The Global Economy and the Environment

In today’s global economy, the phrase “sustainable development” is often thrown around by experts. Having witnessed significant economic growth all around the world in the past century, it is easy to ignore a key piece of the puzzle. The environment in which all these economic activities take place is not given much attention and consideration as it is mostly thought of as a means to an end. This has given rise to a second and more critical perspective on the global economy which has come to be known as the ecological perspective. In contrast to this perspective is the mainstream view of the global economy. This view maintains the opinion that we should expect more growth as it will increase prosperity and help curb issues like poverty and underdevelopment in certain parts of the world. Economists that hold this view of the global economy rarely pay much regard to the environment that has enabled such levels of economic growth to take place. Rising tensions between these two unique perspectives of modern economics have led to a great debate on climate change resulting from economic activity. If global economic activity is resulting in the destruction of the world in which we all live – a world that has allowed all of this growth to be possible – then we need to ask ourselves, to what extent is this growth and development really “sustainable”?

The conflict between these two views is best described by Lester Brown when he suggests that mainstream economists, “respect the market because it can allocate resources with an efficiency that a central planner can never match,” while ecologists look at the economy from a more critical point of view where they consider the fact that the economy is, “increasingly in conflict with its support system.” For one to gain a clear understanding of both views of the global economy, it is necessary to outline some of the major arguments raised by both sides.

The Mainstream View 

Generally speaking, most countries, both in the developed and underdeveloped world have experienced significant economic growth in the past century. The development of new and more efficient production methods in countries like the United States resulted in mass production of goods. Household incomes subsequently grew as economies became stronger and more competitive on the global scene. The rise of industrialization led to a noteworthy change in the world’s economic conditions. Furthermore, international trade encouraged the production of diverse goods and services, further strengthening the global economy as a whole.

With these economic achievements and more, few people stopped to think about the implications rapid economic growth had on the environment. Consequently, the world saw the increased development of systems and political structures that harnessed and encouraged economic growth at the expense of the environment. According to Lester R. Brown’s description of mainstream economists, these practices were upheld simply because they were efficient in growing our economies.

Climate change has only recently become a topic of discussion as it has, in the past, either not been noticed or been regarded as a non-pressing issue. For example, a factory worker in Uganda who works in a factory that majorly contributes to air pollution is less concerned about that pollution, and more worried about what his or her family will eat or whether they will have shelter. For most people, engaging in economic activities (that harm the environment) is necessary for survival and this leaves less time to consider the effects of their actions on a much larger scale.

The Ecological Perspective

Advocates of the ecological perspective like Gary Gardner and Thomas Prugh emphasize the fact that for the economic growth we have witnessed in the past century to be sustainable, there is need for a major transformation of the world’s economic system. According to Gardner and Prugh, the side effects of modern economic activity include an increase in carbon dioxide (CO2) levels, up to 2 million premature deaths as a result of urban air pollution, and among others, a decline in the number of bees, bats and other vital pollinators across North America. These effects are evidence of the environmental destruction caused by economy activity. The common person would barely pay attention to something like a decrease in the number of pollinators but without pollinators, crops that are vital to nourishing the world’s population inevitably become endangered. This in turn endangers the lives of human beings themselves.

The World Trade Organization (WTO) and other intergovernmental organizations like the Organization for Economic Cooperation and Development (OECD) recognize the fact that trade can have both positive and negative impacts on the environment. They suggest that while economic growth that results from trade can lead to increased pollution and exploitation of natural resources, it can also contribute to giving countries a greater capacity to address environmental issues.

The Way Forward

As a supporter of the ecological view of the global economy, I think it is vital to pay attention to the environmental implications of our actions as failure to do so will result in limited ability to continue growing economically. Furthermore, as suggested by Gardner and Prugh, the world economy should concentrate more on development rather than growth simply because the primary reason for growth is to develop people’s lives and nations as a whole. This would allow phrases like “sustainable development” to be a reality while preserving our ecosystems.


Comments are closed.