Is economic growth the source of or the solution to our global environmental problems?
Some commentators (e.g., Beckerman 1996, Boyce 2007) have noted that increased wealth—whose precursor is greater economic growth—is positively associated with stronger environmental regulations. This is to say that greater affluence brings with it greater willingness and ability to pay the costs of improving environmental quality. The general claim is that so long as people live in relative poverty, social and environmental problems are commonly overshadowed by economic ones: but that once basic needs and wants are met, individuals and communities are in a unique position to turn their attention and their resources to these policy problems.
Would this imply, in contrast to scholars like Arrow et al. (1995) or Brown (2011), that greater economic growth—and, thus, higher levels of consumption—and greater wealth distribution are necessary to solve our growing global environmental problems? Or are economic goals inherently in tension with environmental policy objectives?
Critical Deliberation 
Is economic growth a help or a hindrance to global environmental problems? Based on an analysis of economic growth rates versus climate change, it appears that economic growth is harmful in relations to environmental change and concern. The EPA states that “climate changes prior to the Industrial Revolution in the 1700s can be explained by natural causes, such as changes in solar energy, volcanic eruptions, and natural changes in greenhouse gas (GHG) concentrations.” (EPA, Climate Change: Causes). Post-Revolution, Europe’s economic growth began to rise as well.
Humans are notoriously bad at long term planning and the understanding of future consequences. To the irrational mind, it makes sense to put off expensive changes – such as requiring coal plants to achieve carbon emission standards that call for changes to the functioning and mechanics of the plant – for short term gains; i.e., profit. Since many environmental concerns are long term in nature – such as climate change – it is difficult to comprehend how failing to make changes now will affect humanity thirty years from now. The desire to increase short-term gains and failure to comprehend long term consequences is both part of what leads into continuing environmental concerns.
The argument that economic growth is good for the environment is an inherently faulty one. Economic growth contributes to the increased standard of living and per capita GDP – people are getting wealthier. As average wealth increases, so does cost of living and luxuries – people on the equator want air conditioning to help with the heat, those in the north need heaters for the winter, a more meat filled diet is consumed, more clothes, toys and appliances are bought – all of which increases the demand on the environment to provide. Earth’s carrying capacity is finite, and as more people’s incomes grow and their consumption increases, that capacity will be overreached. The average person will not necessarily care or understand the strain their lifestyle and consumption will place on the earth – they will consume cars, electricity, plastic wrapped products and imported fruit because those are luxuries they can afford now, and desire them. Companies will have little incentive to change production-related carbon output, or to advocate for less consumption – they will be making increased profits. From a Marxist perspective, environmental concerns place second to economic growth and activity. Regulation will hurt the free market and MNCs (multinational corporations) in their profits. If it is cheaper to save money by not imposing regulations on carbon emissions or standards on water quality, environmental concerns will take a backseat. According to the Guardian, the world’s top firms have caused $2.2 trillion dollars worth of economic damage (Jowitt, “World’s top firms cause $2.2tn of environmental damage, report estimates”). Environmental damage is clearly not a priority.
From this perspective, economic growth is harmful in relation to global environmental concerns. Profit in the now is preferable to security in the future. The invisible hand of the market cares not for environmental concerns, and concern for economics over the environment will not solve anything.
There are some that claim that economic growth and greater wealth lead to the strengthening of environmental concern and regulation. Beckerman and Boyce are among these individuals that believe in a strong correlation between these two. They believe that because of a growing economy and more wealth this then promotes the greater likelihood of this “excess” to be used toward environmental quality. This concept is accepted by many, one example being German Chancellor Angela Merkel. Merkel recently had the opportunity to address students at the Tsinghua University in Beijing in regards to this concept. She states that, “Sustainable development does not sacrifice economic growth. This is a misunderstanding. Sustainable development gives us a new opportunity to create wealth”(Associated Press 2014). However, there are others that take the stance of the opposing argument, which states that economic growth often, results in the cause of environmental degradation.
Arrow specifically discusses this in terms of natural resources. These resources are required in order to increase economic productivity causing us to reach the finite levels of natural resources quicker. Many forms of economic growth come from forms of industrialization, which also leads to greater levels of environmental degradation. Brown also takes this point of view but from a slightly different perspective, stating that there is little consideration for externalities in regards to economic growth from an industrialization standpoint. Both Arrow and Brown would agree that economic development would, more often than not, result in higher levels of environmental problems rather than the potential to correct the problems once the money is there to do so.
There are many examples of global situations that reflect the ideas of Arrow and Brown in regards to a negative correlation between economic growth and environmental protection. For example, in an article in the New York Times, by Stephen Castle, talks about how Europe may need to begin cutting back on environmental regulations in order to ensure that the economy will be able to recover. Castle states, “High energy costs, declining industrial competitiveness and a recognition that the economy is unlikely to rebound strongly any time soon are leading policy makers to begin easing up in their drive for more aggressive climate regulation”(Castle 2014: para 3). Europe is one of the leading global locations for strong environmental concern and regulation and yet the economy struggles there due to these strict regulations that have caused cut backs in jobs and increased costs for everyday goods.
There is a clear tension that is revealed between these two sides of this particular topic. Depending on the ways in which the economy is going to be expanded (industrialization) there are an array of environmental concerns that will result from that growth. Until a time when environmental protection can be used as a tool for economic growth, this will continue to be a clashing issue.
The Growing Economy and Resulting Environmental Degradation
In my opinion the exceeding economic growth will do nothing but continue to result in the deterioration and abuse of the environment. What it all comes down to is the greedy nature by which America has come to be a prosperous nation. The fact remains that the people who are the wealthiest 1% in the nation are also the people with the most control over where money is redistributed, regulatory processes, and all the companies that our country relies on. Yearly, they take over “a quarter of the United States’ income” (Stiglitz 2011: 2), and have seen their incomes continue to rise, while everyone else’s in the country are falling.
Looking past the control these individuals have, and I do say individuals because there are so few, it’s also about the inability to stop trying to expand their wealth and economic status, nobody wants to halt or redistribute their wealth. Once someone has reached a certain level of wealth it seems as though it is nearly impossible for them to relinquish any of the luxuries they have become accustomed to. Our country has been built on the foundation of the American Dream, where everyone has a fighting chance to BE that 1% of the wealthiest that is essentially responsible for governing our country. The point i’m trying to make here is why would any of the wealthy people care to preserve the environment, with the possibility of giving something up, when they are seeing nothing but power increase and financial stability in their futures?
With all of this being said, I think the argument that the poorer countries have nothing to contribute to improving our environment is invalid because poorer countries simply don’t exploit the environment with the exuberance that wealthier countries do. (Panayotou 2003: 3) In fact, most poor countries receive the shortest end of the stick with regard to environmental racism; the idea that low income minorities generally support the burden of environmental waste and degradation that has been a result from the more active consumers. (Colquette 1991) While there are some people who have enough wealth to try and give back to and reinstate lost quality within the environment, the difference made from that effort would be entirely insignificant if we continue to use resources in the way we have been.
In conclusion, I think we are approaching a downward spiral that is absolutely related to the economic growth our country has become reliant upon. It is believed that economic security isn’t enough, we must continue to grow and expand, which will continue to have extreme environmental externalities for everyone.
Beckerman, Wilfred. “Economic growth and the environment: Whose growth? Whose environment?.” World development 20.4 (1992): 481-496.
Colquette, Kelly Michele, and Elizabeth A. Henry Robertson. “Environmental racism: The causes, consequences, and commendations.” Tul. Envtl. LJ 5 (1991): 153.
Panayotou, Theodore. “Economic growth and the environment.” Economic survey of Europe (2003): 45-72.
Stiglitz, Joseph. “Of the 1%, by the 1%, for the 1%.” Vanity Fair 11 (2011).
Economic growth results in commitment to the environment? Not in the U.S.
The economic growth model–in terms of environmental political theory, at least–encompasses the idea that fiscally well-to-do countries will more actively protect and preserve their ecological surroundings. People espousing this idea believe that residents in such a country, having attained a certain quality of life, will jump at the possibility of investing in the environment. When looking in particular at the United States, however, this model doesn’t seem to hold water. Not only are economic growth and environmental quality not positively correlated, they may in fact be at odds. Why? One important reason comes to mind: political polarization has created a political atmosphere in which environmental concerns will never be taken seriously.
We live in a time in which being a Republican means not voting for Democrats simply because they’re democrats, and vice versa. Resultantly, and in light of the economic growth model and how it doesn’t necessarily apply to the U.S., a commitment to preserving ecological reserves seems to be dependent not upon the economic well-being of the country–as the economic growth model suggests–but instead party affiliation. In 2014, Democrats and Republicans in Congress seemed to value economic growth and the environment quite differently. Fifty-nine percent of Republicans would rather spur economic growth and 66% of Democrats would rather invest in preserving the environment (Swift 2014). This opposing relationship between party views undoubtedly demonstrates how ideological differences and growing animosity between Democrats and Republicans have essentially disconnected economic goals from those associated with the environment, creating a political setting in which the environment will never receive the full attention it deserves. I, for one, can’t help but think this disconnect is in large part due to the more extreme parts of the Republican party, who are undoubtedly willing to sacrifice environmental quality for the sake of job creation and economic health. Unfortunately, it doesn’t end there; the American people are more extreme in their beliefs, too. In 2009, 49% of the public believed that climate change is caused by man while only 61% believed in the process of evolution (PewResearch 2009). Such widespread disregard to science and distaste for those of another party, especially in the Republican party will most likely result in environmental problems being largely ignored and the economic growth model becoming irrelevant. An understandable objection to this argument would stem from the United States’ current economic position. What if the U.S. just hasn’t reached the economic prosperity necessary to fully focus on environmental issues? To this I would respond: I will concede the point that possibly the United States isn’t economically developed enough to address environmental issues on the scale being discussed. However, the extent of the partisanship and extreme beliefs of those in government, if they persist, is by itself enough to undercut any hope of environmental legislation. If a large number of Congressmen are knowingly refusing to accept what the legitimate scientific community is telling us, then I see no hope for the future preservation of our ecological reserves.
“Section 5: Evolution, Climate Change and Other Issues.” Pew Research Center for the People and the Press RSS. Pew Research Center, 9 July 2009. Web. 10 July 2014.
Swift, Art. “Americans Again Pick Environment Over Economic Growth.” Gallup Politics. N.p., 20 Mar. 2014. Web. 10 July 2014.
Environmental Problems in the Hands of the Rich
Economic growth is at once both the main hindrance and the true solution to the problem of environmental change. Economic incentive both drives environmental problems and solutions. At first we see developing countries place economic concerns above environmental ones, but as they approach high-income levels we observe growing regulatory standards, and a higher appreciation for the natural world. In order to see the full breadth of this idea, one needs to examine both an upper income country, and a lower income country to see how they handle their environmental problems and the differences therein.
One can assume that a country with the close to zero amounts of industrialization will be more environmentally sound. No factories would mean a very low quantity of air pollution. Using natural farming methods in the absence of chemicals and fertilizers would attribute to more pure water runoff. However, “No country in history has emerged as a major industrial power without creating a legacy of environmental damage” (Kahn 2007: 1). In order to progress economically as a country, environmental quality must be compromised. Like in The Tragedy of the Commons, by Hardin, it is human nature to exploit resources for one’s own benefit. Currently, China has one of the fastest growing economies in the world, yet some of the worst environmental regulations. People wear masks in the street because the air quality is so poor. China is transitioning from an underdeveloped country to one of the most powerful. Unfortunately, that road is one of environmental destruction.
There is hope, however. According to the Kuznet’s curve, once citizens of a country have reached a comfortable standard of living and have money to spend, they start turning their attention off their own gain and work towards restoring the environment (Dinda 2004: 25). Countries like the U.S. have started to implement much stricter regulations. This is the first step toward returning the environment. One could argue that once resources have started to be replenished, it will be human nature to exploit that again. However, as long as we stay economically comfortable, the environmental issues will trump economical ones.
Industrialization, and therefore environmental pollution, is inevitable. Nobody wants to live in a cave his or her whole life. So while economic growth is ultimately the devastating to the environment, it is also the only hope of a solution.
Dinda, Soumyananda. “Environmental Kuznets Curve Hypothesis: A Survey.” Environmental Kuznets Curve Hypothesis: A Survey. N.p., 2004. Web. 10 July 2014.
Kahn, Joseph, and Jim Yardley. “As China Roars, Pollution Reaches Deadly Extremes.” The New York Times. The New York Times, 25 Aug. 2007. Web. 02 July 2014.
Shafik, Nemat, and Sushenjit Bandyopadhyay. Economic Growth and Environmental Equality. Working paper no. 904. D.C.: World Bank, 1992. Web. 10 July 2012.
Economic Growth and the Exacerbation of Environmental Issues
The argument against and in favor of economic growth as a solution to environmental issues has the potential to be strong in both directions. Many biologists would be willing to spend their entire lives arguing against economic growth as a solution, as it blatantly contradicts their sometimes short sighted opinions of how our environment is changing and being damaged by humans. It is also difficult for people to focus on protecting the environment when they are unable to even maintain comfortable lives as seen in countries where poverty and poor living conditions are common. So in contrast to Arrow et al (1995) and the belief that economic growth can solve environmental issues once development has succeeded, carrying capacity, ecological limits, and overall economic growth, it is indisputable that the Earth’s resources are finite and in many cases economic growth does not always lead to environmental improvement – in fact, it sometimes leads to further degradation.
Ecosystem resilience tends to be overstated by those who do not truly understand its capacity – in countries with heavy development, and even in already developed countries where many individuals live comfortable lives with all of their base needs met, over-consumption is still a huge issue, and developed countries just have a tendency to be relatively blind to the environmental issues that they are unknowingly causing. Development leads to population growth in every case, and our environment’s carrying capacity and finite resources are connected in that resources tend to be used (both in developing and already developed areas) faster than they can be replenished. While one would generally assume that with base needs met (water, food, shelter, etc.) a population can then turn its attention to repairing the damage caused by development, this other example of shortsightedness in humans is what will eventually cause us to reach our true carrying capacity. In the long term, growing populations, as I mentioned earlier, will only lead to depletion of resources which truly undermine the capacity and benefits of economic growth.
The relationship between economic growth and environmental quality is something that can solve some problems, but definitely not all of them. How does economic growth solve population growth and the inevitable over-consumption that follows? What about the distribution of pollution from economic growth and the resilience of the atmosphere? The interdependence of these things are not addressed by economic growth and while this position in support of growth may seem to be a long term solution in contrast with the shortsightedness of many ecologists/biologists, even longer term side effects like the ones I stated above (population growth and finite resources) cannot be truly addressed by development.
If I were to make on call on whether or not economic growth spurs environmental regulations/quality, I would say that there is a certain threshold in which it is not the case (ergo when a developing country is making the transition to a developed country and is reliant on “dirty” energy so to speak in order to make the shift. There also seems to be a class of developed countries that have “grown out” of the more harmful forms of energy (at least for now), and have transitioned to cleaner and sustainable energy. And the last category which renders the theory most likely false is developed countries that have plateaued in economic growth but are still utilizing harmful energy sources One example of each category is first China, second France, and lastly the U.S. This case is one where I am in agreement with what looks to be a majority of members from the class.
China is still widely in the midst of its economic growth and has not yet reached the threshold to where they have outgrown the need to utilize harmful sources of energy. The country however, is still utilizing pretty harmful sources of energy (which makes the economic growth theory not likely to be true) namely coal and oil. The two combined contributed to 87% of China’s energy grid in 2011 (N/A 2014, 1-2), which hurts the theory that economic growth causes environmental regulations and quality to increase. If China was currently invested it alternative and renewable resources more so than they are, they the theory might hold true, however this is not the case.
Next, France for many years and to this day is perhaps the best example of how the theory could potentially be true due to the nature of France’s energy breakdown. A hefty majority of France’s electrical power grid (estimated at over 70%) is comprised of nuclear power, along with renewable sources such as solar being the second most prominent contributor to the grid. However France is considering going against the economic growth theory due to an opinion shift based on the Fukushima plant crisis in Japan (Broomby 2014, 1). Reverting back to fossil fuels could mean that France doesn’t necessarily comply with the economic growth theory, degrading it further.
Lastly, the U.S. as we know is still tinkering with the possibilities of alternative renewable sources of energy even though much of the grid is still made up of traditional harmful non renewable sources of energy. Coal continues to make up a majority of energy generation in the U.S. even though the U.S. is past the period of substantial economic growth. This trend is indicative of the theory being inaccurate in its predictions.
*N/A. “China.” U.S. Energy Information Administration – EIA – Independent Statistics and Analysis. U.S. Energy Information Administration, 4 Feb. 2014. Web. 10 July 2014.
* Broomby, Rob. “France Struggles to Cut down on Nuclear Power.” BBC News. BBC, 10 Jan. 2014. Web. 10 July 2014.
Economic Growth and Environmental Improvement Through Political Polarization
Economic growth and ability of improving the environment have valid arguments for both positive and negative correlations. However, I would like to focus my argument on Jacobs response and how he uses political polarization as the main issue pertaining to environmental risks and lack of environmental regulations. I do concede to Jacobs main point that in the U.S. economic growth and improving the environment does not have a positive correlation and that it does absolutely contradict itself. That being said, I do not think that all the responsibility of damage to the environment, and responsibility for lack of progress on environmental improvement should fall directly on republicans shoulders.
In the United States the House of Representatives, currently Republicans hold 242 seats to the Democrats 193 (Google). However both our Senate and President lean Democratic and this shouldn’t be forgotten (Google). Within America today political polarization is a highly debated issue and I do believe that within the realm of environmental issues, public opinion is polarized but not to the extent that we can point at one group absolutely. When environmental improvement actions involve economic regulations Republicans are definitely the first to raise questions but in the end both Democrats and Republicans have looked the other way when environmental improvement was left behind and economic improvement was put as the priority. Our tragedy of the commons is much more complex than simply parting our population as for or against economic regulations by political affiliation.
Following the polarization issue, whether the United States is “economically developed enough to address environmental issues on the scale being discussed” seems like a no-brainer. When you hold the most wealth in the world and also have the largest economy, it seems to be very contradictory to say that we economically don’t have the means to pursue environmental issues that not only improve the environment, but also the human population. That’s like saying Warren Buffet is the richest man in America but doesn’t have the means to buy a Tesla instead of a Ferrari. Environmental issues argued this way show that we as Americans treat improving the environment as a choice, not by accountability or by responsibility of the people causing the degradation and pollution in the first place. This is something that we need to get past as the economic world power, and get past pointing the finger at the other group politically, and as a country made up of both Republicans and Democrats, collectively move in progressing the health of the environment and also building an economy that is more respectful of the commons that is being destroyed.