Download - Environmental and Development
-
8/3/2019 Environmental and Development
1/64
A discussion Paper on the interplay between
Economic development and the Environment
Presented for Panel discussion on EnhancingEnvironmental Protection for Sustainable
Development at Wollega University, Nekemte
BY:Mekonnen Bersisa
June, 2010
-
8/3/2019 Environmental and Development
2/64
Outline
Development Vs Growth: ConceptsHow we measure Economic growth anddevelopment
Natural and Environment ResourceEconomic development Vs Environmentresource
What is sustainable development
Poverty and the environment
Conclusions
-
8/3/2019 Environmental and Development
3/64
Growth Vs Development: Concepts
Economic growth may be one aspect ofeconomic development but is not the same
Economic growth:
A measure of the value of output ofgoods and services within a time period
Economic Development:A measure of the welfare of humans in a
society
-
8/3/2019 Environmental and Development
4/64
Growth Vs. Development: Concepts
ED refers to social and technologicalprogress
It a in the waygoods andservices are produced, not merely an
in production achieved using the oldmethods of production on a wider scale.
-
8/3/2019 Environmental and Development
5/64
Measure of Economic Growth
-
8/3/2019 Environmental and Development
6/64
Measure of Economic Growth
Approaches: Value of income, expenditure and output
GDP Gross Domestic Product The value of output produced within a country during a time
period
GNP Gross National Product
The value of output produced within a country plus netproperty income from abroad
GDP/GNP per head/per capita Takes account of the size of the population
Real GDP/GNP
Accounts for differences in price levels in different periods
-
8/3/2019 Environmental and Development
7/64
Economic Growth
Using measures ofeconomic growth can givedistorted pictures of thelevel of income in a
country the incomedistribution is not takeninto account.
A small proportion of thepopulation can own a largeamount of the wealth in a
country. The level ofhuman welfare for themajority could therefore bevery limited.
This might be a
common picture
But this could be just
around the corner!
-
8/3/2019 Environmental and Development
8/64
Economic Growth
Shopping Hall in SaudiArabia
Dubai Skyline
High economic growth fuelled through capital spending can hide anumber of underlying economic problems how is the income andwealth distributed? Who is doing the spending and will it trickle downto the poor?
-
8/3/2019 Environmental and Development
9/64
National Income: Problems withusing GDP/GNP
Reliability of data?
How accurate is the data that is collected?
Distribution of income?
How is the income distributed does asmall proportion of the population earn ahigh % age of the income or is incomemore evenly spread?
-
8/3/2019 Environmental and Development
10/64
NI Problems with usingGDP/GNP
Quality of life?
Can changes in economic growth measurechanges in the quality of life?
Does additional earnings power bring with itadditional stress, increases in working hours,increased health and family problems?
Impact of exchange rate? Difference in exchange rates can distort the
comparisons need to express in onecurrency, but which one and at what value?
-
8/3/2019 Environmental and Development
11/64
NI Problems with using GDP/GNP
It might not be pleasant, butwhat he finds among therefuse could be all he has.
Black/informal economy?
Some economic activity notrecorded subsistence
farming and barter activity, forexample
Some economic activity iscarried out illegally building
work cash in hand, drugdealing, etc.
Work of the non-paid may notbe considered but may
contribute to welfare charitywork, housework, etc.
-
8/3/2019 Environmental and Development
12/64
Economic Development
Development incorporates thenotion of a measure/measures ofhuman welfare
As such it is a normative concept open to interpretation and
subjectivity What should it include?
-
8/3/2019 Environmental and Development
13/64
Normative concepts of Devt
-
8/3/2019 Environmental and Development
14/64
Indicators of Economic Development
-
8/3/2019 Environmental and Development
15/64
Measure of Economic Development
-
8/3/2019 Environmental and Development
16/64
Human Development Index (HDI)
According to various issues of HDR, HDI : a socio-economic measure focusing on
three dimensions of human welfare:
Living a long and healthy life --- Lifeexpectancy at birth
Being educated--- Access to education,
literacy rates Standard of living GDP per capita:
Purchasing Power Parity (PPP)
-
8/3/2019 Environmental and Development
17/64
Where Ethiopia stands?
According to the reports of UNDP, WorldBank, UNICEF, WFP (2009)
Population: 71.3 million
Pop. growth rate: 1.8%GDP per capita: US$64.73
Pop. below poverty line: 50%
Life expectancy at birth: 54.7years (HDR2009)
Infant mortality: 110.4 per 1000
HIV prevalence: 4.4%
-
8/3/2019 Environmental and Development
18/64
Where Ethiopia stands?
Access to clean water: 22%
Literacy rate: 49% (men), 34% (women)
GDP-Real growth rate = 11.1% Gini index = 29.97% (0.3)
Income distribution: the richest 10%
hold 33.7% of national incomeBetween 1995 and 2007 Ethiopia's HDI
rose by 3.13% annually from 0.308 to
0.414 today
-
8/3/2019 Environmental and Development
19/64
Country profile
The HDI of Ethiopia (0.414), gives thecountry a rank of 171st out of 182 countriessee facts below given below
http://var/www/apps/conversion/current/tmp/scratch16264/HDI%20Ethiopia.dochttp://var/www/apps/conversion/current/tmp/scratch16264/HDI%20Ethiopia.doc -
8/3/2019 Environmental and Development
20/64
HDI Trends
-
8/3/2019 Environmental and Development
21/64
Environmental Resources
Environmental resources are resourcesprovided by nature that are indivisible.
example: an ecosystem, an ozone layer,or the lower atmosphere
They are not consumed directly, butpeople consume the services theseresources provide (Kahn 1995:5).
-
8/3/2019 Environmental and Development
22/64
Ethiopias position
Carbon efficiency = 0.15 CO2emission/$GDP
Deforestation; overgrazing; soil erosion;desertification; water shortages in someareas from water intensive
farming and poor management (someenvironmental problems)
-
8/3/2019 Environmental and Development
23/64
Economic system and theEnvironment
Air pollutionEnergy
AirSold Waste
Water Waste, Heat
Amenities
Raw materials Water pollution
-
8/3/2019 Environmental and Development
24/64
Link
The knowledge of the relationship betweenthe environment and the economy help usto design an appropriate policy that
prevents undue depreciation of the value ofthese special assets, the environment, sothat it may continue to provide aesthetic
and life sustaining services.
-
8/3/2019 Environmental and Development
25/64
Link
In line with this fact, modern ecologistshave the stand point saying that theenvironment possesses a unique carrying
capacity to support humans, and once thatcapacity is exceeded widespread ecologicaldestruction occurs with disastrous
consequence for humanity. The focus is nolonger on individual societies but on thesurvival of the planet.
-
8/3/2019 Environmental and Development
26/64
Economic system Vs. Environment
There have long been massive debate onthe relationships b/n economic activity andthe environment/natural resources: to put
some: The Limit to growth model (Pessimists
view point)
The Optimist View points The Environmental Kuznets Theory
-
8/3/2019 Environmental and Development
27/64
1.The Limits to growth
The Limit to growth (Meadow et al,1972) came with the concept claimingthat environmental limits would cause
the collapse of the economic system inthe middle of the 21st century.
The issue was long been debated
among economists (and otherintellectuals) and the book was roundlycondemn by most economists.
-
8/3/2019 Environmental and Development
28/64
The Limit to growth
Yet it was a stimulus to the re-emergencyof interest in natural/environmentalresources on the part of economists in the
early 1970s.A system dynamic was built to incorporate
five major trends of global concerns:
accelerating industrialization
Rapid population growth
-
8/3/2019 Environmental and Development
29/64
Limit to growth
Widespread malnutritionDepletion of non-renewable resources and
A deteriorating environment
The interconnections and
interdependency among thesevariables were shown byincorporating:
-
8/3/2019 Environmental and Development
30/64
Limit to growth
i. a limit to the amount of land available foragriculture;
ii. a limit to the amount of agricultural outputproducible per unit of land in use;
iii. a limit to the amount of non-renewableresources available for extraction;
iv. a limit to the ability of the environment toassimilate wastes arising in productionand consumption , which limits falls as the
level of pollution increase.
-
8/3/2019 Environmental and Development
31/64
Limits to growth
The conclusions derived from the modelwere :
1.If the present growth trends in worldpopulation, pollution, food production, andresource depletion continue unchanged,the limits to growth on this planet will be
reached sometime within the next 100years. The most probable result will be asudden and uncontrollable decline in both
population and industrial capacity.
-
8/3/2019 Environmental and Development
32/64
Limit to growth
2. It is possible to alter these trends and toestablish a condition of ecological andeconomic stability that is sustainable far
in to the future.
The state of global equilibrium could bedesigned so that the basic material needs
of each person on earth are satisfied andeach person has an equal opportunity torealize his or her individual human
potential.
-
8/3/2019 Environmental and Development
33/64
Limit to growth
3. If the worlds people decide to strive forthis second outcomes rather than the first,the sooner they begin working to attain it,
the greater will be their chance of success.
Standard growth model.doc
http://var/www/apps/conversion/current/tmp/scratch16264/Standard%20growth%20model.dochttp://var/www/apps/conversion/current/tmp/scratch16264/Standard%20growth%20model.doc -
8/3/2019 Environmental and Development
34/64
2.The Optimist model
As a reply for the limits to growth model,Herman Khan and his associate presentedan alternative vision in a book titled The
Next 20 years: A Scenario for Americaand the world.
This vision is an optimistic one based in
large part on the continuing evolution of aform of technological progress that servesto push back the natural limits until they
are no longer limiting.
-
8/3/2019 Environmental and Development
35/64
Optimist model
For the most part, the optimists placedfaith in future technological progress to tapnew sources of energy, overcome any
resource limitations, and control pollutionproblems
The saying ofNecessity is the mother ofInvention supports the basic optimistmodel
-
8/3/2019 Environmental and Development
36/64
Optimist model
They conclude that:
The future path of population growth isexpected by Khan and his associates toapproximate an S-shaped logistic curve.
-
8/3/2019 Environmental and Development
37/64
Khans perspective on prospective of
Humanity (in fixed 1975 dollars)
2176:
15 million people
$300 trillion GNP
$20,000 per capita
1976:
4.1 billionPeople
$3.5 trillionGNP
$1300 percapita
1776:
750 million people
$150 billion GNP
3 E i t l K t
-
8/3/2019 Environmental and Development
38/64
3. Environmental Kuznetshypothesis
It has been hypothesized that the relationshipbetween economic growth and some form ofenvironmental degradation has a unique
patter. Such a relationship is called an
Environmental Kuznets curve (EKC) after
Kuznets (1955) , who hypothesized aninverted U-shape for the relationship betweena measure of inequality in distribution of
income and the level of income.
-
8/3/2019 Environmental and Development
39/64
EKC
The notion of the hypothesis is thatEconomic growth means higher emissionsper capita until per capita income reaches
the turning point, and there after actuallyreduce emission per capita.
If the EKC hypothesis held generally, it
would imply that instead of being a threat tothe environment ( The Limit to growth),economic growth is the means to
environmental improvement.
-
8/3/2019 Environmental and Development
40/64
EKC
i.e. a countries develop economically, movingfrom lower to higher levels of per capitaincome, overall levels of environmental
degradation will eventually fall.
EKC
Environmentald
egradation
C
-
8/3/2019 Environmental and Development
41/64
Empirical evidences on the EKChypothesis
The hypothesis has been area of empiricalstudy employing econometric models, andthus debating conclusions have been
made by various economists. Example Shafik and Bandyopadhyay (1992) :
estimated the coefficients of relationship
between environmental degradation andper capita income for 10 differentenvironmental problems
-
8/3/2019 Environmental and Development
42/64
EKC empirics
They conclude: Majority of the relationship proven to fit to
the hypothesis
But CO2 emissions, a major contributionto the greenhouse gases , do not fit theEKC hypothesis.
Panayotou (1993) investigated the EKChypothesis for: SO2,NO2, Suspendedparticular material(SPM) and
deforestation.
-
8/3/2019 Environmental and Development
43/64
EKC empirics
all the fitted relationship are inverted U-shaped
Yet the basic question is weather thisholds for the Long run or not!!!!
-
8/3/2019 Environmental and Development
44/64
What is sustainable Development?
According to UNCED(1987) : the term sustainable development,
refers to progress that meets the needs of
the present without compromising theability of future generations to meet theirown needs.
Sustainability means not only the survivalof the human species but also maintainingthe productivity of natural, produced, andhuman assets from generation to
generation.
-
8/3/2019 Environmental and Development
45/64
Sustainable Devt
Equity in economic efficiency. Knowing the capacity of the environment
and using that capacity to the maximum of
it and not beyond that.Survival of future depends on present
generation.
-
8/3/2019 Environmental and Development
46/64
What is sustainable Development?
There should be equitable distribution ofresources among generations.
There should not be absorptive limit.
-
8/3/2019 Environmental and Development
47/64
Objectives of sustainable
development
Economic objective:-promoting growth andefficiency e.g. income redistribution,employment, targeted assistance, increase of
PCI of poor and decrease uncompensatedfuture cost
Social Objectives:- fulfilling peoples cultural,
material, and spiritual needs in equitablemanner (e.g. popular participation, consultation,pluralism)
Environmental objectives:- maintaining and
-
8/3/2019 Environmental and Development
48/64
Signs of unsustainable development
Poverty- a billions of population lives underabsolute poverty. The level of poverty isgetting most horrible overtime
Increasing world population andconsumption of resources: - the worldpopulation increased from 4.4 billion in 1940
to 5.6 in 1970 and to 6.2 billion in 2000 ---- Resource depletion: - in less than 200
years, the planet has lost 6 million km2 offorests.
-
8/3/2019 Environmental and Development
49/64
Signs of unsustainable development
Pollution:- an increase in industrializationleads to an increase in pollution which inturn leads to increase in cancer in
developed countries Global climate change: - because of
depletion of Ozone layer the world
temperature has been increasing; rain falldecreases by 20% to 40% and worldtemperature has increased from 0.4% to
0.8%.
Poverty and the Environment
-
8/3/2019 Environmental and Development
50/64
Poverty and the Environment
Both environmental degradation and poverty
alleviation are urgent global issues that have alot in common, but are often treatedseparately.
Consider the following:
Human activities are resulting in mass speciesextinction rates higher than ever before,
currently approaching 1000 times the normalrate;
Human-induced climate change is threatening
an even bleaker future;
-
8/3/2019 Environmental and Development
51/64
Poverty and the Envt
At the same time, the inequality of humansocieties is extreme:
The UN 1998 HDR reveals that:
Globally, the 20% of the worlds people in thehighest-income countries account for 86% oftotal private consumption expendituresthepoorest 20% a minuscule 1.3% ;
To highlight this inequality further, considerthat approximately 1 billion people suffer fromhunger and some 2 to 3.5 billion people have a
deficiency of vitamins and minerals
-
8/3/2019 Environmental and Development
52/64
Poverty and the Envt
Yet, some 1.2 billion suffer from obesity
One billion people live on less than a dollar aday, the official measure of poverty
However, half the world nearly three billionpeople lives on less than two dollars a day.
Yet, just a few hundred millionaires now ownas much wealth as the worlds poorest 2.5billion people
-
8/3/2019 Environmental and Development
53/64
Poverty and Envt
Poverty and third world debt has beenshown to result in resource stripping just tosurvive or pay off debts.
For example, Nepal and Bangladesh havesuffered from various environmentalproblems such as increasingly devastating
floods, often believed to be resulting fromlarge-scale deforestation.
-
8/3/2019 Environmental and Development
54/64
Poverty and Envtal stress
Grinding poverty and impatience may spur
people to strive for immediate gain,
forgetting long-term sustainability,especially when property or use rights are
unclear.
-
8/3/2019 Environmental and Development
55/64
Poverty and Envtal stress
To survive, impoverished people:
degrade and destroy their immediate environment;
Cut down forests for fuelwood and export earnings;
overuse marginal agricultural land;
migrate to shrinking areas of vacant land, and
destroy habitat for biological species essential for
pharmaceuticals and seed varieties
-
8/3/2019 Environmental and Development
56/64
Poverty and Envtal stress
Forests around the world face increasedpressures from timber companies, agriculturalbusinesses, and local populations that use
forest resources. Some environmentalists, from rich nations
especially, also raise concerns about
increasing populations placing excessiveburdens on the worlds resources as thecurrent major source of environmental
problems.
-
8/3/2019 Environmental and Development
57/64
Poverty and Envtal stress
According to U.N.World Commission onEnvironment and Development (1987):
Impoverished people forego maintenance ofvegetation, forests, and the biosphere.
At subsistence levels of living, when peoplessurvival is at stake, hand-to-mouth economicsprevail in which the future is infinitely discounted;
-
8/3/2019 Environmental and Development
58/64
Poverty and Envtal stress
People overexploit natural resources and under
invest in conservation and regeneration,
Leading to resource depletion and species loss.In this economic climate, people make
irreversible decisions, foreclosing options by
logging and mining of rain forests and other
economic options that reduce species
(Panayotou 1993; Flavin 1989).
-
8/3/2019 Environmental and Development
59/64
Conclusion poverty and envt
Poverty and environmental
stress end up with Viciouscycle of poverty
-
8/3/2019 Environmental and Development
60/64
So what? (Green accounting)
Green accounting incorporatesenvironmental assets and their source andsink functions into national and corporate
accounts. It is the popular term for environmental
and natural resource accounting.
-
8/3/2019 Environmental and Development
61/64
Green Accounting
Conventional national accounts largelyignore:
New or newly observed scarcities of
natural resources, which threaten toundermine the sustainability of economicperformance and growth, and
Environmental degradation as anexternal (social) cost of economic activity
.
-
8/3/2019 Environmental and Development
62/64
Green accounting
Further critique refers to a possibledistortion from counting environmentalprotection expenditures as an increase in
national income, despite the fact that suchdefensive expenditure tends to maintain,rather than increase, the welfare of
society. In response, the United Nations issued in
1993 and revised in 2003 a handbook on
a System for integrated Environmental
-
8/3/2019 Environmental and Development
63/64
Conclusion
Thus to bring sustainabledevelopment there must be a
balance between the threeobjectives of sustainable
development.
-
8/3/2019 Environmental and Development
64/64
End
Thank You!