- •Strong and weak sustainability
- •Making sustainability operational
- •Sustainability in the real-world economies.
- •Economic growth and sustainability.
- •Equity within and between generations.
- •Environmental accounting and green budgets.
- •Market limitation.
- •Economic instruments for environmental protection.
- •Conclusive remarks.
Conclusive remarks.
Economy and Sustainable Development – Key Issues (see table 8.1)
One of the main issues of Session 8 for Ukraine is the countries in transition perceive the welfare gap separating them from the European Union as something which contradicts sustainable development more seriously than degraded environments and depleted resources. Here sustainability means providing for a smooth, growing flow of physical output over the next two to three decades rather than putting constraints on consumption.
Issue
Economic growth
Social equity
Intergenerational equity
National budgets
Economic values
Property rights
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Traditional economy
Unquestionable goal. Environmental, social and political problems to be resolved through growth of material welfare.
Markets determine distribution of income.
Present generation has unconstrained access to exhaustible resources. Intertemporal allocation of consumption determined by short-term investment decisions.
Environment and natural resources reflected in GDP on an ad hoc basis. Lack of mechanisms to account systematically for depleting the natural capital.
Markets determine values through price mechanism. Non-marketed goods and services are underpriced and consequently under-provided.
Not defined clearly for some public goods. Lack of consistency in policy. Regulations oscillate between laissez faire and administrative arbitrariness.
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Sustainable economy
Material output growth cannot be sustained for ever. Environmental, social and political problems to be resolved through increased efficiency.
Safety nets established to protect social fabric from decay.
Present generation consciously limits its access to natural resources so as to let its successors enjoy a non-decreasing level of welfare.
Depletion of the natural capital (including environmental degradation) subtracted from annual incomes/products. Restoration of natural capital registered as an investment.
Social and economic mechanisms are established to value public goods such as the environment and subsequently to provide their adequate supply.
Property rights to the environment clearly defined. Consequently regulations can make cautious use of market instruments where appropriate.
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