Problem

Unsustainable economic development


Experimental visualization of narrower problems
Other Names:
Uncontrolled economic growth
Dependence on uncontrolled economic growth
Indiscriminate economic growth
Development as indiscriminate economic growth
Unsustainable development of energy and industry
Nature:

Economic growth is inconsistent with sustainable development when it results in the net reduction of the portfolio of assets which includes: natural assets, comprising resource assets (biological resources, agricultural land, geological resources) and environmental assets (ecological processes and biological diversity, including species and places that are valued aesthetically or for their own sake); manufactured assets (technology, buildings, equipment, infrastructure); and human assets (knowledge, skills).

Background:

Sustainable development requires economic efficiency and equity within and between generations. Economic efficiency is the production of the optimal combination of outputs by means of the the most efficient combination of inputs. Equity is the expansion of opportunities for the disadvantaged and passing on to future generations a portfolio of assets of equal or greater value than the existing one. If one group increases its welfare at the expense of another, it should compensate the other by transfer of assets of equal or greater value, both within generations and between generations. Such compensations should be made now rather than in the future, because the welfare of the deprived group has actually been reduced, and equity is not served by compensation that is merely hypothetical.

In order to ensure that the total value of the portfolio of assets is not diminished: the assets must be valued to reflect all their current and future contributions to future welfare; incentives must be provided so that individuals and organizations manage the assets according to these values; depletion or degradation of one asset must be compensated by an increase in the value of another.

Sustainability needs to be uncoupled from economic growth. Macro-economic management then becomes the humane handling of the amount of economic growth, or lack of it, that is achieved. It is not yet known how much growth that will turn out to be but there are two possibilities. Emphasis on "sustainability" may generate modest growth. But the continuing emphasis on growth will intensify unsustainability as in the past. Both possibilities are implicit in current uses of "sustainable development".

Incidence:

Economic development is unsustainable when it increases vulnerability to crises. For example: a drought may force farmers to slaughter animals needed to sustain production in future years; a drop in prices may cause farmers or other producers to over-exploit natural resources to maintain incomes.

The annual increase in industrial production in 1989 was as large as that of Europe's total production in the 1930s.  A global economy growing at 2-3% per year implies a quadrupling of industrial output in the same period so that a fourfold increase in environmental performance is necessary just to maintain current environment impacts – which scientific evidence already indicates as portending future disasters.

Broader Problems:
Unsustainable development
Related UN Sustainable Development Goals:
GOAL 1: No PovertyGOAL 2: Zero HungerGOAL 3: Good Health and Well-beingGOAL 4: Quality EducationGOAL 5: Gender EqualityGOAL 6: Clean Water and SanitationGOAL 7: Affordable and Clean EnergyGOAL 8: Decent Work and Economic GrowthGOAL 9: Industry, Innovation and InfrastructureGOAL 10: Reduced InequalityGOAL 11: Sustainable Cities and CommunitiesGOAL 12: Responsible Consumption and ProductionGOAL 13: Climate ActionGOAL 14: Life Below WaterGOAL 15: Life on LandGOAL 16: Peace and Justice Strong InstitutionsGOAL 17: Partnerships to achieve the Goal
Problem Type:
C: Cross-sectoral problems
Date of last update
27.03.2020 – 01:03 CET