Chapter 2 Sustainable Development: From Malthus to Ecological Economics
2.1 Evolution of the concept of Sustainable Development
2.1.4 Environment and Resource Economics (1960s- 1990s)
These environmental concerns led to the growth of two overlapping fields within neoclassical economics - environmental economics and natural resource economics. Environmental economics is concerned about ‗sink‘, i.e. economy‘s insertion into the environment and the pollution problems; while natural resource economics is concerned about ‗source‘, i.e. what economy extracts from the environment and the problems of allocation of resources. During this phase, the natural resources included air, water, agricultural resources (land, soil), renewable resources (forests, fisheries, and wildlife) and non-renewable resources (oil, metals and minerals).
Environmental economics is based on the ecology of the ecosystem. The prime focus of this branch of economics is to study the ‗flow‘ of biotic and abiotic processes like rate of energy flows, the distribution and flows of biochemical substances in land and water ecosystems, and of gasses and particulates present in the atmosphere. Environmental economists study global warming, climate change, pollution, purification of water in watersheds etc. (Dasgupta, 2000). Such studies have provided valuable understandings of the effects of human-led activities on the sink services of the environment. In environmental economics, natural resources are valued in "quality" indices, e.g. soil quality, the freshness of the air, the salinity of water such as those for air, soil, or water (Dasgupta, 2000).
Resource economics, on the contrary, is a study of the natural environment, which deals with the relations and interdependence between human economies and
ecological systems. Issues associated with supply of natural resources into human sphere are prime concerns of this discipline. It wants to study the ‗stock‘ of natural resources with the objective to develop methods of environmental management to ensure economic sustainability. In resource economics, stocks of natural resources are ‗quantities‘ such as biomass units for forests, animal herd size (in numbers), acre-feet for aquifers, etc.
Though there are fundamental distinctions between these two paradigms, both study renewable resources, and insights from one field of study have helped to understand the other (Dasgupta, 2000). So after some time of their emergence, resource and environmental economics were merged. These discussions now form a part of the sustainable development discourse.
2.1.5 ‘Limits to Growth’ reinstated
Although the thoughts of the classical economists did not receive much attention then, but they could foresee the potential threat from scarcity of resources even at the time when resources were available in abundance and there was no sign of scarcity. The environmental concerns of the 1960s led to almost a revolutionary movement. Environmental economists were mostly involved into it and tried to link the theory of external effects of human-led activities from an economic point of view. This movement started to give more emphasis on the seemingly inefficient activities of the contemporary economies. It also focused on changing lifestyle of people which started to consume more beyond basic requirements.
Gradually, the unjustifiable style of life became identical with the hunt of economic progress, and many people started to think about adverse effects of such growth. But this movement was not new. The notion of absolute limits advocated by the classical economists was brought back and people started to reinstate that due to demographic and ecological constraints the economy cannot grow forever and there is a limit to growth.
This ‗limit to growth‘ concept has become the title of a famous report called ―The Limits to Growth” which was published by the ―Club of Rome‖ in 1972. The report considered non-renewable resources. This report too accepted the contribution of technology by the following words:
“Over the past three hundred years, mankind has compiled an impressive record of pushing back the apparent limits to population and economic growth by a series of spectacular technological advances” (Meadows et al., 1972, pp. 129).
Nonetheless ―The Limits to Growth” publicized for the first time the impression that growth could be restricted by the limited regenerative capacity of the natural capitals (Meadows et al., 1972). Using sophisticated computer simulation model, the authors focused attention on depletion of non-renewable resources and resulting increase in commodity prices. The report was about to search for a model to represent a sustainable global structure without unexpected strong breakdown; and is skilled to fulfill basic needs of people. So ―The Limits to Growth” mainly talked about ecological limits assuming that population and industrial capital would grow exponentially, and consequently, there would be a similar growth in demand for food and non-renewables resources which apparently lead to growth in pollution (Ekins, 1993).
So the concept of outer limit, that if resources get depleted economy cannot grow, has thus emerged in this way among the mainstream economists. Till then there was no proper definition of SD. However, ―The Limits to Growth‖ report used the word sustainability very meaningfully. In the Introduction of the report, the authors explained their concerns on sustainability. The continued growth patterns of global population, industrialization, environmental pollution, food production and resource degradation would limit growth by 2072 which might result in an unexpected and irrepressible fall in both population and industrial capability.
However, it is not impossible to reach a stable and sustainable ecological and economic condition where each person would be able to meet his basic needs with equal opportunity. People should start working to achieve such a condition at the
earliest (Meadows et al., 1972). Though the term SD was not defined, ‗the limits to growth‘ agenda very rightly could understand the relation between the environment and economy.
Environmental discussions became more important and essential because of the apprehension that economic growth might jeopardize the existence of the humankind and the earth. This anxiety gathered momentum during the 1960s with the publications of paradigm-breaking books and articles like Rachel Carson‘s
―Silent Spring‖ (Carson, 1962), Garrett Hardin‘s ―The Tragedy of the Commons‖
(Hardin, 1968), etc. Towards the last part of the 1960s, the environmental anxieties touched almost all parts of the Western world, where people usually thought about two factors responsible for environmental degradation- economic growth and growth of population (UNEP, 2003). These views were reflected in the Club of Rome‘s global growth model for the future of the world which was constructed precisely to explore five key drifts-accelerating industrializations, speedily growing population, extensive malnourishment, degradation of non- renewable resources, and a worsening environment (Meadows et al., 1972, pp.
21).