle be reduced by at least four or five-fold, thereby allowing for continued economic growth without increasing resource depletion and associated pollution.[132][133] On the other hand, an extensive historical analysis of technological efficiency improvements has conclusively shown that energy and materials use efficiency improvements were almost always outpaced by economic growth, in large part because of the rebound effect (conservation) or Jevons Paradox resulting in a net increase in resource use and associated pollution.[134][135] Furthermore, there are inherent thermodynamic (i.e., second law of thermodynamics) and practical limits to all efficiency improvements. For example, there are certain minimum unavoidable material requirements for growing food, and there are limits to making automobiles, houses, furniture, and other products lighter and thinner without the risk of using their necessary functions.[136] Since it is both theoretically and practically impossible to increase resource use efficiencies indefinitely, it is equally impossible to have continued and infinite economic growth without a concomitant increase in resource depletion and environmental pollution, i.e., economic growth and resource depletion can be decoupled to some degree over the short run but not the long run. Consequently, long-term sustainability requires the transition to a steady state economy in which total GDP remains more or less constant, as has been advocated for decades by Herman Daly and others in the ecological economics community.