It’s economic - there is no wealth without a healthy environment
The global economy strongly relies on nature. In turn, the impact of our activities on the environment can have a great economic cost. This page provides an overview on the economics of sustainable development.
The value of nature
Economists strive to evaluate the cost of environmental degradation versus the cost of action. Here are 2 striking estimates:
- The global value of the goods and services from nature nearly doubles that of humans.
- 40% of the global economy is based on biological products and processes.
If our environment is threatened, the economy is threatened
A striking example is climate change and anticipated problems if greenhouse gas emissions are not mitigated, e.g.
- Industry, settlement and society: extreme weather events with high economic costs, especially in the communities near rivers and coasts.
- Food, crops, fibre and forest products: crop yield decreases expected in tropical areas, with increased risk of hunger.
Three axes of economy that impact sustainable development
- Poverty reduction, a key issue guiding international policies
- Corporate responsibility and accountability, corporations having great economic and political power
- Market economy: the global market can promote exploitive activities, place people in precarious situations and challenge the environment.
The solution lays at the confluence of market influences and environmental protection to the advantage of local communities.
Fair trade: trade can go hand in hand with solidarity
- An importer from the North purchases and distributes coffee produced in a preserved environment in the South.
- Farmers sell their production at a price which covers their production costs and allows a decent living.
This is fair trade, a way to reduce North/South inequalities and fight against poverty. Many associations lobby and act in favour of fairer trade. This is for example the case of the Max Havelaar association.
Read more on how social conditions relate to SD!