Saturday, October 06, 2012

Downside of Growth

 

There Is a Conflict between Economic Growth and:

(1) Environmental Protection
A growing economy consumes natural resources and produces wastes. It results in biodiversity loss, air and water pollution, climate destabilization, and other major environmental threats.
(2) Economic Sustainability
A healthy environment is the foundation of a healthy economy. We need healthy soils for agriculture, healthy forests for timber, and healthy oceans for fisheries. Along with clean air for breathing and clean water for drinking, these are the building blocks of a prosperous economy and a good life.
(3) National Security and International Stability
When economic growth threatens the environment and economic sustainability, social unrest is the result, and national security is compromised. Economic growth was once used for building military power, but in an overgrown global economy, economic sustainability is more conducive to diplomacy and stability among nations.

Evidence of the Conflict

The conflict between economic growth and environmental protection is becoming more apparent as the oversized economy bumps up against limits.  From depletion of ocean fisheries to loss of pollinators, from groundwater drawdown to deforestation, from climate change to increasing concentrations of toxic pollution (not to mention increasing childhood cancer rates), from massive urban slums to degraded rural lands, the consequences of too much economic growth are observable all around us.
Ecological footprint analysis also reveals that the economy has become overgrown.  The footprint measures how much land and water area a human population requires to produce the resources it consumes and to absorb its wastes under prevailing technology. According to data from the Global Footprint Network, the footprint of all nations exceeded the biological capacity of the planet in the mid- to late 1980s. We find ourselves in a global state of overshoot, accumulating ecological debt by depleting natural capital to keep the economy growing.

Uneconomic Growth

Continuing to grow the economy when the costs are higher than the benefits is actually uneconomic growth.  The United Nations has classified five types of uneconomic growth:
  • jobless growth, where the economy grows, but does not expand opportunities for employment;
  • ruthless growth, where the proceeds of economic growth mostly benefit the rich;
  • voiceless growth, where economic growth is not accompanied by extension of democracy or empowerment;
  • rootless growth, where economic growth squashes people’s cultural identity; and
  • futureless growth, where the present generation squanders resources needed by future generations.
The downsides of economic growth can be avoided by maintaining an optimal scale of the economy.
Marginal cost refers to the cost of producing one more unit of a good or service. Marginal benefit is the benefit gained from one more unit. This graph shows the marginal costs and benefits of GDP growth. Costs tend to rise and benefits tend to decrease for each additional unit of growth. We should stop growing GDP, therefore, when marginal costs are exactly equal to marginal benefits. If costs are less than benefits, then GDP growth is economic (the green part of the graph). When costs rise above benefits, GDP growth is uneconomic (the brown part).

24 comments:

  1. Jessica Y. SanchezOctober 08, 2012 9:23 PM

    Economic growth is a double edge sword. We cannot have a growing economy while saving the environment and maintaining a nation’s security; something has to give. The economy can’t grow and create jobs without expanding. Jobs are created when goods, buildings, and food are bought and sold. This creates issues for the environment. More land is needed, more people travel, and more pollutants are introduced into the environment along with other contributors to the degradation of the environment. The people of the world have to choose what is more important to them, the environment or the way they live their own life. A nation’s security will always be threatened with a prosperous economy. Everyone wants to be on top and will do anything to get there, not only does the super power wants to be on top, but it wants to ensure its position for the future. The super power will invade countries to make the people of that country live the way they see fit and also give company’s an option to build there if conquered.

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  2. The main conflict between economic growth and the environment relates to the fact that economic growth strides to improve the standard of living based on infinite wants. However, these wants cannot be achieved because our resources are finite. As our population increases, more of these wants arise (from more people), and it puts more stress on the environment. We need a form of growth that is based on improving our standard of living relative to our non-material desires and the planet. By allowing people more leisure time (from their work), we can in the process create more jobs for people and decrease environmental degradation (on the individual level). I believe the best way to promote economic growth that benefits the environment is through full cost pricing. Full cost pricing includes the damage done to the environment to make a product and therefore creates revenue to solve environmental problems as well as discourages us from making the most unsustainable choices (the most expensive ones).

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  3. Kassandra Martinez PerezOctober 08, 2012 10:50 PM

    We will not be able to maintain a sustainable balance between economic growth and saving the environment because the vast majority of the people worry only about themselves and family not for other nor the environment. All they think about is making it threw the year; and by doing so the economy grows and the environment is decreased. In this world some might see it as a huge cycle that everything we use from nature we should find a way to give it back but most of the people don't. Pollution will keep rising and so will the population and waste. Actions have to be taken now, not in a few more years. Especially on the fact that we are already being affected by the damages we have brought upon ourselves.

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  4. In my honest opinion we are screwed. Its the basic idea of not in my back yard. The average human says yea i use more resources than the earth can sustain but it doesn't affect me personally yet therefore it is not a problem with me. As long as this mindset is in place there will be no change at all. Until something that affects all of us happens there is no room for change. In my opinion, we need a disaster in order to change. Population growth is on the rise and so is resource and environmental degradation and we can't make environmentally friendly technology quick enough to support it. So as long as the economy is expanding we are screwed.

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  5. "The conflict between economic growth and environmental protection is becoming more apparent as the oversized economy bumps up against limits." I think this sentence described a lot. It's stating that the combination of economic growth and environmental protection is a big problem. The more and more resources that we are using is creating more waste, which is polluting the earth. This includes, air, water, climate and other threats. This ultimately depletes fisheries, decreases the amount of pollinators and more. Unfortunately, I do not believe that we will be able to create a good balance between these economics and the environment because too many people are concerned about their own needs and wants rather than the big issue that is taking place in the environment. I also believe that a lot of people are not educated enough to know that the majority of their actions not only pollute the air, but also our food and crops and this relates to the economy because as these resources become depleted the non-renewable resources keep increasing, which is not good. One of the main reasons why people aren't changing their lifestyle is because they believe that they are only one person out of millions, and their efforts won't do anything anyways and they are right. Instead, we need everyone to come together and change the way of living dramatically, which is almost impossible. People are going to do what they usually do, which is play dumb and wait for a major epidemic to take place before they change their lifestyle at all.

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  6. Economic growth can often have a negative effect on the environment. It can cause a conflict between itself and environmental protection, sustainability, and national security. When the economy and population of the world continues to grow, more resources are being utilized. In some or most cases, these resources are being abused. Deforestation, commercial fishing, and factory pollution all increase as the economy continues to grow. These industries often degrade the environment and diminish its natural resources. As economic growth continues, the ecological footprint of every human on Earth becomes greater. This is more harmful to the environment and will cause future degredation for future generations. People and companies need to reduce the amount of resources they consume and start becoming more environmentally conscious. We need a paradigm shift and a widespread lifestyle change in order to combaat the degredation of the environment. Continuing to grow economically and technologically will not solve the problem.

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  7. Economic growth can often have a negative effect on the environment. It can cause a conflict between itself and environmental protection, sustainability, and national security. When the economy and population of the world continues to grow, more resources are being utilized. In some or most cases, these resources are being abused. Deforestation, commercial fishing, and factory pollution all increase as the economy continues to grow. These industries often degrade the environment and diminish its natural resources. As economic growth continues, the ecological footprint of every human on Earth becomes greater. This is more harmful to the environment and will cause future degredation for future generations. People and companies need to reduce the amount of resources they consume and start becoming more environmentally conscious. We need a paradigm shift and a widespread lifestyle change in order to combaat the degredation of the environment. Continuing to grow economically and technologically will not solve the problem.

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  8. Before I took this class, my vision of sustainability allowed for the paradigm of economic growth. Obviously, I have shifted my opinions. I think that this article puts it best in stating that we are probably heading into a system of uneconomic growth, but some would probably argue this. I feel like this is because the current paradigm is one of economic imperialism, in which the solution is to put a market price on environmental harms. But this in and of itself is an abject refusal to deal with the actual problem. Put a market price on externalities like pollution and they help contribute to economic growth, which only further exacerbates the problem we're in now. Sneaky, sneaky, right?

    The focus really needs to be on economic development rather than growth. Development is possible, as we have discussed, but not likely in the near future considering the current recession; to the typical human around the world, growth equals more opportunities. And yes, it did, in years past when the population was not as great and when we were not using all of our resources at the rate at which we use them now. Development implies steady-state economics, but politically how does a politician run on a platform in which fewer jobs are created and there is a lower level of throughput? So it's not just an economics issue. It's political.

    I took a class once in which we talked about NIMBY environmentalism - Not In My Back Yard, and how it could actually probably motivate people to feel somewhat attached to their region and thus create local environmental change. BUT the problem really exists on a global level, especially as the article points out the market has just become so outsized and this is the crux of the issue. There are limits to growth, and the thing is, we probably haven't quite reached that point where people are worried, or where people don't think that technology or economic imperialism can help us out of any environmental issue.

    Will we ever get to this point? It's funny because a lot of economics classes I've taken think that it's not going to be for a few hundred years, but the environmental ones believe such a point is imminent. I, for one, don't know if the world as a whole is ready to accept a new paradigm, one which acknowledges resource limits.

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  9. I found it very interesting to read about the categorization of uneconomic types of growth that the United Nations has created. I find this to be a very accurate and useful breakdown of the topic. Furthermore, I feel like much of the economic growth that the economy of the United States (and the rest of the developed world, for that matter) is experiencing today exhibits characteristics that place the growth into at least one of these categories. For example, the GDP has grown by leaps and bounds in the previous decades, but unemployment is as big of a problem as ever, if not more so, which is a characteristic of jobless growth. This problem is a result of the fact that much of the growth has also been ruthless growth. As for voiceless growth, the power of Corporate America was apparent during the Occupy Movement, where it looked as though the police were on the payroll of the finance industry. Not to mention, with the Citizens United ruling by the Supreme Court, the only "people" whose rights are expanding are the corporations. Rootless growth is seen in an expansion of companies of the developed world into less-developed nations. Many indigenous lands of South American have been encroached on, for example, at the expense of the usefulness of the land to those people, who had relied on them for generations. Futureless growth is occurring in nearly every form of growth today, since, as said in the post, we have been at an ecological deficit for decades now.

    Nowhere are these facts of uneconomic American growth proven more than by the fact that the United States is showing obvious signs of having an overgrown global economy. The looming American debt crisis would not be so if there weren't such outrageous expenditures on the global police that is the U.S. military. The primary goal of the U.S. military seems to be to protect American "interests" abroad. This kind of protection shouldn't be necessary for legitimate economic interests, which indicates that these interests are actually ones that are also responsible for uneconomic growth. The military as well is, needless to say, uneconomic in many ways. This method of economic growth is responsible for stoking tensions between the U.S. and foreign countries, and sometimes leads to violence.

    The United States economic system has many corrections, the aforementioned among the most pressing, that need to be made before it can even begin to really address economic sustainability and environmental protection. It’s quite conceivable that it is not possible for the system to enact these changes within its current paradigm. A total shift to an economy and society that held environmental protection as its top priority would have all other features of economic sustainability naturally follow.

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  10. The bottom line is OVERPOPULATION. With a balanced number of people on this planet, people would be able to live in any matter they desire. Seeing how it would be frowned upon if a few billion people were killed we have to start from the point of overpopulation and move forward. The lifestyle choices that are made by people with affluence, and by this I mean not living directly off the land as a tribe, or Native American would, simply put is overconsumption. They need to have all of these toys and gadgets, swearing it is making life easier. Then everyone else becomes engulfed in this unnatural world of technology because in order to survive you have to adapt to your surroundings. I personally hate technology and wish that life could be much simpler, but that is not a choice for me to make because society forces me to do certain things in order to provide for myself. The question is, how do we get people to let go of their electronics and return to a more simplistic life that would release a majority of the strain on the planet. With the addiction to technology growing stronger every day, I don't know the answer to that, and it brings us back to trying to solve over population.

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  11. I was interested to learn about the UN's classifications of uneconomic growth. This information provides a depth to society and the effects of a nation's economic growth in various ways. There are many connections among the five examples of uneconomic growth, and many seem directly related to ruthless growth. Because growth mostly benefits the rich, job opportunities do not expand, people do not feel empowered in democracy, cultural identity is jeopardized, and the Earth's resources are not preserved for unborn citizens. The five categories are separate entities, but ruthless growth seems to be the category that can exacerbate or catalyze the others. Unfortunately, I do believe that ruthless growth will continue in the U.S. for quite some time, but it is the responsibility of other civilians that do not reap the benefits of ruthless growth to ensure that the other four do not continue to a tragic degree.

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  12. Economic growth for our society in today’s age is not what we need to help our world. Our world is dyeing right now due to the fact that we are overpopulated. Our economic system and how the world functions, seems to me like a domino effect. When there is over population then there is a greater demand for things, which then leads too inflation and as a whole we are not able to sustain in our living environment no longer as well as we use too. With that said the environment is affected by our actions that we take on our economy. With inflation in the economy people will have to adjust and the effect of this will be less jobs. With less jobs and the same rate of growth in our world, we will begin to harshly deplete our resources and our ecological depletion will be 5 times more than the average human should be. If we continue to operate the same way we have been, then we are only asking for a negative downfall for not just our economy but for our environment as well. The environment and economy play hand in hand at all times.

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  13. Davin AjodhasinghOctober 10, 2012 11:48 PM

    There is a conflict between economic growth and economic sustainability. From an economist point of view, growth involves supplying limited goods and services to a growing number of people. Resources are maximized and efficiency only matters when talking at the margin. This means that more natural capital is being used in the production process. This would therefore contradict the term, economic sustainability since Ecological growth seeks a steady-state economy at an optimal scale. An environmental economist looks at the world as a full world economy where the welfare of economic services is increased while ecological services decrease. Economists agree about the need to use means efficiently in the service of end but they disagree on the role of policy. For an ecological economist, using means in the service of ends implies policy. If we are going to make policy based on using means in the service of ends, we need to spend a lot of time thinking about those means and ends. In other words, ends need to be ranked

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  14. In my opinion economic growth means absolutely nothing if our environment is rotting before our eyes. If our country was rich and the economy was doing well it would not change the way we live. Just because companies can afford to be more “green” because they are doing well economically, doesn’t mean that they will. Our country has seen better days when it comes to the economy but even then companies were not looking out for the damage they were doing to the oceans or the forests they were forever worrying about profit and economic growth. I’m sure that if we had a stronger economy right now things could be improved in certain ways for the environment but I think we are doomed either way. As long as the population keeps rising, so will the rate of poverty and pollution. It seems that even by changing daily habits to be more sustainable, the damage has already been done. There is proof that as human beings we are doing something wrong to this planet, as we drive around all day long and push toxic chemicals into the air, or even the amount of acres of trees we chop every minute. As people educated about the environment we need to not only change our daily habits but change or lifestyle completely and also make change by telling others how important it is to do so as well.

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  15. I believe in evolution in all forms, and our economy has definitely gone through an evolution from the industrial revolution to a modern technology based economy. What we are experiencing with the conflict between economic growth and the environment is society reaching it's limits, and because of this I think that the economy will go through a shift, and evolve once again. Karl Marx wrote the manifesto in the 1840s when the industrial revolution was at a peak and capitalism was put into place. He suggested that the conditions humans and the environment were placed into because of the capital system were not sustainable and would not last. He believed that the capitalist society would eventually evolve into more of a socialist society. I agree with this perspective. If you look around today, we can see the build up of damage the generations before us left. We can see "the depletion of ocean fisheries to loss of pollinators, from groundwater drawdown to deforestation, from climate change to increasing concentrations of toxic pollution" but I think we can also see hope and we can also see the socialist influence beginning. In the last presidential debate, both parties democrat and republican brought up the issue of the environment several times. This is something that has never been a huge focus or a main concern before. People are slowly but surely beginning to evolve in the way they think about their environment and their rights. They are becoming more conscious about what they are buying, where it is coming from and how it affects them.  I also believe that this economic shift will be a process. It will take time and will have to begin from the inside out, from the inside of businesses, with corporate social responsibility and from the inside of people, making the effort to be more conscious and aware. Our society is far from perfect or sustainable, but I do believe that we are evolving and people are taking the first few steps in the right direction to a better society. Maybe I'm an optimist, but I'm not blind, I see where society has been and I see where it could go. With that being said, I'd rather have faith in our society and work towards making it better than to believe were all screwed and hopeless.

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  16. Economic growth is the root of the environmental problems that this world is facing. If we keep promoting economic growth then we are continuing to promote population growth and therefore depletion of natural resources. Our economy is already in a bad spot right now. I think if everyone realized that nothing is going to get better until it gets worse people would be more open to beginning a steady-state economy and lowering the birth/death rate throughput. The realization that economic growth is important in the short term, but environmental issues are important now and in the long run more than ever. Everyone needs to stop putting the economy on such a high pedestal, and replace it with the environment or we will lose both the economic and environmental battle.

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  17. Gisselle RodriguezOctober 11, 2012 8:11 PM

    The evidence that economic growth is coming to an end is becoming more conspicuous than ever. As we have recently seen with the 2008 economic crash, people have been carelessly overspending, and borrowing money which lead to an increase in personal debts and an outrageous national debt. Even with debt people continue to consume. Our addiction to overconsumption has given us a huge thirst for oil, and we are now seeking to quench our thirst by venturing into other countries and extracting oil from the direst forms of extraction. These forms of extractions are causing devastating and irreversible environmental catastrophes. In order for us to not only save the economy, but also save the planet we live on, we must first acknowledge three things. First, we must understand that the system or "government" that controls our economy is the cause of our social, economic and environmental problems. Second, we must realize that there are environmental limits to our economic growth and we are now reaching those limits. And finally, our idea that overconsumption is good and will make us happy is wrong and is the exact reason why we are reaching our environmental limits. To solve these problems we will have to completely reinvent all of our systems and mold them to fit into our finite planet’s limitations. If we do not comply with the limitations of our planet, it will lead to the drastic collapse of our global empire, therefore making life of human beings on Earth uninhabitable.

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  18. Laura SorrentinoOctober 12, 2012 1:18 AM

    With the major conflicts deriving from economic growth, there is no way that economic growth can be considered good. Environmental protection being effected is only our first major problem. If our biodiversity begins to decrease even more than it already is then there will be significant changes in the balance of our environment, in the end affecting everyone on the planet. This is just one of the environmental threats mentioned in the article and there are many more. In addition to environmental threats, economic sustainability will also be affected. It is so ignorant to deplete our natural capital to the point where we wont have any resources to make monetary capital, which is the goal of our capitalist society. I don't understand why people are too naive to realize this evident reality. It is very clear that companies today encourage population growth in order to gain economic growth. However, the goal should not be economic growth, but instead life growth, which is the point of living, clearly. Once we understand as a whole that our environment makes us and gives us everything we have, we may then learn not to take advantage of it.

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  19. Nataliya MagomedovaOctober 13, 2012 11:31 AM

    Obviously you cannot grow and sustain at the same time. Those are two different objectives. Americans have been forced to be obsessed with growth, and development and surplus, - in our capitalist minds we think that in some way we are evolving and in some way we are creating a better life for ourselves. But as it turns out, as much as we'd like to believe that we are "evolving" the truth of the matter is, the only growth we have is because of technological advances in society. But we live in a finite earth and nothing lasts forever, our objective should be to sustain all that we have so that its of a benefit to all beings. Humans need to focus more on living to be fulfilled, than buying from huge corporate robots, and constantly consuming valuable resources. There was a time when corporations (like Coca-cola, or Chevron) had a lifetime of 50 years but now they're are robotic monsters with only one thing in mind-$$$$$$$. The worst part is-they are claiming they should have the same rights as people, ie. "freedom of speech" to donate to the Federal Election Comittee in favor of their candidate (30 million in 2010) It's not the governments fault we are in crisis. Its the corporations that fool us with the illusion of choice, it doesnt matter if you choose Coke or Pepsi- either way they are making $$$$. American citizens need to take back their power, because last time I checked we have those rights.

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  20. " jobless growth, where the economy grows, but does not expand opportunities for employment;
    * ruthless growth, where the proceeds of economic growth mostly benefit the rich;
    * voiceless growth, where economic growth is not accompanied by extension of democracy or empowerment;
    * rootless growth, where economic growth squashes people’s cultural identity; and
    * futureless growth, where the present generation squanders resources needed by future generations."

    It seems that free market capitalism will always produce uneconomical growth according to the five characteristics outlined by the U.N. When business is allowed to do as it pleases, and the only goal is to make as much money as possible, factors like employment opportunities, cultural values, and the voice/well-being of the poor definitely takes a back seat. This is why, if we want healthy economies, government needs to set limits on business and not leave it to the 'invisible hand'.

    Right now in the U.S. we also show all five signs of uneconomic growth. This is because the policies and business owners have short sighted goals and views. It is a very dangerous situation which will only be controlled by government intervention or a mass revolt of the people against these businesses which are taking advantage of them.

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  21. Nataliya MagomedovaOctober 15, 2012 3:42 PM

    Small correction. *****....."30 million to donate to t.v broadcasting*** NOT FEC.

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  22. I see the word economics, I think we're in a recession we need economic growth and that is what this articles says is a bad thing.So where is the middle ground? How can the world economy be regulated so that it doesn't go over the tipping point.Article gives me more questions than answers but i suppose that's a good thing with in itself.

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  23. The issue of economic growth only gets more obvious as time goes by. Although many would go as far as call themselves an environmentalist, they are wrong. For as long as our society continues to strive for economic growth, there cannot be environmentalism. Politicians continue to convince people that their standards of living would improve if elected. Yet they also say that they will implement wind turbines and solar powered energy. This is a pointless effort to appease those who wish for a strong economy and those who want to save the world. To meet the ever growing needs and wants of people, it is clear that the natural resources will be used up as our carbon footprint increases.

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