Stewardship in a “full” world – by Robert Costanza
The economies of China and India are growing at a rapid clip. But these nations seem to be making the same environmental mistakes that Western countries made during their development—this time with a vengeance, given their enormous populations. And their “real” economic improvements, once the costs of environmental and health damage are subtracted, may turn out to be much smaller than growth rates would suggest. Is this an inevitable byproduct of development, one they will eventually outgrow? Or is there something inherently wrong with the conventional development model? Is the impact on the world’s natural resources sustainable? Is there a better way?
The mainstream model of development, sometimes known as the “Washington Consensus,” is based on a number of assumptions about the way the world works, what the economy is, and what the economy is for (see the table on page 33). These assumptions emerged during a period—the early industrial revolution—when the world was still relatively empty of humans and their built infrastructure. Natural resources were abundant, social settlements were sparser, and inadequate access to infrastructure represented the main limit on improvements to human well-being. It made sense, at that time, not to worry too much about environmental and social “externalities.” They could be assumed to be relatively small and ultimately manageable.
It made sense to focus on the growth of the market economy, measured in terms of gross domestic product (GDP), as a primary means of improving human welfare. It made sense, in that context, to think of the economy as only marketed goods and services, and to think of the goal as increasing the amount of goods and services produced and consumed.
The world, however, has changed dramatically since that time. We now live in a world relatively full of humans and their built infrastructure. Since the end of World War II, the planet has experienced what some have called “the great acceleration” in the consumption of fossil fuels and the growth of market economies. The human footprint has grown so large that, in many cases, limits on the availability of natural resources now constrain real progress more than limits on capital infrastructure do.
In this new context, we first have to remember that the goal of an economy is to sustainably improve human well-being and quality of life. Material consumption and GDP are merely means to that end, not ends in themselves. We have to recognize, as both ancient wisdom and new psychological research tell us, that material consumption beyond real need can actually reduce well-being.
Such a reorientation leads to specific tasks. We have to identify what really does contribute to human well-being, and recognize and gauge the substantial contributions of natural and social capital, both of which are coming under increasing stress. We have to be able to distinguish between real poverty in terms of low quality of life, and merely low monetary income. Ultimately we have to create a new vision of what the economy is and what it is for, and a new model of development that acknowledges the new full-world context.
[Robert Costanza is an ecological economist at the University of Vermont. To read the rest of this article either click the previous link and see the range of publications, or click here.]
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