Lecture Notes

Sustainable Development
and National Strategies

Dina Barbian
University of Erlangen-Nuremberg (Germany)

[email protected]
Facebook: https://www.facebook.com/groups/
see: Sustainable Development and Macroeconomics
about the lecturer: http://wi1.uni-erlangen.de/team-network/team/dinabarbian
These Lecture Notes are only for use in the

“Sustainable Development and National Strategies” course at

Sofia University "St Kliment Ohridski",
Faculty of Economics and BA, 2014.

Reproduction is not allowed without the permission of the author.

Table of Contents

I. Introduction ...................................................................................................... 1
II. Sustainable Development – Definition and History ...................................... 2
1. What is Sustainability? ................................................................................. 2
2. History.......................................................................................................... 2
2.1 Meadows et al. (1972, 1992 and 2004) ............................................... 3
2.2 Jørgen Randers (2012) ....................................................................... 5
2.3 WCED – Our Common Future (1987) ................................................. 5
2.4 United Nations Conference on the Human Environment (1972).......... 6
2.5 United Nations Conference on Environment and Development (1992) 6
2.6 The World Summit on Sustainable Development (2002)..................... 7
2.7 United Nations Conference on Sustainable Development (2012) ....... 8
2.8 Summary ............................................................................................. 9
III. Sustainable Development – Governance ..................................................... 10
1. Sustainable Development and Economic Growth ...................................... 10
1.1 Basics ................................................................................................ 10
1.2 The Economic System and Thermodynamics ................................... 11
1.3 Economic Growth, GDP, Life Quality and Welfare ............................ 13
1.4 Qualitative Economic Growth ............................................................ 15
1.5 “Growth” and “Development” ............................................................. 16
2. Sustainable Development and the Ecology ............................................... 16
IV. Sustainable Development – A New Approach? ........................................... 18
1. Description ................................................................................................. 18
2. Principles and Concept .............................................................................. 18
2.1 Anthropocentrism .............................................................................. 18
2.2 Nature Conservation ......................................................................... 18
2.3 Justice and Equality .......................................................................... 19
2.4 Comprehensiveness .......................................................................... 20
2.5 Long-term Durability .......................................................................... 21
3. Sustainable Growth?.................................................................................. 21
4. Summary ................................................................................................... 23
V. Why Sustainable Development? ................................................................... 24
1. Main Problems: Overpopulation and Environmental Degradation ............. 24
 1.1 Industrialized and Developing Countries ........................................... 24
1.2 Threats to Sustainability: Environmental Degradation ....................... 28
VI. Major Objective: A Sustainable World ......................................................... 29
1. Our World and our Limits ........................................................................... 29
1.1 Basics ................................................................................................ 29
1.2 Natural Elements Necessary to Sustain Life and Carrying Capacity . 30
1.2.1 Specification of the Natural Elements ................................... 30

1.2.2 Carrying Capacity ................................................................. 31

1.2.3 The Natural Elements Necessary to Sustain Life and a Simple

World Model.......................................................................... 33

1.3 Impact of Interference with Nature .................................................... 35

1.3.1 Extraction of Resources from Environment .......................... 35

1.3.2 Insertion of Wastes into Environment ................................... 43

1.4 Influencing Factors on the Ecological System ................................... 44

1.4.1 Population ............................................................................. 44

1.4.2 Satisfying Needs ................................................................... 47

1.4.3 How much is enough? What makes people happy? ............. 49

2. Implementing Sustainability ....................................................................... 50

2.1. Protection of Natural Elements Necessary to Sustain Life ................ 50
2.2. Reduction of Bad Influences for Ecosystem ...................................... 50
2.3. Consequences for World Countries................................................... 53
2.4. A Sustainable World .......................................................................... 53
VII. Summary and Conclusions ........................................................................... 54
VIII. References ...................................................................................................... 57
Dina Barbian Sustainable Development
and Macroeconomics

General Information about the workshop:

This workshop is divided into two parts: the first part is from 4th to 7th of March 2014,
and the second is from 14th to 17th of April 2014.
Time of teaching for the first part is from 9.00 am to 10.30 am and from 10.45 am to
11.30 am (Tuesday to Friday).

Time of project presentation for the second part is from 9.00 am to 10.30 am and
from 10.45 am to 12.15 am (Monday to Thursday).

Course material consists of the Lecture Notes provided to the students some weeks
before the workshop starts, as well as a detailed list of the structure and the contents
for the project presentation.

Location:
Sofia University "St Kliment Ohridski", Faculty of Economics and BA

Description:
In part one of this workshop students learn some theoretical aspects about the
science of sustainable development and about recent researches on national
strategies for sustainable development. The starting point is the history and the most
often-quoted definition: “Sustainable development is development that meets the
needs of the present without compromising the ability of future generations to meet
their own needs" by the Brundtland Commission with the report “Our Common
Future” (1987). The term “Sustainable Development” has become worldwide popular
after the UN Conference on Environment and Development held in Rio de Janeiro in
1992. With the Agenda 21 they outlined an important action plan for nations. It was
adopted by more than 178 nations.
Our world is a complex and dynamic system; some natural processes and cycles are
difficult to understand. Therefore in this workshop students will work with a reduced
world model consisting of only five natural elements that are necessary to sustain life
on earth: air, water, soil, the ozone layer and sun.
The concept of sustainable development (with the descriptors “anthropocentrism”,
“nature conservation”, “justice and equity”, “comprehensiveness” and “long-term
durability”) can contribute to finding strategies, principles and policies for a national
sustainable development. Ecological and social objectives are as important as
economic objectives.
Helping impoverished countries and combating against environmental degradation
are the biggest challenges in our world. The main limit of our ecosystem is the
carrying capacity for human influences controlled by the world population and
satisfaction of needs. Suitable sustainable development strategies for nations can’t
be implemented immediately. It takes time, maybe long time. But ultimately humans
are responsible for a sustainable development and the implementation of strategies
for world nations.
Dina Barbian Sustainable Development
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Second Part - Project Presentation:

For the presentation the student should work on a case study which consists of an
analysis of a country in consideration of the concept of Sustainable Development
described and explained in the first part of the workshop. The student can choose a
favorite country and try to find out some feasible strategies for a sustainable
development in this country.
The student’s output is an oral presentation (appr. 20-30 minutes) and a short written
summary (maximum 10 pages, Arial 11pt) delivered latest by 17th of April 2014.

Grading:
The assessment consists of two parts: oral presentation (counting 50 %) and written
paper (counting 50 %).

Prerequisites:
Students should have a basic understanding of economics and natural sciences.
Dina Barbian Sustainable Development 1
and Macroeconomics

I. Introduction

The term “Sustainable Development” has become popular since the UN Conference
on Environment and Development held in Rio de Janeiro in 1992. The Brundtland
Commission Report (World Commission on Environment and Development, 1987)
has made a great contribution by emphasizing the importance of sustainable
development and by giving the most often quoted definition.

The starting point of theory formation is the ethical idea of sustainability. It is based
on obligations toward future generations and presupposes intergenerational equity.
Concerning specific resources and services (e.g. fresh water, the atmosphere as a
carbon sink, the wide variety of ecosystems), it is evident that continuing growth at
these utilization rates is unsustainable.

Problems on earth are diverse: underdevelopment, poverty, drought and famine,

environmental depletion, wastage, waste of resources etc. The aim of Sustainable
Development is to solve these problems and create a situation that is of long-term
durability for all present and future generations, known as intra- and intergenerational
equity.

Sustainable Development is of concern to everybody and it affects every country in

the world, all firms, all regions, all towns and all households. Sustainable
development is an anthropocentric concept, because humans are at the center of
interest. It is also a normative concept.

The concept has three main pillars: social, economic and ecological aspects.

A simple world model is the base for developing strategies to implement sustainability
on the earth. The main limits are the carrying capacity of the earth and the capacity
for human impact on resource removal and waste insertion. Both limits are influenced
by population growth and the satisfaction of needs. The development of natural
means of livelihood depends on the carrying capacity of the earth. The earth can
regenerate if limits are adhered to. The limits of ecosystems have an impact on our
economic system if sustainability is implemented.

How should mankind deal with natural resources especially with non-renewables?

How should mankind solve problems like poverty and wastage?

What are the consequences for world nations?

Whether a sustainable world is possible or not, will be discussed at the end of the
lecture.
Dina Barbian Sustainable Development 2
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II. Sustainable Development – Definition and History

1. What is Sustainability?

After the United Nations Conference on Environment and Development in Rio (1992)
the term “SD” (Sustainable Development) became a keyword. Not only economists,
but also physicists, engineers, social and political scientists and theologians are
showing their interest.

Sustainable development has been defined in many ways, but the most frequently
quoted definition is from Our Common Future in 1987, also known as the Brundtland
Report (WCED, 1987, p. 43):

"Sustainable development is development that meets the needs of the present

without compromising the ability of future generations to meet their own needs.”

The starting point of theory formation is the ethical idea of sustainability. It is based
on obligations toward future generations and presupposes intergenerational equity.

It contains within it two key concepts:

• the concept of needs, in particular the essential needs of the world's poor, to
which overriding priority should be given; and
• the idea of limitations imposed by the state of technology and social
organization on the ability of the environment to meet present and future
needs.

2. History

The idea of sustainability dates back more than 40 years.

It was a key theme of the United Nations Conference on the Human Environment in
Stockholm in 1972. The concept was coined explicitly to suggest that it was possible
to achieve economic growth and industrialization without environmental damage.

In the ensuing decades, mainstream sustainable development thinking was

progressively developed through the World Conservation Strategy (1980) and with
the publication by the World Commission on Environment and Development (WCED)
of its report "Our Common Future" (more commonly known as the "Brundtland
Report” (1987)).

In 1992, the UN Conference on Environment and Development (UNCED), or the

"Earth Summit", in Rio de Janeiro, agreed on a Declaration setting out 27 principles
supporting sustainable development. The Summit also agreed a plan of action called
Agenda 21, and recommended that all countries produce national sustainable
development strategies. A special UN Commission on Sustainable Development was
created.
Dina Barbian Sustainable Development 3
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In 2002, the Johannesburg Summit reviewed the progress made on global

sustainable development since the Rio Summit. The World Summit on Sustainable
Development (WSSD, 2002) confirmed that the first decade of the new century, at
least, would be one of reflection about the demands placed by mankind on the
biosphere.

2.1 Meadows et al. (1972, 1992 and 2004)

“The Limits to Growth” is a 1972 book modeling the consequences of a rapidly

growing world population and finite resource supplies, commissioned by the Club of
Rome. Its authors were Donella H. Meadows, Dennis L. Meadows, Jørgen Randers,
and William W. Behrens. The book used a computer simulation model (system
dynamics) and called it the “World3 model” (Forrester, 1971) to simulate the
consequence of interactions between the Earth's system and the human system.

As result they indicated that economic growth at current rates could not continue in
the long term. The book was widely understood to claim that environmental limits
would cause the collapse of the world economic system by the middle of the twenty-
first century.

The book echoes some of the concerns and predictions of the Reverend Thomas
Robert Malthus in An Essay on the Principle of Population (1798).

In his essay, Malthus argued that the geometrical power of increase in human
numbers (world population), and an arithmetical growth in agricultural production,
would regularly combine to produce famine, increased mortality, and longer hours of
work. According to Malthus, population growth would reach such a level that the land
would no longer be able to support it, and widespread starvation would occur.

Five variables were examined in the original model of Meadows et al. (1972), on the
assumptions that exponential growth accurately described their patterns of increase,
and that the ability of technology to increase the availability of resources grows only
linearly. These variables are: world population, industrialization, pollution, food
production and resource depletion:
Dina Barbian Sustainable Development 4
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Many prominent economists, scientists and political figures criticized the Limits to
Growth. They attacked the methodology, the computer, the conclusions, the rhetoric
and the people behind the project.

However, it played an important role in bringing concerns about the over-use of

natural resources into the political debate.

Three of the four authors of the 1972 book are the authors of the sequel with the title
“Beyond the limits”. It uses the same World 3 model as the original. Only some
modifications were made, some of the relationships were modified, and some of the
numerical values for parameters were changed.

The conclusions:

The three conclusions from the original “The limits to growth” (1972) are still valid:
Dina Barbian Sustainable Development 5
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Meadows et. al (2004): In 2004 the three authors Meadows, Meadows and Randers
have teamed up again to update and expand their original findings. In many ways,
the message contained in “Limits to Growth: The 30-Year Update” is a warning.
Overshoot cannot be sustained without collapse. After explaining overshoot, the book
discusses population and industrial growth, the limits on available resources,
pollution, technology and, importantly, ways to avoid overshoot. There is reason to
believe that humanity can still reverse some of its damage to Earth if it takes
appropriate measures to reduce inefficiency and waste.

2.2 Jørgen Randers (2012)

The book “2052 - A Global Forecast for the Next Forty Years” written by J. Randers is
a Report to the Club of Rome Commemorating the 40th Anniversary of “The Limits to
Growth”.

Forty years ago, The Limits to Growth study addressed the grand question of how
humans would adapt to the physical limitations of planet Earth. It predicted that
during the first half of the 21st century the ongoing growth in the human ecological
footprint would stop – either through catastrophic "overshoot and collapse" – or
through well-managed "peak and decline."

In the book, Jørgen Randers, one of the co-authors of “Limits to Growth”, issues a
progress report and makes a forecast for the next forty years. To do this, he asked
dozens of experts to weigh in with their best predictions on how our economies,
energy supplies, natural resources, climate, food, fisheries, militaries, political
divisions, cities, psyches, and more will take shape in the coming decades. He then
synthesized those scenarios into a global forecast of life as we will most likely know it
in the years ahead.

The good news: we will see impressive advances in resource efficiency, and an
increasing focus on human well-being rather than on per capita income growth. But
this change might not come as we expect. Future growth in population and GDP, for
instance, will be constrained in surprising ways – by rapid fertility decline as result of
increased urbanization, productivity decline as a result of social unrest, and
continuing poverty among the poorest 2 billion world citizens. Runaway global
warming, too, is likely.

Randers guides in his book along a realistic path into the future and discusses what
readers can do to ensure a better life for themselves and their children during the
increasing turmoil of the next forty years.

2.3 WCED – Our Common Future (1987)

Ms Gro Harlem Brundtland, who chaired the WCED (World Commission on

Environment and Development) in 1987, was the former Prime Minister of Norway.
The report “Our Common Future” (edited by WCED) described both the extent of
Dina Barbian Sustainable Development 6
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poverty and the various threats to sustainability. What was needed was a new kind of
economic growth that had much less environmental impact and which increased the
capacity of the environment to deliver human satisfaction.

The Brundtland Report may be considered to be a political document, not based on

rigorous scientific analysis. The report comprised three objectives:

1. To re-examine the critical environment and development issues and to

formulate realistic proposals for dealing with them;
2. To propose new forms of international cooperation on these issues that will
influence policies and events in the direction of needed changes;
3. To raise the levels of understanding and commitment to action of individuals,
voluntary organizations, businesses, institutes and governments.

The WCED focused on the issues of: population growth, food security, biodiversity
loss, energy, resource depletion, and pollution and urbanization. (Common and
Stagl, 2005, p. 363)

2.4 United Nations Conference on the Human Environment (1972)

The United Nations Conference on the Human Environment, held in Stockholm,

Sweden, in 1972, was a ‘first’ in many respects: it was the first meeting that brought
the nations of the world (113 countries participated) together to discuss the
environmental future of the planet; it was the first United Nations conference on a
single global issue; it was the first global meeting that saw a large presence and
influence of non-state actors, including non-governmental organizations and
scholars; and it was the first meeting to seek global policy consensus on issues
related to the environment.

The major institutional legacy of the conference was the creation of the United
Nations Environmental Programme (UNEP). This was accompanied by two
declaratory documents – The Stockholm Declaration and the Stockholm Action Plan
– ideas from which have been carried forth by subsequent summits.

2.5 United Nations Conference on Environment and Development (1992)

The United Nations Conference on Environment and Development (UNCED),
also known as the Rio Summit, Rio Conference, Earth Summit was a major United
Nations conference held in Rio de Janeiro in 1992. 172 governments participated,
with 108 sending their head of State or Government. Some 2,400 representatives of
non-governmental organizations (NGOs) attended, with 17,000 people at the parallel
NGO "Global Forum", who had Consultative Status.

The issues addressed included:

Dina Barbian Sustainable Development 7
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• systematic scrutiny of patterns of production — particularly the production of

toxic components, such as lead in gasoline, or poisonous waste including
radioactive chemicals
• alternative sources of energy to replace the use of fossil fuels which are linked
to global climate change
• new reliance on public transportation systems in order to reduce vehicle
emissions, congestion in cities and the health problems caused by polluted air
and smog
• the growing scarcity of water

An important achievement was an agreement on the Climate Change Convention

which in turn led to the Kyoto Protocol. Another agreement was to "not carry out any
activities on the lands of indigenous peoples that would cause environmental
degradation or that would be culturally inappropriate".

The Convention on Biological Diversity was opened for signature at the Earth
Summit, and made a start towards redefinition of measures that did not inherently
encourage destruction of natural ecoregions and so-called uneconomic growth.

The Earth Summit resulted in the following documents:

• Rio Declaration on Environment and Development

• Agenda 21
• Convention on Biological Diversity
• Forest Principles
• Framework Convention on Climate Change (UNFCCC).

Both Convention on Biological Diversity and Framework Convention on Climate

Change were set as legally binding agreements.

Critics, however, point out that many of the agreements made in Rio have not been
realized regarding such fundamental issues as fighting poverty and cleaning up the
environment.

2.6 The World Summit on Sustainable Development (2002)

The World Summit on Sustainable Development (WSSD) or Earth Summit 2002
took place in Johannesburg, South Africa, in 2002. It was convened to discuss
sustainable development by the United Nations. WSSD gathered a number of
leaders from business and non-governmental organizations, 10 years after the first
Earth Summit in Rio de Janeiro. (It was therefore also informally nicknamed
"Rio+10".)

The Johannesburg Declaration was the main outcome of the Summit; however, there
were several other international agreements. It laid out the Johannesburg Plan of
Implementation as an action plan.
Dina Barbian Sustainable Development 8
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The absence of the United States rendered the summit partially impotent. George W.
Bush boycotted the summit and did not attend; the US government did not send a
delegation.

2.7 United Nations Conference on Sustainable Development (2012)

The United Nations Conference on Sustainable Development took place in Rio
de Janeiro, Brazil, on 20-22 June 2012 (nickname: Rio+20) to mark the 20th
anniversary of the 1992 United Nations Conference on Environment and
Development (UNCED), in Rio de Janeiro, and the 10th anniversary of the 2002
World Summit on Sustainable Development (WSSD) in Johannesburg.

The conference was organized by the United Nations Department of Economic and
Social Affairs. The decision to hold the conference in 2012 in Rio de Janeiro was
made by the UN General Assembly Resolution on 24 December 2009.

The conference had three objectives:

1. Securing renewed political commitment for sustainable development.

2. Assessing the progress and implementation gaps in meeting previous
commitments.
3. Addressing new and emerging challenges.

The conference has two themes agreed upon by the member states.

1. Green economy within the context of sustainable development and poverty

eradication.
2. Institutional framework for sustainable development.

7 Critical Issues at Rio+20:

The preparations for Rio+20 have highlighted seven areas which need priority
attention; these include

1. decent jobs,
2. energy,
3. sustainable cities,
4. food security and sustainable agriculture,
5. water,
6. oceans and
7. disaster readiness.
(see http://www.uncsd2012.org/)
Dina Barbian Sustainable Development 9
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2.8 Summary
Dina Barbian Sustainable Development 10
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III. Sustainable Development – Governance

1. Sustainable Development and Economic Growth

1.1 Basics
The circular flow model

The circular flow model consists of seven assumptions:

1. The economy consists of two sectors: households and firms.

2. Households spend all of their income (Y) on goods and services or
consumption (C). There is no saving (S).
3. All output (O) produced by firms is purchased by households through their
expenditure (E).
4. There is no financial sector.
5. There is no government sector.
6. There is no overseas sector.
7. It is a closed economy with no exports or imports.

In the simple two sector circular flow of income model the state of equilibrium is
defined as a situation in which there is no tendency for the levels of income (Y),
expenditure (E) and output (O) to change, that is:

Y=E=O

The circular flow describes how a market economy works. A market economy is one
in which individuals influence directly what is produced, marketed, and consumed.
Individuals do this by spending money on what they want. This then directs
producers to produce goods and services that individuals will consume. The amount
Dina Barbian Sustainable Development 11
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of goods and services that are made available is related to the laws of supply and
demand.

The circular flow of goods and services is a simplified illustration of basically two
flows: the flow of incomes to households from businesses, and the flow of resources
to businesses from households. This model excludes the more complex influences of
microeconomic factors. In the macroeconomic perspective, resources flow from
households to businesses, which change the resources into goods and services for
consumption in the product markets. Households are rewarded for the resources they
provide in the form of money. It is a circular process that flows in both directions.

1.2 The Economic System and Thermodynamics

A major contribution to economics by Georgescu-Roegen (Nicholas Georgescu-

Roegen, with his well-known book “The Entropy Law and the Economic Process”
from 1971) was the concept of entropy from thermodynamics. His work contributed
significantly to bio-economics and to ecological economics.

“The almost fabulous comfort … of many past and present societies made us
forget the most elementary reality of economic life, the fact that, among all the
things that are required for our living, only the purely biological ones are
indispensable for our survival.” (Nicholas Georgescu-Roegen, 1971)

Basics

First Law (Law of Conservation of Matter): Energy/Matter can neither be created nor
destroyed.

Second Law (Law of Increased Entropy): In all energy transformations, energy/matter quality
will be consumed.

First Law of Thermodynamics

The first law of thermodynamics is one of the absolute physical laws of the universe.

The amount of energy in the universe is constant – energy can be changed, moved,
controlled, stored, or dissipated. This energy can be in work, heat, potential or kinetic form.

Second Law of Thermodynamics

The second law of thermodynamics shows that all of the energy in the universe is moving
towards a less “useable” form. The quality deteriorates gradually over time. Usable energy is
converted into unusable energy.
Dina Barbian Sustainable Development 12
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“Entropy” is defined as a measure of unusable energy within a closed or isolated system: as

usable energy decreases and unusable energy increases, “entropy” increases.

Summary:

Contribution to Economics

Applying the thermodynamic theory to the economic system there is a transformation from
low entropy (resources) to high entropy (wastes). As a by-product you obtain goods for
satisfying human needs. The economic system is absolutely dependent on the low entropy
from the ecological system. In the context of sustainable development it is essential that the
economic system produces goods and services without consuming too much low entropy.

Thermodynamics and Recycling

According to the second law of thermodynamics, in all energy transformations, energy or

matter quality will be consumed, and entropy increases.

With Recycling, the high entropy wastes of production, which are unusable energy or matter,
are processed and then reused as inputs to production. So Recycling helps to decrease
entropy.

Recycling has two consequences:

• The amount of waste inserted into the environment is reduced.

• To the extent that recycled material is used, the amount of the corresponding
resource extracted from the environment is reduced, too.
Dina Barbian Sustainable Development 13
and Macroeconomics

Applying the thermodynamic theory to the economic system causes a transformation

from low entropy (resources) to high entropy (wastes). As a by-product you obtain
goods for satisfying human needs. The economic system is thoroughly dependent on
the low entropy from the ecological system. Without low entropy the economic
system couldn’t function, e.g. produce goods and services. In the context of aiming
for sustainable development it is essential that the economic system produces goods
and services without consuming too much low entropy.

1.3 Economic Growth, GDP, Life Quality and Welfare

The Brundtland Report outlines: What is needed now is a new era of economic
growth – growth that is forceful and at the same time socially and environmentally
sustainable.

In a limited world, unlimited growth is not possible. We need a new growth, a growth
that consists of economic, ecological and social components.

Gross domestic product (GDP) refers to the market value of all final goods and
services produced within a country in a given period. It is often considered an
indicator of a country's standard of living.

GDP measures both a nation’s total output of goods and services and its total
income.

Source: http://en.wikipedia.org/wiki/File:WeltBIPWorldgroupOECDengl.PNG
Dina Barbian Sustainable Development 14
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Relationship between GDP, Life Quality and Welfare (see Fornallaz, 1990, p. 33)

The curve starts at a point, where a small increase in GDP contributes to a big
increase in Life Quality. This development has a Limit. It proceeds until an increase in
GDP can only be realized by a decrease of Life Quality (see Present Development).
The result can be an increasing resource depletion and environmental degradation.
At this point, when achieving a sufficient material supply, it should be of interest to
expand the immaterial supply in order to obtain more Life Quality (Target
Development).

This development should be possible in developed countries where a sufficient

material supply is guaranteed. A minimum of material supply is necessary to sustain
human life, such as in developing countries. As a consequence, only developed
countries have the possibility of conserving the environment adequately. This
circumstance leads to a paradox, formulated by some scientist: “As long as the
satisfaction of needs has not already reached a minimum amount, people have to
exploit their environment in order to reach a situation when minimum life quality is
reached and environmental protection is possible. So satisfaction of needs is a
prerequisite of environmental conservation.”

The Environmental Kuznets Curve (EKC) comes to the same conclusion:

Dina Barbian Sustainable Development 15
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The relationship between Environmental Degradation and Income per Capita is

shown in the figure. Countries with a low per Capita Income has an increasing
environmental influence, countries with a high per Capita Income reach a situation
with decreasing environmental impact. The consequence is that only countries with a
high per Capita Income can implement environmental precautions effectively.

World countries have to realize a minimum Life Standard for environmental

conservation strategies. At the same time it is also necessary when reaching a high
standard of Life Quality to limit the environmental impact. A maximum Life Quality is
dependent on the environmental Carrying Capacity.

1.4 Qualitative Economic Growth

Environmental assets play a role in the concept of qualitative growth. “Qualitative
Growth” is often defined as a growth, in which the per Capita Income results in an
increasing satisfaction of needs by sustaining the present environmental quality or by
increasing it.

How can we transform the global economy from a system striving for unlimited
quantitative growth, which is manifestly unsustainable, to one that is ecologically
sound without generating human hardship through more unemployment?

From the ecological point of view, the distinction between ‘good’ and ‘bad’ economic
growth is obvious. Bad growth is growth of production processes and services which
externalize social and environmental costs that are based on fossil fuels, involve toxic
substances, deplete our natural resources, and degrade the Earth’s ecosystems.
Good growth is growth of more efficient production processes and services which
fully internalize costs that involve renewable energies, zero emissions, continual
recycling of natural resources, and restoration of the Earth’s ecosystems.
Dina Barbian Sustainable Development 16
and Macroeconomics

A few steps toward Qualitative Growth (according to Fritjof

Capra, 2009):
1. Need to be formulated by multi-disciplinary teams
2. Tax systems need to be restructured
3. Companies need to reassess their production processes
4. Reforming international finance and monetary systems

1.5 “Growth” and “Development”

Leading American economist Herman Daly illustrates the fundamental difference
between growth and development by these definitions:

• Growth – the quantitative increase in size or throughput of biophysical matter.

Daly has argued that economic growth is based on the “limitless
transformation of natural capital into man-made capital”.
• Development – the qualitative improvement in economic welfare from
increased quality of goods and services as defined by their ability to increase
human well-being. This infers promoting increased economic activity only
insofar as it does not exceed the capacity of the ecosystem to sustain it.

2. Sustainable Development and the Ecology

Three Strategies for Integrating Ecology and Economics (by Daly, H.E. and Farley,
J., Ecological Economics, 2011, p.51.):

In this course the circular model is defined as the economic system. The economic
system is a subsystem of the ecological system:
Dina Barbian Sustainable Development 17
and Macroeconomics
Dina Barbian Sustainable Development 18
and Macroeconomics

IV. Sustainable Development – A New Approach?

1. Description

Sustainability aims a development that is sustainable. The focus is human life, so

man is at the center of interest. Man is a major part of the Economic System and
absolutely dependent on an Environmental System. When searching for a new
approach it is necessary to examine the role of the environmental system. Future
generations should be considered thus intergenerational equity is essential. All
generations, present and future should have the same access to environmental
resources and same possibilities to satisfy their needs. So principles of equality are
to be considered. Development applies to humans as a whole, so a holistic concept
is needed. How long should a Sustainable Development last?

2. Principles and Concept

2.1 Anthropocentrism

From Rio Declaration:

Principle 1 of the Rio declaration: Human beings are at the centre of concerns for
sustainable development. They are entitled to a healthy and productive life in
harmony with nature.

Sustainability points out an anthropocentric point of view. Anthropocentrism means

that the humans are in the center of the debate. Sustainability focuses on humans.
Humans are absolutely dependent on natural resources and on a healthy ecological
system.

2.2 Nature Conservation

Conservation of Species is the reason why humans care first for their own life and
then for Nature. But man is only “complete” if he protects Nature adequately. So it is
necessary that the Ecological System plays an important role when finding principles
for sustainability.
Dina Barbian Sustainable Development 19
and Macroeconomics

2.3 Justice and Equality

Justice can only exist within the coordinates of equality. This basic view can be
elaborated in many different ways, according to what goods are to be distributed and
how they are to be distributed equally between individuals, families, nations, races,
and species. It affirms that freedom and justice without equality are hollow and that
equality itself is the highest justice.

Pearce (1988) differentiates between three sorts of justice:

- Intragenerational Justice
- Intergenerational Justice
- Justice to Nature

Sustainability focuses on humans of all generations, present and future. All

generations should have access to the same possibility of satisfying needs.

Problem: How can we allocate resources between the present and future
generations? Future generations are not represented in the process of making
decisions today.

Problems of equity:

- All use of natural resources, especially of the non-renewables, benefits the

present generations but not future generations.
- Degradation in the quality of environmental resources
- Loss of environmental services performed by natural resources
- Lack of effective access to natural resources
- Irreversible actions such as nuclear accidents harm all generations
- Depletion of resources
- Degradation in environmental quality

Positive:

Improvement in technology

The theory of intergenerational equity according to Edith Brown Weiss (1989):

“At any given time, each generation is both a custodian and trustee of the planet for
future generations and a beneficiary of its fruits. This imposes obligations upon us to
care for the planet and gives us certain rights to use it.”
Dina Barbian Sustainable Development 20
and Macroeconomics

Intragenerational equity is justice in the present generation: How can we expect

impoverished countries to care about future generations, if they cannot even care for
their own people today?

Poverty is a primary cause of ecological degradation. Intergenerational equity

requires wealthy countries, which can afford to protect natural resources without
overexploitation, to assist impoverished ones in realizing access to natural resources
without destruction.

We have a responsibility towards future generations. Each generation is responsible

for the next generation, its own children and grand-children.

The theory is that each generation receives a natural and cultural legacy in trust from
previous generations and holds it in trust for future generations. Obligations: to
conserve natural and cultural resources for future generations, to benefit from the
resources of their ancestors.

2.4 Comprehensiveness

Sustainability affects all countries and all mankind. In most cases environmental
problems (e.g. enhanced greenhouse effect, depletion in the ozone layer) are world
problems. An interdisciplinary approach should be given, because economic theory
alone can’t solve the existing problems.

Sustainable development embodies integration, and understanding and acting on the

complex interconnections that exist between the environment, the economy, and
society. This is not a balancing act or a playing of one issue off against the other, but
recognition of the interdependent nature of these three pillars.
Dina Barbian Sustainable Development 21
and Macroeconomics

2.5 Long-term Durability

How long is long-term? Costanza and Patten (1995) have discussed this question
and came to the conclusion that it does not mean “maintenance forever”, because
“nothing lasts forever, not even the universe”. According to them a “sustainable
system … is thus one that attains its full expected life span within the nested
hierarchy of systems within which it is embedded”. This means that a shortening of
the normal natural lifecycle of systems has to be avoided.

Humans have to take care of future generations, so there is need to protect all
natural resources, especially the non-renewables.

Different developments in countries give the people different chances to secure their
survival and the survival of their children and grand-children. The question about
intergenerational equity and fairness must be discussed. Currently, one quarter of the
world population is using three quarters of the world’s resources.

3. Sustainable Growth?

The Brundtland Report points out that Sustainable Development is a Development,

that respects the limits of nature. Therefore we need a new growth.

Does a Sustainable Growth exist?

Only a few scientists have discussed this question. The most famous is Daly:
“Sustainable Growth: An Impossibility Theorem”:

“Impossibility statements are the very foundation of science. It is impossible to: travel
faster than the speed of light; create or destroy matter-energy; build a perpetual
motion machine, etc. By respecting impossibility theorems we avoid wasting
resources on projects that are bound to fail. Therefore economists should be very
interested in impossibility theorems, especially the one to be demonstrated here,
namely that it is impossible for the world economy to grow its way out of poverty and
environmental degradation. In other words, sustainable growth is impossible.

In its physical dimensions the economy is an open subsystem of the earth

ecosystem, which is finite, nongrowing, and materially closed. As the economic
subsystem grows it incorporates an ever greater proportion of the total ecosystem
into itself and must reach a limit at 100 percent, if not before. Therefore its growth is
not sustainable. The term "sustainable growth" when applied to the economy is a bad
oxymoron—self-contradictory as prose, and unevocative as poetry.

Economists will complain that growth in GNP is a mixture of quantitative and

qualitative increase and therefore not strictly subject to physical laws. They have a
point. Precisely because quantitative and qualitative change are very different it is
Dina Barbian Sustainable Development 22
and Macroeconomics

best to keep them separate and call them by the different names already provided in
the dictionary. To grow means "to increase naturally in size by the addition of
material through assimilation or accretion." To develop means "to expand or realize
the potentialities of; to bring gradually to a fuller, greater, or better state."
When something grows it gets bigger. When something develops it changes. The
earth ecosystem develops (evolves), but does not grow. Its subsystem, the economy,
must eventually stop growing, but can continue to develop. The term "sustainable
development" therefore makes sense for the economy, but only if it is understood as
"development without growth" - i.e., qualitative improvement of a physical economic
base that is maintained in a steady state by a throughput of matter-energy that is
within the regenerative and assimilative capacities of the ecosystem. Currently the
term "sustainable development" is used as a synonym for the oxymoronic
"sustainable growth." It must be saved from this perdition.

Politically it is very difficult to admit that growth, with its almost religious connotations
of ultimate goodness, must be limited. But it is precisely the nonsustainability of
growth that gives urgency to the concept of sustainable development. The earth will
not tolerate the doubling of even one grain of wheat 64 times, yet in the past two
centuries we have developed a culture dependent on exponential growth for its
economic stability. Sustainable development is a cultural adaptation made by society
as it becomes aware of the emerging necessity of nongrowth. Even "green growth" is
not sustainable. There is a limit to the population of trees the earth can support, just
as there is a limit to the population of humans and of automobiles. To delude
ourselves into believing that growth is still possible and desirable if only we label it
"sustainable" or color it "green" will just delay the inevitable transition and make it
more painful.”

From European Commission (see

http://ec.europa.eu/europe2020/priorities/sustainable-growth/index_en.htm):

Sustainable growth means:

• building a more competitive low-carbon economy that makes efficient,

sustainable use of resources
• protecting the environment, reducing emissions and preventing biodiversity
loss
• capitalizing on Europe's leadership in developing new green technologies
and production methods
• introducing efficient smart electricity grids
• harnessing EU-scale networks to give our businesses (especially small
manufacturing firms) an additional competitive advantage
• improving the business environment, in particular for SMEs
• helping consumers make well-informed choices.
Dina Barbian Sustainable Development 23
and Macroeconomics

4. Summary
Dina Barbian Sustainable Development 24
and Macroeconomics

V. Why Sustainable Development?

1. Main Problems: Overpopulation and Environmental Degradation

1.1 Industrialized and Developing Countries

The world can be divided into industrialized and developing countries. Each country
has more or less their own unsustainable growth path due to their specific problems,
e.g. overpopulation or satisfying of needs, depletion of resources and waste
accumulation etc.

It is necessary to achieve a situation in which people satisfy their needs without

destroying the environment.

To achieve sustainable development is the work of mankind, especially in

industrialized countries, because they have money and technical know-how, but they
also waste the most resources and are the main polluters of global environmental
devastation.

Differences between industrialized and developing countries are shown in a gradient

of extreme consumption and production. About 20% of the world population lives in
industrialized countries, their consumption of goods is about 80% of world goods.
The consequences are a high accumulation of waste; they cause nearly 90% of the
waste in the world.

Differences can be noticed in the rate of population growth, life expectancy, health
care etc. Underdeveloped countries have a high population growth rate (about 45%
are under 15 years) and an average life expectancy of 66 years (see World Bank,
2010,
http://data.worldbank.org/indicator/SP.DYN.LE00.FE.IN/countries/1W?display=map).

Life expectancy is a fundamental indicator of both well-being and poverty.

Life expectancy is projected to increase in developed and developing countries in

future years, according to the United Nations. For the world as a whole, life
expectancy at birth rose from 47 years in 1950-1955 to 69 years in 2005-2010. Over
the next 40 years, life expectancy at birth is expected to continue on a similar path. At
the global level, it is projected to reach 76 years in 2045-2050 and 82 years in 2095-
2100. By the end of the century, people in developed countries could live on average
around 89 years, compared to about 81 years in developing regions.

Life expectancy is projected to increase in the world’s least developed countries

(LDCs), which include many countries highly affected by HIV/AIDS. Life expectancy
at birth in the LDCs was estimated to be 58 years in 2005-2010 but is expected to
Dina Barbian Sustainable Development 25
and Macroeconomics

increase to about 70 years in 2045-2050, and 78 years by 2095-2100 (United

Nations, 2013).

Infant mortality is about 7 to 10 times higher than in industrialized countries.

There are still 1.4 billion people living in poverty, although this represents a decline
from the 1.9 billion in 1981 (UN, Poverty Report 2010). Poverty is the principal cause
of hunger and undernourishment. According to the most recent estimates of the Food
and Agriculture Organization of the United Nations (FAO, 2009), the number of
hungry people worldwide is 963 million, or about 14.6 per cent of the estimated world
population of 6.6 billion. Most of the undernourished live in developing countries.

The poorest 40 % of the world’s population account for only 5 % of global income. On
the other hand, the richest 20 % account for 75 % of world income (United Nations
Development Programme, 2007).

Overpopulation combined with human consumption rates and patterns in recent

history are rapidly depleting the Earth’s natural resources. The UNEP Global
Environmental Outlook 2007 Report declares that while the human ecological
footprint demands 21.9 hectares of land per person, the planet has a biological
capacity for only 15.7 hectares per person. By 2025, 1.6 billion people will live in
countries with absolute water scarcity, while decreasing land productivity and
biodiversity will threaten billions of people. The UNDP’s annual Human Development
Report depicts a decline in social capital in the developing world and an alarming
growth in economic disparity.

The world population has grown tremendously over the past two thousand years. In
1999, the world population passed the six billion mark.

According to the United Nations, ("2010 Revision of the World Population Prospects")
world population has reached 7 Billion on October 31, 2011. World population for
2015 is estimated at 7,324,782,000.
Dina Barbian Sustainable Development 26
and Macroeconomics

The chart shows past world population data back to the year 1750 and future world
population projections through the year 2050.

World Population Growth

Year Population
1 200 million
1000 275 million
1500 450 million
1650 500 million
1750 700 million
1804 1 billion
1850 1.2 billion
1900 1.6 billion
1927 2 billion
1950 2.55 billion
1955 2.8 billion
1960 3 billion
1965 3.3 billion
1970 3.7 billion
1975 4 billion
1980 4.5 billion
1985 4.85 billion
1990 5.3 billion
1995 5.7 billion
1999 6 billion
2006 6.5 billion
2009 6.8 billion
2011 7 billion
2025 8 billion
2043 9 billion
2083 10 billion
Dina Barbian Sustainable Development 27
and Macroeconomics

United Nations, Department of Economic and Social Affairs, Population Division

(2013): World Population Prospects: The 2012 Revision, Press Release: "World
Population to reach 9.6 billion by 2050 with most growth in developing regions,
especially Africa".

Effects of human overpopulation (from Wikipedia,

http://en.wikipedia.org/wiki/Overpopulation#cite_note-202):

• Inadequate fresh water for drinking as well as sewage treatment and effluent
discharge. Some countries, like Saudi Arabia, use energy-expensive
desalination to solve the problem of water shortages.
• Depletion of natural resources, especially fossil fuels
• Increased levels of air pollution, water pollution, soil contamination and
noise pollution. Once a country has industrialized and become wealthy, a
combination of government regulation and technological innovation causes
pollution to decline substantially, even as the population continues to grow.
• Deforestation and loss of ecosystems that sustain global atmospheric
oxygen and carbon dioxide balance; about eight million hectares of forest are
lost each year.
• Changes in atmospheric composition and consequent global warming
• Irreversible loss of arable land and increases in desertification
Deforestation and desertification can be reversed by adopting property rights,
and this policy is successful even while the human population continues to
grow.
• Mass species extinctions from reduced habitat in tropical forests due to
slash-and-burn techniques that sometimes are practiced by shifting cultivators,
especially in countries with rapidly expanding rural populations; present
extinction rates may be as high as 140,000 species lost per year. As of 2008,
the IUCN Red List lists a total of 717 animal species having become extinct
during recorded human history.
• High infant and child mortality. High rates of infant mortality are caused by
poverty. Rich countries with high population densities have low rates of infant
mortality.
• Intensive factory farming to support large populations. It results in human
threats including the evolution and spread of antibiotic resistant bacterial
diseases, excessive air and water pollution, and new viruses that infect
humans.
• Increased chance of the emergence of new epidemics and pandemics. For
many environmental and social reasons, including overcrowded living
conditions, malnutrition and inadequate, inaccessible, or non-existent health
care; the poor are more likely to be exposed to infectious diseases.
• Starvation, malnutrition or poor diet with ill health and diet-deficiency
diseases (e.g. rickets). However, rich countries with high population densities
do not have famine.
• Poverty coupled with inflation in some regions and a resulting low level of
capital formation. Poverty and inflation are aggravated by bad government and
bad economic policies. Many countries with high population densities have
eliminated absolute poverty and keep their inflation rates very low.
• Low life expectancy in countries with fastest growing populations
Dina Barbian Sustainable Development 28
and Macroeconomics

• Unhygienic living conditions for many based upon water resource depletion,
discharge of raw sewage and solid waste disposal. However, this problem can
be reduced with the adoption of sewers. For example, after Karachi, Pakistan
installed sewers, its infant mortality rate fell substantially.
• Elevated crime rate due to drug cartels and increased theft by people
stealing resources in order to survive
• Conflict over scarce resources and crowding, leading to increased levels of
warfare
• Less Personal Freedom / More Restrictive Laws. Laws regulate interaction
between humans. Law "serves as a primary social mediator of relations
between people." The higher the population density, the more frequent such
interactions become, and thus a need for more laws and/or more restrictive
laws to regulate these interactions develops. It is even speculated that
democracy is threatened due to overpopulation, and could give rise to
totalitarian style governments.

1.2 Threats to Sustainability: Environmental Degradation

Poverty leads to Population Growth and is a primary cause of ecological degradation.
People are forced to overexploit the resources in order to satisfy their own basic
needs.

More threats to sustainability:

1. Resource depletion
2. Waste accumulation
3. Loss of resilience
4. Biodiversity loss (see http://www.iucn.org/)
Dina Barbian Sustainable Development 29
and Macroeconomics

VI. Major Objective: A Sustainable World

1. Our World and our Limits

1.1 Basics

The human species inhabits a unique planet – planet earth. The earth has existed for
about 4.6 billion years. Humans have inhabited this planet for perhaps only 3 million
years. With our technology we are able to destroy the environment, but we also have
the capability to improve the conditions for future generations. For about 200 years
now, man has been aware that he is overexploiting nature and its resources.

The development of life and vegetation is a dynamic process, in which several

animals and plants came into existence by adapting to changes and some have
become extinct.

The ecosystem Earth has several spheres:

Planet earth can be seen “as comprising four main spheres:

1. Lithosphere: the solid outer shell of the earth;

2. Hydrosphere: the water on or near the surface of the earth;
3. Atmosphere: the gases surrounding the earth’s surface;
Dina Barbian Sustainable Development 30
and Macroeconomics

4. Biosphere: living organisms and their environment.” (Common and

Stagl, 2005, p. 22)

Interfaces between environment and human beings:

1.2 Natural Elements Necessary to Sustain Life and Carrying Capacity

1.2.1 Specification of the Natural Elements

Dina Barbian Sustainable Development 31
and Macroeconomics

Influencing Factors to the Natural Elements (Soil, Water, Air and Ozone Layer):

1.2.2 Carrying Capacity

Carrying capacity refers to the maximum abundance of a species that can be

sustained within a given area of habitat. When an ideal population is at equilibrium
with the carrying capacity of its environment, the birth and death rates are equal, and
size of the population does not change. Carrying capacity is never static.

Supporters of the concept argue that humans, like every species, have a finite
carrying capacity. Animal population size, living standards, and resource depletion
vary, but the concept of carrying capacity still applies. The carrying capacity of Earth
has been studied by computer simulation models like World3 (see Forrester, 1971).

Carrying capacity, at its most basic level, is about organisms and food supply, where
"X" amount of humans need "Y" amount of food to survive. If the humans neither gain
nor lose weight in the long run, the calculation is fairly accurate. If the quantity of food
is invariably equal to the "Y" amount, carrying capacity has been reached. Humans,
with the need to enhance their reproductive success, understand that food supply
can vary and also that other factors in the environment can alter humans' need for
food.

Technology is an important factor in the dynamics of carrying capacity. Currently, the

use of fossil fuels has artificially increased the carrying capacity of the world by the
use of stored sunlight, albeit at the expense of many others.
Dina Barbian Sustainable Development 32
and Macroeconomics

Agricultural capability on Earth expanded in the last quarter of the 20th century. But
now there are many projections of a continuation of the decline in world agricultural
capability (and hence carrying capacity) which began in the 1990s.

Development of the Carrying Capacity for Humans:

10,000 B.C. Hunters and Gatherers 6 million Humans

1 A.D. Hunter and Gather, simple Agriculture 300 million Humans
appr. 1780 A.D. Pre-industrial agrarian society 750 million Humans
appr. 1830 A.D. Early industrial societies 1 billion Humans
appr. 2000 A.D. Modern industrial societies > 6 billion Humans

One way to estimate human demand compared to the ecosystem's carrying capacity
is "Ecological Footprint" accounting (see
http://en.wikipedia.org/wiki/Ecological_Footprint).

Postel (1994)

“The earth’s capacity to support humans is

determined not just by our most basic food
requirements but also by our levels of
consumption of a whole range of resources, by the
amount of waste we generate, by the technologies
we choose for our varied activities, and by our
success at mobilizing to deal with major threats.”

One of the most important books in this field is from Wackernagel and Rees (1996).
They estimated the footprint for the global economy for each year from 1961 to 1999.
They found out that the ratio of the footprint size to the land actually available
increased from appr. 0.7 (in 1961) to appr. 1.2 (in 1999). This means that the world
needs 1.2 earths to run their global economy. There are differences in the use
between the countries. The USA uses more than e.g. Togo. If all of the world’s
people were to consume at the US level, it would require a few earths to support
them.

In 2050 it is estimated that we will need 3 earths.

Dina Barbian Sustainable Development 33
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1.2.3 The Natural Elements Necessary to Sustain Life and a Simple World
Model
In this workshop we use a simple model of the world in order to find feasible
strategies for Sustainable Development.

The simple world model consists of 5 basic natural resources: These are the sun, the
soil, the air, the water and the ozone layer. I will call them the five natural elements
necessary to sustain life. All our lives are controlled by one or more of these
resources.

Man can influence only 4 of these resources. So he is responsible for them. He has
influence on the soil quality, water quality, air quality and the ozone layer.

But what are the main influences on air, water, soil and the ozone layer? The way we
are satisfying our needs has a major influence on these resources.

Soil:

Our world has a limited surface. There is only limited land for agriculture and
cultivation. Our earth can produce only a limited amount of food for humans and
animals.

What are the main negative influences that cause soil degradation?

Examples: desertification, erosion, wastage

Water:
Dina Barbian Sustainable Development 34
and Macroeconomics

99.5 % of our biosphere and 72 % of the earth’s surface consists of water. Humans
need water for several usages. Only 2 ‰ of the water on the earth is potable. We
have enough water for all; the problem is only the availability.

A big problem is the increase in water pollution. Water is an important natural

resource that covers 71% of the Earth's surface.

Air:

There is enough air for all human beings. Pollution is the main reason for diminishing
air quality. What are the consequences? Regions with a high air pollution cause harm
and discomfort to humans and other living organisms.

The air is able to regenerate.

Ozone layer:

The ozone layer is a layer of the Earth’s atmosphere which contains relatively high
concentrations of ozone. This layer absorbs 97-99 % of the sun’s high frequency
ultraviolet light, which can damage life on Earth. So the ozone layer makes life
possible.

The ozone layer can be depleted by various kinds of free radicals. Over
approximately 5 % of the Earth’s surface, around the north and south poles, much
larger (but seasonal) declines have been seen; these are the ozone holes.

In order to sustain human life on earth it is essential to protect the ozone layer.

Sun:

The Sun is the star at the center of the Solar System. The energy of this sunlight
supports almost all life on Earth and drives Earth’s climate and weather. Humans
have long recognized the Sun’s role in supporting life on Earth.

The way in which we satisfy our needs has a major influence on our resources. To
satisfy our needs we have to use nature’s resources and in the same way we
produce waste.

Satisfying the needs of a growing world population is a big challenge.

Population exceeding the carrying capacity of an area of environment is called

overpopulation. Spikes in human population can cause problems such as pollution
and traffic congestion. A growing world population needs more food and so on.
Dina Barbian Sustainable Development 35
and Macroeconomics

Solar Radiation:

(source: http://www.physicalgeography.net/fundamentals/7f.html)

1.3 Impact of Interference with Nature

Impact of Interference with Nature

Extraction Insertion
of Resources of Wastes
from Environment into Environment

1.3.1 Extraction of Resources from Environment

Resources

Stock Resources Flow Resources

Renewables Non-Renewables
Dina Barbian Sustainable Development 36
and Macroeconomics

Resources can be distinguished into stock (renewable and non-renewable) and flow
resources. Explanation according to Common and Stagl (2005, p.94): “With flow
resources, the amount used today has no implications for the amount that could be
used in the future. With stock resources, the amount used today does have
implications for future availability. In the case of a non-renewable resource, there is
no rate of use that can be sustained forever. In the case of a renewable resource,
there are rates of use that can be indefinitely maintained.”

Examples for flow resources: solar radiation, wave power, wind power, hydro power,
tidal power.

Examples for stock resources:

Renewable resources: are biotic populations which can reproduce
Non-renewable resources: natural growth is zero; minerals and fossil fuels

The Management of Renewable Resources

(according to Pearce, D.W. and Turner, R.K., 1990, p. 241 ff.; and Barbian, D., 2001, p.112 ff.)

Basics

− renewable resources are biotic populations which can reproduce

− stock (X) is not fixed; can be increased as well as decreased
− stock (X) will increase if it is allowed to regenerate
− if regeneration capability is kept, there is a never ending possibility to use
renewables for all generations, present and future

Stock of Renewables

− all renewables follow a logistic function

− there is a maximum stock (Xmax), also called “carrying capacity”: no
renewable can regenerate to levels above the carrying capacity of the
ecosystem in which it exists
− there is a minimum stock (Xmin), also called “safe minimum standard” or
“critical level”: a minimum stock level of Xmin should be guaranteed, otherwise
the resource is threatened with extinction
− when stock is lower than Xmin, then the resource dies out
Dina Barbian Sustainable Development 37
and Macroeconomics

− if stock size is maintained at XMSY, the rate of growth is the fastest possible,
and the sustainable yield is greatest

Rate of Growth

− rate of growth ( ) means “the rate of change in X with respect to time”

− first the rate of growth increases, reaching a maximum (at MSY) and then
declines as the stock increases until it reaches the carrying capacity of its
environment at Xmax
− rate of growth at Xmin and Xmax of this resource is zero
− rate of growth at XMSY is at its highest level, also called the “maximum
sustainable yield (MSY)”
− MSY is the most we can take from the resource on a sustainable basis,
without reducing its long-term stock (MSY-Definition: “The MSY is defined as
the maximal possible catch such that the population biomass can continue to
regenerate.” (Bousquet, Duchesne and Rivest, 2008))

Rate of Harvesting

− harvesting within regeneration rate is possible

− if the rate of harvest exceeds the rate of natural growth of the resource, the
renewable disappears; this can also happen if the resource population falls
below some critical level (Xmin) (e.g. by over-harvesting)
− maximum rate of harvest is MSY; if it is higher the population dies out
− XMSY is in the context of economics the optimal stock; at this level the highest
benefit could be achieved
Dina Barbian Sustainable Development 38
and Macroeconomics

Function of Regeneration for Renewables:

Dina Barbian Sustainable Development 39
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Harvest of Renewables:

Harvest Rate = MSY is the highest feasible harvest

Case A ( X = XMSY )
• no stock reduction
• rate of harvest at rate of natural regeneration
• stock of renewables is available for future generations

Case B ( X min < X < XMSY )

• partial stock reduction
• consumption is higher than natural regeneration
• reduced stock of renewable with reduced natural regenerative ability

Case C ( X = X min)
• stock is heavily reduced
• natural regenerative ability is just zero
• no availability for future generations

Case D ( XMSY < X < X max)

• partial stock reduction
• consumption is higher than natural regeneration
• reduced stock of renewable, but with remaining natural regenerative ability

Case E ( X = X max)
• stock is at saturation level
• natural regenerative ability is just zero
• remaining availability for future generations

Harvest of Renewable Resources according to time t

Stock of Renewable Resources ( Xt − 2)

Growth of the Stock ( Xt − 1) Harvest ( Ht − 1)

Residual Stock of Renewables ( X tR )

Formula: X t = X t − 2 + X t −1 − H t −1
R
Dina Barbian Sustainable Development 40
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Dina Barbian Sustainable Development 41
and Macroeconomics

The Management of Non-Renewable Resources

Harvest of Non-Renewables according to time t:

Stock of Non-Renewables ( X t − 2)

Harvest ( H t −1)

Residual Stock of Non-Renewables ( X tR )

Formula: X t = Xt − 2 − Ht − 1
R

Consequence
• every consumption by actual generation reduces the availability of future
generations
• the higher actual consumption rate, the lower future availability

Further problems
• no secure information about existing stocks
• uncertainty about future preferences, demands, technical substitution
Dina Barbian Sustainable Development 42
and Macroeconomics

Consequence: use by no generation; no benefits for any generation

Better: Regulations on use

Consequence: Dilemma Situation: every consumption today inhibits future use and
vice versa; in each case there is a given preference for one generation which should
be avoided when implementing sustainability

Possible Solutions:

- Substitution of Non-Renewables by Renewables

- Increase in ecological efficiency
Dina Barbian Sustainable Development 43
and Macroeconomics

1.3.2 Insertion of Wastes into Environment

Common and Stagl (2005, p. 337):
Waste: solid, fluid, gaseous

Common and Stagl (2005, p. 98):

Waste: unwanted by-product of economic activity

Emission: flow of wastes into environment

Pollution: wastes can lead to pollution, when

the emission is harmful to any living organism

Examples: acid rain, ozone depletion, widespread desertification, species loss,

depletion of ocean resources, wastage, waste accumulation

Management of Wastes:

waste treatment: the modification of waste before its discharge into the environment
so as to reduce the damage arising (Common and Stagl, 2005, p. 106)

Recycling

Recycling has two consequences:

1. Amount of waste inserted into the environment is reduced.

2. Amount of corresponding resource extracted from the environment is reduced.

Dina Barbian Sustainable Development 44
and Macroeconomics

1.4 Influencing Factors on the Ecological System

1.4.1 Population

1 A.D. 1650 1850 1950 1980

1600 years 200 years 100 years 30 years

= 250 million

Malthus (see Chapter II.2.1):

According to Malthus, population growth would reach such a level that the land would
no longer be able to support it, and widespread starvation would occur. When
Malthus lived, the earth population was 1 billion. Malthus proposed an adaption of
population increase to food supply.

When talking about world population and satisfaction of needs, urbanization should
also be mentioned (see http://en.wikipedia.org/wiki/Urbanization):

Urbanization is the physical growth of urban areas as a result of global change.

Urbanization is also defined by the United Nations as movement of people from rural
to urban areas with population growth equating to urban migration. The United
Dina Barbian Sustainable Development 45
and Macroeconomics

Nations projected that half of the world's population would live in urban areas at the
end of 2008.

As more and more people leave villages and farms to live in cities, urban growth is
increasing. The rapid growth of cities like Chicago in the late 19th century and
Mumbai a century later can be attributed largely to rural-urban migration. This kind of
growth is especially commonplace in developing countries.

Percentage of World Population: Urban vs. Rural.

Urbanization rates vary from country to country. The United States and United
Kingdom have a far higher urbanization level than China, India, Swaziland or Niger,
but a far slower annual urbanization rate, since a lower percentage of the population
live in rural areas.

The world is undergoing the largest wave of urban growth in history. In 2008, for the
first time in history, more than half of the world’s population will be living in towns and
cities. By 2030 this number will swell to almost 5 billion, with urban growth
concentrated in Africa and Asia. While mega-cities have captured much public
attention, most of the new growth will occur in smaller towns and cities, which have
fewer resources to respond to the magnitude of the change.

Economic effects of Urbanization

Urbanization is often viewed as a negative trend, but can in fact, be perceived simply
as a natural occurrence from individual and corporate efforts to reduce expense in
commuting and transportation while improving opportunities for jobs, education,
housing, and transportation. Living in cities permits individuals and families to take
advantage of the opportunities of proximity, diversity, and marketplace competition.
Dina Barbian Sustainable Development 46
and Macroeconomics

Environmental effects of Urbanization

The urban heat island has become a growing concern and is increasing over the
years. The urban heat island is formed when industrial and urban areas are
developed and heat becomes more abundant. In rural areas, a large part of the
incoming solar energy is used to evaporate water from vegetation and soil. In cities,
where less vegetation and exposed soil exists, the majority of the sun’s energy is
absorbed by urban structures and asphalt. Hence, during warm daylight hours, less
evaporative cooling in cities allows surface temperatures to rise higher than in rural
areas. Additional city heat is given off by vehicles and factories, as well as by
industrial and domestic heating and cooling units. This effect causes the city to
become 2 to 10o F (1 -6o C) warmer than surrounding landscapes.

Population of the 29 urban agglomerations that are expected to become mega-cities in 2025:

Source: United Nations, Department of Economic and Social Affairs, Population Division: World Urbanization
Prospects, the 2009 Revision. New York, 2010.
Dina Barbian Sustainable Development 47
and Macroeconomics

1.4.2 Satisfying Needs

Need: something that is necessary for

organisms for survival and to live a healthy
life

Want: something that a person would like

to have

Humans have to use natural resources when satisfying their needs. But what are the
limits of satisfaction?

Maslow's hierarchy of needs (from http://www.abraham-

maslow.com/m_motivation/Hierarchy_of_Needs.asp)

Physiological Needs

Physiological needs are those required to sustain life, such as:

• Air
• Water
• Food
• Sleep

If these fundamental needs are not satisfied then one will surely be motivated to
satisfy them. Higher needs such as social needs and esteem are not recognized until
one satisfies the needs basic to existence.
Dina Barbian Sustainable Development 48
and Macroeconomics

Safety Needs

Once physiological needs are met, one's attention turns to safety and security in
order to be free from the threat of physical and emotional harm. Such needs might be
fulfilled by:

• Living in a safe area

• Medical insurance
• Job security
• Financial reserves

According to the Maslow hierarchy, if a person feels threatened, needs further up the
pyramid will not receive attention until that need (threat) has been resolved.

Social Needs

Once a person has met the lower level physiological and safety needs, higher
level motivators awaken. The first level of the higher level needs are social needs.
Social needs are those related to interaction with others and may include:

• Friendship
• Belonging to a group
• Giving and receiving love

Esteem Needs

After a person feels that they "belong", the urge to attain a degree of importance
emerges. Esteem needs can be categorized as external motivators and internal
motivators.

Internally motivating esteem needs are those such as self-esteem, accomplishment,

and self respect. External esteem needs are those such as reputation and
recognition.

Some examples of esteem needs are:

• Recognition (external motivator)

• Attention (external motivator)
• Social Status (external motivator)
• Accomplishment (internal motivator)
• Self-respect (internal motivator)

Maslow later improved his model to add a layer in between self-actualization

and esteem needs: the need for aesthetics and knowledge.
Dina Barbian Sustainable Development 49
and Macroeconomics

Self-actualization

Self-actualization is the summit of Maslow's motivation theory. It is about the quest

for reaching one's full potential as a person. Unlike lower level needs, this need is
never fully satisfied; as one grows psychologically there are always new opportunities
to continue to grow.

Self-actualized people tend to have motivators such as:

• Truth
• Justice
• Wisdom
• Meaning

Self-actualized persons have frequent occurrences of peak experiences, which are

energized moments of profound happiness and harmony. According to Maslow, only
a small percentage of the population reaches the level of self-actualization.

1.4.3 How much is enough? What makes people happy?

The answer is the result of the work of psychologists (and a few economists). They
tried to measure how satisfying various human needs contributes to happiness. They
have been studying peoples’ feelings and investigating what makes them happy.

According to Common and Stagl (2005, p. 200) “happiness is a state of mind, of

feeling, and psychologists ask people how they feel”.

The results are that people with a high happiness scores are more likely to:

- Be rated as happy individuals by family and friends

- Be more optimistic about the future

- Be less likely to attempt suicide

- Recall more positive than negative life events

- Smile more during social interaction

- Be more healthy
Dina Barbian Sustainable Development 50
and Macroeconomics

2. Implementing Sustainability

2.1. Protection of Natural Elements Necessary to Sustain Life

If sustainability is to be implemented in the world, some basic conditions are required.

First of all existing pollution and devastation should to be reduced.

The main challenge is to protect the controllable natural elements (air, water, soil,
ozone layer).

The economic system is absolutely dependent from the ecological system.

• respect regenerative ability of ecological

system
• respect assimilative ability of ecological
system to absorb wastes
• respect the natural means of livelihood
(soil, air, water, ozone layer)

2.2. Reduction of Bad Influences for Ecosystem

Strategies for Reducing Environmental Problems:

1. Complying with limit values
2. Improving environmental efficiency
3. Respecting the natural regenerative ability

The environment is already degraded by many wastes. Environmental degradation is

of many types:

Dimension Environmental Problems

International Ozon hole, enhanced greenhouse

effect, rainforest deforestation, ocean
overfishing, plastic waste in oceans
National Acid rain, soil degradation, air pollution,
water degradation

Regional Waste, waste water, exhaust gases,

noise
Dina Barbian Sustainable Development 51
and Macroeconomics

Proposal for the Intergenerational Use of Non-Renewables:

Each generation can use an amount between 0 (zero) and the maximum stock of the
Non-Renewable.

It is better for each generation to use the Non-Renewables than not to use them.

It is necessary to avoid over-exploitation.

A possible solution:

Each generation is allowed to use the same percentage of the Non-Renewables.

That would be in accordance with a nearly intergenerational equity of use. The result
is a relative intergenerational equity, but not an absolute intergenerational equity.

An appropriate removal rate should be defined. A use under 50 % of the stock is

recommended unless the stock would be overexploited.
Dina Barbian Sustainable Development 52
and Macroeconomics
Dina Barbian Sustainable Development 53
and Macroeconomics

2.3. Consequences for World Countries

The protection of the natural elements to sustain life has the highest importance.

Which are the consequences and affordable changes for

Transportation, Food, Energy?

Developing countries have to use natural resources and produce waste because they
have to satisfy their really basic needs. Poverty is the main problem in these
countries, so poverty reduction is the first strategy towards sustainability. (A number
of impoverished countries have recently received partial or full cancellation of loans
from foreign governments and international financial institutions, such as IMF and
World Bank.)

Industrialized countries have already reached a high level of satisfaction of needs. An

increasing level of consumption doesn’t necessary lead to more welfare. There is the
need to think about what is really necessary for life.

2.4. A Sustainable World

Is a sustainable world feasible? How high is our carrying capacity?

A Sustainable World cares for all Human Beings in all Countries. Natural
Elements Necessary to Sustain Life are to be protected. Impact of
Interferences to Nature are allowed within the Regenerative Capacity
without Harming Nature or Poeple‘s Health. A Sustainable World is of
Long-term Durability.

5 Parts:
Anthropocentrism, Nature Conservation, Justice and Equality, Holistics,
Long-term durability

3 Pillars:
Economy, Ecology, Social Objectives

Protection of Air, Water, Soil and Ozone Layer.

Reduction of Negative Impacts caused by Population Growth and

Satisfaction of Needs.

Some strategies for businesses: cradle-to-cradle; design-to-recycle

Dina Barbian Sustainable Development 54
and Macroeconomics

VII. Summary and Conclusions

The starting point of the theory foundation is the definition of “Sustainable

Development” from the World Commission on Environment and Development (1987).
By developing some descriptors we will try to find strategies for the implementation of
sustainable development in the world.

A sustainable world can’t be reached immediately. It takes time, maybe long time.

But ultimately humans are responsible for a sustainable world and for the
implementation of suitable strategies.

Important internet pages:

• World Bank: www.worldbank.org

• International Monetary Fund: www.imf.org

• United Nations Conference on Trade and Development (UNCTAD): www.unctad.org

• United Nations Development Programme (UNDP): www.undp.org

• Food and Agricultural Organization (FAO): www.fao.org

• World Trade Organization (WTO): www.wto.org

• World Health Organization (WHO): www.who.int

• United Nations Industrial Development Organization (UNIDO): www.unido.org

• International Labour Organization (ILO): www.ilo.org

Some important articles:

Articles
Amir, S. (1994), The role of thermodynamics in the study of economic and ecological
systems. Ecological Economics 10, p. 125-142.
Amir, S. (1995), The environmental cost of sustainable welfare. Ecological Economics 13, p.
27-41.
Arrow, K. et al. (2004) Are we consuming too much? Journal of Economic Perspectives 18,
p. 147-172.
Ayres, R.U. (1996), Limits to the growth paradigm. Ecological Economics 19, p. 117-134.
Azqueta, D. and Sotelsek, D. (2007), Valuing nature: From environmental impacts to natural
capital. Ecological Economics 63, p. 22-30.
Dina Barbian Sustainable Development 55
and Macroeconomics

Boyce, J.K. (1994), Inequality as a cause of environmental degradation. Ecological

Economics 11, p. 169-178.
Callens, I. and Tyteca, D. (1999), Towards indicators of sustainable development for firms -
A productive efficiency perspective. Ecological Economics 28, p. 41-53.
Clarke, M. and Lawn, P. (2010), The end of economic growth? A contracting threshold
hypothesis. Ecological Economics 69, p. 2213-2223.
Costanza, R. and Patten, B.C. (1995), Defining and predicting sustainability. Ecological
Economics 15, p. 193-196.

Daly, H.E. (1990), Toward some Operational Principles of Sustainable Development.

Ecological Economics 2, p. 1-6.
Davidson, J. (2000), Sustainable development: Business as usual or a new way of living?
Environmental Ethics 22, p. 25-42.
de Graaf, H.J., Musters, C.J.M. and ter Keurs, W.J. (1996),Sustainable development:
looking for new strategies. Ecological Economics 16, p. 205-216.
Ekins, P. (1993), ‘Limits to growth’ and ‘sustainable development’: grappling with ecological
realities. Ecological Economics 8, p. 269-288.
England, R. W. (1998) Should we pursue measurement of the natural capital stock?
Ecological Economics 27, p. 257-266.
Farber, S.C., Costanza, R. and Wilson, M.A. (2002), Economic and ecological concepts for
valuing ecosystem services. Ecological Economics 41, p. 375-392.
Glasby, G.P. (2002), Sustainable Development: The Need for a new Paradigm.
Environment, Development and Sustainability 4, p. 333-345.

Gowdy, J.M. and McDaniel, C.N. (1995), One world, one experiment: addressing the
biodiversity-economics conflict. Ecological Economics 15, p. 181-192.

Harte, M.J. (1995), Ecology, sustainability, and environment as capital. Ecological

Economics 15, p. 157-164.
Hediger, W. (2000), Sustainable development and social welfare. Ecological Economics 32,
p. 481-492.
Hinterberger, F., Luks, F. and Schmidt-Bleek, F. (1997), Material flows vs. ‘natural capital’ -
What makes an economy sustainable? Ecological Economics 23, p. 1-14.
Jamieson, D. (1998), Sustainability and beyond. Ecological Economics 24, p. 183-192.
Kahn, J.R. and McDonald, J.A. (1995), Third-world debt and tropical deforestation.
Ecological Economics 12, p. 107-123.
Kallis, G. (2011), In defence of degrowth. Ecological Economics 70, p. 873-880.
Kallis, G. and Norgaard, R.B. (2010), Coevolutionary ecological economics. Ecological
Economics 69, p. 690-699.
Kates, R.W., Leiserowitz, A.A. and Parris, T.M. (2005), What is Sustainable Development?
Environment: Science and Policy for Sustainable Development 47, 3, p. 8-21.
Dina Barbian Sustainable Development 56
and Macroeconomics

Martinez-Zarzoso, I. and Maruotti, A. (2011), The impact of urbanization on CO2 emissions:

Evidence from developing countries. Ecological Economics 70, p. 1344-1353.
Max-Neef, M. (1995), Economic growth and quality of life: a threshold hypothesis.
Ecological Economics 15, p. 115-118.

Moran, D.D., Wackernagel, M., Kitzes, J.A., Goldfinger, S.H. and Boutaud, A. (2008),
Measuring sustainable development - Nation by nation. Ecological Economics 64, p. 470-
474.
Munasinghe, M. (1995), Making economic growth more sustainable. Ecological Economics
15, p. 121-124.
Niccolucci, V., Pulselli, F.M. and Tiezzi, E. (2007), Strengthening the threshold hypothesis:
Economic and biophysical limits to growth. Ecological Economics 60, p. 667-672.
Rapp Nilsen, H. (2010), The joint discourse ‘reflexive sustainable development’ - From
weak towards strong sustainable development. Ecological Economics 69, p. 495-501.
Rennings, K. (2000), Redefining innovation - eco-innovation research and the contribution
from ecological economics. Ecological Economics 32, p. 319-332.
Schneider, F., Kallis, G. and Martinez-Alier, J. (2010), Crisis or opportunity? Economic
degrowth for social equity and ecological sustainability. Journal of Cleaner Production 18, p.
511-518.
Tolba, M.K. (1977) Development without Destruction. Agriculture and Environment 3, p.
369-382.

van den Bergh, J.C.J.M. (2011), Environment versus growth — A criticism of “degrowth”
and a plea for “a-growth”. Ecological Economics 70, p. 881-890.

Wetzel, K.R. and Wetzel, J.F. (1995), Sizing the earth: recognition of economic carrying
capacity. Ecological Economics 12, p.13-21.
Woodward, R. T. and Bishop, R C. (1995), Efficiency, sustainability and global warming.
Ecological Economics 14, p. 101-111.
Dina Barbian Sustainable Development 57
and Macroeconomics

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