The debate on the matter of environmental policies versus economic growth has recently heated up in the US. President Bush has talked of cutting spending, cutting taxes and regulating pollution. On the other hand his supporters argue that economic growth will stimulate the economy and help solve some of America's economic problems. But what exactly does economic growth do for the environment?
One of the biggest contributions made by economic growth is the fact that it makes the use of non-carbon energy like geothermal heat and water vapor more efficient. Also, more buildings are being constructed with high efficiency technology. All of this lessens the demand for the pollutants that cause global warming.
However, the environmental impact of economic growth is not the only thing to consider when debating the pros and cons of the two. Many economists argue that there is little correlation between economic growth and the level of environmental impact. They point to other countries which have managed to thrive despite the fact that their economy grows significantly but their environment remains virtually unchanged.
In fact a recent study by Michigan State University showed that economic growth does not lead to a reduction in the concentration of carbon dioxide in the atmosphere. This means that the US may continue to see an increase in atmospheric concentration of this pollutant. While this might seem alarming, experts note that the amount of carbon dioxide released from burning fossil fuels remains steady. The study also points out that despite a slowdown in economic growth, the US is still growing at a fast rate compared to other leading economies.
There are, however, some indirect impacts of economic growth that can be considered. For example, when people live in greater proximity to one another, there is increased traffic of people. This increased traffic emits carbon dioxide into the atmosphere. However, the carbon dioxide emission caused by economic growth lessens as the economy grows. Also, people who work in big cities such as New York, Los Angeles or Houston emit more carbon dioxide due to the traffic and other sources of waste.
One of the concerns that researchers have about the impact of economic growth on the environment is its effect on biodiversity. Economic growth inevitably leads to increased human mobility leading to an increase in the movement of various species of animals. Studies have shown that these changes are often marked by the increased concentrations of species in specific areas. It has been observed that species such as mosquitoes, spiders, owls and rats tend to move towards areas with higher concentrations of human habitation.
Similarly, how does economic growth benefit the environment when it is used for economic enrichment. When people have greater access to consumer goods, they tend to use those goods more. This, in turn, alters the way humans interact with nature. As these changes are marked by the expansion of markets, the use of natural resources and wildlife is likely to be negatively impacted.
The debate about the effects of economic growth on the environment can also shed light on the various forms of economic activities that take place within the global context. Extensive research has been conducted on how various forms of economic activity impact the environment. Although the results of these studies vary, they largely suggest that the introduction of new sources of capital (such as knowledge-based venture capital) and new forms of enterprise are likely to have negative impacts on the environment.
How does economic growth benefit the environment when considered from another perspective? According to some analysts, economic growth is beneficial because it leads to a more dynamic distribution of income across the population. Other analysts argue that economic growth could have devastating environmental impacts, particularly if rapid development occurs in places at the interface between natural habitats and urban sprawl. Rapid urbanization could also lead to increased environmental pollution and environmental degradation, if it is accompanied by a rapid growth in population. However, other analysts argue that population expansion and economic growth can often lead to improved living conditions for many people, especially for . . . . . . the poor.
How does economic growth benefit the environment through sustainable development? One aspect of sustainable development relates to how economic growth is linked to the protection and management of natural resources. In developing countries, sustainable development focuses on how economic growth is balanced by the reduction of pollution, improvement in quality of life, and an investment in the preservation and enhancement of the natural environment. Stabilizing prices may reduce the risk of damage to the environment, although this effect could be offset by increased prices for essential goods and services. However, the negative impact of price increases on the provision of basic services would still likely outweigh any benefits derived from increased prosperity.
How does economic growth benefit the environment through innovation? Innovation has become a topic of increasing interest recently because many people believe that the growth process through technological advances could help to mitigate the effects of climate change. The positive economic consequences of economic growth are often viewed as providing an enhanced quality of life for those who are most in need of it. Because people tend to be more efficient at the tasks that they perform, economic growth provides them with the resources and information necessary to address urgent needs. The creation of new products and innovations could also create new jobs and increase the country's tax revenue.