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A Poverty of Reason: Sustainable Development and Economic Growth
     

A Poverty of Reason: Sustainable Development and Economic Growth

by Wilfred Beckerman
 

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In this detailed economic investigation of sustainable development, a noted professor of economics argues that many of the alarms commonly sounded by environmentalists are, in fact, unfounded, and that current sustainable development policies should be reconsidered in light of their effects on the earth's human population, such as increased poverty and

Overview


In this detailed economic investigation of sustainable development, a noted professor of economics argues that many of the alarms commonly sounded by environmentalists are, in fact, unfounded, and that current sustainable development policies should be reconsidered in light of their effects on the earth's human population, such as increased poverty and environmental degradation in developing countries. In a rare balanced counterpoint to popular sustainable development rhetoric, Professor Beckerman forces policy makers to consider whether future generations have rights that morally constrain and trump the claims of those alive today, particularly the masses of people living in dire poverty, arguing that the current sustainable development program is a menace to the prosperity and freedom of both current and future generations.

Editorial Reviews

Foreign Affairs
Beckerman, an Oxford economist, takes on three phrases frequently invoked in debates over environmental policy: "sustainable development," "the precautionary principle," and "intergenerational equity." He demonstrates that each is highly problematic — and that some interpretations of them could have detrimental effects on the world's poor and on future generations. Beckerman finds clear thinking and clear expression deficient in most public debate (even among those who know better), and his discussion of climate change and biodiversity has resonance well beyond those two illustrations. The notion of "sustainable development," for example, rests on two erroneous assumptions, according to Beckerman. First, he finds the claim that continuing growth will ultimately exhaust the world's resources (and therefore stifle future growth) deeply flawed, both empirically and conceptually; future generations are in fact likely to be much better off. Second, he disputes the term's claim to the moral high ground, based on a view of intergenerational equity that cannot, Beckerman argues, withstand scrutiny. Serious debate about current actions (or inactions) with long-term effects must take into account Beckerman's cogent arguments.

Product Details

ISBN-13:
9780945999850
Publisher:
Independent Institute, The
Publication date:
09/01/2002
Pages:
130
Product dimensions:
6.00(w) x 9.00(h) x 0.30(d)

Read an Excerpt

A Poverty of Reason

Sustainable Development and Economic Growth


By Wilfred Beckerman

The Independent Institute

Copyright © 2003 The Independent Institute
All rights reserved.
ISBN: 978-1-59813-183-3



CHAPTER 1

What Is Sustainable Development Supposed to Mean?


Sustainable Development and Conceptual Chaos

The first question that has to be asked about sustainable development is, What exactly does it mean? The second question is, What is so good about it? This chapter focuses on the first question.

One of the most famous definitions of sustainable development is that contained in the Brundtland Report, Our Common Future: "development that meets the needs of the present without compromising the ability of future generations to meet their own needs" (World Commission on Environment and Development [WCED] 1987: 43). But such a criterion is not very helpful. Not every need of the present generation is being met, so why should future generations be any different? Moreover, people at different points in time or at different income levels or with different cultural or national backgrounds differ about the importance they attach to different needs. The injunction that we should enable future generations to meet their needs does not provide any clear guidance as to what has to be preserved in order that future generations may do so.

Furthermore, this injunction seems to leave no room for trade-offs. Suppose we accept the claim of some environmental activists that future generations will face more serious environmental problems than those we currently face. How many of the needs (and wants, if such things differ) of the current generation are to be sacrificed in order to help future generations meet their needs? The urgency of needs varies enormously, even for a given individual, let alone for different individuals and then different generations. The term needs does not stand for some objective, homogeneous, and indivisible entity. So no guidance is provided by the statement that the ability of the present generation to meet its needs must not be sacrificed at all in order to enable future generations to meet their needs.

The Brundtland Report also contains another concept of sustainable development that is not so much meaningless as morally outrageous. The report states that "The loss of plant and animal species can greatly limit the options of future generations; so sustainable development requires the conservation of plant and animal species" (WCED 1987: 43). But, we might ask, how far does the Brundtland Report's injunction really go? What price must we pay to conserve all plant and animal species for posterity? Are we supposed to mount a large operation, at astronomic cost, to ensure the survival of every known and unknown species on the grounds that they may give pleasure to future generations or may turn out, in a hundred years' time, to have medicinal properties? Approximately 98 percent of all the species that have ever existed are believed to have become extinct already, but most people do not suffer any great sense of loss as a result. How many people lose sleep because it is no longer possible to see a live dinosaur?

Clearly, absolutist conceptions of sustainable development — for example, that we have to maintain the environment exactly as it is today — are morally repugnant. Given the acute poverty and environmental degradation in which many of the world's population live, we cannot justify using up vast resources in an attempt to save from extinction, say, every single one of the several million species of beetle that exist. Resources would be better devoted to more urgent environmental concerns, such as increasing access to clean drinking water or sanitation in the Third World or raising educational standards for females in some developing countries where a major obstacle to raising living standards is a high birth rate.

When it soon became obvious that the "strong" concept of sustainable development was morally indefensible, as well as totally impracticable, many environmentalists shifted their ground. A new version was adopted, known in the literature as "weak" sustainability. This version of sustainability allows for some natural resources to be run down as long as adequate compensation is provided by increases in other resources, perhaps even in the form of man-made capital. But what constitutes adequate compensation? How many more schools or hospitals or houses or factories or machines are required to compensate for using up some mineral resources or forests or clean atmosphere? The answer, it turned out, is that the acceptability of the substitution is to be judged by its contribution to sustaining human welfare.

For example, John Pezzey, in an authoritative and extensive survey, concludes that most definitions still "understand sustainability to mean sustaining an improvement (or at least maintenance) in the quality of life, rather than just sustaining the existence of life" (1992: 11). He went on to adopt as a "standard definition of sustainable development" one according to which welfare per head of population must never decline (ibid). The same definition is adopted in the editorial introduction to a more recent extensive collection of articles on sustainable development, where it is stated that "non-negative change in economic welfare per capita becomes the intertemporal equity objective" (Faucheux, Pearce, and Proops, 1996: 4). This definition has also been confirmed in other authoritative sources.

One important feature of these definitions is that they are couched in terms of maintaining well-being or welfare, not some concept such as the overall stock of natural capital. In other words, they allow for substitutability between natural and man-made capital provided that, on balance, there is no decline in welfare. The central variable, welfare, that must not be allowed to decline is thus treated as some sort of catchall variable. But if the choice between preserving natural capital and adding to, or preserving, man-made capital depends on which of them makes the greater contribution to welfare, the whole point of replacing the orthodox economist's paradigm of welfare maximization with some allegedly wider concept that incorporates non-welfarist values is fatally undermined. In the attempt to rid the original "strong" concept of sustainable development of its most obvious weaknesses, the baby has been thrown out with the bathwater.

In addition to the appeal that conventional economic growth is unsustainable or unethical, a third line of argument in favor of sustainable development is often deployed. This argument abandons any attempt to provide a precise definition of sustainable development and offers instead a ragbag of all sorts of desirable objectives in whatever field of human activity one likes to imagine. For example, in the United States the Clinton administration set up the President's Council on Sustainable Development in 1993 and an Interagency Working Group on Sustainable Development in 1996 to oversee implementation of the council's recommendations. In its turn, the working group created three task forces. The first of these task forces set out in detail the main objectives of sustainable development, which include items such as increased per capita income and employment, decreased violent crime, decreased traffic congestion, and a host of other worthy objectives, none of which seems to have any connection with the idea of sustainable development.

Similarly, in the introduction to a recent survey of policies on sustainable development, the authors suggest that, for their purposes: "it is not necessary to adjudicate among slightly different presentations of the core principles of sustainable development. In our view, it is sufficient to note that ...sustainable development indicates an interdependent concern with: promoting human welfare; satisfying basic needs; protecting the environment; considering the fate of future generations; achieving equity between rich and poor; and participating on a broad basis in development decision-making. While these points may appear vague, they are not without content" (Lafferty and Meadowcroft 2000: 19).

Just these two illustrations — it is too easy to cite many others — demonstrate the way that sustainable development has become an all-embracing concept to the extent that it has no clear analytical bite at all. It is true that — as the great British economist Arthur Pigou spelled out clearly several decades ago — economic welfare is not the whole of welfare. It is merely that part of it that can, in his famous phrase, "be brought directly or indirectly into relation with the measuring rod of money" (1932: 11). It is right that one should also be concerned with other ingredients of the quality of life, such as personal and social relationships or certain aspects of the environment that may not be commensurate with economic welfare. But almost everybody would be in favor of measures to help improve such aspects of human welfare. Only criminals would oppose a reduction in violent crime. The whole problem is the selection of the means toward these ends and the assessment of trade-offs of one against the other. Here the concept of sustainable development has nothing to add. Indeed, it subtracts from the objective of maximization of human welfare because the slogan of sustainable development seems to provide a blanket justification for almost any policy designed to promote almost any ingredient of human welfare irrespective of its cost and hence irrespective of the sacrifice of other ingredients of welfare.


The Measurement of Sustainable Development

The impossibility of devising an intellectually coherent and operational definition of sustainable development is illustrated by the difficulties faced by bodies that have attempted to measure sustainability. For example, at the United Nations Conference on Environment and Development (UNCED) in Rio de Janeiro, the United Kingdom committed itself to develop a set of indicators to show whether Britain's development was becoming more sustainable (Department of the Environment [DOE] 1996: 1). As part of this effort, an interdepartmental working group was set up (of course) to consider the matter and report on its findings. Few bureaucrats are likely to dispute the necessity for such a group because for many people committees are places where conversation is a substitute for the boredom of work and the loneliness of thought. Unfortunately, as the working group's report concedes, it is not at all clear what sustainable development means, so it is difficult to know how to measure it or which policies promote it (UK DOE 1996: 5).

Very recently (January 2001) an important attempt was made to introduce some intellectually respectable measurement into the sustainability literature: an environmental sustainability index (ESI) for 122 countries, produced by a team under the direction of Dan Esty of Yale University and involving the collaboration of teams at Yale and Columbia Universities (Esty et al. 2001). This index is undoubtedly the most serious, original, and thoughtful contribution to the debate produced so far. Its statistical analyses are higprofessional (notwithstanding what seems to be a mysterious elementary arithmetical mistake). It clearly represents a major research effort to bring together a new and extensive range of environmental data, and it is very honest both about gaps in the data and about the methodology. The study was also supported by private funds, not by the taxpayer.

Unfortunately, the index fails to come to grips with the sustainability part of the concept of environmental sustainability. It is claimed that

environmental sustainability can be presented as a function of five phenomena: (1) the state of the environmental systems, such as air, soil, ecosystems, and water; (2) the stresses on those systems, in the form of pollution and exploitation levels; (3) the human vulnerability to environmental change in the form of loss of food resources or exposure to environmental diseases; (4) the social and institutional capacity to cope with environmental challenges; and finally (5) the ability to respond to the demands of global stewardship by cooperating in collective efforts to conserve international environmental resources such as the atmosphere. We define environmental sustainability as the ability to produce high levels of performance on each of these dimensions in a lasting manner. We refer to these five dimensions as the core "components" of environmental sustainability. (Esty 2001: 9, italics in original.)


But the report also says that "The Index creates a series of comparative benchmarks of environmental conditions in different countries" (2001: 9). So apparently it is not really an index of environmental sustainability after all. For example, it includes measurements of urban sulfur dioxide (SO2) and nitrogen oxide (NOX) concentrations, and many other stock variables that are clearly indicators of environmental conditions. No explanation is given of why and how they are proxy variables for environmental sustainability. Environmental conditions in, say, late-nineteenth-century British and American cities were awful, but the cities remained standing and now generally enjoy far better environments than do most cities in poorer developing countries.

Furthermore, the index lacks any firm conceptual basis for aggregating together the constituent items of whatever it is that it is really trying to measure. The aggregation method used in the study is to group the basic sixty-seven variables that are believed to be related to environmental sustainability into twenty-two core indicators. Within each of these twenty-two groups, the underlying variables are given equal weight — that is, they are simply averaged. And then each of the twenty-two core indicators is given equal weight in arriving at the overall ESI (Esty 2001: 23). Thus, a variable that is used together with three others to construct some core indicator will have only half the weight of a variable that is used, in conjunction with only one other variable to construct some other core indicator. It is not obvious that there can be any conceptual basis for this discrimination. Nor is there any explicit attempt to weigh either the underlying sixty-seven variables or the twenty-two core indicators in terms of their marginal contribution to what the index is supposed to be measuring — namely, environmental sustainability. Indeed, without some independently defined concept of environmental sustainability — that is, other than what it is that the index measures — it is difficult to see how any such weighting can be carried out.

In short, one cannot measure environmental sustainability — let alone sustainable development — just by combining together in a largely arbitrary manner a collection of what environmental indicators one can put together, basically because there is no clear conceptual basis for sustainable development to begin with.

CHAPTER 2

Finite Resources and the Prospects for Economic Growth


Finite Resources and the Market Mechanism

As indicated above, there are two basic features of the claim that society ought to follow the path of sustainable development. One is the positive proposition that resources are finite in some meaningful sense, and the other is the normative proposition that this limitation imposes special obligations on us to respect the rights of future generations and the accompanying obligations of intergenerational justice. In this chapter and the following two chapters, I concentrate on the former.

Resources are either finite, or they are not. If they are, then the only way to ensure that they last forever is to stop using them. Bringing future economic growth to a halt is not enough. Levels of consumption need to be reduced to infinitesimal levels if finite resources are to be made to last. But, of course, even the most fanatical proponents of sustainability would hardly go that far and would soon sell a critical pass by confessing that, perhaps, after due reflection, with everything taken into account, etc., etc., etc., the human race will eventually find ways of coping with the changes that take place in the balance between demand and supply of resources.

In other words, one cannot have it both ways. Either resources are finite in some relevant sense, in which case even zero growth will fail to save us in the long run, or resources are not really finite in any relevant sense, in which case this argument for slowing down growth collapses. In a famous book published in 1972, The Limits to Growth, this dilemma was avoided by cutting off the computer printout at the year when it becomes clear that even a proposed stationary state will still be untenable on account of exhaustion of what was assumed to be a finite supply of resources (Meadows et al. 1972).

In fact, of course, not only are resources not finite in any relevant sense, but the evidence of all past history, including even the relatively recent past, shows that there have been no trends toward the exhaustion of any resources that matter. Similarly, past history is littered with predictions of imminent resource scarcity that have been subsequently falsified. Malthus's predictions approximately two hundred years ago — namely that world population would soon outrun food supplies — are probably the most famous. But more than two thousand years earlier Pericles in Ancient Greece made equally false similar predictions (French 1964).


(Continues...)

Excerpted from A Poverty of Reason by Wilfred Beckerman. Copyright © 2003 The Independent Institute. Excerpted by permission of The Independent Institute.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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Meet the Author

Wilfred Beckerman is an emeritus fellow of Balliol College at Oxford University. Dr. Beckerman is an economist and the author of many academic articles and several books including In Defence of Economic Growth, Small is Stupid and most recently Justice, Posterity and the Environment (with J. Pasek). Dr. Beckerman has served on Britain’s Royal Commission on Environmental Pollution, and chaired the Academic Panel of Economists for the UK Department of the Environment from 1991 to 1996.

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