Arrow,+1995+_Ecological+Economics_

Arrow,+1995+_Ecological+Economics_ - POLICYFORUM Economic...

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Unformatted text preview: POLICYFORUM Economic Growth, Carrying Capacity, and theEnvironment Kenneth Arrow, BertBolin,RobertCostanza, ParthaDasgupta, CarlFolke,C.S. Holling, Bengt-Owe Jansson, Simon Levin, Kari-Goran Mdler, Charles Perrings, David Pimentel Nationalandinternationaleconomicpol- icyhasusuallyignoredtheenvironment.In areaswheretheenvironmentisbeginningto impingeonpolicy,asintheGeneralAgree- mentonTariffsandTrade(GATT)andthe North American Free Trade Agreement (NAFTA),itremainsatangentialconcern, and the presumption isoften made that economic growthandeconomic liberaliza- tion(includingtheliberalizationofinterna- tionaltrade)are,insomesense,goodforthe environment.Thisnotionhasmeant that economy-wide policy reforms designed to promote growth and liberalization have beenencouragedwithlittleregardtotheir environmental consequences, presumably ontheassumptionthattheseconsequences would either take care ofthemselves or couldbedealtwithseparately. In thisarticlewe discuss the relation between economic growth and environ- mental quality,andthelinkbetweeneco- nomic activityand the carrying capacity andresilienceoftheenvironment (1). EconomicGrowth,Institutions, andtheEnvironment The general proposition that economic growth isgood forthe environment has beenjustifiedbytheclaimthatthereexists an empiricalrelationbetween percapita incomeandsomemeasuresofenvironmen- tal quality.Ithas been observed thatas K.ArrowisintheDepartmentofEconomics, Stanford University,Stanford,CA 94305,USA. B.Bolinisinthe Department ofMeteorology, UniversityofStockholm, 106 91 Stockholm,Sweden. R.Costanzaisdirectorof theMaryland InternationalInstituteforEcologicalEco- nomics,UniversityofMaryland,Box38,Solomons,MD 20688,USA.P.DasguptaisontheFacultyofEconom- ics,CambridgeUniversity,CambridgeCB39DD,UK.C. FolkeisattheBeijerInternationalInstituteofEcological Economics, RoyalSwedishAcademyofSciences,Box 50005,S-10405Stockholm,Sweden.C.S.Hollingisin theDepartmentofZoology,UniversityofFlorida,Gaines- ville,FL32611,USA.B.-0.JanssonisintheDepartment ofSystemsEcology,UniversityofStockholm,S-10691 Stockholm, Sweden. S.LevinisintheDepartment of EcologyandEvolutionaryBiology,PrincetonUniversity, Princeton,NJ08544,USA.K.-G.Malerisdirectorofthe BeijerInternational Instituteof Ecological Economics, RoyalSwedishAcademyofSciences,Box50005,S-104 05Stockholm,Sweden.C.PerringsisheadoftheDe- partmentofEnvironmentalEconomicsandEnvironmen- talManagement, UniversityofYork,YorkY01 5DD,UK. D. Pimentel isinthe Department of Entomology and SectionofEcologyandSystematics,CornellUniversity, Ithaca, NY 14853,USA. incomegoesupthereisincreasingenviron- mental degradation up to a point, after which environmental quality improves. (Therelationhasan"inverted-U"shape.) One explanationofthisfindingisthat people inpoorcountries cannot affordto emphasizeamenitiesovermaterialwell-be- ing.Consequently, intheearlierstagesof economicdevelopment,increased pollution isregardedasanacceptablesideeffectof economicgrowth.However,whenacountry hasattainedasufficientlyhighstandardof...
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Arrow,+1995+_Ecological+Economics_ - POLICYFORUM Economic...

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