Economics for a sustainable planet

Sustainable development endorses the idea that social, environmental, and economic progress is possible within the limits of earth’s natural resources. Sustainable development acknowledges that everything in the world is connected through space and time; hence, environmental pollution created in one part of the globe disturbs the other part of the globe or decisions made by the present generation will affect the future generations. Sustainable development is the route to world’s sustainable future. Therefore, to achieve true sustainability there is a need to harmoniously balance economic, social, and environmental sustainability factors. Environmental sustainability means that world’s ecological limits are not transgressed. Economic sustainability requires that existing resources are used optimally so that a responsible and beneficial balance can be achieved over the longer term. Social sustainability is the ability of society, or any social system, to continually achieve a good social wellbeing. Yet there are policies and practices in social, political, and economic milieu that constantly promote unsustainability or are fundamentally in tension with the sustainable development notion. For example, sustainability and economic growth are fundamentally incompatible because the contemporary global economic system, which promote economic growth, assumes continuous expansion in consumption of material goods and resources, a phenomenon that conflicts with the environmental notion of a finite planet with limited resources. Similarly, the unfair economic structures in the economic system create great wealth inequalities, which could lead to social unsustainability and social unrest. Likewise, the solutions to world’s political problems if enforced without considering the will and aspirations of the affected local population create social unrest and affect the global peace. This chapter emphasizes on the need for a fair and just economic system to achieve sustainability. It shows that climate change, ecological degradation, population growth, poverty and the resource scarcity, the problems of failing financial markets, and economic recession are all intertwined with the present economic system, which has been responsible for transgressing the balance of nature. The chapter then reviews reforms and alternatives, proposed in literature, to the present economic system to promote sustainability such as steady-state economics; environmental economics, ecological economics; restorative economics; local self-reliance/alternative currency, etc. Existence of interest and discount rates, which are a given necessity of the world economic system, means that the future costs and benefits are less valuable than those in the present - a clear case of intergenerational inequity and injustice. The chapter, using the concepts of systems thinking, make a case against discounting the future and shows that the discounting practice is in conflict with the holistic approach to the environment. The chapter shows that all the reforms or alternatives to contemporary economic system proposed in the literature do not really address the root cause of all the problems, which is the built-in interest-based system, made possible with the paper currency, in the economy that creates great injustices. The chapter argues that solutions of science and technology to ecological problems are limited because of ecological shortsightedness and corporate greed. Finally, in the future directions a broad framework of “fair and just” economic system is laid out which if realized can lead to an ecologically sustainable future for the planet.