Environmental Problems, Their Causes, and Sustainability 1

26 andEconomics, Environment,SustainabilityPollutionControlCASE STUDYHow Important Are NaturalResources?Economics is the study of how individuals andsocieties choose to use limited or scarce resources tosatisfy their unlimited wants. Recall that economicgrowth is an increase in a nation’s capacity to providepeople with goods and services, and economicdevelopment is the improvement of human livingstandards by economic growth. For more than 200years there has been a debate on whether there arelimits to economic growth.Neoclassical economists such as Milton Friedmanand Robert Samuelson view economic growth asboth necessary and desirable. Neoclassical economistsalso view economic growth as unlimitedbecause if we deplete a particular resourcewe should be able to useour ingenuity and technologyto find a substitute.For example, ifwe run out ofoil weshouldNo-tillcultivationForestconservationProduction ofenergy-efficientfuel-cell carsbe able to find a substitute such as hydrogen or nuclearpower. Thus, natural capital is viewed as an importantbut not indispensable economic resource.Ecological economists such as Herman Daly andRobert Costanza disagree. They point out that there areno substitutes for many natural resources, such as air,water, fertile soil, and biodiversity. They conclude thatultimately economic growth is limited because someforms of economic growth can deplete and degrade thequantity and quality of these irreplaceable forms ofnatural capital. They call for us to redesign our economicsystems to encourage environmentally sustainableforms of economic development and to discourageenvironmentally harmful forms of economic growth.In the middle of this debate are environmentaleconomists.They generally agree with ecological economiststhat some forms of economic growth are notsustainable. But they believe we can modify the principlesof neoclassical economics and reform currenteconomic systems, rather than totallyUnderground CO 2storage usingabandoned oil wellsHigh-speed trainsredesigning them. Figure 26-1 showssome of the forms of economicgrowth and development thatmost ecological and environmentaleconomists wantto encourage.Solar-cellfieldsDeep-seaCO 2 storageBicyclingCommunities ofpassive solar homesLandfillCluster Wind farmshousingdevelopmentWaterconservationRecyclingplantRecycling, reuse,and compostingFigure 26-1 Solutions: these are some components ofmore environmentally sustainable economic developmentfavored by ecological and environmental economists. Thegoal is to have economic systems put more emphasis onconserving and sustaining the air, water, soil, biodiversity,and other natural resources that sustain all life and alleconomies.