Unsustainable economic development

Visualization of narrower problems
Uncontrolled economic growth
Dependence on uncontrolled economic growth
Indiscriminate economic growth
Development as indiscriminate economic growth
Unsustainable development of energy and industry

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).


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".


The combined effects of increasing world population and of per capita consumption are putting pressure on the limited resources of the planet and on the limited capacity of man's natural ecosystems for self-regulation and self-regeneration. This pressure will necessarily bring about, in a non-remote foreseeable future, a general readjustment of the relationship between man and his natural ecosystems, at the cost of a catastrophic decrease in world population, due to massive mortality, together with a major degradation of the material and cultural standards of humanity.

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.

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.


1. To allow maximization of economic growth to be the overwhelming determinant of development is to guarantee that mostly inappropriate development will result. To conceive of development as indiscriminate economic growth is to favour the wealthy, since their fundamental interest lies in maximizing the amount of return on investment without having to be concerned whether capital ought to be invested more appropriately, whether or not it is profitable. Growth means quantitatively more. Development means qualitatively better. The two are not the same and may indeed be inversely related.

2. When it comes to practicalities, economic "recovery" programmes never seem to differentiate between environmentally sound investments and recovery based on greater energy use, increased car sales, more intensive agriculture or any of the other myriad practices that are causing environmental problems.

3. We cannot allow the Gross National Product to destroy the Gross Natural Product any further. Conserving and recreating nature must become our highest priority.

4. Environmentally malign economic growth hurts the poor first and hardest. The gap between what urgently needs to be done and the policies still being pursued is now so vast as to threaten the legitimacy of the entire political system.

5. The continued quest for economic growth as the organizing principle of public policy is accelerating the breakdown of the ecosystem's regenerative capacities and the social fabric that sustains human community. This intensifies competition for resources between rich and poor. This shifts power away from governments responsible for the public good toward a limited number of corporations and financial institutions driven by a single imperative, namely the quest for financial gain.

6. If China were to consume resources at the level of South Korea or Taiwan and import crude oil and grain at rates comparable to those of other rapidly growing East Asian economies, it would need more energy and more cereals than are currently available on the world market.

7. Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist (Kenneth Boulding).


1. Business requires growth because it results in larger markets. Governments favour it because it results in a larger tax base. Growth is favoured by socialists because it makes redistribution easier. People in a consumer society like growth because well-being has been redefined as well-having, namely having more.

2. Economic growth provides the conditions in which protection of the environment can best be achieved. "Low growth" strategies make society worse off than it might otherwise have been.

(C) Cross-sectoral problems