NCPA - National Center for Policy Analysis

Why Growth Is the Environment's Best Friend

November 12, 2012

Many people argue that as economies grow so does the need for energy production and distribution. As a result, the environment suffers as it is forced to sustain a larger population that produces waste and contributes to destruction, says Kenneth P. Green, a resident scholar at the American Enterprise Institute.

Contrary to popular belief, the single best thing we could do to minimize energy's impact on the environment is not only maximize our own economic growth but also help developing countries increase theirs.

Rather than looking at energy use and environmental degradation as a linear relation, the relationship looks more like an inverted U; this is called the Kuznets curve. The Kuznets curve argues that societies go through a series of phases.

  • First, a society overuses a resource.
  • Second, the society reaches a point where they realize they are overusing a resource.
  • Third, there is a period where the society takes action to reduce their overuse.
  • Finally, once the resource consumption is reduced, they reach the maximum sustainable level.

Central to this theory is that countries that are poor use a resource to expand their economy, and once that is accomplished, they can shift their resources to cut their consumption of a resource. In other words, economic growth is the main driver in helping societies get to the point in which they develop solutions to fix the environment.

Developed countries should also help developing countries increase their economic growth as a means of helping the environment. Since many developing countries are focused on economic growth, environmental concerns are put on the backburner.

Some economists argue that this theory only applies to local-area pollutants and resource protection. But when it comes to global environmental issues like greenhouse gas emissions, companies have an incentive to find poor, developing nations to conduct business that don't have strict environmental standards.

Source: Kenneth P. Green, "Why Growth is the Environment's Best Friend," The American, November 7, 2012.


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