Earth Up! | Do We Understand Economic Growth and Sustainability in terms of Limited Natural Resources?

Earth Up! is a monthly column by Ayesha Mehrotra that intends to cover varied issues and solutions with respect to environmental sustainability in India.

“Unlimited economic growth and exclusive conservation of limited natural resources are two sides of the same coin of development and both together can lead us towards sustainability.”

The current neoclassical economic theory, which more or less reflects upon development policies which are built, ignores ecological and entropic limits and constraints to economic growth. What Harvey (1996) calls the ‘standard view’ of the mainstream economics rests on technological capabilities and explorations to overcome all social and environmental problems. In recent discussions around this topic, it has been clear that economic growth and conservation are more or less parallel streams of thinking. However, these principles have a wider scope of possibilities- where resource conservation and economic growth can collide in order to build a safer environment along with market capabilities.

Currently, economics only recognizes the value of things for utility, or a marketable commodity for profit. The idea of nature as a free gift, where the value or cost of extraction and production is negated in economic values is a problematic design to begin with. Damage, depletion or degradation of natural resources is considered in neoclassical economics to be an unimportant ‘externality’ in dominant economic theory, because it assumes that human economic activities are grossly independent of natural resources (Deb, 2009). Today environmental inequalities and injustices are not only limited to exposure to contamination, toxics, and dumping. They also exist in the allocation of environmental goods and services. The concept of ecosystem services and ecological value with a non-anthropocentric ideology is difficult to establish in the world of economics. The definition of sustainable development provided by Brundtland Commission Report is a true example of balancing resource consumption with sustainable economic growth can work out. However, this has several loopholes and flaws which bring out how resource consumption is being overused in different ways to suit the requirements of production.

The short-term benefits of economic growth are many. Growth of businesses and nations could result in large profit making systems, which would ultimately lead to creating jobs, expanding resources and improving quality of life. Many economists even argue that the technology has enabled the scope of limited resource consumption and maximum exponential growth through products, global travel, rapid communication and information along with efficiencies of global trading and market opportunities. Economic growth derived from all these technological creations does indeed feed on itself, as materialistic consumerism remains unsatisfactory for almost everyone. Yet, in order to grow, the economy also feeds on natural resources and emits waste that pollutes all natural systems and threatens ecosystems which ruin the niches for many species, including humans themselves. The endless use of resources such as fossil fuels, oil and gas facilitate economic growth along with technological advances that extract large amounts of energy from the earth, while polluting at the same time. These counterbalancing forces neglect the foundation upon which economic growth is built, and in the long run will create a sinkhole which swallows up the basis of economy, environment and society which are connected in more than one way. The environment is harshly affected due to the release of toxic by-products with no sustainable means of removal along with high carbon based residuals. The balance still remains a question mark, because it is impossible to choose what can be eliminated as a system by itself. However, economic growth highly depends on natural resources, which in turn allows exploitation and depletion to occur at a fast rate.

Coming to a more positive approach and possible solutions, which is very limited and the impact is yet to be assessed at a large scale- is the principle on which circular economy exists, which mainstream economics is slowly approaching towards. The idea of a circular economy provides partial solutions to natural resource consumption, where recycling, reusing and reducing the consumption of new resources is implemented. This stresses on the re-utilization of waste as raw material for other products. Examples across the world prove that this is a sustainable process, in both theory and practical application. Resources such as iron, aluminum and steel which have drastic rates of mining and irreversible impacts on the environment can be reused from existing products in the market itself. However, this still doesn’t include the implications of energy consumption and carbon footprint levels. Accordingly, the system needs to be restructured in terms of realistic, inclusive and considerable impact analysis.

The question of limited natural resources and unlimited economic growth still remains a grey area, as there are still no concrete solutions to curb the problem of environmental exploitation. Although there are new approaches economics takes into consideration and is gradually adopting, the idea of natural resources and economic growth remains a huge challenge. Humans depend on economic opportunities for a sufficient and comfortable lifestyle, whereas if and when the natural resource base diminishes to an unfathomable level, we might not have an economy at all which exists, to be able to depend on the same.

Ayesha Mehrotra is the Sustainability and Outreach Officer at One Future Collective.

References:

Anguelovski, I and M Alier. (2014). ‘The environmentalism of the poor’ revisited: Territory and place in disconnected glocal struggles. Ecological Economics, 102:167-176.
Alier, M. (2004). Environmentalism of the poor- A study of ecological conflicts and valuation. OUP, New Delhi. (Chapters 1, 4).
Deb, D. (2009). Beyond developmentality: Constructing inclusive freedom and sustainability. Earthscan, London. (Chapter 2).