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Development and sustainability are mutually reinforcing outcomes

By Alan Moran - posted Friday, 15 March 2002


Sustainable development as a term came into its own with the 1987 publication of the Brundtland Report. Brundtland herself was a Norwegian Socialist, and the report itself showed that influence. For example, reminiscent of earlier, flawed analysis by the Club of Rome, the report looked to replace existing energy usage with green power claiming that energy was being used in an unsustainable way.

Development and Resource Depletion

The Club of Rome projected forward usage rates of different minerals and combined these projections with existing proven reserves. The result was an apparent unsustainable level of usage and a looming depletion of a great many of the world’s resources. We were, for example to run out of oil in 1992, of lead in 1993 and of aluminium (based on one of the world’s most abundant raw materials) by 2003.

Absurd though these predictions turned out to be they created a whole environmental industry that continues to prophesy "The End of the World is Nigh" but just moves the dates forward for each new cohort of wide-eyed gullibles. Thus, Paul Ehrlich, a high priest in the environmental movement, realizing in the 1980s that oil remained plentiful, put the oil crisis back to the 1990s. Environmentalists who pay inadequate attention to the interconnectedness of people’s wants and their wherewithal to pay for them often make such basic errors. The fact is that when goods become scarce their price rises and this leads to them being used more sparingly, a search for new sources and a search for substitutes. This process applies to environmental services just as it does to the resources we use.

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Sustainability and Other Environmental Services

While physical limits to the supply of many materials remains, during the 1990s the focus of concern shifted to the alleged conflict between environmental "goods and services" and the private goods and services that make up our conventionally described living standards. That focus has a great many dimensions. These include loss of environmental values due to human pressures on the environment; among other features, these values are said to include:

  • depletion of forests and agricultural land;
  • air pollution;
  • species loss; and
  • catastrophic environmental outcomes said to follow from a global warming largely due to burning fossil fuels.

Examination of these dimensions of environmental sustainability demonstrates that the worries are misplaced, or that the only conflict between them and development is a result of poor political institutions. The latter were most notably evident in the former socialist countries, where a considerable environmental accompanied such economic development as took place. Among the socialist states, urban pollution was the worst in the world, forests had been severely depleted, seas poisoned, and increasing amounts of land were being brought under cultivation without accompanying increases in food output.

Observing such outcomes and contrasting them to those in countries like Australia provides the key to understanding how economic development and environmentally sustainable outcomes are not only compatible but are mutually reinforcing.

Sustainable Development with Agriculture and Forestry

Private ownership provides good incentives for conservation and careful usage for many of the reasons that explain why privately owned houses are better cared for than those owned by the government. Ownership confers a personal benefit, which is optimised by combining usage and conservation. If someone owns in perpetuity a timbered area of land they will harvest and resuscitate the timber to maximise its value. If they have no on-going rights they will harvest it as quickly as possible. Not to do so would mean no gain since others would take the value.

Australian forest areas have tended to increase over the past 100 years. Until recently this reflected the value of the wood for commercial purposes. This conservation force is being undermined by the reduced security in such ownership brought about by Regional Forest Agreements (or rather governments’ ready willingness to overturn them). Future conservation will rely increasingly on reserving forests from woodcutting, with the accent on preservation rather than conservation and a likelihood of forest degradation by severe fire.

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Private ownership also is responsible for the increase in Australian agricultural productivity. In the past forty years, Australia's farm production has increased by 130 per cent. Performance in other countries has been comparable. Table 1 offers some quantification of this in Australia.

TABLE 1
Average % Increase in Annual Volume of Farm Output

1951-1962 1962-1972 1972-1982 1977/8-1998/9
4.0 3.5 1.0 2.6
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About the Author

Alan Moran is the principle of Regulatory Economics.

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