Notes on Sustainable Development - Introduction and Growth
I. What Is Sustainable Development?
Sustainable development is both an analytical framework and a normative project for addressing global problems.
It is guided by the SDGs, aiming to steer economic diplomacy and policy through 2015–mid-century.
Our starting point: a crowded planet with 7.2 billion people, roughly 9× the 800 million around 1750, with population rising by about 75 million per year.
People are distributed across sharply different contexts: extreme poverty, near-poverty, and high-income living standards, all within one interconnected world economy.
The world economy now produces roughly $90 trillion in output per year (gross world product, GWP), and by crude statistics GWP is at least 200× larger than in 1750, though many modern goods/services did not exist 250 years ago.
Key observed features: vast wealth alongside extreme poverty; a global interdependence of trade, finance, technology, production, migration, and networks; and mounting environmental threats from economic activity.
The environment is a critical constraint: nature provides food, water, materials, and ecosystem services, but the huge world economy is degrading these environmental bases.
Environmental threats span climate change, freshwater scarcity, ocean chemistry, and habitat loss. Earth’s key cycles (water, nitrogen, carbon) are being altered in ways that are dangerous and largely unprecedented in the last 10,000 years of civilization.
These challenges motivate a normative framework that seeks a holistic balance among economic, social, and environmental goals, plus good governance.
Major four objectives of a good society (the normative framework):
Economic prosperity
Social inclusion and cohesion
Environmental sustainability
Good governance by governments and major actors (including multinational firms)
Historical development of the concept:
1972: Stockholm Conference foregrounded sustainability and development challenges; Limits to Growth warned of resource limits.
1980: World Conservation Strategy introduced the phrase sustainable development and emphasized carrying capacity and needs of future generations.
1987: Brundtland Commission defined sustainable development as development that meets present needs without compromising future generations’ ability to meet theirs (intergenerational justice).
1992: Rio Earth Summit codified a three-part framework (economic, social, environmental) and the principle of intergenerational justice.
2002: WSSD in Johannesburg emphasized integration of three components as interdependent and mutually reinforcing pillars.
2012: Rio+20 reaffirmed the three dimensions and introduced the SDGs as action-oriented, communicable, globally applicable goals driven by governments with stakeholder involvement.
In current use, sustainable development is both a normative ideal (what a good society should aim for) and an analytical field (how the economy, society, and environment interact).
Embracing complexity: sustainable development is a science of complex systems with four interacting domains: economy, society, environment, and governance.
Complex systems exhibit emergent properties, nonlinear responses, and potential for booms/busts; a small change can propagate to large system-wide effects.
A skilled practitioner must diagnose each case specifically, acknowledging the system’s complexity rather than seeking a single universal solution.
Role of technology:
Three aspects discussed: (1) technology as a main driver of long-run growth; (2) negative side effects of tech (e.g., coal) despite large positive direct effects; (3) potential for directed technological change through public/private R&D, policy, and governance.
Governments have historically steered technology for broader social goals (military and civilian innovations) and will need to guide sustainable innovations (energy, transport, construction, health, education).
Policy tools include public R&D funding, public labs, regulations, prizes, and adapted patent laws to spur targeted innovations.
Normative orientation: a good society is not just rich; distribution, social mobility, non-discrimination, social cohesion, and environmental stewardship matter for well-being.
Trade-offs between efficiency (growth) and equity (fairness) have often been assumed, but synergies are possible.
Examples of synergies: using taxes to fund health/education (boosting productivity), pollution controls that reduce disease and absenteeism, and thus improve both growth and equality.
Analytical sense of growth and measurement (II): An Introduction to Economic Growth
Economists summarize a country’s development by GDP per capita: ext{GDP per capita} = rac{ ext{GDP}}{N} where GDP is the market value of production and N is population.
GDP vs GNP (income-based): GDP counts production inside country borders; GNP counts income earned by residents, regardless of location. In some cases, GNP < GDP when foreign-owned production dominates inside the country.
Cross-country comparisons use GDP measures converted to a common price basis (PPP) to reflect real purchasing power, and/or GDP at constant prices for real growth assessment.
GDP at PPP uses a common set of international prices to sum production and consumption across countries, so 1 ext{ in GDP}_{PPP} has equal purchasing power across countries.
GDP measures only market transactions; non-market activities (e.g., home childcare) are excluded unless monetized (e.g., paid caregiving).
GDP also ignores environmental harms and other negative externalities associated with production.
Therefore, GDP per capita is a rough proxy for well-being, not a perfect measure.
Economic growth measured and interpreted:
Growth in GDP over time indicates increased output; however, the relevance is greater for GDP per capita (output per person) for standard of living.
The “rule of 70”: if a variable grows at rate g% per year, its value doubles roughly every
t ext{ years} \
I. What Is Sustainable Development?
Economists summarize a country’s development by GDP per capita: ext{GDP per capita} = \ rac{ ext{GDP}}{N}$$ where GDP is the market value of production and N is population.
GDP vs GNP
GDP counts production inside country borders; GNP counts income earned by residents, regardless of location.
In some cases, GNP < GDP when foreign-owned production dominates inside the country. This distinction matters because it indicates whether the economic activity within a country's borders primarily benefits its residents or foreign entities.
What GDP does not measure
GDP measures only market transactions; non-market activities (e.g., home childcare) are excluded unless monetized (e.g., paid caregiving).
GDP also ignores environmental harms and other negative externalities associated with production.
Therefore, GDP per capita is a rough proxy for well-being, not a perfect measure.