Environmental Problems, Their Causes, and Sustainability 1

Germany:Blue Angel (1978)Canada:EnvironmentalChoice (1988)United States:Green Seal (1989)Nordic Council:White Swan (1989)European Union:Eco-label (1992)China:Environmentallabel (1993)Figure 26-13 Solutions: symbols used in some of the eco-labeling programs that evaluate green orenvironmentally favorable products.United States where, for example, the Green Seal labelingprogram has certified more than 300 products; seeFigure 26-13.Eco-labels are also being used to identify fishcaught by sustainable methods (certified by the MarineStewardship Council) and to certify timber producedand harvested by sustainable methods (evaluated byorganizations such as the Forestry Stewardship Council;Solutions, p. 205).26-6 REDUCING POVERTY TOIMPROVE ENVIRONMENTAL QUALITYAND HUMAN WELL-BEINGHow Is the World’s Wealth Distributed?Flowing up to the RichSince 1960, most of the financial benefits of globaleconomic growth have flowed up to the rich ratherthan down to the poor.Poverty is usually defined as the inability to meetone’s basic economic needs. According to a 2000 WorldBank study, half of humanity is trying to live on lessthan $3 (U.S.) a day and one of every five people onthe planet is struggling to survive on an income ofroughly $1 (U.S.) per day.Poverty has numerous harmful health and environmentaleffects (Figure 1-11, p. 13, and Figure 19-18,p. 429) and has been identified as one of the five majorcauses of the environmental problems we face (Figure1-10, p. 13).Most neoclassical economists believe a growingeconomy can help the poor by creating more jobs, enablingmore of the increased wealth to reach workers,and providing greater tax revenues that can be used tohelp the poor help themselves. Economists call this thetrickle-down effect.However, since 1960, most of the benefits ofglobal economic growth as measured by income haveflowed up to the rich rather than down to the poor(Figure 26-14). Since 1980, growth of this wealth gaphas increased. According to Ismail Serageldin, theplanet’s richest three people have more wealth thanthe combined GDP of the world’s 47 poorest countriesand their 600 million people. In Vandana Shiva’swords, “Resources move from the poor to the rich,and pollution moves from the rich to the poor.” SouthAfrican President Thabo Mbeki told delegates at the2003 Johannesburg World Summit on SustainableDevelopment, “A global human society based onpoverty for many and prosperity for a few, characterizedby islands of wealth, surrounded by a sea ofpoverty, is unsustainable.”These trends do not mean that economic growthcauses poverty. Instead, they mean that for a variety ofreasons rich nations and individuals have devotedonly a small fraction of their wealth to helping reducepoverty and its harmful effects on the environmentand human well-being.Poverty is also sustained by corruption, absence ofproperty rights, insufficient legal protection, and inabilityof many poor people to borrow money to growcrops or start a small business.Case Study: What Is the Role of the WorldBank in Economic Development? Controversyover Big LoansThe World Bank makes loans to developingcountries for their economic development, buta number of these loans have had harmfulenvironmental and social effects.The World Bank is the major player in global economicdevelopment. It was formed in 1945 afterWorld War II to provide loans for rebuilding Europeand Japan. In the 1950’s the focus shifted to providingloans to aid the economic development of developingcountries, provided mostly by private investors in the150 countries that jointly own the bank. Investors hopeto make a profit on the funds they put up, mostly frominterest paid on the loans. The United States providesmore of the investment capital than any other countryand the presidents of the bank have all been Americans.598 CHAPTER 26 Economics, Environment, and Sustainability