Ed. Note: We are happy to share this reader response, which is part of a series submitted by undergraduate students at Loyola University Chicago from a course called ENVS 363: Sustainable Business Management.
In our global world, the economy is constantly being studied and argued about. As a result, policy makers need to take into account a multitude of factors when framing policy. Should the government intervene or remain hands off? Should there be tax breaks for certain industries or taxes levied on a particular type of business? Should the health of the economy come before the health of the environment? Yet throughout these questions, one important question is often left out of the equation: How do we foster economic sustainability?
This is an important question because it can help curb one of the main forces pushing our economy to its brink: growth.
Consumer and throwaway culture has dominated the free marketplace for the last century. We need to buy more, spend more, and throw away more in order for our economies to flourish. We are constantly seeking newer, better, and bigger. Something outdated? Throw it in the trash and buy a new one.
This model cannot last forever.
For centuries, humans have acted as if we are living in a world with unlimited resources. Neoclassical economists believe that exponential economic growth can be indefinite and that it is the path a nation must remain on to maintain long-term prosperity. There was no thought that one day we might burn our entire supply of coal or that our freshwater lakes would dry up. Economies have exponentially consumed more and more resources without stopping to take a look at the bigger picture. Not only is continued growth dangerous for the Earth’s well-being, it jeopardizes the long term survival of humanity.
More than ever, there is an urgent need to find a way to restructure our economies and how we think about our relationship to this planet. Already, we are beginning to see what our future may hold if we continue “business as usual.” Around the world there are emerging climate refugees fleeing their homes as a result of their environment being degraded. For the first time in the United States, a group of Native Americans were forced off the island they inhabited because of rising sea levels. Land was receding so fast that they were facing the “equivalent to the size of a football field lost every 45 minutes.”
We need to move away from rapid consumption and into different forms of an economy. One way to encourage this is to reframe how we understand our economy. Right now, there are clear winners and losers, and companies view environmentally friendly practices as a burden.
Scientists urge businesses that global growth trends cannot persist. It is very possible that society may be butting heads with our limits within the century. In order to prevent this from happening, businesses need to start taking cues from scientists. While it may seem nigh impossible for the corporations to stop their pattern of resource depletion, what actually may be harder is surviving in the long term. At this rate, in the future, businesses will find themselves constantly vying for limited resources.
Take water as an example. Every human needs water to sustain themselves, and similarly nearly every business also needs water—largely for the production of their product. Water scarcity will eventually touch every business around the world, directly or indirectly. Basic economic models show that once water becomes scarce, the price will skyrocket. The rising cost of water will have a direct relationship on the rising cost of conducting business operations. This means to conduct business the same as before a water shortage, businesses will have to pay more throughout their entire supply chain.
This all may sound scary and hypothetical, but it is imperative to understand that the threat looms nearer than may be apparent. At the rate we are consuming water, it is already in the process of becoming a scarce resource. Water is being used at an increasing rate to satiate our ever growing agricultural and industrial needs, but there is simply not enough to go around. Water is a necessity, for people and businesses, but at the current pace the situation is simply going to get worse with time. While water is just one example of how businesses could be affected by scarcity, the situation is true for every resource. It is only a matter of time before governments realize how lax policy has led us down a path of no return.
In the eyes of developers and economists, “more” is needed to expand the economy. One reason for this is because countries around the globe keep score of their economy, keeping score of who is winning and who is losing. The scorecard shows a country's gross domestic product, or GDP. This number is like a meter that shows how well a country's economy is performing compared to the rest of the world.
However, in our current system, GDP only tells the story of how much things are worth in terms of money. If a forest is cut down and converted into timber for building, it is entered as a positive contribution to GDP. In that number, there is no corresponding number connected to environmental degradation, ecosystem loss, or carbon contribution. Though the process of clear cutting could have seriously affected hundreds or thousands of people and animals, it is simply counted as a “win” on the global GDP scorecard. The economy is supported by a finite biosphere, and as human consumption patterns grow, the economy’s demand for natural resources will surpass what is sustainably available. We must change our perspective of what counts as a positive contribution to our economy.
What if countries took into consideration environmental degradation as a negative in their GDP? Perhaps they would start paying attention more to their processes of production.
Or, what if as a world, we stopped competing for the most production and consumption? We could pay more attention to contributing to conservation or raising the standard of living.
By encouraging countries to care about their environmental impact, citizens of every country would benefit.
An economy based on growth and a higher GDP is no longer viable due to depleting resources and is no longer desirable, for there is no correlation between growth and happiness. A shift toward a “better” economy includes reuse of natural materials and finding alternative uses for waste while promoting local, sustainable development. A business’ desire to grow should not be driven by neoclassical economics and linear economies, but rather by a circular economic model and collaborative consumption.
 Breslin, S. (2016, Feb. 22). Louisiana tribe officially becomes America’s first climate refugees. https://weather.com/news/climate/news/biloxi-chitimacha-choctaw-indians-climate-refugees