The Economics of Nature and the Nature of Economics

The Economics of Nature and the Nature of Economics

Advances in Ecological Economics series

Edited by Cutler J. Cleveland, David I. Stern and Robert Costanza

This book discusses important recent developments in the theory, concepts and empirical applications of ecological economics and sustainable development. The editors have assembled a fascinating collection of papers from some of the leading scholars in the field of ecological economics.

Chapter 7: Implementing sustainable development: a practical framework

Mohan Munasinghe

Subjects: environment, ecological economics

Extract

Mohan Munasinghe INTRODUCTION TO SUSTAINABLE DEVELOPMENT The degradation of the environment has become a serious issue worldwide in recent years. Decision makers are seeking more proactively designed projects and policies that will help anticipate and minimize environmental harm. In the early years of the twenty-first century, the concept of sustainable development has emerged which seeks long-run improvements in the quality of life while protecting productive assets (especially natural resources) for the benefit of future generations (WCED, 1987). Past work has focused mainly on project level environmental effects through processes such as environmental impact assessments. Continued progress in this area is very important given that conventional development projects often have serious environmental consequences. However, policies that go beyond the local project level frequently have even more potent effects. In particular, for many decades policy reforms contained in the adjustment process, particularly in sector adjustment lending, have included elements that affect natural resource use and the environment. For example, rationalizing of electricity and water prices and removing subsidies for pesticides have been standard objectives of project and sector lending. More generally, conventional economywide reform efforts (including structural adjustment programmes) have been guided mainly by efficiency and income distribution objectives, without specifically seeking to influence the quality of the natural environment. However, to the extent that they have major impacts on relative prices or on incomes, such reforms hold significant potential either to help or to harm the environment. Therefore analysing links between economywide policies and environment is as important as studying the...

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