Introduction

Environmental degradation is now apparent on a global scale. In addition to the deterioration of what were once considered free goods (such as air and water), escalating scarcity of natural resources, deforestation, desertification and threatened bio-diversity are now commonplace across the spectrum. There are certainly no reservations over the scale of this degradation, however there is much controversy concerning the apparent environmental degradation – economic development nexus.

Many have argued that short-term tradeoffs exist in the form of environmental degradation, for superior long-term economic gains. One of the positions put forward is that environmental degradation is the result and inevitable price of economic development. This viewpoint is based on the Environmental Kuznets Curve, regarding environmental degradation as the ‘necessary evil’ for achieving ‘economic development’ and suggesting that environmental assets are degraded in the early stages of economic development, only to improve after some income threshold has been passed at a later point.

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In the last decade, extensive literature has argued that a direct link between environmental degradation and economic development is too simplistic and that the nexus is governed by a complex web of factors. These authors have argued that other explanatory variables should be included in the models, including; inequality (Kaufman et al, 1998), income growth, institutional and political factors (Torras & Boyce, 1998) and international trade (Stern et al., 1996)

The following paper gives an overview of the literature published to date and puts forward a conceptual, methodological and fundamental critique, before concluding with some reflections on the debate.

The Environmental Kuznets Curve (EKC) Hypothesis

The EKC Hypothesis was originally put forward by (and named after) Simon Kuznets (Kuznets, 1955) who was the first to observe the relationship between inequality and per capita income. Today, this bell shaped curve has been used to explain the relationship between environmental degradation and economic development. An example of its use is in the analysis of the relationship between indices of air and water pollution and per capita income (as an indicator of economic growth). Studies by Shafik (1994) and Stern et al. (1996) show clearly how levels may at first increase, and then decrease as per capita income grows. This evidence supports the view that environmental degradation may not necessarily be the inevitable price of economic development in the long term.

Munasinghe (1999) describes the EKC hypothesis as an approach that seeks to relate the state of the environment to the stage of development. He argues that Developing countries have much to learn from the experiences of industrialized nations, and by restructuring growth and development they could `tunnel’ through any potential EKC – thereby avoiding the transition through the stages of growth that involve relatively high (and even irreversible) levels of environmental harm.

In contrast to Munasinghe, Stern et al. (1996) criticize EKC estimates, arguing that the inference that further development will reduce environmental degradation is dependent on the assumption that world per capita income is normally distributed when in fact median income is far below mean income. Furthermore, evidence has suggested that incorporating environmental degradation into development plans is a route that will ultimately lead to situations in which the benefits of rising GDP become offset – or even outweighed – by the economic losses resulting from damaged ecosystem failure and the inability to provide crucial services, such as clean air and water.

(Gangadharan ; Valenzuela, 2001).

In this scenario, ‘environmental degradation is neither the inevitable price of, nor a desirable path for, economic development’ (UNDP, et al, 2005). As without such services, those affected will suffer greatly in terms of health and well-being, as biased development efforts against the environment and the poor will further complicate the achievement of sustainable development.

More importantly, it cannot be expected that the same relationship exists between income or ‘economic development’ and different dimensions of environmental degradation. Shafik (1994) has observed that the EKC relationship can be observed only for specific environmental pressure factors and not for others, “Where environmental quality directly affects human welfare, higher incomes tend to be associated with less degradation. But where the costs of environmental damage can be externalized, economic growth tends to result in a steady deterioration of environmental quality. Further criticisms of the EKC hypothesis, are that it fails to include many forms of environmental degradation such as biodiversity loss, desertification or global climate change, each of which may entail irreversible losses; that no amount of income growth can restore.

Economic Growth and Environmental Degradation

The sustainability of resources and environmental decline were first considered when early economists noted the importance of declining resource quality for economic sustainability. Today, importance has shifted towards natural resources upon which humans rely.

Where natural resources consist of environmental systems such as the ozone layer, tropical forests or the global atmosphere. Although environmental degradation constitutes a major concern, it is not the inevitable price of, nor a desirable path for, economic development. There are examples of countries which have seen increases in both population and economic activity that have experienced improvements in their environment. For example, in the past 30 years, the economic output of most western industrialized countries has risen by over 50% and yet the quality of many of their environments has improved. Devlin & Grafton (1998) note that:

‘The United States has seen a dramatic decline in the total emissions of lead and carbon monoxide, and levels of total suspended particulates are less than half what they were in the 1940s. London, at one point known for the poor quality of its air, is now a much healthier place than a generation ago.’

(Devlin & Grafton, 1998: 14)

Nonetheless, in most parts of the world the quality of the environment continues to diminish. Poor air and water quality, environmental degradation, and threatened biodiversity are becoming commonplace across the spectrum from newly industrialized regions to those that stand as a monument to the excesses of past and present industrial policies. It is clear, that in the absence of effective regulation, economic growth and environmental degradation are inextricably linked.

Following on from the work of Swanson (1996), Booth (1998) has noted the shift from micro to macro-economics in relation to the current dilemma over the tragedy of the commons. In the eyes of conventional economists, environmental problems exist as a result of a pricing system failure. Whereby, market-determined prices fail to reflect the social costs of environmental damage caused by economic development.

For example, instead of allowing an industrial plant to emit pollutants and impose environmental degradation on the larger society, they should be required to internalize the social costs of their environmental impact by bearing the costs of the pollution they are responsible for in addition to abstaining from outsourcing polluting processes to the developing world. Whilst this solution may seem attractive, in a profit and growth geared economy this may be deeply problematic for social, political and economic reasons.

Furthermore, even if environmental costs were effectively internalized, economic growth could lead the path for environmental degradation regardless. This is because the internalization of environmental costs is based on social costs, and therefore, environmental degradation will still occur if the added benefits of growth exceed the added social costs of environmental degradation that result from that growth. Consequently, such pricing, may result in higher living costs leading to lower levels of the quality of life which can in turn be linked back to environmental degradation at the local level. (Booth, 1998: 3)

Swanson (1996) highlights the fact that current and future generations have even more to contend with – beyond environmental problems at the local level. We must now come to grips with recognized environmental decline at the global level (Swanson 1996: 1). Some of our most important commons now exist at the global level. What is strange, however, is that although we are now fully aware of the cumulative impact of fossil fuel-based industrialization and global deforestation in terms of its affect on climate change, this universally apparent decline is not being halted?

Adams (2001) attempts to understand why ‘sustainable development’ is running within dominant industrialism and developmentalism rather than challenging it, through a greening of development thought and practice. He identifies two key elements within sustainable development which hinder this change, these are; market environmentalism and ecological modernization.

The first, market environmentalism suggests that by setting prices for environmental ‘goods’ and ‘services’, capitalist economic growth can continue unabated, whilst at the same time problems of environmental management are addressed. (Adams, 2001: 136)

In contrast, ecological modernization refers to a restructuring of the capitalist political economy along more environmentally sound lines. Environmental degradation is seen as a structural problem which can only be dealt with by attending to how the economy is organized, but not in a way that requires an altogether different kind of political-economic system. (Hajer, 1995: 25).

These elements of the sustainable development discourse make us question how exactly one can achieve economic growth, environmental maintenance and equity simultaneously by reconciling the irreconcilable. While such a goal is commendable, there are serious concerns about whether it is in fact attainable. In the future, the sustainable development paradigm needs to challenge the existing notions of progress and economic rationality and not privilege industrial consumerism.

I believe that many of the problems associated with sustainable development in theory and practice are down to the inevitable result of human short-comings in reasoning and foresight in combination with the relatively opportunistic nature of species. This view is in agreement with that put forward by Garrett Hardin in his seminal essay on the Tragedy of the Commons (Hardin, 1993). These negative aspects of human nature help to explain some of the causes of environmental degradation outside of economic development.

Further Causes of Environmental Degradation

‘Environmental degradation exists when the environment is suffering due to an underlying social problem such as poverty, unrest, inequality, or other sources of non-co-operation. It is the social problem that creates the conditions that give rise to a social cost while, in the case of environmental degradation, it is the natural environment that is the recipient of this costliness.’

(Swanson, 1996:173)

Environmental degradation stems from situations in which societies are worsening their own position as a result of their failure to co-operate in the commons, co-operation that is essential for sustainable development. If we define environmental degradation in terms of natural resource decline, the relationship between economic and sustainable development will become unavoidably problematic. As a result, environmental degradation is far more complex than the simple inevitable outcome of economic development. Root causes of environmental degradation are both highly complex and site-specific, with the driving forces often involving adverse climatic conditions in combination with social, political, ecological and cultural factors that strain the environment beyond its ecologically sustainable limits.

Population growth and scarce resources are equally as important as market mechanisms that account for the social value of the environment. Furthermore, demographic conditions such as maintained high fertility rates, as a response to lack of capital, land, insurance and credit markets further link population growth and environmental degradation, and this is most apparent in poor countries where high growth rates go hand in hand with poor production methods, in addition to increased pressure on natural resources further deteriorating the environment.

Swanson (1996) explains that although population growth is clearly constraining the finite scale of the ecosystem, which sets limits to processing energy, exploiting resources and recycling wastes:

‘Population size is not the only problem, as even a very rapid population growth in a low density area may prevent the onset of adjustment mechanisms necessary to adapt production and social conditions to a changed demographic situation.’

(Swanson, 1996: 105)

He also argues that although there are numerous avenues to resource degradation there is only one underlying source, and this is the institutional interface between human society and its environment. When this institutional structure is weak at recognizing depletion or controlling utilization of some part of the environment, Swanson argues that it is only then that there is an enhanced likelihood of degradation for the corresponding commons.

‘The overarching problem that society faces is the construction of institutions capable of registering and responding to all forms of important environmental scarcities.’

(Swanson, 1996: 11)

Following on from this, Blaikie (1985) argues that it is important to understand the linkages between environment, economy and society as highly complex. Where very often ‘development’ in its crudest sense, both affects and is affected by the environmental status of a given area. Furthermore, at the local level, access to and distribution of environmental goods such as cultivable land or clean water is uneven. It is therefore clear that a political-economic analysis of environmental degradation is paramount to its understanding.

At the same time, it is essential to acknowledge that some changes to nature and natural resources may not constitute ‘environmental degradation’, and that one aspect of human development has always been the reorganization of resources with which the earth was originally endowed.

The Relationship between Poverty and Environmental Degradation

Over the past two decades, environmental degradation has continued to worsen, further exacerbating poverty and habitat insecurity. One cannot discuss the relationship between environmental degradation and economic development without considering poverty. Poverty and the environment are linked in complex and intricate ways.

Not only are those affected by poverty more likely to live in environmentally degraded areas, but frequently, they are themselves responsible for this environmental degradation because their poverty forces them to do so. As a result, there exists a catch 22 scenario, where a trap begins to form between poverty and environmental degradation, with little chance of escape. Adams (1990) argues that:

“This linkage between poverty and environmental degradation provides perhaps the clearest demonstration of the centrality of social, political and economic issues in questions of environment and development. It is on the environments in which the poor live and from which they draw their sustenance that concern about sustainable development has to focus.”

(Adams, 1990: 87)

Conventional wisdom concerning the relationship between the environment, economic development and poverty uncovers a deterministic relationship. The key problem with this interrelation is that poverty is negatively related to sustainable development due to the short time horizons of the poor. However the economic development required to reduce the affects of this poverty, is in itself responsible for further environmental degradation.

I believe that the emphasis on income growth to explain and diminish environmental degradation should be questioned and in agreement with many authors I argue that other explanatory variables should be included in the model.

An example of this can be illustrated through the work of Boyce (1994) in his examination of how inequality can affect the environment-income relationship getting mixed or conflicted results. Boyce set forth the hypothesis that greater inequality may increase environmental degradation, because of an increased rate of environmental time preference, thus reducing the concern for the future for both poor and rich. Where, on the one hand the poor exploit natural resources as it is often the only resource at their disposal – and an immediate source of income that can help them secure day to day survival. Furthermore, economic inequality is often associated with political instability and risk of revolts, therefore on the other hand, this leads rich people – who should bear most of the financial costs of protecting the environment to prefer policies that exploit the environment and invest returns abroad (where political stability is greater) rather than investing in the defense of natural resources at the local level.

The United Nations Conference on Environment and Development’s Agenda 21, the global action programme for sustainable development, can be argued to be the first manifestation of international commitment to addressing the poverty-environment nexus, with promising initiatives emerging in combating the thematic areas of ‘poverty’, ‘desertification and drought’ and ‘sustainable mountain development.’ (Gettkant, 1993).

Environmental Degradation and Sustainable Development

“Environmental degradation is a central issue in sustainable development… definitions are confused, and strong scientific evidence on long-term environmental change is often lacking.”

Adams (2001: 212)

The relationship between environmental degradation and economic development is fundamental to sustainable development. As a result it has attracted much attention within the literature over the past 15 years. Participants in this debate have both supported and heavily criticized the results put forward and as a result this issue is under much dispute. Despite evidence for the existence of the EKC being mixed and inconclusive, several conclusions can be drawn from the relationship between economic growth and environmental degradation. From the perspective of governance – since there is no ‘clear’ relationship – ambitious policy measures are required if sustainability is to improve and the institutional influence cannot be overlooked.

Until recently, the international community and national governments have tended to neglect the need for integrated poverty alleviation and environmental management programmes. However, there has been an increase in the awareness and importance of the environment and sustainable development and in many regions we are witnessing changing perceptions of the environment. As a result the relationship between man and the environment has been given a higher priority through rehabilitation and sustainability projects at the local level.

In the aftermath of the U.N. Conference (UNCED), El-Ashry (1993) outlines how there was increased recognition amongst development policymakers in terms of the failure to take the costs of environmental damage into account, and the realization that, not taking costs of environmental damage into account would prove inefficient and often unsuccessful in terms of sustainable development and economic well-being.

Similarly, environmentalists were beginning to understand that often, solutions lie in faster – not slower – development alongside better quality environmental policies. Sadly, despite this broad agreement at the conceptual level on the need to integrate policies for development and the environment, a large gap between practice and rhetoric has remained.

Hardin placed the deleterious effects of environmental degradation and human opportunism at the very core of the ‘tragedy of the commons’ believing that it is necessary to take these problems in hand to prevent disaster for the human race. There are varying views in response to Hardin: ecologists argue that tragedy will only be avoided if human nature itself is transformed. Where institutions and government policy are irrelevant if human nature continues to lead us into environmental degradation, be it at the micro or macro level. On the other hand, institutional economists take human opportunism as a fixed parameter and then use its predictability within human nature to guide the evolution of institutions that will channel aggregate behavior in a constructive direction. Swanson (1996) argues that if relied upon too extensively the institutionalist approach will potentially end in tragedy. Where the solution must come from a complex evolution of change, resulting in both institutions and society being able to match that of the resources they must regulate.

Hardin’s model has been extremely influential in the discourse surrounding global environmental problems, particularly the so-called ‘global commons’ such as the oceans and atmosphere, which fall under the domain of no single government. The elegance of Hardin’s model is partly down to it’s simplicity, combining a recognizable human motive (self-interest) with a recognizable set of social rules (those allowing open access) to produce a result that most would recognize as undesirable (rapid depletion or destruction of the resource or environment in question). (Harden, 1993)

Critique

At the conceptual level, the argument that environmental degradation is neither the inevitable or desirable path for development implies that environmental degradation can be avoided by means of a distortion or manipulation of the ‘environmental Kuznets curve.’

Thereby tunneling through the stage where environmental degradation is increased to achieve a lower, more desirable level of degradation, as is found at higher levels of achieved economic development.

The problem with this concept however, is that the ‘bell shaped – EKC’ cannot be generalized for all emissions or environmental degradations. The literature reviewed clearly illustrates that findings are extremely sensitive to a change in the type of pollutant analyzed. In addition, the EKC concept ignores institutional factors, which cannot be overlooked. Economic development will not in itself improve environmental quality and this belief is founded in the assumption that public demand for improved environmental quality will lead to implementation of effective environmental policy or control. Further considerations; include the role of education and social developments in the improvement of environmental quality.

Methodologically we can criticize the attention paid to country specific differences. Comparisons between developed and developing countries will accordingly provide very different sets of results and this crucial element was often overlooked in the literature with brash generalizations and omission of key factors in EKC analysis. For example, Stern et al (1996) pointed out that:

“the assumption that changes in trade relationships associated with development have no effect on environmental quality” severely restricts the explanatory power of the conclusions drawn from EKC analysis.”

(Stern et al., 1996)

Consider, for instance, the outsourcing of pollution intensive production to the developing world, now commonplace amongst the richer nations.

Conclusion

Some have argued, incorrectly, that environmental quality should be traded off, in return for economic development. I would like to conclude that this argument is intellectually unfounded and can in fact bias development efforts against the environment in addition to those affected by poverty. Recent analysis shows that a fundamental critique of the EKC hypothesis is its failure to fit many forms of environmental change such as the global climate or biodiversity loss. Furthermore, the EKC is highly sensitive to policy measures which may enable the bypass of the early stages of accelerating environmental decline (Stern et al, 1996). In short, environmental degradation is neither inevitable, nor does it describe a desirable development path.

So why are there so many disputes within the literature? Is the difference a disciplinary one between ecologists and geographers, or are the varied perspectives just given alternatives between environmental experts and economists? Is the disagreement methodological or essentially political? The answer to this, I believe lies in the very nature of sustainable development and poverty, both of which are inextricably linked (alongside a whole ream of further external factors) to the already complex environmental degradation – economic development debate. These competing interest groups each brings there own stance to the forefront, revealing multifaceted interrelations. To improve understanding in this field, interdisciplinary studies are essential as are the considerations for North-South power relations. This leads us to further points for reflection which include: ‘Is global pollution mainly a problem of poverty or a problem of affluence?’, and ‘What is the balance of responsibility between North and South in global environmental degradation?’

While environmental doomsday seems ever approaching here on Planet Earth, solutions to these environmental ills are controversial. Global ‘environmentalism’ is now deeply routed in the core of ‘Western’ development thought and practice; where exploitation of traditional communities in the name of environmental protection and conservation still continues despite fifty years of ‘decolonization’. This dehistoricizes and marginalizes the environmental traditions of non-Western cultures, and whilst environmental degradation may not recognize national or regional boundaries, the ‘global’ solutions advocated by the North perpetuate the dependency relations of colonialism. Sustainable development may attempt to reconcile opposing interests between environmental degradation and economic development, however there still remains a contradiction in terms, as sustainability and economic development are based on very different and often incompatible assumptions.

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