Economy Vs Environment

 Economic expansion: Is it environmentally sustainable?

By Masooma Amjad Khokhar

 

It may have gone unnoticed, but this is a historical event. For the first time in the entire history of humanity, we live in a world where poverty no longer affects most of the population. Surprised? Well you shouldn’t be. Experts already told you that this was about to happen. Let’s forget all the apocalyptic perspectives that we’ve covered for so many years about the world we live in. The truth is that today, on our planet, most of the population either belongs to the middle class or to the wealthiest classes. In other words, as you can see, poverty is now not such a looming issue. Yes, I know, there’s still a lot of poverty, but the truth is that we’ve never before known a world where poverty didn’t affect most of the population. Don’t tell me that is not great news. But just a second, you might be asking yourself some questions, like for example, what on earth are you talking about? What do you mean exactly? If that’s the case, why is there so much pessimism? Or maybe, is all this sustainable? Can the environment withstand such a heavy burden? Are we perhaps on the threshold of the world’s destruction? We’ll explore all of these questions in this blog. The general impression is that we live in a world full of misery, Inequality, injustice.

 

 And yes, all of that exists but, fortunately, it’s becoming less frequent. Yes, see, every time we turn on the TV or visit a news website, we almost always find catastrophes of all kinds. Unfortunately, we don’t usually find good news even though these kinds of news are much more important. See, according to the Brookings Institute and the World Data Lab’s estimates, we hit an extraordinary milestone in September 2018. For the first time in the history of mankind, most people who live in this world are no longer poor. We’re talking about more than 50% of the world’s population, of approximately 5.6 billion people who belong to middle class or wealthy homes. In fact, this is the rough distribution of the world’s population today, check it out. Now, some of you may be wondering. What exactly do you mean by the middle class? Well fundamentally, people with enough purchasing power to allow them to live comfortably. That is, they can buy washing machines and refrigerators; they can go to restaurants and on vacation, people who can endure some unexpected instability such as an illness or a period of unemployment without falling back into poverty. But to be more specific, for this study’s authors, the households that have a consumption capacity of more than $11 a day per person, adjusted by the price level are part of the middle class. But that’s not all; the best is yet to come. Allow me to explain. As you know, there’s still a lot of poverty in the world. No less than 650 million people live in extreme poverty. They aren’t even guaranteed the most basic things like food. And of course, 650 million people are far too many. The good news is that changes are happening so quickly that in a few decades this issue may have disappeared entirely.

 But do you want to know exactly how quickly we’re talking about? Well, to give you an idea of how fast things are changing, check out these figures. In our world, for every second that passes, 1 person escapes extreme poverty. Every second, it’s exactly this lightning fast rate that caused the population living in conditions of extreme poverty to fall by 75% between 1990 and 2015. But even with this news, without a doubt, what’s most surprising is what’s happening with the middle class. In that same period of time, that is, every second, approximately 5 people leave poverty behind and joins the middle class. 5 people per second! That, folks, means that, if this rate continues, in just about 12 years, by the year 2030, the middle class would make up the vast majority of the world’s population. Good news, don’t you think? A middle class world means a world with fewer poor people, with a greater commitment to academic studies and knowledge, with a greater tendency to set up companies and, also, a population that’s more demanding toward politicians among other things because the middle class is a proprietary class. People in the middle class have houses, savings, businesses, and that, of course, leads them to be more committed to stability and to be more demanding. And not only that, as we’ve told you many times, this huge growth means another thing hundreds of thousands of opportunities for enterprise. Now, just a moment here’s a question that many of you may be asking yourselves. Can our world support so many people consuming so much? Aren’t we sowing the seeds of destruction? Let's see Climate change, mass extinction and water pollution. I don’t even have to say it. We’re facing many challenges. In fact, if we just take a look at the news, we could get the impression that we’re heading directly and at full speed towards the precipice. And of course, with so many people consuming more and more resources, it’s normal for our lives to be pervaded by this question: What’s going to happen to our planet?

 But, what if it wasn’t exactly like that? What if, after a certain level, the relationship between the environment and wealth was positive? Well, that's the direction that things are moving. See, when we talk about development, economic growth, consumption. Two issues logically concern us a lot: one is pollution and damage to the environment, and the second is whether or not there will be resources for everyone. Let’s start with the first one. Is it possible that things aren’t going down such a bad path? Let's take a look, for example, at what has happened in recent years in the largest economies on the planet: that is, in the United States, the European Union, China and Japan. Well, in 1960, the United States issued 0.94 kilograms of CO2 for every dollar of production. In 2014 this value was just 0.34, 64% less. For its part, the European Union reduced its CO2 emissions per dollar of production by 54% between 1991 and 2014. Same for Japan even China, infamous China, the country that used coal for everything, has reduced its relative CO2 emissions by 75% over the past 4 decades.

 

That is to say, technological developments and new environmental concerns are helping the world produce more while polluting less. Yes, folks, you heard that right. Improved technology and increasing concern for the environment are managing to slow down and even reverse our damage to the planet. Take a look at the United States: Again and again, environmental improvements once deemed impossible have taken place. Since 1970, when the Environmental Protection Agency was established, the United States has slashed its emissions of five air pollutants by almost two-thirds. Over the same period, the population grew by more than 40 percent, and those people drove twice as many miles and became two and a half times richer. The truth is that it’s becoming increasingly clear that the relationship between the environment and wealth has an inverted U shape. That is to say, after a determined level of wealth, societies begin to worry more about the environment, begin to take measures to take care of it and begin to develop and use cleaner technologies. “Renewable energies will dominate the future German electricity sector thanks to the impulse of offshore wind and geothermal.” For example, this is what the Environmental Performance Index - an index constructed from metrics that measure the quality of air, water, forest and natural habitats-indicates.

 

 

 Out of the 180 countries that make up the index, all but 2 have improved in the last decade. On the other hand, this index also shows that the richer a country is, on average, the cleaner its environment becomes, the more environmental awareness exists, and the better results it gets. Sure, if we think about it, it's quite logical. Richer countries can allocate more resources towards technological development and protecting natural areas. In fact, since 1990, as the world has become richer and richer, protected areas have almost doubled. Today, more than 15% of the surface of the planet is protected. And not only is that, deforestation, one of the great ecological threats, undergoing a clear decline. Deforestation of the world’s largest tropical forest, the Amazon, peaked in 1995, and from 2004 to 2013 the rate fell by four-fifths. Steven Pinker) Well, a larger middle class will mean more resources to care for the environment, more people developing cleaner technologies and a greater level of environmental awareness. Don’t get me wrong, there are many challenges ahead, but the trend isn’t nearly as bad as it’s often portrayed.

We don’t really need to take our foot off the gas, and of course we’re convinced that we need to promote cleaner production methods and technologies, but we’re not in an apocalyptic or irreversible situation. And of course the empirical evidence tells us that the best way to overcome these challenges is with more investment and with richer and better-formed societies. Regarding the second question to whether natural resources will be exhausted or not...I think we can rest assured that they won’t be. Not only because there are many resources, but above all because human activity aims to seek better ways of production, including recycling, the development of new technologies that allow for the exploitation of new resources or that manage to do more with less. For all of these reasons, dear friends of Masoomakhokhar.blogspot.com and don’t worry, we’ll talk much more about this topic in the future. I think we have to be more than satisfied for the first time in the history of humanity, our average condition isn’t poverty or hunger. Yes, humanity is managing to defeat poverty.  And as always, I’ll see you in the next blog.