sustainable development from an economic perspective

Sustainability from an Sustainability from an Economic PerspectiveEconomic Perspective

Dr. Joachim H. Spangenberg

Helmholtz Centre for Environmental Research UFZ, Dept. Community Ecology, Halle, Germany

Dr. Joachim H. Spangenberg, Biodiversity and SPAC, Belgrade 9.10. 07

Presentation at the Presentation at the UNDP Capacity development LabUNDP Capacity development Lab

“Integrative Capacity “Integrative Capacity CdevelopmentCdevelopment for Sustainable for Sustainable

DevelopmentDevelopment””Hotel Devin, Hotel Devin, Bratislava, October 15Bratislava, October 15thth, , 20122012

Ecology, Halle, Germany

From the policy discourse:From the policy discourse:-- Sustaining the capital stocksSustaining the capital stocks

-- Getting the prices rightGetting the prices right--Green economyGreen economy

From the sustainability conceptFrom the sustainability concept


From the sustainability conceptFrom the sustainability concept-- The full Brundtland definitionThe full Brundtland definition

--Production & ConsumptionProduction & Consumption--The big capacity deficitThe big capacity deficit

Sustaining the capital stocksSustaining the capital stocks


Human made capital Human made capital

Natural capital Natural capital

Human capital Human capital


Human capital Human capital Social capital Social capital

Sustaining the capital stocksSustaining the capital stocks-- to generate a constant income flowto generate a constant income flowby sustaining the sum of all stocks, by sustaining the sum of all stocks, assuming substitutability (weak SD), assuming substitutability (weak SD),

-- or by preserving each stock (no or by preserving each stock (no substitution, strong SD)substitution, strong SD)


substitution, strong SD)substitution, strong SD)

HOWEVER: capital stocks have a size, but HOWEVER: capital stocks have a size, but no quality no quality –– the Mafia is an important the Mafia is an important element of the social capital, but not a element of the social capital, but not a contribution to social sustainability.contribution to social sustainability.

Getting the prices rightGetting the prices right


EcosystemEcosystem

functionsfunctions

BiodiversityBiodiversityServicesServices

The World according to The World according to environmental environmental economistseconomists

LabourLabour

The The

EconomyEconomyServicesServices

The Production


functionsfunctions

SocietySociety Human well being

IncomeIncome

PressuresPressures

Nature

SourcesSources& Sinks& Sinks

ConsumptionConsumption

DemandDemand The Production

System &

The Financial

System

Ecosystem

processes

Biodiversity ServicesServices

Sources Sources

& Sinks& Sinks

EcosystemEcosystem integrity (if natural)integrity (if natural)

or health (all systems)or health (all systems)

The World according to The World according to ecological economistsecological economists


processes

SocietySociety Human well being

EconomyEconomy

DriversDrivers

PressurePressure

PressuresPressuresPressurePressuress

If the environment is part of the If the environment is part of the economyeconomy-- then pricing it is the solution, then the then pricing it is the solution, then the market will do the rest and internalising market will do the rest and internalising external cost leads to optimal solutions.external cost leads to optimal solutions.


HOWEVER: if vice versa the economy is HOWEVER: if vice versa the economy is part of nature, economic laws do not part of nature, economic laws do not necessarily apply, there is no equilibrium, necessarily apply, there is no equilibrium, supply does not match demand, and the supply does not match demand, and the economic optimum is not necessarily economic optimum is not necessarily ecologically optimal (extinction can be).ecologically optimal (extinction can be).

Green economyGreen economy


First step towards a solution?First step towards a solution?


InsteadInstead of of inefficientinefficient productionproductionand and unjustunjust distributiondistribution……


……wewe needneed greengreen innovationinnovationand and socialsocial justicejustice!!


Innovative environmental Innovative environmental

technologies technologies combining combining

emission reduction and emission reduction and

recycling are needed recycling are needed

but not really new but not really new

and insufficient.and insufficient.


E.g.: Metal dust recovery system, enforced by regional kings „to avoid damage to neighbouring fields and grazing grounds”.

Source: Agricola, G. (1556). De re metallica

and insufficient.and insufficient.

But a Green Economy is less But a Green Economy is less than Sustainable Developmentthan Sustainable Development


The full Brundtland definitionThe full Brundtland definition


““Sustainable Sustainable development is development is development development that that

meets the needs of the meets the needs of the present without present without compromising the compromising the ability of future ability of future generations to meet generations to meet


generations to meet generations to meet their own needs. Itheir own needs. It t contains within it two contains within it two key conceptskey concepts two key two key concepts: …concepts: …

(definition cont.)1. The concept of “needs”,

in particular the essential

needs of the world’s poor, to

which overriding priority

should be given, and

2. The idea of limitations


2. The idea of limitations

imposed by the state of

technology and social

organisation on the

environment’s ability to meet

present and future needs.”(WCED 1987, (WCED 1987, p.43p.43))

… to certain activities, in order to allow

replenishing of natural resources or

naturalcapital, justice and social equality.

The alternative is collapse (e.g. fisheries).

A Sustainable Economy A Sustainable Economy requires limitations ... requires limitations ...


The alternative is collapse (e.g. fisheries).

CombattingCombatting povertypovertyrequires other allocation mechanisms than

the market, as the poor have no purchsing

power: merit & public goods, entitlements.

Production & ConsumptionProduction & Consumption


Today,

too many people

use money they don‘t have,

to buy things they don‘t need

Unsustainable Consumption Unsustainable Consumption


to buy things they don‘t need

to impress people they don‘t like..

Sustainable consumption

is not about neglecting needs,

but about identifying adequate satisfiers.

Production: Efficiency plus Resilience

The most efficient solution today can be

outdated tomorrow. Innovation systems and

Sustainable Consumption & Sustainable Consumption & Production Production


outdated tomorrow. Innovation systems and

diversity provide resilience.

Consumption: Sufficiency plus Opulence

Living with enough is recommendable, but

quality of life requires opportunities to party,

squandering resources with friends

The real capacity deficitThe real capacity deficit


Standard Standard economicseconomics failsfails..

In In sustainabilitysustainability economicseconomics, ,


In In sustainabilitysustainability economicseconomics, , capacitycapacity buildingbuilding isis urgenturgent

ThankThank youyouforfor youryour

attentionattention


attentionattentionForFor thethe presentationpresentationand and otherother paperspapers seesee

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sustainable development from an economic perspective

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