The Relationship between Economic Growth and Sustainability

The Relationship between Economic Growth and SustainabilityPresented by Kayla Davenport

The Three Pillars: Social Environmental Economic (our

focus)

What is Economic Growth?▪ Economic Growth: The rate of increase in real (adjusted for

inflation) gross domestic product (GDP).▪ Economic growth is more of the same (jobs, income,

people, etc.).▪ Is this increase in rGDP always evenly distributed? ▪ Short Answer: Absolutely Not.

UC Berkeley Economics professor Emmanuel Saez updated his estimates of income inequality

95% of income gains from 2009 to 2013 have accrued to the top 1%.

Unequal per-capita GDP Distribution in the U.S.

Disability-Adjusted Life-Years: One DALY can be thought of as one lost year of healthy life. This

metric is used to quantify the burden of pollution or disease. A key human capital indicator of sustainability According to the World Bank, per 1,000 people:

Sub-Saharan Africa: 120 India: approx. 70 Middle East: 60+ China: 15 “Established Market Economies”: approx. 7

Ensuring Equitable Distribution of Growth▪ How can we ensure that economic growth improves the well-

being of all people?▪ The U.N.’s Human Development Report argues that, for

economic growth to improve everyone’s well-being, it must:▪ 1. Prevent those who failed to gain from growth from

experiencing poverty.▪ 2. Create jobs.▪ 3. Ensure wide participation.▪ 4. Protect the environment for future generations.▪ 5. Protect cultural traditions.

Economic Growth: is it Sustainable?Yes:▪ Produces income that raises

many out of poverty▪ Higher incomes lead to safer

drinking water and cleaner, less resource-intensive production technologies

No:▪ Rich countries consume the

majority of the world’s resources

▪ These countries are responsible for a great deal of the world’s trash, toxic emissions, ozone-depleting chemicals, and greenhouse gases. “The problem of the sustainability of a macroeconomy is less

about economic growth per se, and more about the nature of what is produced and how” (319).

In the case of Energy and Economic Growth:

Production side: Energy intensity has declined in most countries. This is attributed to improvements in technical efficiency associated with new capital.

Consumption side: Economic growth tends to be associated with increases in energy consumption (e.g., electricity, air conditioning, refrigeration, space and water heating).

Environmental Kuznets Curve (EKC)Figure 13.1 There is an

inverted-U relationship between pollution intensities and per-capita GDP

This curve links per-capita GDP growth to sustainability

Disputes over the EKC

Not all pollutants follow this pattern

Not all economists accept the EKC

Declining Material Throughput: How is it Done?

“Service and flow” economies Leasing rather than owning Purchasing locally produced goods

and services

Economic Growth vs. Economic Development

Which term should we use when discussing Sustainability?

In Summary…

What is the relationship between economic growth and sustainability?

Works Cited:Hackett, S. 2011. Environmental and Natural Resources Economics: 313-320. 4th ed. Armonk, NY.: M.E. Sharpe, Inc.

Three Pillars. Digital image. Thwink.org. N.p., n.d. Web. 31 Jan. 2017. <http://www.thwink.org/sustain/glossary/images/ThreePillars_ArchitecturalSimple_Large.png>.

Debate. Digital image. Clipartpanda.com. N.p., n.d. Web. 1 Feb. 2017. <http://images.clipartpanda.com/debate-clipart-1be2a998702ad3820d3c62219a4dfd18.jpg>.

Economic Growth. Digital image. Personalmoneyservice.com. N.p., n.d. Web. 1 Feb. 2017. <http://personalmoneyservice.com/wp-content/uploads/2015/02/economic-growth.jpg>.

Thumbs Up. Digital image. Clipartfest.com. N.p., n.d. Web. 31 Jan. 2017. <https://img.clipartfest.com/754e17cfd61de8bae4ee7d6c3465e271_thumbs-up-thumb- up- clip-art-at-clipart-of-thumbs-up_1860-2371.png>.

Barro, Josh. "95% Of Income Gains Since 2009 Went To The Top 1% - Here's What That Really Means." Business Insider. Business Insider, 12 Sept. 2013. Web. 02 Feb. 2017.