The relationship between environmental degradation and economic development is a hush talk because not many leaders are comfortable talking about it. The need for creation of cheaper products has swelled the sweat shop and orient run manufacturing industry. But the costs were rather huge.
Green GDP is the GDP growth rate adjusted to the growth in the economy thus accounting all and any afflictions to the environment. Very idealistic this may seem and there were also countries who have employed this aggregation but that has blanched away the countries from being so idealistic. China, the country I’m speaking about, feared their Green GDP could even show negative figures and pulled out of any such statistical circus. Another growing country, India, also promises to change their course GDP into Green GDP in a few years.
Countering the generalization, Simon Kuznets came up with his ground breaking Environmental Kuznets Curve establishing a relationship between per capita income and environment which states that the rise in per capita level of income after the meeting of every quantitative milestone set for development, so that environment which could be extensively damaged due to developmental activities now becomes a luxury and people willingly offer to trade in for greater environmental sustainability. This vouching was in scale with the conditions of U.K while the EKC was established.
Expressive needs about the GDP and its ineffective ruling of economic performance are mostly heard, never accounted. Now certain countries are solely dependent on their natural resources for their development, particularly fossil fuels. When eco-systems fail to sustain life on this planet, only then do we begin to see the hands burn and nations run, not to save lives but to save inadequate short term determinants of the economic growth.
We can very well see how the Kuznets Curve seems a thing so far away. Like the classical economists say, that the equilibrium is stable in the long run when no one has any idea how long is the long run going to be, the Kuznets Curve – how it explains that the richer the country gets the more aesthetically luxurious the people tend to be, that could sound like religion to anyone. Joseph Stiglitz and many economists opine the looseness GDP tends to portray when the costs for such a thing as independent as economic prediction. Does the EKC hold true in the richest and the most powerful countries out there? It doesn’t.
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©The Idea Bucket, 2013. (Submitted by Mikky)