Can Economic Growth and Environmental Sustainability Be Compatible?

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Category: Business and Industry

Date Submitted: 11/17/2010 12:33 PM

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The term of “sustainable development”, which means not only continued economic growth but also environmental and social improvements, is becoming a fashionable and political notion in the world. In national views, it is one of the long-term goals that all governments aim to so that countries can be developed and remained stable. Yet, to achieve such multiple objects is not an easy task. In fact, some people criticize that governments’ policies to beat the economic recession is harmful to environment. This essay will discuss governments’ choices as well as the concern about trade-off between environmental sustainability and economic growth.

The relationship between economic growth and environmental degradation is illustrated by the “environmental Kuznets curve”. According to Kuznets (1965), environmental damage increases with income at low level of development, then declines steadily thanks to efficient changes of technologies.

Obviously, at specific stages, trade-off between the goals of achieving both economic growth and standards of environmental quality really exists. In other words, in short run, the growth of economy and environmental protection can be compatible. For instance, governments used to face trade-off when emphasizing policies to promote economic growth and competitiveness since the recession spread worldwide. These policies may not focus much on environment but I hold the opinion that governments did the right things.

The global economy was hit hard since the financial crisis in 2008. Beginning with a reduction in Singapore economy, numerous Asian countries experienced a growth slowdown. China’s GDP growth was down to the lowest increasing rate of 6.8% whereas Japan’s economy fell by 12.7% in 4th quarter of 2008. Together with a deep decline in economic growth, global recession affected the regional export sector and workers’ life seriously. Also, rate of unemployment increased as budget for hiring workers was cut down. Consequently, a...