The Economic Case for Sustainable Development

By Nitze, William A. | Issues in Science and Technology, Summer 1993 | Go to article overview

The Economic Case for Sustainable Development

Nitze, William A., Issues in Science and Technology

Starting with Our Common Future, the report of the United Nations Commission on Environment and Development, and culminating in the United Nations Conference on Environment and Development (UNCED) in Rio de Janeiro, the concept of "sustainable development" has gained widespread acceptance throughout the world. Although disagreement exists on the sustainability of particular practices, consensus exists on the central goal: economic development that leaves future generations with a stock of environmental amenities (i.e., topsoil, clean air, potable water, forests, species) no less, and preferably more, abundant than those enjoyed by their predecessors. To achieve this goal, all countries, rich and poor, must shift from the resource-depleting, environmentally destructive development patterns of the past.

The conventional wisdom, particularly in developing countries, in that in traditional accounting terms the new, more environmentally sustainable patterns of development will be more costly than conventional practices. This perception threatens to undermine the movement toward the new patterns because it means that sustainable development will be implemented in the developing world only if the industralized countries agree to pay the incremental cost of doing the right thing or if the developing countries are willing to give higher priority to long-term environmental goals than to their desperate and immediate economic needs.

The assumption that there will be incremental costs is reflected in the structure of the major international programs to promote sustainable development. For example, the Global Environmental Facility (GEF) was established in 1991 under the joint management of the World Bank, the United Nations Development Program and the United Nations Environment Program to provide funding to meet the "agreed full incremental costs" of redesigning "baseline" development projects so that they protect the ozone layer, reduce greenhouse gas emissions, preserve biodiversity, and protect international waters. Similarly, the Framework Convention on Climate Change, which was signed by more than 150 countries at UNCED, requires developed countries to provide developing countries with "such financial resources, including for the transfer of technology, needed by the developing country Parties to meet the agreed full incremental costs of implementing measures" to reduce greenhouse gas emissions or adapt to climate change. In each case it is assumed that doing the right thing costs more.

Counterproductive myth

Although many environmentalists fought hard to win these financial commitments from the industrialized countries, the concept on which they are based is likely to be detrimental to sustainable development. Most developing countries, particularly in Asia and Latin America, are determined to do what they can to achieve rapid economic growth over the next few decades. They are aware that such growth may cause increased air and water pollution, loss of forests, soil erosion, and other consequences harmful to human health and the environment, but they are not ready to make significant economic sacrifices to avoid those consequences. If forced to make a choice, most developing countries will choose more rapid economic development over protection of the environment. As they become more prosperous, they are likely to give greater priority to minimizing local environmental problems such as urban smog or groundwater contamination, but in the meantime, they could cause irreversible harm to the global environment through practices such as increased greenhouse gas emissions or ocean discharges.

This pattern is already evident in Asia. All Asian governments increasingly recognize that their historical growth patterns are environmentally unsustainable, yet only the most wealthy appear ready to follow Japan in making serious changes. The Korean and Taiwanese governments are finally beginning to take serious steps to reduce pollution. …

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