ESSAY: To what extent will high economic growth lead to sustainable economic development?

Question 1

Definitions of economic growth and sustainable development

Answer 1

Economic growth- the increase in the value of the economy through the expansion of components of AD
Sustainable development- meeting the needs of todays population without compromising the ability of future generations to meet their own needs

Question 2

How high economic growth might lead to sustainable development?

Answer 2

• Economic growth can allow the development of new and more renewable sources of energy that don’t deplete our scarce natural resources, as the government has more tax revenue available to spend on new environmental projects
• high economic growth in which all people share in prosperity means that everyone will enjoy the benefits of a developed and safe society, which would suggest sustainable development (low inequality)
• supply side economic growth may be best for sustainable development to avoid extreme economic cycles and keep employment high and inflation low, employment and growth only one aspect of sustainable development
• REDD stands for Reducing Emissions from Deforestation and Forest Degradation in Developing Countries and is designed to provide financial incentives funded by advanced nations for developing countries to preserve their forests and instead invest in low-carbon paths to sustainable development.

Question 3

How high economic growth might not lead to sustainable development?

Answer 3

• high industrialisation that drives economic growth may see the rapid depletion of natural capital, for example deforestation in parts of the world as there is a derived demand for wood to produce goods
• increased carbon emissions from the production associated with economic growth increases pollution ie air pollution, noise pollution etc which can worsen the standards of living of people within an economy
• depletion of natural materials reduces the amount of capital available to future generations and therefore limits their own ability to endure sustainable development
• high levels of inequality would see the top earners getting richer and the majority of the population not enjoying increased prosperity, in an emerging economy the economic growth may be driven by MNCs or a very small % of high earners

Question 4

What does this link depend on??

Answer 4

• It may depend on the type of economic growth ie is it supply side or demand side
• the effectiveness of the government and other organisations as to whether they implement successful sustainable development polices like CO2 quotas to match the economic growth
• the economic cycle, is it extreme or increasing at a sustainable level, may be determined by emerging or developed economy