Environmental and Natural Resource Economics 3rd ed. Jonathan M Environmental and Natural Resource Economics 3rd ed. Jonathan M. Harris and Brian Roach Chapter 21 – Institutions and Policies for Sustainable Development Copyright © 2013 Jonathan M. Harris

Figure 21.1: A Conceptualization of Sustainable Development Social Equity Sustainable Development Sustainable development has three dimensions: economic, social, and environmental. Full sustainability occurs at the intersection of these three dimensions. Thus the analysis of sustainable development requires an interdisciplinary perspective. Economic Sufficiency Environmental Resilience

Table 21.1: Environmental Data for Selected Countries Country 2011 population (millions) Energy consumption1 CO2 emissions2 Motor vehicles3 Per capita Total Per 1,000 people Bangladesh 150 201 30 0.3 46 3 0.5 China 1,344 1,695 2,257 5.3 7,049 47 62.6 France 65 3,959 256 5.9 366 598 37.7 India 1,241 560 676 1.5 1,722 18 21.1 Japan 127 3,700 472 9.5 1,207 589 74.8 Mexico 112 1,559 175 4.3 473 276 30.4 Thailand 70 1,504 103 4.2 273 134 9.0 United States 311 7,051 2,163 18.0 5,472 802 246.2 World 6,974 1,790 12,483 4.8 32,102 137 933.0 Energy consumption, CO2 emissions, and vehicle use vary widely across countries. Developing countries such as China and India are increasing their consumption, but are still well below per capita levels in the developed world. In total energy consumption, China now exceeds the U.S., and exceeds the U.S. by a larger margin in total carbon emissions due to its greater reliance on coal. Source: World Bank, World Development Indicators database, . 1. Commercial energy from all sources, measured in kilograms of oil equivalent per capita, 2009 data. Totals in million metric tons of oil equivalent. 2. Emissions from industrial processes, measured in metric tons of CO2 per capita, 2008 data. Totals in million metric tons. 3. Includes automobiles, buses, and freight vehicles, date of data varies (generally 2009, Thailand 2006). Totals in millions of vehicles.

Figure 21.2: The Active World Bank Environmental Portfolio, Fiscal Year 1993-Fiscal Year 2010 ENRM as % of Total Lending ENRM Lending ENRM Lending (left axis) ENRM as % of Total Lending (right axis) After extensive criticism of the negative environmental effects of some of its major projects, the World Bank has attempted to “green” its operations with more specifically environmental loans. Environmental loans, at one point as much as 17% of Bank lending, fell to 4.7% in 2002, but have since increased in quantity and as a percentage of total loans. Source: World Bank, 2004, 2010. Note: ENRM = Environmental and Natural Resource Management

Figure 21.3: World Bank Energy Finance and Climate Change, 2000-2007 Some World Bank energy projects include explicit consideration of climate change, but a larger number do not. Between 2005 and 2007, less than 30% of the Bank’s lending to the energy sector integrated climate change considerations, while over 50% did not include climate considerations. Source: World Resources Institute, 2008.

Figure 21.4: Growth Reaching a Steady State Resource-using Economic Activities Steady State The concept of a steady-state economy, proposed by ecological economist Herman Daly, does not necessarily mean an end to growth in well-being or economic services, but posits a limit on the consumption of material and energy resources. Activities such as services, arts, communication, health care, education, could continue to grow while total “throughput” of resources and energy reached a limit. Time

Figure 21.5: A No-Growth Scenario for the Canadian Economy 300 250 200 GDP/Capita Index (2005=100) 150 100 GHG Unemployment 50 Poverty A model of a “post-growth” economy for Canada involves GDP/capita stabilizing at a higher level, while a tax on greenhouse gas emissions lowers GHG emissions by 22% by 2030. A shorter work week allows for full employment, with less growth in material consumption but more spending on health and education. Poverty and debt/GDP levels decline. Debt to GDP 2005 2010 2015 2020 2025 2030 2035 Year Source: Adapted from Victor, 2008, p. 182. Note: GDP = gross domestic product; GHG = greenhouse gases.