Environmental Degradation and Economic Development

The relationship between environmental degradation and economic development is a hush talk because not many leaders are comfortable talking about it. The need for creation of cheaper products has swelled the sweat shop and orient run manufacturing industry. But the costs were rather huge.

Green GDP is the GDP growth rate adjusted to the growth in the economy thus accounting all and any afflictions to the environment. Very idealistic this may seem and there were also countries who have employed this aggregation but that has blanched away the countries from being so idealistic. China, the country I’m speaking about, feared their Green GDP could even show negative figures and pulled out of any such statistical circus. Another growing country, India, also promises to change their course GDP into Green GDP in a few years.

But who really considers Green GDP seriously ? 

Countering the generalization, Simon Kuznets came up with his ground breaking Environmental Kuznets Curve establishing a relationship between per capita income and environment which states that the rise in per capita level of income after the meeting of every quantitative milestone set for development, so that environment which could be extensively damaged due to developmental activities now becomes a luxury and people willingly offer to trade in for greater environmental sustainability. This vouching was in scale with the conditions of U.K while the EKC was established.
Environmental Kuznets Curve
Environmental Kuznets Curve
Expressive needs about the GDP and its ineffective ruling of economic performance are mostly heard, never accounted. Now certain countries are solely dependent on their natural resources for their development, particularly fossil fuels. When eco-systems fail to sustain life on this planet, only then do we begin to see the hands burn and nations run, not to save lives but to save inadequate short term determinants of the economic growth.

We can very well see how the Kuznets Curve seems a thing so far away. Like the classical economists say, that the equilibrium is stable in the long run when no one has any idea how long is the long run going to be, the Kuznets Curve – how it explains that the richer the country gets the more aesthetically luxurious the people tend to be, that could sound like religion to anyone. Joseph Stiglitz and many economists opine the looseness GDP tends to portray when the costs for such a thing as independent as economic prediction. Does the EKC hold true in the richest and the most powerful countries out there? It doesn’t.
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©The Idea Bucket, 2013. (Submitted by Mikky)


  1. Fascinating. Perhaps some day we will have a precise formula to help us answer the age-old question: Is it worth it?

    Liked by 1 person

    1. A. M. says:

      That’s true, Jill! And thanks for stopping by. 🙂


  2. Nexialist says:

    Great article reminded me to brush up on some much needed economics. Keep it up!


    1. A. M. says:

      Thank you for your feedback 🙂


  3. Jack Curtis says:

    Many of the greens seem more the New Malthusians than rational planners, from what I can see. It’s inarguable that environmental destruction is a cost of moving from hunter-gatherer status but too many seem to assume that must be reversed without a rationale for doing so, other than the already established changes.

    Green seems to me a daydream until we can agree on definitions and goals…something we certainly need to accomplish. Also something exceedingly difficult, as the post indicates. The ultimate problem, as with so many human endeavors, is probably: who decides?

    Meantime, we seem to need a lot more science (and who’s going to pay for it) and a lot less emotion. I wish us luick… we’re likely to need it!


  4. drybredquips says:

    Thanks for liking “awakened to exercise.” Much truth in the above. Proving the truth of several adages: “You don’t get something for nothing,” “there’s a price for everything,” you take the bad with the good” etc. etc.


  5. janpanlaqui says:

    i’ve always suspected this but have never had the assets to prove it. the only way i can easily demonstrate this is by going onto google maps and looking at a low income neighborhood and a higher income neighborhood. the higher income neighborhoods have more trees while the lower income neighborhoods have less greenery and natural aesthetics.


  6. moneyfyi says:

    I like your posts. They make me notice things I never knew or have forgotten. Kuznets being in the latter category.
    There are two choices as to how to proceed. 1) account for the degradation and in so doing build expensive overseeing bureaucracies and higher required capital costs. In the beginning capital is the primary restraint, so if Kuznets is right you slow or maybe permanently displace the trend toward higher standards of living. His system does stabilize eventually but with some temporary unpleasantness. 2) permit the degradation, presumably without some of the heinous, now known, examples and move as quickly as possible to the more developed economy. Then fix the environment.
    The choices are mutually exclusive and I have seen little work as to which is better over a long period. Say three generations. I do know that environmental integrity is a luxury good. You can either afford to fix it after the harm or you can afford to not cause the harm and live at a much lower economic standard. I suppose because the affording arises from valuing other things more than economic wealth. The risk is getting stuck in the middle. Not enough growth to begin to equalize or fix things that got broken.
    A hard question and one which I imagine will work its way out in the same old way. Life is about tradeoffs. Sadly, not everyone favours the same set.


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