Figure 2.3: The Three Goals of Economic
development (after Goodland 1994)
In an attempt to breakthrough the impasse
Goodland (1994) distinguished environmental sustainability from social
sustainability and economic sustainability. While economic sustainability
is maintenance of capital or keeping capital intact, poverty reduction
is the main goal of social sustainability.
Broadly defined environmental sustainability seeks to enhance the quality
of human life through protection of natural resources (both sources and
sinks). Protection of natural resources ensures that the supply of raw
materials could be maintained over long term. Environmental sustainability
requires that the wastes generated do not exceed the assimilative capacity
of the natural waste sinks. The basic message is loud and clear, - humanity
must learn to live within the limitations of the physical environment,
both as a providers of inputs (sources) and as a sink for wastes (Serageldin
1993). Keeping environmental goals in mind sustainable development can
now be defined as 'Development without growth beyond environmental carrying
capacity' or as 'development without growth in throughput of matter and
energy beyond regenerative and absorptive capacities' (Daily and Ehrlich
1992). As emphasised before, the principal means of achieving environmental
sustainability is through maintenance of natural capital.
Daly (1994) defined natural capital as the stock that yields the flow
of natural resources. Almost in a similar manner Goodland (1994) defined
natural capital as the stock of environmentally provided assets (such
as minerals, soil, atmosphere, forests, fauna, water, wetlands, etc.)
that provide a flow of useful goods or services. Other forms of capital
include human capital (people, institutions, education, cultural cohesion,
information, knowledge, etc.) and man-made capital (houses, roads, factories,
ships, etc.). Human capital may also be termed as social capital (Goodland
1994).
Two important functions of natural capital are to supply resource and
to assimilate waste. Environmental sustainability calls for continuity
of these functions over the long-term for which certain constraints on
resource utilisation and waste generation must be imposed.
In order to be able to lay down a set of rules to ensure maintenance of
natural capital over long term it is important to recognise that depending
on their regenerative capacity natural resources can be categorised as
renewable resources and non-renewable resources. The stock of a renewable
resource over time does not remain fixed and can be increased as well
as decreased. The stock of fish in a pond comes as a handy example. Theoretically
speaking, a perpetual supply of a renewable resource can be maintained
if harvesting rate is less than (or at the most equal to) the growth rate
of that resource.
In order to operationalise the concept of environmental sustainability
the following input output rules may be suggested (Pearce and Turner 1990,
El Serafy 1991 1993).
1. Total amount of waste to be generated by any project over a period
should be such that the waste can be assimilated (made harmless or put
back to productive uses) by the receiving environment without any loss
of capability to assimilate that quantity and quality of waste in future.
This is the output rule.
2. The maximum rate of a renewable resource intake for a project should
not be greater than the natural regeneration rate of that resource. This
is the input rule.
Environmental sustainability, thus, imply that neither the stock of renewable
resources nor the waste assimilative capacity should be allowed to decline.
In aggregate the resource supportive capacity and the waste assimilative
capacity together define an environment's carrying capacity. The task
is to prevent renewable resources from becoming exhaustible.
2.6 Sustainable Development and Mineral Resources
As has already been mentioned a new wave of environmental concern swept
past the western world in the early 1970s. The wave was stimulated by
principally three factors.
1. The so-called 'oil shock' inflicted upon the world by the petroleoum
cartel, - OPEC, through sharp rise in petroleum prices.
2. A synchronised economic boom throughout the developed world leading
to sharp rise in commodity prices.
3. The publication of the results of a systems dynamics modelling study
by the Club of Rome, titled - 'The Limits to Growth' (Meadows et al. 1972),
which predicted the collapse of per capita food and industrial output
as a result of the exhaustion of non-renewable resources.
'The Limits to Growth' study was both severely criticised and widely read.
A scare dominated the development thinking process for the next few years.
And even today a threat, right or wrong, persists that extraction of minerals
from the ground is incompatible with sustainable development. However,
over the years efforts have been made to chalk out strategies for optimal
depletion of natural resources to ensure that the intergenerational equity
perspective is properly considered. While some environmentalists feel
that mining is incompatible with sustainable development some others desire
to manage non-renewable resources in such a way as to eliminate their
use. Miller (1991) identified two causes for such feelings or desire.
First, some believe that all mines and processing plants unavoidably and
irreversibly damage the environment, leaving a degraded legacy for future
generations. Thus the output rule of sustainable development is violated.
The second perceived problem is that all non-renewable resources, if used
now, will unavoidably become scarce, thereby depriving future generations
of the benefits of using them. As observed by Daly (1994) non-renewable
natural capital can not be increased either actively or passively. When
put to use it can only be diminished. Current thinking on mineral production
no longer focuses upon possible resource exhaustion in near future. In
1992 Meadows and others published 'Beyond the Limits', - a sequel to 'Limits
to Growth', which reflected the shift in focus from resource exhaustion
to the capacity of the earth to absorb the pollution arising from resource
production and use. However, the debate still continues (Kesler 1994,
Simon 1995).
Miller (1991) argued that the resource in the ground is a kind of fixed
capital. When produced and used it can be converted into other kinds of
durable capital goods, including roads, hospitals, etc., which will be
of benefit to future generations. Conservation will not necessarily increase
the futures inheritance, but merely change its composition from 'capital
goods' to natural products.
Echoing the same argument Aitken (1991) pointed out that a non-renewable
resource in the ground is a kind of unrealised wealth. When it is produced
and used economic surpluses are generated. These surpluses if invested
in human resources and man-made resources can accrue benefit to the future
generations.
'Our Common Future' (WCED 1987) stresses the need to ensure economic growth
without impairing the capacity of future generations to grow. But the
report tells more about what is to be achieved than how to achieve it.
As emphasised by Pearce (1991), - if sustainable development is achievable,
the challenge is to figure out what we must do, in an operational sense
to harmonise the economy and the environment.
The Club of Rome's forecast on shortages of natural resources has gone
wrong. Rather the opposite has happened. On one side the agricultural
and industrial output recorded phenomenal increase during the intervening
period, while on the other side the prices of almost all natural resource
commodities showed a downward trend in real terms reflecting no resource
scarcity!
It is indeed very surprising that even after twenty-five years of active
deliberations and debates on all possible fora, the intelligent and informed
individuals remain so divided on such an issue involving the future well
being of humanity. The divergence of views, at least in part, is because
of adoption of different paradigms, coupled with quite contrasting views
on the benefits of technology, public policy and the market place (Tilton
1996).