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Effects Of Economic Growth On The Environment

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What Is Economic Growth? And Why Is It So Important?

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By Carlos Scheel Carlos Scheel Scilit Preprints.org Google Scholar * , Eduardo Aguiñaga Eduardo Aguiñaga Scilit Preprints.org Google Scholar and Bernardo Bello Bernardo Bello Scilit Preprints.org Google Scholar

Economic Growth And Its Impact On Environment

Received: 31 December 2019 / Revised: 25 January 2020 / Accepted: 27 January 2020 / Published: 11 February 2020

Sustainable development is a major concern for developing and developed economies, as economic growth must lead to scarcer and more expensive resources. Although countries have introduced public policies focusing on resource and energy efficiency, there is an increasing need for a coordinated industrial strategy that can create sustainable prosperity through a holistic management of natural resources, capable of “uncoupling” economic growth. from resource exploitation and natural degradation. Consequently, the aim of the current research is to develop a decoupling model capable of creating increasing economic returns, reducing the social gap and restoring the natural capital for regions in developing countries. Departing from a literature review of peer-reviewed articles on successful industrial cases of decoupling around the world, we contrasted the linear production model with the United Nations Environment Program’s (UNEP) current four decoupling indicators to propose a more robust model. The result was an eight-factor decoupling model that used a well-supported framework for sustainable wealth creation called “circular value ecosystem” (CVES). Using system dynamics, we deployed the proposed framework using system dynamics modeling to improve the understanding of our proposal. We found that this model, with the proper regional conditions in developing countries: (1) can reduce the consumption of natural resources, through substitution; (2) produce alternative economic increasing returns; (3) reduce the negative environmental impacts; and (4) create self-sustainable prosperity for the economy, the environment and the social development of the most stakeholders of these regions. Decoupling economic growth represents a complex and challenging task whose successful implementation can only be achieved if it is managed at a regional level with a systemic approach.

Although steady economic growth is one of the main objectives appearing in the industrial policies of most developed countries, most of their economic activities are associated with the exploitation and industrialization of natural resources. Such resources are becoming scarcer and more expensive to exploit, leading to a decrease in resource efficiency and extensive environmental damage, especially in developing countries [1].

Several studies concerned with sustainable development (e.g. [2, 3]) have pointed out that regional policies and coordinated industrial strategies are necessary to develop a holistic management of natural resources, which is able to “decouple” economic growth from: ( a) an excessive natural resource exploitation, (b) the extensive volumes of waste and residues produced by industrialization, (c) the negative environmental impacts, and, as a result, (d) a widening of the socio-economic gap – circumstances which developing countries have suffered for decades, in contrast to industrialized ones.

Globally Unequal Effect Of Extreme Heat On Economic Growth

The decoupling of economic growth from resource extraction has encouraged research interest among scholars and authorities around the world since, among others, the call of the United Nations Environment Program (UNEP) International Resource Panel to decouple human well-being from resource consumption [4 ]. Decoupling, itself, has become a burgeoning field of research with its own decoupling theory [5] and numerous and increasing research articles on the subject (e.g. [6]). These studies, which range from analysis of decoupling at a micro-level of analysis (e.g. [7, 8]), to more regional macro-level assessments (e.g. [9, 10]), recognize that decoupling is a complex systems challenge that the is worth studying if true sustainability is to be achieved in the face of a growing demand for resources by an increasing population [11]; the latter is one of the main reasons why effective decoupling mechanisms are needed.

However, after the recent industrial revolution produced by digital technologies, the emergence of a new era based on environmental technologies suggests that natural resource productivity (RP) is the core characteristic to be optimized when implementing new sustainable strategies. In parallel development, resource efficiency (RE) becomes a relevant factor for the formulation of sustainable policies of countries as well as the current planned expansion of resilient cities [12]. However, increasing RE requires enormous amounts of economic capital and restrictive public policies [ 3 , 13 ].

Figure 1 depicts the relationships between economic growth results of conventional industrialization, human well-being, resource use and environmental impact. Environmental impacts and resource use can be controlled by an economic degrowth. However, this method is not a viable option for less developed countries, where social and environmental issues are not a priority for their decision makers.

Despite the fact that the world is already full of waste and residues, the demand for raw materials is increasing worldwide [14, 15]. Around 80% of consumer goods and materials are thrown away; more than 30% of processed foods go to waste once they enter the food supply chain. In Europe alone, the average occupancy of cars is less than 10%, and from 10% to 15% of material goes to waste during construction. Moreover, the demand for raw materials will grow over the next twenty years by more than: 200% for agricultural land; 137% for water; 57% for steel; and we will need more than 32% of the current level of produced energy. On the other hand, there is an increasing demand for a new plastic economy capable of recycling at least 70% of the plastic produced, from its current low of 14% [16].

What Is A Circular Economy?

These data lead us to consider decoupling resources used to achieve economic growth from environmental degradation as a necessary activity. This is an issue that has reached the top economic development agencies [17], environmental protection organizations [4], government institutions [18] and various academic researchers (e.g. [3, 19, 20]).

The high demand for resources emphasizes that the focus on resource efficiency is only able to bring solutions for specific cases and within a short term, such as transport logistics through fuel reduction; but in the long run this solution will lead us to the slowdown of the economy [21, 22]. Existing literature does not identify a proven model that provides a systemic approach that can effectively resolve this disconnection issue [ 23 ]. For sustainable development, in the long term, a model is needed to be adapted to various situations and regions – as the highly extractive economies – to not only work on the optimization of efficiency factors or the application of appropriate technologies for decoupling, but also to look for innovative mechanisms. to create sustainable wealth based on alternative ways of producing new sources of economic added value [24].

Accordingly, the following research questions arise, “Which innovative mechanisms can help the decoupling process beyond REs?” and “How will this mechanism be able to decouple economic growth from resource consumption?” We aim to answer these research questions by proposing a decoupling framework based on a systemic view of growth, and on a circular economy approach through the creation of a circular value ecosystem (CVES). Based on this framework, we argue that it is possible to create a viable circular value ecosystem capable of decoupling economic growth from natural resource extraction, by transforming residues, waste and obsolete products into valuable assets, while it simultaneously creates increasing economic returns, narrows the social gap and restores the natural capital for regions in developing countries.

The approach used in this paper focuses on the application of circular economy (SE) strategies [25, 26], with a systemic view of growth, and on the application of proper policies, i.e. innovation strategies to towns and communities to circulate [27] , adapted from successful cases, with lessons learned from countries that were able to reduce the demand for natural resources and at the same time create opportunities for sustainable growth by implementing unconventional business models.

Economic Indicators That Affect Business Success [2023 Guide]

Based on the sustainable wealth creation approach through the framework for innovation and enabling technologies (SWIT) [24], the current research proposes a model to “compose a circular”

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