PART II – ECONOMIC PILLAR
Among the three pillars of the sustainable development framework, the economic pillar received and still receives the most attention. This is because this pillar links directly to the bottom line, which concerns a lot of people from politicians to businesses to ordinary men and women. And bottom line concerns connect with possibilities of barriers to growth.
In the early years of sustainable development negotiations at the UN, observers often assumed that the “potential barrier to growth” was a concern of the developing countries. But I remember sitting in the negotiation room in 1991, listening to the debate and noticing that industrialized countries articulated a bigger concern on this issue. They could see the writing on the wall. The global sustainability crisis is traceable to their rampant use of natural resources since they embarked into the Industrial Revolution. Since they started the sustainability crisis, logic says they should take the first corrective actions by changing their consumption and production patterns. But this did not fit with the political interests of many if not most industrialized countries. The sustainability “dilemma” has been an interplay of growth and greed against our future on the planet.
This economics quandary of the sustainability equation lead to the most contentious concept of the international negotiations: namely, the concept of common but differentiated responsibilities (CBDR). Even after more than 30 years, the concept continues to be intensely debated and colors all sustainability negotiations today. It is about money, power and who pays for the change necessary.
CBDR is the idea that while all of humanity needs to be responsible for ensuring sustainability of our planet (the “common” part), some countries, namely the industrialized, have greater responsibility because their activities created the problem in the first place. The developing world with its poverty levels cannot be assigned the same level of responsibility as those who created the problem (the “differentiated” part). The outcome is then an understanding that while industrialized countries reduce their excessive consumption and production patterns, developing countries get an opportunity to continue consuming natural resources to reach economic development levels necessary for decent living standards. Their economic development can be have less negative impact on the planet if it benefits from the many lessons learned since the start of Industrial Revolution. But the developing world lacks the technology and the finance for such less impactful development. So the CBDR demands that industrialized countries provide the financial and technological support considering much of their wealth came from exploitation of the planet’s natural resources, through colonialism.
CBDR aims to distribute global responsibility equitably but is prone to abuse. The world of 2020s is different from that of the 1990s. Some of the developing countries have since become today’s economic juggernauts such as China, Brazil and India. The international community has recast the CBDR concept into “common but differentiated responsibilities and capabilities” (CBDRC) in which addition of “capabilities” is an effort to take into account the new economic capacities of the emerging economic players. Yet, the newly emerged economic powerhouses resist accepting their new role, holding onto the 1990s understandings arguing that they are still fighting poverty and other development woes. The CBDR debate will continue and will stunt the intentions of the present generation to take better care of the planet for future generations.
KEY CONCEPTS
The Economic Pillar is about recognizing that any economic activity has impacts which are costs that are normally external to the traditional cost calculations. These costs are known as externalities.
Once externalities are determined the next step is to find ways to separate production from its impacts – known as decoupling. The jury is still out on whether decoupling works or not. It is impossible to achieve absolute decoupling without stopping production all together. So most decoupling success stories are about relative decoupling as in less impact rather than no impact.
While decoupling is a valiant effort, a more useful approach may be for production to mimic nature itself in which nothing is wasted. This approach is known as circular economy. Going from the traditional wasteful system to one that is circular requires upfront costs and investments which creates resistance.
And finally, while aiming for decoupling and circularity, it is also and equally necessary to take a second look at how we understand “growth” and see if we could use some course corrections in that understanding. There have been various proposals for alternatives to growth-based economy. An overview of the ideas can be found here. Among the examples are “sufficiency economy” (origin traced to a Thai King), and steady-state economy” (origin traced to World Bank economist Herman Daly in 1970s). Another idea that is reemerging today is the idea of “degrowth” (origin traced to French philosophers of the 1970s), reemerging today through the work of economists such as Giorgios Kallis and Jason Hickel . Degrowth brings together a number of strands that emphasize a healthy planet, healthy societies, a focus on well being rather than GDP etc.
Questions an engineering student could ask on the externalities dimension would include asking what costs are involved in producing and using a gadget besides its material and labor costs. If the external costs are better understood, the gadget can be designed differently. For example, if the addictive nature of an algorithmic platform were known early in its development, the engineers with a sustainable development prism might have developed the algorithm differently, reducing the resultant addictions.
In the area of decoupling the engineering student can ask whether the gadget they are designing would increase or reduce decoupling goals for which the student would need to learn decoupling in detail not cursively. On circularity the student would need to design the product in such a way that its production, use and disposal do not create any waste. And on degrowth the engineering student would need to do some soul searching on what is more important human wellbeing and dignity or constant growth.
PRINCIPLES
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