The dilemma between economic growth and environmental growth

L-R: Carbon emissions lead to human induced global warming. Global warming induced climate change leads to natural disasters

Paul Ekins, Professor of Energy and Environmental Policy at the University College London, was the first speaker of Sustainability in Crisis conference organised by St Edmunds College, University of Cambridge. Accepting the ongoing conflict between economic growth and environmental growth, he aimed to show the reconciliation of these two applying economic theories. He came to a conclusion that, despite the ongoing conflict, environmental growth policy will reign over the current economic growth policy and, contradictory to popular belief, environmental growth focus will greatly enhance economic growth.
Further conclusion was that the underlying reason not to take the environmental growth policy was actually not fearing of tardy economic growth, but to become politically unpopular. Despite this, environmental growth policy is a necessity for adequate mitigation of climate change. The sooner the better to avoid the imminent collapse of the environment, said Paul.
Third kind of growth besides economic and physical growth is growth in human welfare which is deeper than the other two and mostly based on faith. None of the physical and economic growth alone does resolve the growth in human welfare. Certainly, the growth in human welfare is dependent on sustaining environmental functions. However, it has a complex relationship to economic growth some functions of which help human welfare and some other functions harm, such as too much load of economic growth increases employment but decreases leisure and deteriorates human relationship.
Paul Ekins however admitted that the growth in human welfare could not be fully addressed by traditional thoughts of economic growth. Nonetheless, the economic growth is the wheel of civilisation and comes from applied knowledge to transform the non-resources into resource. Exploitation of resources is the way of economic growth and therefore has negative impact on the natural environment. Thus, the radical environmentalists urge to curve the economic growth for the sake of environmental growth. Paul Ekins has given a thought to reconcile the two and tried to identify whether economic growth is environmentally sustainable.
He showed that it was theoretically possible and “absolute decoupling” is a policy tool to do so. Countries like France, Germany, and UK have tried to apply the decoupling and in some instances achieved absolute decoupling. In Germany, GDP grew by about 23% in an instance, but the production of sulphur dioxide fall by about 90%. Several other countries such as Japan, Turkey, and USA have achieved “relative decoupling” in some instances. Their initiatives have helped grow air pollution in a lesser proportion to their GDP. Therefore, it is possible to achieve environmentally sustainable economic growth in practice. Now the question is how.
The three possible suggestions to achieve environmental growth to mitigate climate change are radical application of environmental pricing, investment to innovate environmentally viable technology, and behaviour change of mass population. Paul Ekins indicated that the application of these policies could reduce economic growth (GDP) in the short term, but increase GDP by about 1% in the long term probably by 2050 only for the initiatives taken to reduce carbon emission.
Investment for green innovation and technologies will lead to higher employment with environmental impact of less pollution and fewer resource uses. Thus, the environmental growth leads not only to economic growth but also growth in human well-being.
Formulation and implementation of Environmental Tax Reforms (ETR) is a solution to reconciliate economic and environmental growth. ETR is the shifting of taxation from 'goods' (like income, profits) to 'bads' (like resource, pollution). Countries like Denmark, Sweden, UK have implemented ETRs in small scale. So far, the outcomes include the reduction of emissions and energy demand, and increase of employment. Furthermore, the GDP of ETR countries have been increasing compared to non ETR countries since 1994.
One of the concerns of policy makers is that the cost of implementing strong environmental growth is very high. Huge investments are required in the development and deployment of greener technologies right along the innovation chain for large-scale climate change mitigation. It is a long-term process to get benefits and requires to accept short-term discomfort. Each government is typically of 4 to 5 years term and thus reluctant to take the challenge fearing to become less popular.
Main reason to be politically unpopular is that high carbon prices for ETR will greatly change lifestyles and consumption patterns of mass people. Nonetheless, this politically unpopular policy needs to be initiated not to face environmental collapse so soon. It is already too late and millions of the world's population are in immediate danger of losing ground under their feet to rising water level for the rapid pace of global warming.
Paul Ekins concluded with a prediction that relatively high growth countries in a sustainable future would be those who had developed and could export resource-efficient technologies and products. This conclusion bears underlying direction for growing countries like Bangladesh. At one point in the future, developed countries could obligate import of green products as they did for the cause of child labour in the garments sector. Importing developed countries at once urged to prohibit child labour in garments sector, otherwise they insisted no trade. Similarly, they may insist import of only low-carbon products.
Keeping this possibility in mind, Bangladesh can seriously consider going for the production of low-carbon products for export and local consumption, so she can be ahead of partaking more global share of exports and contribute to mitigate climate change. Being a front level sufferer of climate change, Bangladesh can present herself as a leader to formulate and implement environmental growth policies which, besides contributing to mitigate climate change, would create a prospect to take the lead in low-carbon products exporting to developed countries which have already initiated many serious policies for greener growth for the sake of a sustainable future.
Discussions of Paul Ekins at the University of Cambridge prove that the environmental growth initiatives contribute positively to economic growth and defy the demand of radical environmentalists to halt economic growth. Politically unpopular choice of environmental growth policies are essential to formulate and implement to defer impending possibility of environmental collapse. Bangladesh has some to take from the discussions of Paul Ekins -- introduce greener productions that could make it a desirable source country of low-carbon products import for the countries which have been looking to grow in a greener way to lengthen the world's sustainability.
Bangladesh has potential to lead producing and exporting of greener products and technologies. The question is how sincere the policy makers of Bangladesh are to take the initiative in the interest of economic growth of Bangladesh as well as the environmental sustainability of the mother earth.

The writer is an assistant professor at University of Liberal Arts Bangladesh (ULAB).
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