Economic sustainability may be viewed as finding a way to grow the economy without damaging or depleting natural resources. It’s about balancing environmental responsibility, social equity, and economic growth. In essence, economic sustainability is figuring out how to use resources in such a way that is not harmful to current or future generations, or to the environment.
This article will explore the answer to “what is economic sustainability,” some of its key components, examples of what it looks like in developmental action, and what it takes to achieve.
Examples of Economic Sustainability
Since COVID-19 struck in 2020, the question “what is economic sustainability?” has been on everyone’s mind. The pandemic forced us to re-evaluate what’s important and what are the things we can live without. After all, what good is a strong economy if it comes at the expense of our health and wellbeing?
Fortunately, many individuals and organizations were already practicing the concept of economic sustainability long before the pandemic. What’s more, we’re seeing more people and businesses adopt such initiatives. Thanks to their efforts, we now have an emerging blueprint for an economically sustainable future.
Here are some examples of what economic sustainability looks like in action:
1. Reduced Reliance on Fossil Fuels
According to The National Academies of Sciences, Engineering, and Medicine, oil, coal, and natural gas – all fossil fuels – provide 81% of total energy in the United States. Can you imagine how our economy would look if we reduced reliance on these energy sources, and weren’t subject to volatile pricing?
We’d not only be doing our part to save the planet but also creating jobs in the renewable energy sector. Our power and electricity will come from solar, wind, and geothermal sources. Cities will have electric cars and public transportation that run on renewable energy, and people will have more employment opportunities in the green energy industry.
Whilst this may seem an un-affordable dream, the reality is that a clean energy revolution is happening, and this future may be closer than we think.
2. Increased Recycling
Americans consume 94% of nonrenewable natural resources. But if we start recycling more, we can save and use these resources again. In fact, per the Population Media Center, we can also lessen our carbon footprint drastically. That entails reducing pollution, which is excellent news for our economy and the environment.
We’ll take what would have been considered trash and turn it into something of value. For instance, the United States Environmental Protection Agency reported that in 2018, recycling efforts reached 193 million metric tons of carbon dioxide from composting, recycling, and burning municipal solid waste for energy. This effort is equivalent to removing 42 million cars from the road each year.
3. Improved Public Health
Our economy and public health are interconnected. We can create a domino effect that will positively impact our economy if we focus on improving public health. After all, what is economic sustainability if it comes at the expense of our health?
Greenpeace Organization, in their report entitled “Toxic Air: The Price of Fossil Fuels” and co-published with the Centre for Research on Energy and Clean Air (CREA), says that globally, around 4.5 million deaths each year, and estimated economic losses amounting to USD2.9 trillion, or approximately 3.3% of global GDP, can be attributed to air pollution from fossil fuels.
When we have a healthier population, we will have fewer cases of chronic diseases. Healthcare institutions will also save money, and employees will be more productive because they are healthy – just like Practice Greenhealth‘s report on the cost-savings of hospitals in 2018 worth $53 million from environmental initiatives.
4. More Sustainable Agriculture
How we grow and produce our food also affects economic sustainability. But if we want to achieve it, we must move toward more sustainable agricultural practices. That involves using renewable energy sources, investing in technology, and diversifying our food sources.
The world population is expected to reach 9 billion by 2050. This will put a lot of pressure on agriculture to produce enough food for everyone. The United Nations predicts that we will need 70% more food by 2050 than we do now in order for everyone to have access to adequate amounts of food.
This means that we need to find ways to make agriculture more sustainable so that it can provide enough food for future generations without destroying our environment or depleting our natural resources.
5. A Circular Economy
The way our economy is set up now, we take resources from the earth, use them to create products, and then dispose of them once we’re done. This is known as a linear economy, and it’s not sustainable. The “take-make-dispose” puts strain on our resources and creates pollution.
On the other hand, a circular economy is built on using resources more efficiently. In this economy, products are designed to be reused, repaired, or recycled instead of being thrown away. This way, we can save 290,000 lives yearly that we’d lose otherwise to outdoor air pollution by 2050 and conserve $700 billion in natural resources. (Ellen Macarthur Foundation)
How Full-Cost Pricing Creates Economic Sustainability
Full-cost pricing is the act of pricing products and services that includes all costs associated with providing them – from environmental to social. This could include, for example, the fee to use a specific resource or the price of carbon.
But what does this have to do with economic sustainability? If we price products and services according to their total cost, we signal businesses and consumers that we value sustainable practices.
By adopting full-cost pricing, we can create an alternative to a sustainable economy that promotes lasting welfare for the present time and for the generations to come.
Sustainable Economic Development Defined
Per the Center for Neighborhood Technology, sustainable economic development pertains to a regional effort rooted in local economies’ unique assets as tools to address their challenges. The goal is to provide quantifiable, real-world, practical, and implementable benefits for businesses, consumers, and institutes.
It’s similar to the United Nations’ 17 Sustainable Development Goals, which we created to end poverty, protect the planet, and ensure prosperity for all by 2030. In other words, it’s a way to create economic growth without sacrificing the environment or depleting resources. This is known as the triple bottom line approach, which we need to adopt if we want to achieve economic sustainability.
Economic sustainability is about achieving long-term economic growth without damaging the environment or depleting resources. It’s about balancing what we need and what we have. There are many ways to accomplish this, but some of the most important include adopting a circular economy, implementing full-cost pricing, and promoting sustainable economic development.
We are still far from perfecting these alternatives. Still, one significant step toward a sustainable economy always starts by acknowledging that there is indeed an impending danger and by evaluating and correcting our actions that might be causing the deterioration of the environment.