Global warming and depletion of the ozone layer, land degradation by agriculture, industrial and household pollution, depletion of subsoil resources by mining, loss of habitat and biodiversity from deforestation, and desertification from grazing semi-arid lands are conspicuous examples of the impacts of economic activity on the environment. They are generally viewed as symptoms of the unsustainability of economic production and consumption, and many indicators have been advanced to confirm this. Table 14.1 shows some indicators taken from a large variety of international sources. They differ widely in concepts and definitions, scope and coverage, units of measurement, statistical validity and results. There is an obvious need to develop a common conceptual framework as a basis for more systematic data collection and analysis.
Table 14.1 Indicators of non-sustainability Indicator
Biomass appropriation of terrestrial ecosystems Climate change
Ozone layer depletion
Deforestation Fossil fuels
Source: Bartelmus (1994, Table 1.3).
1-3.5°C of global warming (2100) 65cm sea level rise (2100) 30-40% decrease of ozone column above Antarctica
11% of vegetated surface degraded (since 1945)
10 million environmental refugees
500 billion tons of topsoil lost (since 1972)
5 million ha of cropland lost annually
70% of agricultural dryland lost
% of total biodiversity in danger of extinction
5000 to 150 000 species lost annually
16.8 million ha of forest area lost annually
90 years of proved recoverable reserves
243 years of proved reserves in place
At first sight the common underlying notion of sustainable development seems to provide such a framework. Unfortunately, popular definitions such as the Brundtland Commission's 'satisfaction of current and future generations' needs' (WCED 1987) or the economists' favorite of 'non-declining welfare' (Pezzey 1989) are opaque: both fail to specify the ingredients and time frame of welfare or needs. Nor do they specify any particular role for the environment. No wonder scarcely comparable indicators of the quality of life (Henderson, Lickerman and Flynn 2000), sustainable development (United Nations 1996a), human development (UNDP 1999), genuine progress (Cobb, Halstead and Rowe
1995), expanded wealth (World Bank 1997), ecological footprints (Wackernagel and Rees
1996) or environmental sustainability (Yale University et al. 2000) have proliferated.
A further obstacle to agreeing on common indicator sets and a common strategy for sustainable development is a prevailing polarization of environmental and economic scientists who seek to impose their own particular values on the counterpart field. This mutual colonization also seems to continue within the overall rubric of economics, as resource, environmental and ecological economists apply their own cherished tool kits to extend the boundaries of neoclassical economic analysis (Bartelmus 2000). Environmental economists attempt to put a monetary value on the loss or impairment of environmental services as a first step towards 'internalizing' these 'externalities' into the budgets of households and enterprises. Green accounting systems are among the more systematic attempts at modifying conventional macroeconomic indicators such as GDP or capital formation. Most environmentalists and even some ecological economists, on the other hand, reject the 'commodification' and pricing of the environment. In their view, the value of the environment cannot be expressed in money. For them, physical indicators of sustainable development, such as those of Ayres (1993b, 1996); Azar, Holmberg and Lindgren (1996); Ayres and Martinas (1995); United Nations (1996a); or Spangenberg et al. (1999) are preferable.
Physical indicator lists do cover a broader set of social values and amenities. They do not have, however, the integrative power of monetary aggregates generated in environmental accounting systems. But policy makers prefer highly aggregated indices to get a picture of the forest rather than looking at particular trees. When monetary valuation is disdained, more compound indices are constructed, usually as indicator averages, as for instance by UNDP's (1999) Human Development Index, or by adding up the weight of materials entering the economy, notably in material flow accounts (described below). This chapter discusses some of the pros and cons of two commonly applied physical and monetary approaches, with a view to linking or combining them.
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