Sustainable Development |Introduction| Definition | policies

Introduction of Sustainable Development 

The concept of sustainable development is not too old. The term “sustainable development” was firstly used in the World Conservation Strategy presented in 1980 by the International Union for the Conservation of  Nature and Natural Resources. It was commonly used and defined for the first time by the Brundtland Report, entitled Our Common Future,of the World Commission on Environment and Development in 1987.

Sustainable Development Definition

There are many definitions of sustainable development. But the most famous definition is given by the Brundtland Report. It defined sustainable development as “meeting the needs of the present generation without compromising the needs of future generations.”
Sustainable development

Sustainable development means that development should “keep going”. It emphasizes the creation of sustainable improvement in the quality of life of all people through increases in real income per capita ,improvements in education, health and general quality of life and improvements in quality of natural environmental resources.Thus sustainable development is consider as the economic development. It is situation in which economic development does not decrease over time. Sustainable development is development that is everlasting and contributes to the quality of life through improvements in natural environments. Natural environments, in turn, supply utility to individuals, inputs to the economic process and services that support life. Pearce and Warford told that, “Sustainable development describes a process in which natural resource base is not allowed to deteriorate. It emphasizes the hither to unappreciated role of environmental quality and environmental inputs in the process of raising real income and the quality of life.”


Agricultural and industrial development along with urbanization and spread of infrastructure combined with population growth have led to environmental degradation. Environmental degradation “harms human health, reduces economic productivity and leads to the loss of amenities”. The damaging effects of economic development on environmental degradation can be reduced by a judicious choice of economic and environmental policies and environmental investments. Choice between policies and investments should aim at harmonizing economic development with sustainable development. We discuss some policy measures as under:

1. Reducing Poverty.

Such development projects should be started which provide greater employment opportunities to the poor. The government should expand health and family planning services  so as to reach the poor that will help reduce population growth. Further, making investments in providing civic amenities like the supply of drinking water, sanitation facilities, alternate habitats in place of slums, etc. will not only improve welfare but also environment.

2. Removing Subsidies.

To reduce environmental degradation at no net financial cost to the government,subsidies for resource use by the private and public sectors should be removed. Subsidies on the use of electricity, fertilizers, pesticides, diesel, patrol, gas, irrigation water, etc. lead to their wasteful use and environmental problems. Subsidies to capital intensive and highly polluting private and public industries lead to environmental degradation. Removing or reducing subsidies will bring both economic and environmental benefits to the country.

3. Clarifying and Extending Property Rights.

Lack of property rights over excessive use of resources leads to degradation of environment. This leads to overgrazing of common or public lands, deforestation,and over exploitation of resources. Clarifying and assigning ownership titles and tenurial rights to private owners will solve environmental problems. Places where the use of common lands, forests,irrigation systems, fisheries, etc. is regulated and rules for their proper use are laid down by the community, the ownership rights should be clearly specified in the administrative records.

4. Market Based Approaches.

Besides regulatory measures, there is urgent need for adopting market based approaches for the protection of environment. They aim at pointing to consumers and industries about the cost of using natural resources on environment. These costs are reflected in the prices paid for goods and services so that industries and ultimately the consumers are guided by them to reduce air and water pollution.

5. Regulatory Policies.

Regulatory policies also help in reducing environmental degradation. Regulator shave to make decisions regarding price, quantity and technology. In making decisions, they have to choose between the quantity or the price of pollution or resource use or technologies. The regulating authority has also to decide whether policies should target the environmental problem directly or indirectly. It lays down technical standards and regulations and charges on air, water and land pollutants. Regulators should be impartial in applying environmental standards to both public and private sector polluters or resource users.

6. Economic Incentives.

Like regulatory policies, economic incentives relate to price, quantity and technology. Incentives are usually in the form of variable fees to resource users for the quantity of pollutants in air, water and land use. They are given rebates if less waste or pollution is generated than the emission standards laid down.

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Measuring sustainable development is a difficult task which involves the valuation of environmental damage and comparing it with the costs of preventing it. There are also the problems of measuring the capital stock needed for sustainable development, of natural resource accounting, and the use of an  appropriate discount rate for maintaining an optional balance between the use and preservation of natural resources. We discuss a few methods and their implications on sustainable development.

1. Measuring Natural Capital Stock.

The stock of natural resource assets or of environmental assets includes “soil fertility, forests, fisheries, the capacity to assimilate waste, oil, gas, coal, the ozone layer and bio  geo chemical cycles.” The necessary condition for sustainable development is that the natural capital stock should be conserved and improved. This is interpreted to mean that the natural capital stock should remain at least constant. This can be measured in terms of the cost-benefit analysis of changes in the natural capital stock. If it is reduced, say in terms of clearing forests for cultivating land or for habitation, etc., there will be benefits in terms of the use of the land for more productive purposes.Similarly, when the atmosphere is kept clean, it is a benefit and the damage of polluted environment is a cost. So sustainability is consistent with maintaining and improving natural capital assets.Some economists do not agree that more importance should be attached to natural capital than to man-made capital and human capital. According to them, sustainable development relates to the conservation and improvement of the overall capital stock comprising natural, man -made and human capital. This view is consistent with efficiency and inter generational equity. Taking the overall capital stock means that natural and man-made capital can be substituted for each other. This can be done on the basis of social rate of return. This presumes that if a natural capital asset is being depleted, the proceeds from this are invested on man-made capital in order to obtain a high rate of return. But this seldom happens because  from environmental degradation are consumed and not invested. Another problem is of valuation of the proceeds from natural capital and their investment on man-made capital. It is not possible to evaluate the environmental damage correctly on the basis of market prices. The use of shadow prices is not an accurate measure of environmental services.

2. Natural Resource or Green Accounting.

Another measure of sustainable development is green accounting.It permits the computation of income for a nation by taking into account the economic damage and depletion in the natural resource base of an economy. It is a measure of sustainable income level that can be secured without decreasing the stock of natural assets. This requires the adjustment of the system of national income accounts in terms of stock of natural assets. The computation of gross national product(GNP) would be replaced by a measure of national output that includes the economic cost of degrading natural resources which are required to produce goods and services directly and indirectly. Thus GNP would include the stocks of natural assets and the measure of sustainable can be NNP = GNP - DN where DN is depreciation of the monetary value of natural assets during the year. But the computation of such a measure of sustainable income is a complex matter, particularly the computation of monetary valuation of non-marketed natural assets and externalizes. Thus green accounting would require numerous and controversial computations and valuations.

3. Measuring Environmental Values.

Another problem of measuring environmental damage is to  evaluate it and compare it with the cost of preventing it. It concerns comparing the benefits of  environmental protection with the costs incurred on it. In this connection, several indicators are being computed by economists.

4. Social Discount Rate.

Environmental degradation leads to costs and environmental improvements confer benefits on resource users. The problem is how to measure costs and benefits of environmental effects on the present and the future generations. For this, a rate of discount is needed for discounting all costs and benefits. But there is lot of confusion and differences among economists in discounting environmental costs and benefits on the following grounds:Critics do not favor discounting in general and high discount rates in particular. According to them, there is no unique relationship between high discount rates and environmental degradation. When discount rates are high, the level of investment falls which discourages development projects and slows down the pace of development. It thus shifts the burden of high costs to future generations. Even demand declines for resources on which investments are to be made.But the main problem is how to choose a social discount rate. This cannot be the market rate of interest because of uncertainties and imperfections of capital markets. Therefore, the majority of economists measure the social rate of discount at government’s borrowing rates on long-term securities because they are risk less. But there are numerous borrowing rates on government securities relating to different time periods. The problem is which rate to choose as the social discount rate.Many economists, therefore, favor social rate of time preference and opportunity cost of capital in measuring the cost and benefit of environmental degradation. But like the social discount rate, they have their problems of measurement and the effects on environmental degradation on the present and future generations are unclear.Thus no acceptable method has been evolved to measure sustainable development in a proper way.

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